Enterprise Value to FCFF (EV/FCFF)
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- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Free Cash Flow to The Firm (FCFF)
Cigna Group, 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).
- Net cash provided by operating activities
- There was a notable decline from 10,350 million in 2020 to 7,191 million in 2021, representing a significant reduction in operating cash inflow. This decline was followed by a recovery phase, with the figure increasing to 8,656 million in 2022 and further to a peak of 11,813 million in 2023. However, in 2024, the amount decreased again to 10,363 million, still remaining above the levels observed in 2020.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm exhibited a similar trend to operating cash flow. Starting at 10,380 million in 2020, it dropped to 7,037 million in 2021. Subsequently, it increased to 8,354 million in 2022 and reached a high of 11,535 million in 2023. In 2024, FCFF declined to 9,919 million, lower than the peak but above the initial 2020 figure.
- Overall Observations
- The data indicates a dip in both operating cash flows and free cash flow in 2021, suggesting possible operational or market challenges during that period. Recovery and growth are evident through 2022 and 2023, with a return to elevated cash flow levels. The slight decrease in 2024 might signal emerging constraints or a normalization after the strong performance in 2023. Both cash flow metrics closely track each other, reinforcing the consistency of cash generation trends within the firm.
Interest Paid, Net of Tax
Cigna Group, 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
Interest paid, tax = Interest paid × EITR
= × =
The analysis of the financial data reveals distinct trends over the five-year period from 2020 to 2024, focusing on both the effective income tax rate (EITR) and interest paid net of tax.
- Effective Income Tax Rate (EITR)
- The effective income tax rate shows a general downward trend from 21.9% in 2020 to a notably low 2.6% in 2023. This sharp decrease over the first four years indicates a significant reduction in the tax burden during that period. However, in 2024, the EITR rises sharply to 28.3%, surpassing prior years' levels. This sudden increase could suggest a change in tax strategy, regulatory environment, or other financial factors impacting taxation.
- Interest Paid, Net of Tax
- Interest expense net of tax fluctuates over the years with moderate variance. Starting at US$1,124 million in 2020, it decreases to US$1,000 million in 2021 and slightly declines again to US$993 million in 2022. A substantial increase occurs in 2023, rising to US$1,295 million. However, in 2024, interest paid decreases significantly to US$962 million, the lowest within this period. The variability suggests changes in debt levels, interest rates, or financial management decisions affecting cost of debt financing.
In summary, the effective income tax rate exhibits a drastic dip followed by a sharp rebound, while interest paid net of tax shows relative stability with a notable peak in 2023 and a subsequent decline in 2024. These patterns indicate underlying financial dynamics involving taxation and debt costs that warrant further investigation to understand the strategic or economic causes driving these shifts.
Enterprise Value to FCFF Ratio, Current
Cigna Group, current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Abbott Laboratories | |
| CVS Health Corp. | |
| Elevance Health Inc. | |
| Intuitive Surgical Inc. | |
| Medtronic PLC | |
| UnitedHealth Group Inc. | |
| EV/FCFF, Sector | |
| Health Care Equipment & Services | |
| EV/FCFF, Industry | |
| Health Care | |
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
Cigna Group, 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 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Health Care Equipment & Services | ||||||
| EV/FCFF, Industry | ||||||
| Health Care | ||||||
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
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV) Trend
- The enterprise value exhibited a generally upward trajectory from 2020 through 2023, increasing from approximately 95.1 billion US dollars to 120.5 billion US dollars. However, in 2024, the enterprise value declined to roughly 106.9 billion US dollars, indicating a reversal of the previous growth trend observed in the preceding three years.
- Free Cash Flow to the Firm (FCFF) Trend
- The free cash flow to the firm fluctuated over the analyzed period. It started at around 10.4 billion US dollars in 2020, decreased notably to approximately 7.0 billion US dollars in 2021, followed by a gradual recovery to 8.4 billion in 2022. A significant increase occurred in 2023, reaching about 11.5 billion US dollars, but this was succeeded by a decrease in 2024 to approximately 9.9 billion US dollars.
- EV/FCFF Ratio Analysis
- The EV/FCFF ratio reflected volatility throughout the period. Beginning at a relatively low level of 9.16 in 2020, it surged to a peak of 14.17 in 2021, before declining slightly to 13.38 in 2022. The ratio decreased more substantially in 2023 to 10.44, then experienced a marginal increase to 10.77 in 2024. This pattern suggests variations in the market’s valuation of the underlying cash-generating ability of the firm, with a notable peak in 2021 indicating potentially higher valuation multiples during that year.
- Overall Observations
- Overall, the data indicates that the firm experienced growth in enterprise value until 2023, alongside fluctuating free cash flows. The ratio of enterprise value to free cash flow has demonstrated considerable variability, reflecting changing market perceptions and possibly differing operational efficiencies or investment conditions. The decline in enterprise value and free cash flow in 2024, accompanied by a slight uptick in the EV/FCFF ratio, may warrant further investigation into underlying factors influencing both market valuation and cash flow generation during this period.