Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Yahoo! Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
- Operating Activities Cash Flow
- The net cash provided by (used in) operating activities exhibits significant volatility over the analyzed period. It starts with a substantial negative value of approximately -282 million US dollars at the end of 2012, indicating cash outflows from operating activities. This shifts dramatically to a positive inflow of about 1.2 billion US dollars in 2013, demonstrating a strong recovery or operational improvement. The positive inflow moderates somewhat in 2014 to nearly 897 million US dollars, still maintaining a strong cash-generating position. However, 2015 sees a sharp reversal with a large outflow of approximately -2.38 billion US dollars, indicating either operational difficulties or large working capital movements. By 2016, the company returns to a substantial positive inflow of about 1.25 billion US dollars, suggesting a recovery in operational cash generation.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm follows a similar pattern of volatility and mirrors the trend seen in operating cash flows but with slightly larger magnitudes. It begins with a negative cash flow of approximately -791 million US dollars in 2012, indicating that capital expenditures or other investments outpaced operational cash inflows. A significant positive reversal occurs in 2013, with FCFF reaching around 935 million US dollars, reflecting improvement in cash generation and/or reductions in capital spend. In 2014, the FCFF decreases to about 608 million US dollars, indicating moderation but remaining positive. The year 2015 again shows a notable decline to a negative value near -2.9 billion US dollars, highlighting extensive cash use potentially from investments or operational challenges. By 2016, FCFF recovers strongly, reaching approximately 1.26 billion US dollars, aligning with the positive operational cash flow trend.
- Summary of Trends
- The financial data indicate a pattern of substantial fluctuations in cash flows over the five-year period. Both operating cash flow and free cash flow to the firm experience periods of strong positive cash inflows as well as significant cash outflows. The year 2015 is a notable outlier with large negative cash flows, possibly due to extraordinary operating or investment activities. The subsequent rebound in 2016 suggests a return to more favorable cash flow conditions. Overall, the data suggest that the company's cash flow performance during these years was highly variable, likely reflecting changes in operational efficiency, investment decisions, or external market conditions.
Interest Paid, Net of Tax
Yahoo! Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
EITR = 100 × Income tax expense ÷ EBT
= 100 × -126,228 ÷ -335,691 = 37.60%
2 2016 Calculation
Interest paid, tax = Interest paid × EITR
= 0 × 37.60% = 0
The analysis of the effective income tax rate (EITR) over the five-year period reveals significant fluctuations without a consistent trend. Initially, the EITR was relatively high at 32.93% at the end of 2012, followed by a sharp decline to approximately 10.03% in 2013. This was succeeded by a marked increase in 2014 to 34.9%, indicating substantial variability in tax expense relative to pre-tax income.
In 2015, the EITR dropped dramatically to a low of 2.02%, suggesting either minimal taxable income, large tax credits, or other tax adjustments during that year. By the end of 2016, the rate rebounded to 37.6%, the highest in the observed period, pointing to a reversion to a higher tax burden or changes in the company’s taxable earnings or tax strategies.
- Effective Income Tax Rate (EITR)
- Displayed considerable volatility with no stable upward or downward trajectory across five years.
- 2012 started at 32.93%, dipped sharply in 2013, surged in 2014, plunged again in 2015, and ended 2016 at the highest rate of 37.6%.
- The fluctuations might indicate varying profitability, tax planning measures, or changes in tax regulations affecting the company.
- Interest Paid, Net of Tax
- No data available for the entire period, rendering analysis impossible.
Enterprise Value to FCFF Ratio, Current
Yahoo! Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 41,958,614) |
| Free cash flow to the firm (FCFF) | 1,258,996) |
| Valuation Ratio | |
| EV/FCFF | 33.33 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Accenture PLC | 20.43 |
| Adobe Inc. | 19.44 |
| Cadence Design Systems Inc. | 76.28 |
| CrowdStrike Holdings Inc. | 108.57 |
| Fair Isaac Corp. | 59.70 |
| International Business Machines Corp. | 22.13 |
| Intuit Inc. | 43.86 |
| Microsoft Corp. | 58.45 |
| Oracle Corp. | 289.64 |
| Palantir Technologies Inc. | 290.17 |
| Palo Alto Networks Inc. | 40.72 |
| Salesforce Inc. | 19.59 |
| ServiceNow Inc. | 57.79 |
| Synopsys Inc. | 65.25 |
| Workday Inc. | 24.65 |
Based on: 10-K (reporting date: 2016-12-31).
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
Yahoo! Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 38,765,313) | 25,544,484) | 34,717,286) | 36,835,581) | 20,060,871) | |
| Free cash flow to the firm (FCFF)2 | 1,258,996) | (2,902,120) | 608,195) | 934,566) | (790,860) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 30.79 | — | 57.08 | 39.41 | — | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Accenture PLC | — | — | — | — | — | |
| Adobe Inc. | — | — | — | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| CrowdStrike Holdings Inc. | — | — | — | — | — | |
| Fair Isaac Corp. | — | — | — | — | — | |
| International Business Machines Corp. | — | — | — | — | — | |
| Intuit Inc. | — | — | — | — | — | |
| Microsoft Corp. | — | — | — | — | — | |
| Oracle Corp. | — | — | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | — | — | — | — | — | |
| Synopsys Inc. | — | — | — | — | — | |
| Workday Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
3 2016 Calculation
EV/FCFF = EV ÷ FCFF
= 38,765,313 ÷ 1,258,996 = 30.79
4 Click competitor name to see calculations.
The analysis of the financial trends reveals notable fluctuations in both enterprise value and free cash flow to the firm over the observed period. These variations indicate shifts in the company's valuation and its ability to generate cash flow.
- Enterprise Value (EV)
- Enterprise value exhibited significant volatility throughout the five-year span. Starting at approximately 20.06 billion US dollars in 2012, it nearly doubled in 2013 to about 36.84 billion, before declining slightly in 2014 to 34.72 billion. A sharp decrease occurred in 2015 to approximately 25.54 billion, followed by a substantial rebound in 2016, reaching the highest point in the period at 38.77 billion. This pattern suggests external or internal factors impacting market valuation, with the notable dip in 2015 and recovery in 2016 warranting further examination.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm fluctuated markedly, showing instances of both positive and negative cash generation. In 2012, FCFF was negative at around -791 thousand US dollars, indicating an outflow or cash consumption. This situation reversed in 2013 and 2014 with positive cash flows of approximately 935 thousand and 608 thousand respectively, pointing to improved operational or investment conditions. However, 2015 saw a drastic decline to a deeply negative figure of about -2.9 million, reflective of significant cash outflows potentially due to increased capital expenditures or operating challenges. By 2016, FCFF improved markedly to a positive value exceeding 1.25 million, highlighting a recovery in cash generation capacity.
- EV to FCFF Ratio
- The EV to FCFF multiple presents high variability and intermittent missing data. Where available, the ratio was elevated in 2013 (39.41) and surged further in 2014 (57.08), reflecting a high enterprise valuation relative to free cash flow—which may imply market optimism or subdued cash flows. In 2016, this ratio declined to 30.79, suggesting a more balanced or less overstated valuation versus cash flow. The missing values in 2012 and 2015 correspond with negative or absent FCFF figures, indicating the ratio is not computed during periods of negative cash flow, which limits complete trend analysis but aligns with practical constraints in financial ratio calculation.
Overall, the data depict a company experiencing considerable variability in valuation and operational cash flow performance, characterized by recovery periods and phases of financial stress. The interplay of these metrics suggests a dynamic financial environment, with potential impacts from strategic decisions, market conditions, or macroeconomic factors influencing both valuation and cash flow generation.