Enterprise Value to FCFF (EV/FCFF)
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- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Net Profit Margin since 2012
- Return on Assets (ROA) since 2012
- Current Ratio since 2012
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Free Cash Flow to The Firm (FCFF)
ServiceNow Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The annual financial data reveals a consistent upward trend in both operating cash flow and free cash flow to the firm over the five-year period.
- Net Cash Provided by Operating Activities
- This figure shows a strong and steady increase each year, starting at 1,787 million US dollars in 2020 and rising to 4,267 million US dollars by 2024. The growth appears to be accelerating, with the annual increase becoming larger over time, indicating improved efficiency and robust cash generation from core business operations.
- Free Cash Flow to the Firm (FCFF)
- Similarly, FCFF exhibits a consistent growth trajectory, escalating from 1,367 million US dollars in 2020 to 3,394 million US dollars in 2024. This rise parallels the increase in operating cash flow, although FCFF amounts are slightly lower each year, reflecting capital expenditures or other investments. The expanding free cash flow suggests healthy cash availability for debt servicing, reinvestment, or distribution to investors.
Interest Paid, Net of Tax
ServiceNow Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate experienced fluctuations over the analyzed period. It began at 20.57% in 2020, then significantly decreased to 7.63% in 2021. Following this dip, the rate increased again to 18.55% in 2022, reaching its highest point at 21% in 2023 before declining to 18.01% in 2024. This pattern indicates variability in the tax burden, with a notable low in 2021 potentially due to tax benefits or adjustments, followed by stabilization around an approximate 18-21% range in recent years.
- Interest Paid, Net of Tax
- Interest paid, net of tax, shows a clear decreasing trend from 2021 to 2023, starting at 38 million US dollars in 2021 and dropping to 20 million in 2022, then further declining to 18 million in 2023. In 2024, there is a minor increase to 19 million US dollars. The absence of data for 2020 precludes any trend analysis for the earlier period, but from the available figures, the overall interest expense after tax is on a downward trend before stabilizing slightly in the last year.
Enterprise Value to FCFF Ratio, Current
ServiceNow Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Fair Isaac Corp. | |
| International Business Machines Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| EV/FCFF, Sector | |
| Software & Services | |
| EV/FCFF, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2024-12-31).
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
ServiceNow Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Software & Services | ||||||
| EV/FCFF, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a fluctuating trend over the reviewed periods. Initially, there was a slight decline from 114,500 million US$ at the end of 2020 to 110,442 million US$ by the end of 2021. This downward trend continued more sharply into 2022, with the value dropping to 89,597 million US$. However, a significant rebound occurred in the following years, with EV rising substantially to 153,782 million US$ in 2023 and further increasing to 204,354 million US$ by the end of 2024. Overall, this reflects an initial contraction phase followed by marked expansion in enterprise value.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm demonstrated steady and consistent growth throughout the periods analyzed. Starting at 1,367 million US$ in 2020, FCFF rose each year without exception: to 1,837 million US$ in 2021, 2,193 million US$ in 2022, 2,719 million US$ in 2023, and reaching 3,394 million US$ in 2024. This pattern indicates improving operational efficiency and cash-generative capacity over time.
- EV to FCFF Ratio
- The EV/FCFF ratio, a measure of valuation relative to cash flow, displayed considerable variability. It started very high at 83.74 in 2020, suggesting a premium valuation relative to cash flow at that time. The ratio declined significantly over the next two years, dropping to 60.13 in 2021 and further to 40.86 in 2022, reflecting either a relative reduction in enterprise value or increased free cash flow. In the last two years, the ratio rose again to 56.55 in 2023 and 60.21 in 2024, paralleling the increase in enterprise value whilst free cash flow continued to grow. The movements in this ratio indicate periods of changing market perception concerning the company's valuation relative to its ability to generate cash.