Enterprise Value to FCFF (EV/FCFF)
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DuPont de Nemours Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
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Free Cash Flow to The Firm (FCFF)
DuPont de Nemours Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The financial data presents the cash flow components of the company over a five-year period from 2015 to 2019. Two key metrics are considered: "Cash provided by operating activities" and "Free cash flow to the firm (FCFF)", both expressed in millions of US dollars.
- Cash Provided by Operating Activities
- This metric shows a fluctuating trend during the analyzed period. It starts at a high level of 7,516 million USD in 2015 and then declines in 2016 to 5,478 million USD, indicating a reduction in operating cash inflows. In 2017, there is a significant rebound to 8,695 million USD, representing the highest operating cash inflow in the five-year span. This peak is followed by a sharp decrease in 2018 to 4,731 million USD, and further decline in 2019 to just 1,409 million USD, suggesting a marked weakening of operating cash generation capabilities toward the end of the period.
- Free Cash Flow to the Firm (FCFF)
- FCFF follows a similar pattern of volatility across the years. It starts at 4,658 million USD in 2015 and decreases to 2,751 million USD in 2016, reflecting a significant contraction in free cash flow. A strong recovery occurs in 2017 with FCFF rising to 5,431 million USD, surpassing the levels seen in 2015. However, this positive momentum is not sustained, as FCFF falls sharply to 2,294 million USD in 2018 and turns negative in 2019, reaching -322 million USD. The negative free cash flow in the final year indicates that the firm’s operations and investments consumed more cash than they generated, which may raise concerns about liquidity and cash management.
Overall, the company displays notable volatility in its cash flow generation, with peak performance in 2017 followed by a consistent and substantial decline through 2019. The decline in both operating cash flows and FCFF toward the end of the period suggests potential operational challenges or increased capital expenditures that are not being fully offset by operating cash inflows.
Interest Paid, Net of Tax
DuPont de Nemours Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
2 2019 Calculation
Cash paid during the year for interest, net of amounts capitalized, tax = Cash paid during the year for interest, net of amounts capitalized × EITR
= × =
- Effective income tax rate (EITR)
- The effective income tax rate exhibits significant fluctuations over the five-year period. It starts at 21.6% in 2015, drops dramatically to 0.2% in 2016, then spikes sharply to 51% in 2017. Following 2017, the rate decreases to 27.2% in 2018 and further declines to 21% in 2019. This volatility suggests unusual tax events or adjustments influencing the rate, particularly in 2016 and 2017.
- Cash paid during the year for interest, net of amounts capitalized, net of tax
- Cash outflows for interest start at $891 million in 2015 and increase to $1,190 million in 2016, indicating a rise in interest expense or debt levels. In 2017, the amount decreases significantly to $614 million, followed by a sharp increase to $1,540 million in 2018, which is the peak within the period. In 2019, the figure decreases again to $766 million. These fluctuations indicate variability in debt servicing costs, potentially driven by changing debt structures, interest rates, or capitalization policies.
Enterprise Value to FCFF Ratio, Current
DuPont de Nemours Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Linde plc | |
| Sherwin-Williams Co. | |
Based on: 10-K (reporting date: 2019-12-31).
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
DuPont de Nemours Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
3 2019 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a fluctuating trend over the analyzed period. Initially, it increased significantly from 30,575 million US dollars in 2015 to a peak of 77,054 million US dollars in 2017. After this peak, the value declined to 67,539 million US dollars in 2018 and further decreased to 55,738 million US dollars by the end of 2019.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm showed considerable volatility. Starting at 4,658 million US dollars in 2015, it sharply decreased to 2,751 million US dollars in 2016, then recovered to 5,431 million US dollars in 2017. Subsequently, a substantial decline was observed, with FCFF dropping to 2,294 million US dollars in 2018 and turning negative to -322 million US dollars in 2019. This indicates weakening cash flow generation capacity toward the end of the period.
- EV/FCFF Ratio
- The EV to FCFF ratio showed an increasing trend through 2018, starting at a relatively low 6.56 in 2015, rising sharply to 14.68 in 2016, and stabilizing near 14.19 in 2017. A significant spike occurred in 2018, with the ratio reaching 29.44, reflecting a much higher enterprise value relative to the free cash flow available. Data for 2019 is missing, likely due to the negative FCFF, which complicates meaningful ratio calculation.
- Overall Analysis
- The data reflects a period of growth in enterprise valuation through 2017, accompanied by fluctuating but generally positive cash flow, followed by a notable decline in both valuation and cash flow generation from 2018 onward. The surge in the EV/FCFF ratio in 2018 suggests increasing valuation pressures despite declining free cash flow, possibly signaling market expectations not supported by cash flow fundamentals. The negative free cash flow in 2019 is a potential red flag, indicating operational or financial challenges that may warrant further investigation.