Enterprise Value to FCFF (EV/FCFF)
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Sherwin-Williams Co. pages available for free this week:
- Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Sherwin-Williams Co., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-12-31), 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).
1, 2 See details »
The financial information indicates fluctuations in both net operating cash flow and free cash flow to the firm (FCFF) over the five-year period. A general observation is that FCFF closely tracks net operating cash flow, though not identically.
- Net Operating Cash Flow
- Net operating cash flow decreased from US$2,244.6 million in 2021 to US$1,919.9 million in 2022, representing a decline. A substantial increase was then observed in 2023, reaching US$3,521.9 million. This was followed by a decrease to US$3,153.2 million in 2024, and a further increase to US$3,451.6 million in 2025. The overall trend suggests volatility, with 2025 levels approaching those of the 2023 peak.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrored the trend in net operating cash flow. It decreased from US$2,153.5 million in 2021 to US$1,566.7 million in 2022. A significant recovery occurred in 2023, with FCFF reaching US$2,977.0 million. A subsequent decline to US$2,445.7 million was noted in 2024, before rising again to US$3,037.8 million in 2025. The 2025 value represents a strong finish to the period, though slightly below the 2023 peak.
- Relationship between Net Operating Cash Flow and FCFF
- The difference between net operating cash flow and FCFF remains relatively consistent across the observed period, suggesting that the items impacting the calculation of FCFF from net operating cash flow (such as capital expenditures or changes in working capital) are relatively stable in their impact. While both metrics move in tandem, FCFF is consistently lower than net operating cash flow, indicating ongoing investments or adjustments affecting the firm’s available cash.
In summary, the period demonstrates a pattern of initial decline followed by recovery and continued fluctuation in both net operating cash flow and FCFF. The firm experienced a strong rebound in cash flow generation in 2023 and 2025, but also periods of contraction. The consistent relationship between the two metrics suggests underlying stability in the firm’s cash flow conversion process.
Interest Paid, Net of Tax
Sherwin-Williams Co., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-12-31), 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).
2 2025 Calculation
Interest paid, tax = Interest paid × EITR
= × =
3 2025 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
The amount of interest paid, net of tax, exhibited an overall increasing trend from 2021 to 2025. While fluctuations occurred, the final value in 2025 represents a notable increase compared to the initial value in 2021. Concurrent with this trend, capitalized interest, net of tax, began to be reported in 2023 and also showed variability over the period.
- Interest Paid, Net of Tax
- Interest paid, net of tax, increased from $280.865 million in 2021 to $291.314 million in 2022, representing a 3.7% rise. A further increase was observed in 2023, reaching $319.872 million. A slight decrease occurred in 2024, with interest paid, net of tax, totaling $316.161 million. The most substantial increase occurred between 2024 and 2025, with the value rising to $348.357 million, a 10.2% increase. This suggests a growing interest expense burden over the five-year period.
- Capitalized Interest, Net of Tax
- Capitalized interest, net of tax, was not reported in 2021 or 2022. It first appeared in 2023 at $23.578 million, then increased significantly to $46.309 million in 2024. In 2025, this figure decreased to $35.451 million. The presence of capitalized interest suggests the company undertook projects qualifying for interest capitalization, and the fluctuations may reflect changes in the scale or stage of these projects.
- Effective Income Tax Rate (EITR) & Interest Expense
- The effective income tax rate increased from 17.10% in 2021 to 23.20% in 2023, before decreasing slightly to 22.30% in 2024 and then rising again to 23.10% in 2025. While the EITR and interest paid, net of tax, are distinct items, the increasing EITR could partially offset the impact of rising interest expense on net income. The net-of-tax presentation of interest paid suggests the impact of tax shields is already considered in the reported figures.
The combined trends indicate a growing reliance on debt financing or potentially higher borrowing costs, coupled with investment in projects where interest can be capitalized. Further investigation into the underlying debt structure and capital expenditure projects would be necessary to fully understand these trends.
Enterprise Value to FCFF Ratio, Current
Sherwin-Williams Co., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Linde plc | |
| EV/FCFF, Sector | |
| Chemicals | |
| EV/FCFF, Industry | |
| Materials | |
Based on: 10-K (reporting date: 2025-12-31).
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
Sherwin-Williams Co., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Linde plc | ||||||
| EV/FCFF, Sector | ||||||
| Chemicals | ||||||
| EV/FCFF, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibited fluctuations over the five-year period. Enterprise Value and Free Cash Flow to the Firm both demonstrated variability, influencing the observed ratio trends.
- Enterprise Value
- Enterprise Value decreased from US$79,026,380 thousand in 2021 to US$67,907,905 thousand in 2022, representing a decline. A subsequent increase was noted in 2023, reaching US$88,778,727 thousand, followed by further growth to US$97,849,775 thousand in 2024 and US$99,466,234 thousand in 2025. This indicates a general upward trend in Enterprise Value over the latter part of the analyzed period.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm decreased from US$2,153,465 thousand in 2021 to US$1,566,714 thousand in 2022. An increase was then observed in 2023, with the value rising to US$2,976,950 thousand. This was followed by a decrease to US$2,445,671 thousand in 2024 and a subsequent increase to US$3,037,808 thousand in 2025. The trend suggests volatility in Free Cash Flow to the Firm, with peaks in 2021 and 2025.
- EV/FCFF Ratio
- The EV/FCFF ratio was 36.70 in 2021. It increased to 43.34 in 2022, coinciding with the decrease in Free Cash Flow to the Firm and the decrease in Enterprise Value. A significant decrease to 29.82 was observed in 2023, driven by the substantial increase in Free Cash Flow to the Firm. The ratio then rose again to 40.01 in 2024, and decreased to 32.74 in 2025. The ratio’s movement reflects the interplay between changes in Enterprise Value and Free Cash Flow to the Firm, demonstrating sensitivity to fluctuations in both components.
Overall, the EV/FCFF ratio demonstrates a lack of consistent directional movement, indicating that the relationship between enterprise value and free cash flow is subject to change. The ratio’s fluctuations suggest that the market’s assessment of the firm’s value relative to its cash flow generation capabilities has varied over the period.