Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Tesla Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
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- Net cash provided by operating activities
- The net cash provided by operating activities shows a general upward trend over the five-year period. It increased significantly from 5,943 million USD in 2020 to 11,497 million USD in 2021, representing nearly a doubling of cash inflows from operations. This upward momentum continued in 2022 with a further rise to 14,724 million USD. In 2023, there was a slight decrease to 13,256 million USD, indicating a minor contraction in operating cash flows. However, the figure rebounded in 2024, reaching its highest point of 14,923 million USD. Overall, operating cash flow demonstrates strong growth with slight volatility in the most recent years.
- Free cash flow to the firm (FCFF)
- Free cash flow to the firm exhibits a more volatile trend compared to operating cash flow. Beginning at 2,956 million USD in 2020, FCFF increased steadily to 4,813 million USD in 2021 and further accelerated to 7,638 million USD in 2022, suggesting effective capital expenditure management or improved operating efficiency up to this point. However, a significant decline occurred in 2023, where FCFF dropped to 4,448 million USD, followed by a further decrease to 3,660 million USD in 2024. This downturn signals increased investments or other outflows that impacted the free cash flow available to the firm despite operating cash flow still being strong.
- Overall insights
- While operating cash flows consistently grew over the period with only a minor dip in 2023, free cash flow peaked in 2022 and then declined considerably in the following two years. This divergence suggests that although the firm’s core business operations are generating increasing cash, higher capital expenditures or other investment activities are reducing the free cash flow available after operations. The pattern indicates a potential strategic focus on growth or capacity expansion that increased the use of cash despite strong underlying operating performance.
Interest Paid, Net of Tax
Tesla Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
2 2024 Calculation
Cash paid during the period for interest, tax = Cash paid during the period for interest × EITR
= 277 × 20.43% = 57
3 2024 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 0 × 20.43% = 0
The analysis of the financial data reveals several key trends over the observed five-year period.
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibits notable fluctuations. It started at 25.3% at the end of 2020, dramatically decreased to 11.02% by the end of 2021, and further declined to a low of 8.25% by the end of 2022. However, this downward trend reversed in the following years, with the rate rising to 21% by the end of 2023 and slightly decreasing to 20.43% at the end of 2024. This pattern suggests significant tax rate variability, potentially influenced by changes in tax policy, income composition, or temporary tax benefits.
- Cash Paid During the Period for Interest, Net of Tax
- The amount of cash paid for interest, net of tax, shows a consistent decline from 332 million USD in 2020 to 100 million USD in 2023. This decline suggests improved capital structure management, possibly through debt reduction or refinancing at lower interest rates. However, there is a rebound in 2024, with the interest paid rising to 220 million USD, indicating increased borrowing costs or higher debt levels in that year.
- Capitalized Interest, Net of Tax
- Capitalized interest was recorded at 36 million USD in 2020 and increased to 47 million USD in 2021. Data for subsequent years is unavailable, which restricts trend analysis beyond this point. The initial increase may reflect higher investment in capital projects or changes in capitalization policies.
Enterprise Value to FCFF Ratio, Current
Tesla Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 982,156) |
| Free cash flow to the firm (FCFF) | 3,660) |
| Valuation Ratio | |
| EV/FCFF | 268.32 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Ford Motor Co. | 12.52 |
| General Motors Co. | 15.53 |
| EV/FCFF, Sector | |
| Automobiles & Components | 49.38 |
| EV/FCFF, Industry | |
| Consumer Discretionary | 39.40 |
Based on: 10-K (reporting date: 2024-12-31).
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
Tesla Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 1,259,861) | 584,941) | 529,785) | 927,706) | 821,920) | |
| Free cash flow to the firm (FCFF)2 | 3,660) | 4,448) | 7,638) | 4,813) | 2,956) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 344.19 | 131.52 | 69.36 | 192.76 | 278.10 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Ford Motor Co. | 11.76 | 13.01 | 47.17 | 12.09 | 7.06 | |
| General Motors Co. | 15.38 | 9.84 | 11.80 | 16.37 | 13.12 | |
| EV/FCFF, Sector | ||||||
| Automobiles & Components | 59.44 | 24.92 | 34.23 | 42.88 | 30.62 | |
| EV/FCFF, Industry | ||||||
| Consumer Discretionary | 41.92 | 33.08 | 50.80 | 60.24 | 46.23 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 1,259,861 ÷ 3,660 = 344.19
4 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals significant variability in the key metrics under consideration.
- Enterprise Value (EV)
- The enterprise value demonstrated an overall upward trajectory from 2020 to 2024, beginning at approximately $822 billion in 2020 and reaching a peak of nearly $1.26 trillion by the end of 2024. Notably, there was a sharp decline in 2022 to around $530 billion, followed by a gradual recovery in 2023 and a substantial surge in 2024.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm exhibited a generally increasing trend from 2020 through 2022, rising from about $2.96 billion to $7.64 billion. However, this was followed by a consistent decline in the subsequent two years, dropping to approximately $3.66 billion by the end of 2024.
- EV/FCFF Ratio
- The ratio of enterprise value to free cash flow tells a nuanced story. Starting at a very high multiple of 278.1 in 2020, it decreased sharply to 69.36 in 2022, indicating that the enterprise value became more aligned with the free cash flow generation at that point. However, post-2022, the ratio increased again, reaching 344.19 by 2024, which suggests that enterprise valuation escalated disproportionately compared to free cash flow during the most recent years.
In summary, the data reflect volatility in enterprise value and free cash flow over the analyzed period, with a particularly notable divergence in 2024 where enterprise value grew substantially while free cash flow declined, resulting in elevated valuation multiples. This pattern may warrant further examination regarding market expectations, operational efficiencies, or capital structure changes impacting valuation metrics.