Intrinsic value of Alimentation Couche-Tard Inc. Class B Su - ATD-B

Previous Close

$60.17

  Intrinsic Value

$59.86

stock screener

  Rating & Target

hold

-1%

Previous close

$60.17

 
Intrinsic value

$59.86

 
Up/down potential

-1%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ATD-B stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 34.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.01
  11.00
  10.40
  9.86
  9.37
  8.94
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.53
  6.37
  6.24
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
Revenue, $m
  51,212
  56,845
  62,757
  68,945
  75,408
  82,147
  89,165
  96,466
  104,058
  111,948
  120,148
  128,669
  137,525
  146,732
  156,306
  166,267
  176,634
  187,430
  198,677
  210,400
  222,625
  235,380
  248,695
  262,599
  277,125
  292,308
  308,182
  324,786
  342,159
  360,341
  379,376
Variable operating expenses, $m
 
  54,025
  59,610
  65,456
  71,561
  77,928
  84,558
  91,455
  98,627
  106,082
  113,828
  121,557
  129,924
  138,622
  147,667
  157,077
  166,871
  177,070
  187,695
  198,771
  210,320
  222,370
  234,949
  248,084
  261,808
  276,151
  291,148
  306,834
  323,247
  340,424
  358,407
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  48,918
  54,025
  59,610
  65,456
  71,561
  77,928
  84,558
  91,455
  98,627
  106,082
  113,828
  121,557
  129,924
  138,622
  147,667
  157,077
  166,871
  177,070
  187,695
  198,771
  210,320
  222,370
  234,949
  248,084
  261,808
  276,151
  291,148
  306,834
  323,247
  340,424
  358,407
Operating income, $m
  2,294
  2,821
  3,148
  3,490
  3,847
  4,219
  4,607
  5,011
  5,430
  5,866
  6,320
  7,112
  7,601
  8,110
  8,639
  9,190
  9,763
  10,360
  10,981
  11,629
  12,305
  13,010
  13,746
  14,514
  15,317
  16,156
  17,034
  17,952
  18,912
  19,917
  20,969
EBITDA, $m
  3,179
  3,918
  4,325
  4,752
  5,197
  5,662
  6,145
  6,649
  7,172
  7,716
  8,281
  8,868
  9,478
  10,113
  10,773
  11,459
  12,174
  12,918
  13,693
  14,501
  15,343
  16,223
  17,140
  18,098
  19,100
  20,146
  21,240
  22,384
  23,582
  24,835
  26,147
Interest expense (income), $m
  138
  157
  198
  240
  285
  332
  380
  431
  484
  538
  595
  655
  716
  780
  847
  916
  988
  1,062
  1,140
  1,222
  1,306
  1,394
  1,487
  1,583
  1,683
  1,788
  1,898
  2,012
  2,132
  2,257
  2,389
Earnings before tax, $m
  2,151
  2,664
  2,950
  3,249
  3,562
  3,888
  4,227
  4,580
  4,947
  5,328
  5,724
  6,457
  6,885
  7,330
  7,793
  8,274
  8,775
  9,297
  9,841
  10,408
  10,999
  11,615
  12,259
  12,932
  13,634
  14,368
  15,136
  15,939
  16,780
  17,659
  18,580
Tax expense, $m
  518
  719
  796
  877
  962
  1,050
  1,141
  1,237
  1,336
  1,439
  1,546
  1,743
  1,859
  1,979
  2,104
  2,234
  2,369
  2,510
  2,657
  2,810
  2,970
  3,136
  3,310
  3,492
  3,681
  3,879
  4,087
  4,304
  4,531
  4,768
  5,017
Net income, $m
  1,633
  1,945
  2,153
  2,372
  2,600
  2,838
  3,086
  3,343
  3,611
  3,889
  4,179
  4,714
  5,026
  5,351
  5,689
  6,040
  6,406
  6,787
  7,184
  7,598
  8,029
  8,479
  8,949
  9,440
  9,953
  10,489
  11,049
  11,636
  12,249
  12,891
  13,563

