Enterprise Value to FCFF (EV/FCFF)
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Albemarle Corp. pages available for free this week:
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Analysis of Revenues
- Aggregate Accruals
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Free Cash Flow to The Firm (FCFF)
Albemarle Corp., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1, 2 See details »
- Net cash provided by operating activities
- The net cash provided by operating activities exhibited a generally increasing trend from 2018 to 2022, with values progressing from 546,165 thousand USD in 2018 to 1,907,849 thousand USD in 2022. A peak was observed in 2020 at 798,914 thousand USD before a notable decline in 2021 to 344,257 thousand USD. Despite the dip in 2021, the figure rebounded strongly in 2022, achieving the highest level within the period analyzed.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm showed more volatility compared to operating cash flow. Negative FCFF values were recorded in 2018, 2019, and 2021, indicating cash outflows during these years. Specifically, FCFF was -97,333 thousand USD in 2018, declined further to -124,386 thousand USD in 2019, and sharply decreased to -565,873 thousand USD in 2021. Contrastingly, positive FCFF was reported in 2020 at 31,086 thousand USD and significantly increased to 745,588 thousand USD in 2022. This indicates fluctuation in the firm's ability to generate free cash during the period, with 2022 demonstrating a considerable recovery and strong free cash flow generation.
- Overall insights
- The data reflects a robust growth in operational cash inflows over the five-year period, interrupted by a temporary decline in 2021. Meanwhile, the FCFF pattern signals challenges in consistently converting operating cash flow into free cash flow, except for the years 2020 and 2022 when positive and increasing FCFF suggest improved capital allocation or decreased capital expenditures. The sharp rebound in FCFF in 2022 is particularly noteworthy, suggesting improved financial health or efficiency in cash management during that year.
Interest Paid, Net of Tax
Albemarle Corp., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2 2022 Calculation
Cash paid during the year for interest, net of capitalization, tax = Cash paid during the year for interest, net of capitalization × EITR
= × =
3 2022 Calculation
Interest capitalized on significant capital projects, tax = Interest capitalized on significant capital projects × EITR
= × =
The analysis of the annual financial data reveals several noteworthy trends over the five-year period ending in 2022.
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibits a fluctuating pattern across the years. Starting at 18.2% in 2018, it decreased steadily to 14.6% by 2020, indicating a reduction in the tax burden during this interval. However, the rate rose sharply to 22% in 2021, representing a significant increase in tax expense. This upward trend did not persist, as the EITR dropped again to 16.1% in 2022, suggesting some variability in tax strategies or taxable income components during this period.
- Cash Paid During the Year for Interest, Net of Capitalization, Net of Tax
- This metric experienced considerable volatility. From $40,705 thousand in 2018, there was a slight decline to $38,383 thousand in 2019, followed by a sharp increase to $56,688 thousand in 2020. In 2021, the amount paid decreased significantly to $21,633 thousand, before rising dramatically to $77,268 thousand in 2022, the highest level in the observed period. Such fluctuations may reflect changes in debt levels, interest rates, refinancing activities, or cash management policies.
- Interest Capitalized on Significant Capital Projects, Net of Tax
- The amount of interest capitalized increased consistently from $15,787 thousand in 2018 to a peak of $39,000 thousand in 2021. However, it decreased to $26,093 thousand in 2022. This upward trend through 2021 suggests growing investments in capital projects, leading to higher capitalization of interest costs. The decline in 2022 may indicate reduced capital expenditure or changes in project financing.
Overall, the data reflects dynamic shifts in tax rates and interest-related expenses. The variations in effective tax rates and interest payments highlight potential changes in financing strategies and tax planning, while the trends in capitalized interest suggest fluctuating capital project activity over the five-year span.
Enterprise Value to FCFF Ratio, Current
Albemarle Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Linde plc | |
| Sherwin-Williams Co. | |
| EV/FCFF, Sector | |
| Chemicals | |
| EV/FCFF, Industry | |
| Materials | |
Based on: 10-K (reporting date: 2022-12-31).
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
Albemarle Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
| EV/FCFF, Sector | ||||||
| Chemicals | ||||||
| EV/FCFF, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrates a consistent upward trajectory over the five-year period. Starting at approximately 11.08 billion US dollars at the end of 2018, it increased modestly to about 11.70 billion by the end of 2019. A significant jump occurred in 2020, with the EV nearly doubling to over 21.24 billion. This growth trend persisted in subsequent years, reaching nearly 24.59 billion in 2021 and further rising to approximately 33.90 billion by the end of 2022. This pattern indicates substantial expansion in the company's valuation over the examined period.
- Free Cash Flow to the Firm (FCFF)
- The FCFF exhibited notable volatility throughout the period, with values oscillating between negative and positive figures. In 2018 and 2019, the firm experienced negative free cash flow, with amounts of approximately -97.3 million and -124.4 million US dollars, respectively. A reversal occurred in 2020, where FCFF turned positive at about 31.1 million, indicating an improvement in cash generation. However, 2021 saw a sharp decline back into negative territory at approximately -565.9 million, suggesting increased cash outflows or investment activities. In 2022, FCFF rebounded strongly, reaching around 745.6 million, significantly enhancing the firm's cash flow position compared to prior years. This fluctuation suggests periods of both investment and operational challenges followed by recovery.
- EV to FCFF Ratio
- The EV/FCFF ratio is only available for selected years due to missing data in others. In 2020, this ratio is exceptionally high at 683.27, reflecting a disproportionate relationship between enterprise value and free cash flow, likely driven by the relatively low positive FCFF that year. By 2022, the ratio decreased substantially to 45.46, indicating a more balanced valuation relative to cash flow generation, consistent with the significant increase in FCFF during that year. The absence of ratio data for other years limits comprehensive trend analysis for this metric, but the available figures suggest variability linked to FCFF fluctuations.
- Overall Insights
- The data indicate a company undergoing significant valuation growth alongside volatile cash flow performance. Increasing enterprise value suggests strong market confidence or asset acquisition, while the variability in free cash flow points to fluctuating operational efficiency or strategic investment decisions. The extreme EV/FCFF ratio in 2020 suggests a period of low free cash flow relative to valuation, potentially implying overvaluation or transitional business conditions. Improvement in cash flow and a more reasonable ratio by 2022 may represent recovery or enhanced operational performance.