Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Raytheon Technologies Corp. (NYSE:RTX)

Enterprise Value to FCFF (EV/FCFF)

Intermediate level

Free Cash Flow to The Firm (FCFF)

Raytheon Technologies Corp., FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income (loss) attributable to common shareowners (3,519) 5,537  5,269  4,552  5,055 
Noncontrolling interest in subsidiaries’ earnings 224  411  385  368  371 
Net noncash charges 6,818  3,166  1,618  (816) 2,147 
Change in operating capital 811  (231) (950) 1,527  (1,161)
Net cash flows provided by operating activities 4,334  8,883  6,322  5,631  6,412 
Interest paid, net of amounts capitalized, net of tax1 1,286  1,300  794  704  882 
Capital expenditures (1,795) (2,256) (1,902) (2,014) (1,699)
Free cash flow to the firm (FCFF) 3,825  7,927  5,214  4,321  5,595 

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-09).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Raytheon Technologies Corp.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Raytheon Technologies Corp.’s FCFF increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.

Interest Paid, Net of Tax

Raytheon Technologies Corp., interest paid, net of tax calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Effective Income Tax Rate (EITR)
EITR1 21.00% 27.80% 22.70% 27.70% 23.80%
Interest Paid, Net of Tax
Interest paid, net of amounts capitalized, before tax 1,628  1,801  1,027  974  1,157 
Less: Interest paid, net of amounts capitalized, tax2 342  501  233  270  275 
Interest paid, net of amounts capitalized, net of tax 1,286  1,300  794  704  882 

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-09).

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2 2020 Calculation
Interest paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= 1,628 × 21.00% = 342

Enterprise Value to FCFF Ratio, Current

Raytheon Technologies Corp., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (US$ in millions)
Enterprise value (EV) 157,735 
Free cash flow to the firm (FCFF) 3,825 
Valuation Ratio
EV/FCFF 41.24
Benchmarks
EV/FCFF, Competitors1
3M Co. 18.47
Boeing Co. —
Caterpillar Inc. 24.63
General Electric Co. 35.21
Honeywell International Inc. 29.59
Illinois Tool Works Inc. 28.36
Lockheed Martin Corp. 16.37
EV/FCFF, Sector
Capital Goods 59.63
EV/FCFF, Industry
Industrials 46.24

Based on: 10-K (filing date: 2021-02-08).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Enterprise Value to FCFF Ratio, Historical

Raytheon Technologies Corp., historical EV/FCFF calculation, comparison to benchmarks

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 134,857  173,888  145,579  120,307  107,051 
Free cash flow to the firm (FCFF)2 3,825  7,927  5,214  4,321  5,595 
Valuation Ratio
EV/FCFF3 35.26 21.94 27.92 27.84 19.13
Benchmarks
EV/FCFF, Competitors4
3M Co. 16.56 19.73 24.72 28.39 21.43
Boeing Co. — — 16.40 16.93 11.76
Caterpillar Inc. 23.83 16.84 19.43 24.95 20.52
General Electric Co. 32.34 15.85 40.85 22.13 55.78
Honeywell International Inc. 26.49 21.13 19.22 22.51 21.27
Illinois Tool Works Inc. 25.33 22.93 20.00 26.64 22.67
Lockheed Martin Corp. 14.64 21.21 41.00 18.99 19.08
EV/FCFF, Sector
Capital Goods 53.88 24.65 23.90 21.85 23.33
EV/FCFF, Industry
Industrials 41.10 25.74 23.92 25.56 24.60

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-09).

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3 2020 Calculation
EV/FCFF = EV ÷ FCFF
= 134,857 ÷ 3,825 = 35.26

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Raytheon Technologies Corp.’s EV/FCFF ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.