Enterprise Value to FCFF (EV/FCFF)
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
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Free Cash Flow to The Firm (FCFF)
AT&T Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1, 2 See details »
The financial information reveals trends in net cash provided by operating activities and free cash flow to the firm (FCFF) over a five-year period. Net cash from operations demonstrates some volatility, while FCFF exhibits a more pronounced pattern of fluctuation.
- Net Cash from Operating Activities
- Net cash provided by operating activities decreased from US$41,957 million in 2021 to US$35,812 million in 2022, representing a decline of approximately 17%. A subsequent increase to US$38,314 million was observed in 2023. This upward trend continued into 2024, reaching US$38,771 million, and further increased to US$40,284 million in 2025. Overall, while initial decline was noted, operating cash flow generally trended upwards from 2023 through 2025.
- Free Cash Flow to the Firm (FCFF)
- FCFF experienced a significant decrease from US$32,306 million in 2021 to US$23,348 million in 2022, a reduction of roughly 28%. FCFF then increased to US$26,949 million in 2023, but decreased again in 2024 to US$24,008 million. A modest increase to US$25,371 million was recorded in 2025. The FCFF figures indicate a pattern of fluctuation, with 2025 levels remaining below the 2021 peak. The volatility suggests potential shifts in capital expenditure or other non-operating cash flows impacting the firm’s available cash.
The divergence between the trends in operating cash flow and FCFF suggests that factors beyond core operations, such as capital expenditures or changes in working capital, are significantly influencing the amount of cash available to the firm. While operating cash flow has shown recent improvement, FCFF has not followed the same trajectory, indicating a need for further investigation into the drivers of this difference.
Interest Paid, Net of Tax
AT&T Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
2 2025 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= × =
3 2025 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
The period under review demonstrates fluctuations in both interest expense, net of tax effects, and the effective income tax rate. Cash paid for interest, net of tax, generally decreased from 2021 to 2024, before increasing in 2025. Capitalized interest, net of tax, exhibited a more pronounced decline over the same timeframe.
- Cash Paid for Interest, Net of Tax
- Cash paid for interest, net of tax, remained relatively stable between 2021 and 2022, at approximately $6.1 billion. A decrease was observed in 2023, falling to $5.8 billion, and continued downward in 2024 to $5.235 billion. This represents the lowest value within the observed period. However, 2025 saw an increase to $5.737 billion, suggesting a potential stabilization or reversal of the prior trend.
- Capitalized Interest, Net of Tax
- Capitalized interest, net of tax, began at $760 million in 2021 and increased to $1,022 million in 2022. Subsequently, a consistent decline was noted, reaching $688 million in 2023, $265 million in 2024, and further decreasing to $191 million in 2025. This indicates a reduction in projects or activities where interest is eligible for capitalization.
- Effective Income Tax Rate (EITR)
- The effective income tax rate experienced moderate increases from 20.30% in 2021 to 21.30% in 2023. A significant jump occurred in 2024, reaching 26.60%. This was followed by a substantial decrease in 2025, falling to 13.40%. These fluctuations in the EITR likely influence the net-of-tax interest expense figures, though the precise impact requires further investigation into underlying tax provisions and adjustments.
The interplay between the decreasing capitalized interest and the fluctuating EITR, alongside the generally declining, then slightly increasing, cash paid for interest, suggests a complex dynamic in the company’s financing and investment activities. The significant change in the EITR in 2024 and 2025 warrants further scrutiny to understand the drivers behind these shifts and their potential implications for future financial performance.
Enterprise Value to FCFF Ratio, Current
AT&T Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| T-Mobile US Inc. | |
| Verizon Communications Inc. | |
| EV/FCFF, Sector | |
| Telecommunication Services | |
| EV/FCFF, Industry | |
| Communication Services | |
Based on: 10-K (reporting date: 2025-12-31).
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
AT&T Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Telecommunication Services | ||||||
| EV/FCFF, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits fluctuations over the five-year period. Initial values demonstrate a relatively high ratio, followed by a period of decline, and then a subsequent increase. A detailed examination of the ratio’s behavior is presented below.
- Enterprise Value (EV)
- Enterprise Value decreased from US$344,709 million in 2021 to US$278,467 million in 2022, representing a substantial decline. This was followed by a further decrease to US$264,921 million in 2023. However, EV then increased to US$316,146 million in 2024 and continued to rise slightly to US$323,610 million in 2025.
- Free Cash Flow to the Firm (FCFF)
- Free Cash Flow to the Firm experienced a decrease from US$32,306 million in 2021 to US$23,348 million in 2022. FCFF then recovered to US$26,949 million in 2023, before decreasing again to US$24,008 million in 2024. A modest increase to US$25,371 million was observed in 2025.
- EV/FCFF Ratio
- The EV/FCFF ratio began at 10.67 in 2021. It increased to 11.93 in 2022, coinciding with the decrease in FCFF and the larger decrease in EV. The ratio then decreased to 9.83 in 2023, driven by the increase in FCFF and the continued decrease in EV. In 2024, the ratio rose significantly to 13.17, primarily due to the increase in EV and the decrease in FCFF. The ratio remained elevated in 2025 at 12.76, indicating a continued higher valuation relative to free cash flow generation.
The observed fluctuations suggest a dynamic relationship between the company’s enterprise value and its free cash flow generation. The increase in the EV/FCFF ratio in the later years of the period indicates that the market valuation is growing at a faster rate than the firm’s ability to generate free cash flow. The initial decline in the ratio, followed by the subsequent increase, warrants further investigation into the underlying drivers of both enterprise value and free cash flow.