Enterprise Value to FCFF (EV/FCFF)
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- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
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Free Cash Flow to The Firm (FCFF)
GE Aerospace, 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).
The financial information indicates a substantial increase in cash from operating activities and free cash flow to the firm (FCFF) over the observed period. Both metrics demonstrate positive trends, with significant growth occurring between 2021 and 2025.
- Cash from Operating Activities
- Cash from operating activities experienced a considerable surge from US$888 million in 2021 to US$5,864 million in 2022. While there was a slight decrease to US$5,570 million in 2023, the metric recovered to US$5,817 million in 2024 and continued to grow substantially, reaching US$8,543 million in 2025. This suggests improving operational efficiency and profitability over the period.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrored the trend in cash from operating activities. It increased significantly from US$2,032 million in 2021 to US$5,624 million in 2022. A modest decline was noted in 2023, with FCFF at US$5,009 million. However, FCFF rebounded in 2024 to US$5,746 million and experienced strong growth in 2025, reaching US$8,151 million. The consistent positive values and upward trajectory indicate the firm is generating increasing cash flow available to all investors.
The correlation between cash from operating activities and FCFF is strong, suggesting that changes in operational cash flow are a primary driver of changes in FCFF. The substantial growth in both metrics from 2021 to 2025 indicates a strengthening financial position and increased capacity for investment, debt reduction, or shareholder returns.
Interest Paid, Net of Tax
GE Aerospace, interest paid, net of tax calculation
US$ 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
= × =
A significant decrease in cash paid for interest, net of tax, is observed over the five-year period. Simultaneously, the effective income tax rate exhibits considerable fluctuation. These trends are detailed below.
- Cash Paid for Interest, Net of Tax
- The amount of cash paid for interest, net of tax, demonstrates a consistent downward trajectory. Beginning at US$2,338 million in 2021, it declines to US$1,035 million in 2022, representing a substantial reduction. This decrease continues in subsequent years, reaching US$945 million in 2023, US$847 million in 2024, and further decreasing to US$758 million in 2025. The cumulative reduction from 2021 to 2025 is approximately 67.6%.
- Effective Income Tax Rate
- The effective income tax rate experiences notable volatility. It increases significantly from 7.80% in 2021 to 33.70% in 2022. Following this increase, the rate decreases to 11.40% in 2023 and then gradually rises to 12.60% in 2024 and 14.10% in 2025. The rate in 2025, while higher than in 2021, remains below the peak observed in 2022.
The decreasing trend in net interest paid, coupled with the fluctuating effective income tax rate, suggests a potential shift in the company’s capital structure and/or tax planning strategies. The substantial reduction in interest payments could be attributable to debt reduction, refinancing at lower rates, or a combination of both. The changes in the effective income tax rate may reflect alterations in tax laws, changes in the mix of taxable income, or the utilization of tax credits or deductions.
Further investigation is warranted to understand the underlying drivers of these trends and their implications for the company’s financial performance and future outlook.
Enterprise Value to FCFF Ratio, Current
GE Aerospace, current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Boeing Co. | |
| Caterpillar Inc. | |
| Eaton Corp. plc | |
| Honeywell International Inc. | |
| Lockheed Martin Corp. | |
| RTX Corp. | |
| EV/FCFF, Sector | |
| Capital Goods | |
| EV/FCFF, Industry | |
| Industrials | |
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
GE Aerospace, 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Capital Goods | ||||||
| EV/FCFF, Industry | ||||||
| Industrials | ||||||
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 considerable fluctuation over the observed period. Initially, a significant decrease is noted, followed by a period of relative stabilization with a slight upward trend towards the end of the forecast.
- Enterprise Value
- Enterprise Value demonstrates an initial decline from 114,873 US$ millions in 2021 to 97,249 US$ millions in 2022. Subsequently, a substantial increase is observed, reaching 148,093 US$ millions in 2023, 223,963 US$ millions in 2024, and further increasing to 321,771 US$ millions in 2025. This indicates growing overall company valuation over the latter part of the period.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm (FCFF) increased markedly from 2,032 US$ millions in 2021 to 5,624 US$ millions in 2022. A subsequent decrease to 5,009 US$ millions occurred in 2023, followed by a moderate increase to 5,746 US$ millions in 2024 and a further increase to 8,151 US$ millions in 2025. This suggests improving cash generation capabilities, particularly in the later years.
- EV/FCFF Ratio
- The EV/FCFF ratio decreased substantially from 56.53 in 2021 to 17.29 in 2022, largely driven by the increase in FCFF. The ratio then increased to 29.56 in 2023, 38.98 in 2024, and 39.48 in 2025. While the ratio decreased significantly in 2022, the subsequent increases suggest that the enterprise value is growing at a faster rate than free cash flow to the firm in the later forecast period. The stabilization around 39 in the final two years suggests a potential valuation equilibrium, given the projected growth rates of both EV and FCFF.
The observed trends indicate a period of initial undervaluation relative to cash flow, followed by increasing valuation as the enterprise value grows more rapidly than FCFF. The ratio’s movement suggests a changing investor perception of the firm’s future prospects and risk profile.