Stock Analysis on Net

McKesson Corp. (NYSE:MCK)

This company has been moved to the archive! The financial data has not been updated since October 27, 2016.

Enterprise Value to FCFF (EV/FCFF) 

Microsoft Excel

Free Cash Flow to The Firm (FCFF)

McKesson Corp., FCFF calculation

US$ in millions

Microsoft Excel
12 months ended: Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Net (income) loss attributable to noncontrolling interests 52 67 (5)
Net noncash charges 1,466 2,179 1,370 1,108 1,087 834
Changes in operating assets and liabilities, net of acquisitions (104) (610) 508 37 460 302
Net cash provided by operating activities 3,672 3,112 3,136 2,483 2,950 2,338
Cash paid for interest, net of tax1 243 249 165 144 167 169
Payments for property, plant and equipment (488) (376) (278) (246) (225) (233)
Capitalized software expenditures (189) (169) (141) (160) (178) (155)
Free cash flow to the firm (FCFF) 3,238 2,816 2,882 2,221 2,714 2,119

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the McKesson Corp. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. McKesson Corp. FCFF decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.

Interest Paid, Net of Tax

McKesson Corp., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Earnings before tax (EBT)
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Add: Net income attributable to noncontrolling interest 52 67 (5)
Less: Income (loss) from discontinued operations, net of tax (32) (299) (96) 72
Add: Income tax expense 908 815 742 581 516 505
EBT 3,250 2,657 2,096 1,919 1,919 1,635
Effective Income Tax Rate (EITR)
EITR1 27.94% 30.67% 35.40% 30.28% 26.89% 30.89%
Interest Paid, Net of Tax
Cash paid for interest, before tax 337 359 255 207 228 244
Less: Cash paid for interest, tax2 94 110 90 63 61 75
Cash paid for interest, net of tax 243 249 165 144 167 169

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

1 2016 Calculation
EITR = 100 × Income tax expense ÷ EBT
= 100 × 908 ÷ 3,250 = 27.94%

2 2016 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 337 × 27.94% = 94


Enterprise Value to FCFF Ratio, Current

McKesson Corp., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 40,477
Free cash flow to the firm (FCFF) 3,238
Valuation Ratio
EV/FCFF 12.50
Benchmarks
EV/FCFF, Competitors1
Abbott Laboratories 37.08
Cigna Group 9.72
CVS Health Corp. 9.98
Elevance Health Inc. 10.71
Humana Inc. 7.51
Intuitive Surgical Inc. 250.60
Medtronic PLC 21.45
UnitedHealth Group Inc. 20.91

Based on: 10-K (reporting date: 2016-03-31).

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

McKesson Corp., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 43,051 57,740 49,411 27,034 22,057 21,278
Free cash flow to the firm (FCFF)2 3,238 2,816 2,882 2,221 2,714 2,119
Valuation Ratio
EV/FCFF3 13.30 20.51 17.15 12.17 8.13 10.04
Benchmarks
EV/FCFF, Competitors4
Abbott Laboratories
Cigna Group
CVS Health Corp.
Elevance Health Inc.
Humana Inc.
Intuitive Surgical Inc.
Medtronic PLC
UnitedHealth Group Inc.

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

1 See details »

2 See details »

3 2016 Calculation
EV/FCFF = EV ÷ FCFF
= 43,051 ÷ 3,238 = 13.30

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. McKesson Corp. EV/FCFF ratio increased from 2014 to 2015 but then decreased significantly from 2015 to 2016.