Alphabet Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	73,795)	59,972)	76,033)	40,269)	34,343)
Net noncash charges	31,796)	33,758)	17,142)	23,028)	19,358)
Changes in assets and liabilities, net of effects of acquisitions	(3,845)	(2,235)	(1,523)	1,827)	819)
Net cash provided by operating activities	101,746)	91,495)	91,652)	65,124)	54,520)
Cash paid for interest, net of amounts capitalized, net of tax¹	265)	300)	290)	113)	86)
Interest capitalized, net of tax²	156)	108)	137)	183)	144)
Purchases of property and equipment	(32,251)	(31,485)	(24,640)	(22,281)	(23,548)
Free cash flow to the firm (FCFF)	69,916)	60,418)	67,439)	43,139)	31,202)

Based on: 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), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Alphabet Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Alphabet Inc. FCFF decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Alphabet Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR¹	13.90%	15.90%	16.20%	16.20%	13.90%
Interest Paid, Net of Tax
Cash paid for interest, net of amounts capitalized, before tax	308)	357)	346)	135)	100)
Less: Cash paid for interest, net of amounts capitalized, tax²	43)	57)	56)	22)	14)
Cash paid for interest, net of amounts capitalized, net of tax	265)	300)	290)	113)	86)
Interest Costs Capitalized, Net of Tax
Interest capitalized, before tax	181)	128)	163)	218)	167)
Less: Interest capitalized, tax³	25)	20)	26)	35)	23)
Interest capitalized, net of tax	156)	108)	137)	183)	144)

Based on: 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), 10-K (reporting date: 2019-12-31).

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² 2023 Calculation
Cash paid for interest, net of amounts capitalized, tax = Cash paid for interest, net of amounts capitalized × EITR
= 308 × 13.90% = 43

³ 2023 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 181 × 13.90% = 25

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Alphabet Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	2,101,939)
Free cash flow to the firm (FCFF)	69,916)
Valuation Ratio
EV/FCFF	30.06
Benchmarks
EV/FCFF, Competitors¹
Comcast Corp.	16.14
Meta Platforms Inc.	31.08
Netflix Inc.	50.50
Walt Disney Co.	23.70
EV/FCFF, Sector
Media & Entertainment	30.08
EV/FCFF, Industry
Communication Services	26.89

Based on: 10-K (reporting date: 2023-12-31).

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.

Alphabet Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	1,666,699)	1,248,790)	1,832,285)	1,273,801)	879,497)
Free cash flow to the firm (FCFF)²	69,916)	60,418)	67,439)	43,139)	31,202)
Valuation Ratio
EV/FCFF³	23.84	20.67	27.17	29.53	28.19
Benchmarks
EV/FCFF, Competitors⁴
Comcast Corp.	17.60	17.93	15.77	20.50	18.00
Meta Platforms Inc.	26.42	24.09	15.40	29.48	25.83
Netflix Inc.	33.81	77.11	335.37	95.41	—
Walt Disney Co.	31.55	90.23	78.66	63.77	143.18
EV/FCFF, Sector
Media & Entertainment	24.72	23.60	24.79	31.56	32.03
EV/FCFF, Industry
Communication Services	22.31	23.31	31.50	25.72	24.63

Based on: 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), 10-K (reporting date: 2019-12-31).

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² See details »

³ 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 1,666,699 ÷ 69,916 = 23.84

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Alphabet Inc. EV/FCFF ratio decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Alphabet Inc. (NASDAQ:GOOG)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical