Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)
Interest Paid, Net of Tax
EV to FCFF Ratio, Current
EV to FCFF Ratio, Historical

Free Cash Flow to The Firm (FCFF)

Microsoft Corp., FCFF calculation

US$ in millions

12 months ended:	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Net income	88,136)	72,361)	72,738)	61,271)	44,281)	39,240)
Net noncash charges	28,588)	17,609)	15,851)	16,405)	17,877)	9,079)
Changes in operating assets and liabilities	1,824)	(2,388)	446)	(936)	(1,483)	3,866)
Net cash from operations	118,548)	87,582)	89,035)	76,740)	60,675)	52,185)
Cash paid for interest on debt, net of tax¹	1,391)	1,377)	1,651)	1,724)	2,004)	2,165)
Additions to property and equipment	(44,477)	(28,107)	(23,886)	(20,622)	(15,441)	(13,925)
Right-of-use assets obtained in exchange for finance lease obligations	(11,633)	(3,128)	(4,234)	(3,290)	(3,467)	(2,532)
Free cash flow to the firm (FCFF)	63,829)	57,724)	62,566)	54,552)	43,771)	37,893)

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

¹ See details »

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Microsoft Corp. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Microsoft Corp. FCFF decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Interest Paid, Net of Tax

Microsoft Corp., interest paid, net of tax calculation

US$ in millions

12 months ended:	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Effective Income Tax Rate (EITR)
EITR¹	18.20%	19.00%	13.10%	13.80%	16.50%	9.80%
Interest Paid, Net of Tax
Cash paid for interest on debt, before tax	1,700)	1,700)	1,900)	2,000)	2,400)	2,400)
Less: Cash paid for interest on debt, tax²	309)	323)	249)	276)	396)	235)
Cash paid for interest on debt, net of tax	1,391)	1,377)	1,651)	1,724)	2,004)	2,165)

¹ See details »

² 2024 Calculation
Cash paid for interest on debt, tax = Cash paid for interest on debt × EITR
= 1,700 × 18.20% = 309

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Enterprise Value to FCFF Ratio, Current

Microsoft Corp., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	3,204,171)
Free cash flow to the firm (FCFF)	63,829)
Valuation Ratio
EV/FCFF	50.20
Benchmarks
EV/FCFF, Competitors¹
Accenture PLC	25.43
Adobe Inc.	27.37
Autodesk Inc.	48.98
Cadence Design Systems Inc.	65.23
CrowdStrike Holdings Inc.	89.61
International Business Machines Corp.	17.95
Intuit Inc.	37.66
Oracle Corp.	36.47
Palantir Technologies Inc.	253.29
Palo Alto Networks Inc.	38.82
Salesforce Inc.	32.97
ServiceNow Inc.	80.59
Synopsys Inc.	55.93
EV/FCFF, Sector
Software & Services	46.67
EV/FCFF, Industry
Information Technology	55.30

Based on: 10-K (reporting date: 2024-06-30).

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

Microsoft Corp., historical EV/FCFF calculation, comparison to benchmarks

	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	3,146,813)	2,410,213)	2,021,362)	2,093,369)	1,487,741)	999,078)
Free cash flow to the firm (FCFF)²	63,829)	57,724)	62,566)	54,552)	43,771)	37,893)
Valuation Ratio
EV/FCFF³	49.30	41.75	32.31	38.37	33.99	26.37
Benchmarks
EV/FCFF, Competitors⁴
Accenture PLC	25.76	20.26	16.99	24.76	17.90	18.49
Adobe Inc.	—	37.75	20.82	33.61	40.43	40.48
Autodesk Inc.	36.00	20.48	27.63	41.13	23.38	98.38
Cadence Design Systems Inc.	—	63.83	44.54	35.05	44.13	29.35
CrowdStrike Holdings Inc.	81.46	38.65	96.35	141.44	807.14	—
International Business Machines Corp.	—	15.27	16.47	13.10	9.35	12.86
Intuit Inc.	36.79	31.28	32.85	48.64	37.90	33.30
Oracle Corp.	31.24	35.83	31.60	16.36	14.99	14.03
Palantir Technologies Inc.	—	69.13	82.97	66.45	—	—
Palo Alto Networks Inc.	34.69	28.15	29.30	32.74	26.50	20.44
Salesforce Inc.	29.95	28.41	35.97	44.91	39.63	41.21
ServiceNow Inc.	—	56.49	40.86	60.13	83.74	67.96
Synopsys Inc.	56.23	55.87	30.82	38.59	42.88	33.32
EV/FCFF, Sector
Software & Services	—	35.52	29.64	32.41	27.80	23.61
EV/FCFF, Industry
Information Technology	—	34.44	26.72	27.57	23.93	19.63

¹ See details »

² See details »

³ 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 3,146,813 ÷ 63,829 = 49.30

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.	Microsoft Corp. EV/FCFF ratio increased from 2022 to 2023 and from 2023 to 2024.

Microsoft Corp. (NASDAQ:MSFT)

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