.Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
United Parcel Service Inc., FCFF calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| | Net income | |||||
| | Net noncash charges | |||||
| | Changes in assets and liabilities, net of effect of acquisitions | |||||
| | Net cash from operating activities | |||||
| | Cash paid during the period for interest, net of amount capitalized, net of tax1 | |||||
| | Capitalized interest, net of tax2 | |||||
| | Capital expenditures | |||||
| | Proceeds from disposals of property, plant and equipment | |||||
| | Free cash flow to the firm (FCFF) |
1, 2 See Details »
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the United Parcel Service Inc.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | United Parcel Service Inc.'s FCFF declined from 2015 to 2016 and from 2016 to 2017. |
Interest Paid, Net of Tax
United Parcel Service Inc., interest paid, net of tax calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| Effective Income Tax Rate (EITR) | ||||||
| | EITR1 | % | % | % | % | % |
| Interest Paid, Net of Tax | ||||||
| | Cash paid during the period for interest, net of amount capitalized, before tax | |||||
| | Less: Cash paid during the period for interest, net of amount capitalized, tax2 | |||||
| | Cash paid during the period for interest, net of amount capitalized, net of tax | |||||
| Interest Costs Capitalized, Net of Tax | ||||||
| | Capitalized interest, before tax | |||||
| | Less: Capitalized interest, tax3 | |||||
| | Capitalized interest, net of tax | |||||
2017 Calculations
2 Cash paid during the period for interest, net of amount capitalized, tax = Cash paid during the period for interest, net of amount capitalized × EITR
= × % =
3 Capitalized interest, tax = Capitalized interest × EITR
= × % =
Enterprise Value to FCFF Ratio, Current
United Parcel Service Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors | |
| FedEx Corp. | |
| Union Pacific Corp. | |
| EV/FCFF, Sector | |
| Industrial Transportation | |
| EV/FCFF, Industry | |
| Industrials | |
If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
United Parcel Service Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Enterprise value (EV)1 | |||||
| | Free cash flow to the firm (FCFF)2 | |||||
| Ratio | ||||||
| | EV/FCFF3 | |||||
| Benchmarks | ||||||
| EV/FCFF, Competitors | ||||||
| FedEx Corp. | ||||||
| Union Pacific Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Industrial Transportation | ||||||
| EV/FCFF, Industry | ||||||
| Industrials | ||||||
2017 Calculations
3 EV/FCFF = EV ÷ FCFF
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/FCFF | Enterprise value to free cash flow to the firm is whole company valuation indicator. | United Parcel Service Inc.'s EV/FCFF ratio increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
