Walgreens Boots Alliance Inc., FCFF calculation

US$ in millions

12 months ended:	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Net (earnings) loss attributable to noncontrolling interests	(20)	7)	23)	18)	59)	99)
Net noncash charges	2,372)	1,293)	1,532)	1,974)	890)	1,652)
Changes in operating assets and liabilities	(740)	1,941)	1,618)	1,682)	495)	210)
Net cash provided by operating activities	5,594)	8,265)	7,251)	7,847)	5,664)	3,893)
Interest paid, net of tax¹	588)	481)	542)	467)	378)	92)
Additions to property, plant and equipment	(1,702)	(1,367)	(1,351)	(1,325)	(1,251)	(1,106)
Free cash flow to the firm (FCFF)	4,480)	7,379)	6,442)	6,989)	4,791)	2,879)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

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 Walgreens Boots Alliance Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Walgreens Boots Alliance Inc. FCFF increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Walgreens Boots Alliance Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Effective Income Tax Rate (EITR)
EITR¹	13.00%	16.70%	15.70%	19.40%	19.90%	42.90%
Interest Paid, Net of Tax
Interest paid, before tax	676)	577)	643)	580)	472)	161)
Less: Interest paid, tax²	88)	96)	101)	113)	94)	69)
Interest paid, net of tax	588)	481)	542)	467)	378)	92)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

¹ See details »

² 2019 Calculation
Interest paid, tax = Interest paid × EITR
= 676 × 13.00% = 88

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Walgreens Boots Alliance Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	50,256)
Free cash flow to the firm (FCFF)	4,480)
Valuation Ratio
EV/FCFF	11.22
Benchmarks
EV/FCFF, Competitors¹
Costco Wholesale Corp.	59.58
Dollar General Corp.	24.90
Target Corp.	19.33
Walmart Inc.	40.95
EV/FCFF, Sector
Consumer Staples Distribution & Retail	44.40
EV/FCFF, Industry
Consumer Staples	34.19

Based on: 10-K (reporting date: 2019-08-31).

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.

Walgreens Boots Alliance Inc., historical EV/FCFF calculation, comparison to benchmarks

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	66,257)	81,590)	80,464)	97,390)	104,315)	59,181)
Free cash flow to the firm (FCFF)²	4,480)	7,379)	6,442)	6,989)	4,791)	2,879)
Valuation Ratio
EV/FCFF³	14.79	11.06	12.49	13.93	21.77	20.56
Benchmarks
EV/FCFF, Competitors⁴
Costco Wholesale Corp.	37.24	—	—	—	—	—
Dollar General Corp.	22.20	—	—	—	—	—
Target Corp.	17.80	—	—	—	—	—
Walmart Inc.	17.27	—	—	—	—	—
EV/FCFF, Sector
Consumer Staples Distribution & Retail	20.10	—	—	—	—	—
EV/FCFF, Industry
Consumer Staples	22.08	—	—	—	—	—

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

¹ See details »

² See details »

³ 2019 Calculation
EV/FCFF = EV ÷ FCFF
= 66,257 ÷ 4,480 = 14.79

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.	Walgreens Boots Alliance Inc. EV/FCFF ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

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