Free Cash Flow to The Firm (FCFF)
Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).
- Cash Provided by Operating Activities
- The cash provided by operating activities shows variations over the examined periods. Starting at 7,099 million USD in early 2020, it rose significantly to 10,525 million USD in early 2021. In 2022, there was a decline to 8,625 million USD, followed by a notable drop to 4,018 million USD in early 2023. The figure recovered markedly to 8,621 million USD in early 2024, before decreasing again to 7,367 million USD in early 2025. Overall, despite fluctuations, the cash flow from operations generally remained within a range of approximately 4,000 to 10,500 million USD, indicating some volatility but no clear long-term upward or downward trend.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm exhibited pronounced variability across the periods. It began at 4,140 million USD in early 2020 and nearly doubled to 8,230 million USD in early 2021. However, it decreased significantly to 5,143 million USD in early 2022 and further declined to a negative outflow of -1,361 million USD in early 2023, indicating a period of cash flow stress or increased investment activities surpassing operating cash inflows. The FCFF rebounded to positive territory with 4,208 million USD in early 2024 and continued to increase slightly to 4,638 million USD in early 2025. These fluctuations suggest episodes of both strong cash generation and cash consumption, possibly related to investment cycles or changes in working capital management.
- Summary of Trends
- The analyzed financial data reveal fluctuations in both operating cash flow and free cash flow to the firm over the six-year span. While operating cash flow shows moderate volatility, free cash flow displays a wider range including a notable negative value in 2023, which could indicate temporary operational or capital expenditure challenges. Recovery in both metrics after 2023 suggests a return to more stable cash generation and financial health. The periods of decline are followed by significant rebounds, suggesting cyclicality or the impact of specific financial or operational events affecting cash flows.
Interest Paid, Net of Tax
Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).
2 2025 Calculation
Interest paid, net of capitalized interest, tax = Interest paid, net of capitalized interest × EITR
= 615 × 22.20% = 137
- Effective income tax rate (EITR) trends
- The effective income tax rate shows fluctuations over the six-year period. Starting at 22% in 2020, it slightly decreased to 21.2% in 2021, then returned to 22% in 2022. A notable decline occurred in 2023, dropping to 18.7%, followed by a recovery to 21.9% in 2024 and a slight increase to 22.2% in 2025. Overall, the EITR demonstrates variability with a temporary dip in 2023 before stabilizing near the initial levels.
- Interest paid, net of capitalized interest, net of tax trends
- The interest paid displays considerable volatility across the timeframe. The amount peaked at $740 million in 2021, more than doubling the $384 million recorded in 2020. Subsequently, the interest paid declined sharply to $323 million in 2022, then increased modestly to $365 million in 2023. Thereafter, a significant rise is seen again, with amounts reaching $473 million in 2024 and slightly increasing to $478 million in 2025. This pattern suggests variability in financing costs or debt structure adjustments over the years.
- Summary of patterns and insights
- The effective income tax rate remained relatively stable around 22%, aside from a notable drop in 2023, potentially indicating a temporary tax benefit or rate adjustment. In contrast, the interest paid exhibited more pronounced fluctuations, reflecting changing interest expenses possibly due to debt refinancing, changes in interest rates, or shifts in capital structure. The peak interest payment in 2021 and recovery after the dip in 2022 may warrant further analysis to understand the underlying causes. Overall, the financial burden related to interest expenses shows more volatility compared to the tax rate.
Enterprise Value to FCFF Ratio, Current
Selected Financial Data (US$ in millions) | |
Enterprise value (EV) | 57,719) |
Free cash flow to the firm (FCFF) | 4,638) |
Valuation Ratio | |
EV/FCFF | 12.44 |
Benchmarks | |
EV/FCFF, Competitors1 | |
Costco Wholesale Corp. | 66.16 |
Walmart Inc. | 53.70 |
EV/FCFF, Sector | |
Consumer Staples Distribution & Retail | 46.69 |
EV/FCFF, Industry | |
Consumer Staples | 35.23 |
Based on: 10-K (reporting date: 2025-02-01).
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
Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Enterprise value (EV)1 | 60,052) | 89,183) | 89,184) | 107,691) | 93,212) | 61,814) | |
Free cash flow to the firm (FCFF)2 | 4,638) | 4,208) | (1,361) | 5,143) | 8,230) | 4,140) | |
Valuation Ratio | |||||||
EV/FCFF3 | 12.95 | 21.20 | — | 20.94 | 11.33 | 14.93 | |
Benchmarks | |||||||
EV/FCFF, Competitors4 | |||||||
Costco Wholesale Corp. | — | 61.14 | 36.07 | 74.47 | 38.43 | 26.70 | |
Walmart Inc. | 47.89 | 30.87 | 30.99 | 33.26 | 14.86 | 22.39 | |
EV/FCFF, Sector | |||||||
Consumer Staples Distribution & Retail | — | 36.48 | 39.69 | 35.73 | 17.09 | 22.18 | |
EV/FCFF, Industry | |||||||
Consumer Staples | — | 31.17 | 30.26 | 30.41 | 20.99 | 23.37 |
Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 60,052 ÷ 4,638 = 12.95
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibits a notable increase from 61,814 million USD in early 2020 to a peak of 107,691 million USD by early 2022. This upward trend is followed by a decline, bringing the value down to 89,184 million USD by early 2023 and remaining relatively stable at approximately 89,183 million USD in early 2024. A further significant decrease is observed by early 2025, with the enterprise value dropping to 60,052 million USD. Overall, the enterprise value shows a pattern of rapid growth during the initial years, followed by a gradual then more pronounced decline toward the latest recorded period.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow demonstrates volatility across the periods under review. Starting at 4,140 million USD in early 2020, it nearly doubles to 8,230 million USD in early 2021, indicating strong cash generation. However, this is followed by a decline to 5,143 million USD in early 2022 and a sharp drop into negative territory at -1,361 million USD by early 2023. Subsequently, FCFF recovers to positive figures, registering 4,208 million USD in early 2024 and 4,638 million USD in early 2025. The pattern reflects fluctuations potentially attributable to operational challenges or capital expenditure variations, with a notable temporary liquidity strain in 2023.
- EV/FCFF Ratio
- The EV to FCFF ratio moves inversely relative to free cash flow variations. Initially, it declines from 14.93 in 2020 to 11.33 in 2021, suggesting improving valuation multiples tied to cash flow. The ratio then peaks at 20.94 in 2022, indicating increased enterprise value relative to free cash flow. Data for early 2023 is missing, but a high ratio of 21.2 is observed again in early 2024, possibly signaling elevated valuation or diminished cash flow during this period. By early 2025, the ratio declines to 12.95, which aligns with the observed recovery in free cash flow and reduced enterprise value. The fluctuations in this ratio underscore the volatility in cash generation and changes in market or operational conditions affecting valuation.