Enterprise Value to FCFF (EV/FCFF)
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- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Stryker Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The financial data for the period from 2017 to 2021 reveals notable trends in cash flow metrics.
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities exhibits an overall upward trend with fluctuations. Starting at $1,559 million in 2017, it substantially increased to $2,610 million by 2018, indicating significant improvement in operational cash generation. However, it slightly decreased to $2,191 million in 2019 before recovering notably to reach a peak of $3,277 million in 2020. In 2021, the value remained relatively stable at $3,263 million, suggesting the company sustained its strong operational cash flow generation during these years.
- Free Cash Flow to the Firm (FCFF)
- Similarly, the free cash flow to the firm follows a comparable pattern. It rose from $1,198 million in 2017 to $2,234 million in 2018, reflecting improved capacity for discretionary cash after capital expenditures. There was a decline in 2019 to $1,775 million, aligning with the decrease observed in operating cash flow. Subsequently, FCFF sharply increased to $3,039 million in 2020 and was maintained near that level at $3,022 million in 2021. This stability in free cash flow towards the later years indicates the firm’s ability to consistently generate cash available for financing, investment, and other corporate activities.
Overall, the data indicates strengthening cash generation capabilities over the five-year span, with a slight dip in 2019 but strong recovery and sustainability thereafter. The close alignment between operating cash flow and free cash flow trends points to the company’s effective management of operational efficiency and capital expenditures.
Interest Paid, Net of Tax
Stryker Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2 2021 Calculation
Cash paid for interest on debt, tax = Cash paid for interest on debt × EITR
= × =
- Effective Income Tax Rate (EITR)
-
The effective income tax rate experienced notable fluctuations over the five-year period. Starting from a relatively low rate of 10.3% in 2017, the rate more than doubled to 21% in 2018. Subsequently, it declined to 18.7% in 2019 and remained fairly stable in 2020 at 18.2%. In 2021, the tax rate saw a significant decrease to 12.6%, approaching levels similar to those observed in 2017. This pattern indicates variability in tax planning, regulatory impacts, or changes in taxable income composition during the period.
- Cash Paid for Interest on Debt, Net of Tax
-
The cash paid for interest on debt, net of tax, showed an overall upward trend from 2017 to 2021. In 2017, the company paid $237 million, which slightly decreased to $196 million in 2018. However, from 2018 onward, there was a consistent increase: $233 million in 2019, $249 million in 2020, and finally reaching $284 million in 2021. This progression suggests either increased debt levels, higher interest rates, or both, contributing to growing interest expenses net of tax over the years.
Enterprise Value to FCFF Ratio, Current
Stryker Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Abbott Laboratories | |
| CVS Health Corp. | |
| Elevance Health Inc. | |
| Intuitive Surgical Inc. | |
| Medtronic PLC | |
| UnitedHealth Group Inc. | |
| EV/FCFF, Sector | |
| Health Care Equipment & Services | |
| EV/FCFF, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2021-12-31).
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
Stryker Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Health Care Equipment & Services | ||||||
| EV/FCFF, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a consistent upward trend over the five-year period. Starting at $59,894 million in 2017, it increased significantly each year to reach $104,469 million by 2021. The growth was steady, reflecting an increasing valuation of the company's overall market worth.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm displayed more variability across the years. It nearly doubled from $1,198 million in 2017 to $2,234 million in 2018, followed by a decline to $1,775 million in 2019. Subsequently, there was a notable recovery and growth, with FCFF rising sharply to $3,039 million in 2020 and stabilizing slightly lower at $3,022 million in 2021. This pattern suggests fluctuations in cash generation capabilities, with strong improvement in the later years.
- EV/FCFF Ratio
- The EV to FCFF ratio demonstrated considerable volatility. It started very high at 50 in 2017, dropped to a low of 32.91 in 2018, then increased again to nearly 50 in 2019. In the last two years, the ratio settled around the mid-30s, with 33.98 in 2020 and 34.57 in 2021. The fluctuations indicate varying market valuation relative to the firm’s free cash flow, with a lower ratio in certain years potentially signaling a more attractive valuation relative to cash flow generation.