Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Valero Energy Corp., 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).
1, 2 See details »
The financial trajectory between 2019 and 2023 is characterized by significant volatility in cash generation, featuring a severe contraction in 2020 followed by a robust recovery that peaked in 2022.
- Net Cash Provided by Operating Activities
- A substantial decline occurred in 2020, with cash flow from operations dropping to 948 million USD from 5,531 million USD in 2019. This was followed by a strong upward trend, reaching a peak of 12,574 million USD in 2022 before moderating to 9,229 million USD in 2023.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrored the operational trend but exhibited greater magnitude in its fluctuations. The metric turned negative in 2020, reaching -1,459 million USD, indicating that capital requirements and other adjustments exceeded operational cash inflows. A sharp recovery ensued, with FCFF climbing to 4,355 million USD in 2021 and peaking at 10,720 million USD in 2022, before settling at 8,612 million USD in 2023.
- Cash Flow Correlation and Capital Allocation
- The relationship between operating cash flow and FCFF reveals consistent capital expenditure patterns. In 2020, the transition to a negative FCFF despite positive operating cash flow suggests that capital investment was maintained or increased despite falling revenues. In contrast, the gap between operating cash flow and FCFF narrowed significantly in 2023, indicating a reduction in capital outflows relative to the previous peak years.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Interest Paid, Net of Tax
Valero Energy Corp., 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
Interest paid in excess of amount capitalized, including interest on finance leases, tax = Interest paid in excess of amount capitalized, including interest on finance leases × EITR
= 562 × 22.30% = 125
3 2023 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 19 × 22.30% = 4
The financial data from 2019 to 2023 indicates a period of volatility in interest expenses and tax obligations, followed by a trend toward stabilization in the most recent fiscal years.
- Interest Paid in Excess of Amount Capitalized
- Net interest payments experienced significant fluctuations, initially decreasing from US$ 361 million in 2019 to US$ 290 million in 2020. A substantial increase occurred in 2021, where payments peaked at US$ 499 million, before moderating to US$ 442 million in 2022 and US$ 437 million in 2023.
- Capitalized Interest
- A general downward trend is observed in capitalized interest, net of tax. From a high of US$ 72 million in 2019, the value declined and remained relatively stagnant between US$ 40 million and US$ 44 million from 2020 through 2022. A sharp contraction occurred in 2023, with the figure dropping to US$ 15 million.
- Effective Income Tax Rate (EITR)
- The effective income tax rate showed high variance during the analyzed period. A notable spike to 44.90% was recorded in 2020, followed by a sharp decline to 16.50% in 2021. For the 2022 and 2023 fiscal years, the rate stabilized, remaining nearly constant at approximately 22.30% to 22.40%.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Enterprise Value to FCFF Ratio, Current
Valero Energy Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 49,032) |
| Free cash flow to the firm (FCFF) | 8,612) |
| Valuation Ratio | |
| EV/FCFF | 5.69 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Chevron Corp. | 25.93 |
| ConocoPhillips | 21.19 |
| Exxon Mobil Corp. | 28.73 |
| EV/FCFF, Sector | |
| Oil, Gas & Consumable Fuels | 19.91 |
| EV/FCFF, Industry | |
| Energy | 19.82 |
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
Valero Energy Corp., 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 | 54,752) | 57,832) | 46,270) | 43,178) | 37,180) | |
| Free cash flow to the firm (FCFF)2 | 8,612) | 10,720) | 4,355) | (1,459) | 3,731) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 6.36 | 5.39 | 10.62 | — | 9.96 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Chevron Corp. | 14.85 | 8.27 | 13.33 | — | — | |
| ConocoPhillips | 15.38 | 7.43 | 10.72 | — | — | |
| Exxon Mobil Corp. | 12.47 | 7.84 | 10.06 | — | — | |
| EV/FCFF, Sector | ||||||
| Oil, Gas & Consumable Fuels | 13.63 | 7.91 | 11.15 | — | — | |
| EV/FCFF, Industry | ||||||
| Energy | 13.96 | 8.54 | 11.54 | — | — | |
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
= 54,752 ÷ 8,612 = 6.36
4 Click competitor name to see calculations.
The financial trajectory between 2019 and 2023 is characterized by an expansion in enterprise value and significant volatility in cash flow generation, leading to a compression of the valuation multiple in the latter part of the period.
- Enterprise Value Trends
- A consistent upward trend in enterprise value was observed from 2019 through 2022, rising from 37,180 million USD to a peak of 57,832 million USD. A slight contraction occurred in 2023, with the value settling at 54,752 million USD, indicating a period of valuation stabilization following several years of growth.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF exhibited high volatility, characterized by a sharp decline into negative territory in 2020 at -1,459 million USD. This was followed by a robust recovery in 2021 and a substantial surge in 2022, reaching a peak of 10,720 million USD. While 2023 saw a decrease to 8,612 million USD, the level remained significantly higher than the 2019 baseline of 3,731 million USD.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio reflects a shift in the relationship between market valuation and cash flow productivity. After reaching 10.62 in 2021, the ratio compressed sharply to 5.39 in 2022 and adjusted to 6.36 in 2023. This downward shift in the multiple suggests that the growth in cash flow generation outpaced the increase in enterprise value, effectively lowering the valuation multiple relative to the firm's capacity to generate free cash flow.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?