Enterprise Value to FCFF (EV/FCFF)
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Hilton Worldwide Holdings Inc. pages available for free this week:
- Cash Flow Statement
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2013
- Price to Operating Profit (P/OP) since 2013
- Aggregate Accruals
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Free Cash Flow to The Firm (FCFF)
Hilton Worldwide Holdings Inc., FCFF calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
- Net cash provided by operating activities
- The net cash generated from operating activities experienced significant volatility over the five-year period. It started at a relatively high value of 1,384 million USD in 2019 but declined sharply to 708 million USD in 2020, reflecting a substantial reduction possibly due to adverse economic conditions or operational challenges. The downward trend continued in 2021, reaching a low point of 109 million USD, indicating further operational cash flow constraints during that year. However, there was a pronounced recovery in 2022, with operating cash flow soaring to 1,681 million USD, surpassing pre-2020 levels. This positive momentum continued into 2023, with the figure further increasing to 1,946 million USD, suggesting improved operational efficiency and stronger cash generation capacity.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm similarly showed considerable fluctuations in the analyzed timeframe. Beginning at 1,374 million USD in 2019, FCFF decreased to 933 million USD in 2020, marking a significant contraction but a less severe decline compared to operating cash flow. In 2021, FCFF dropped sharply again to 274 million USD, reflecting constrained cash resources possibly due to increased capital expenditures or reduced operating cash flow. A robust recovery ensued in 2022, with FCFF reaching 1,836 million USD, exceeding the levels recorded in 2019. This upward trend persisted in 2023, with FCFF rising to 2,010 million USD, indicating enhanced free cash inflows available for debt reduction, dividends, or reinvestment in the firm's operations.
Interest Paid, Net of Tax
Hilton Worldwide Holdings Inc., interest paid, net of tax calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
2 2023 Calculation
Cash interest paid, tax = Cash interest paid × EITR
= × =
The analysis of the annual financial indicators reveals several key trends over the five-year period ending December 31, 2023.
- Effective Income Tax Rate (EITR)
- The effective income tax rate displayed some fluctuations throughout the five years. It decreased from 28.78% in 2019 to a lower point of 22.08% in 2020, suggesting a possible reduction in tax obligations during that year, potentially influenced by fiscal policies or changes in tax strategies. However, from 2020 onwards, the rate steadily increased, reaching 27.32% in 2021 and remaining relatively stable at 27.51% in 2022. By 2023, there was a significant increase to 31.97%, indicating a notable rise in tax expense or a reduction in tax benefits. This upward trend in the final year points toward either higher taxable income or changes in the tax environment.
- Cash Interest Paid, Net of Tax
- The cash interest paid, net of tax, showed variability over the same period. The amount started at $256 million in 2019, increased significantly to $337 million in 2020, indicating potentially higher debt levels or increased interest rates. It then decreased to $261 million in 2021, suggesting either repayment of debt or refinancing at lower interest rates. Subsequently, there was a modest increase to $278 million in 2022, followed by another rise to $335 million in 2023. The increase in the last year again suggests higher interest expenses, possibly due to increased borrowings or rising interest costs, which may impact net profitability and cash flow.
Enterprise Value to FCFF Ratio, Current
Hilton Worldwide Holdings Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Airbnb Inc. | |
| Booking Holdings Inc. | |
| Chipotle Mexican Grill Inc. | |
| McDonald’s Corp. | |
| Starbucks Corp. | |
| EV/FCFF, Sector | |
| Consumer Services | |
| EV/FCFF, Industry | |
| Consumer Discretionary | |
Based on: 10-K (reporting date: 2023-12-31).
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
Hilton Worldwide Holdings Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Consumer Services | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a fluctuating pattern over the five-year period. Starting at $38,708 million in 2019, it slightly decreased to $38,162 million in 2020, which may reflect market or operational impacts during that period. A significant increase to $50,897 million occurred in 2021, followed by a decline to $47,646 million in 2022. Subsequently, it rose again in 2023 to $57,765 million, reaching the highest level in the period under review. Overall, the trend suggests growing market valuation pressures or expansion activities especially post-2020 despite interim volatility.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm showed considerable variability across the years. After an initial decrease from $1,374 million in 2019 to $933 million in 2020, the figure dropped sharply to $274 million in 2021, indicating potential operational or liquidity challenges during that year. However, a strong recovery was observed in 2022, with FCFF rising to $1,836 million, and it continued to improve in 2023, reaching $2,010 million, the highest value recorded. This rebound suggests improved operational efficiency or enhanced cash generation capacity in the latter years.
- EV/FCFF Ratio
- The EV/FCFF ratio highlights the relative valuation against free cash flow generation and exhibited substantial volatility. The ratio increased from 28.16 in 2019 to a peak of 40.89 in 2020, before reaching an unusually high level of 185.81 in 2021, primarily due to the steep decline in FCFF that year. In 2022, the ratio sharply declined to 25.96, reflecting the strong recovery in free cash flow, and it slightly increased to 28.74 in 2023. This pattern indicates that valuation multiples were stretched in 2021, potentially due to reduced cash flow, and normalized in subsequent years as cash generation improved.