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  872
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  19,146
  20,287
  22,397
  24,606
  26,912
  29,317
  31,822
  34,428
  37,137
  39,953
  42,879
  45,920
  49,081
  52,367
  55,784
  59,339
  63,039
  66,891
  70,905
  75,089
  79,452
  84,004
  88,756
  93,718
  98,903
  104,321
  109,987
  115,912
  122,112
  128,601
  135,395
Adjusted assets (=assets-cash), $m
  18,274
  20,287
  22,397
  24,606
  26,912
  29,317
  31,822
  34,428
  37,137
  39,953
  42,879
  45,920
  49,081
  52,367
  55,784
  59,339
  63,039
  66,891
  70,905
  75,089
  79,452
  84,004
  88,756
  93,718
  98,903
  104,321
  109,987
  115,912
  122,112
  128,601
  135,395
Revenue / Adjusted assets
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
  2.802
Average production assets, $m
  10,327
  11,483
  12,677
  13,927
  15,232
  16,594
  18,011
  19,486
  21,020
  22,614
  24,270
  25,991
  27,780
  29,640
  31,574
  33,586
  35,680
  37,861
  40,133
  42,501
  44,970
  47,547
  50,236
  53,045
  55,979
  59,046
  62,253
  65,607
  69,116
  72,789
  76,634
Working capital, $m
  -104
  -568
  -628
  -689
  -754
  -821
  -892
  -965
  -1,041
  -1,119
  -1,201
  -1,287
  -1,375
  -1,467
  -1,563
  -1,663
  -1,766
  -1,874
  -1,987
  -2,104
  -2,226
  -2,354
  -2,487
  -2,626
  -2,771
  -2,923
  -3,082
  -3,248
  -3,422
  -3,603
  -3,794
Total debt, $m
  4,945
  5,644
  6,864
  8,140
  9,473
  10,863
  12,311
  13,817
  15,383
  17,011
  18,702
  20,460
  22,287
  24,186
  26,161
  28,216
  30,354
  32,581
  34,901
  37,320
  39,841
  42,473
  45,219
  48,087
  51,084
  54,216
  57,490
  60,915
  64,499
  68,250
  72,176
Total liabilities, $m
  11,027
  11,726
  12,946
  14,222
  15,555
  16,945
  18,393
  19,899
  21,465
  23,093
  24,784
  26,542
  28,369
  30,268
  32,243
  34,298
  36,436
  38,663
  40,983
  43,402
  45,923
  48,555
  51,301
  54,169
  57,166
  60,298
  63,572
  66,997
  70,581
  74,332
  78,258
Total equity, $m
  8,119
  8,561
  9,452
  10,384
  11,357
  12,372
  13,429
  14,528
  15,672
  16,860
  18,095
  19,378
  20,712
  22,099
  23,541
  25,041
  26,602
  28,228
  29,922
  31,688
  33,529
  35,450
  37,455
  39,549
  41,737
  44,024
  46,414
  48,915
  51,531
  54,270
  57,137
Total liabilities and equity, $m
  19,146
  20,287
  22,398
  24,606
  26,912
  29,317
  31,822
  34,427
  37,137
  39,953
  42,879
  45,920
  49,081
  52,367
  55,784
  59,339
  63,038
  66,891
  70,905
  75,090
  79,452
  84,005
  88,756
  93,718
  98,903
  104,322
  109,986
  115,912
  122,112
  128,602
  135,395
Debt-to-equity ratio
  0.609
  0.660
  0.730
  0.780
  0.830
  0.880
  0.920
  0.950
  0.980
  1.010
  1.030
  1.060
  1.080
  1.090
  1.110
  1.130
  1.140
  1.150
  1.170
  1.180
  1.190
  1.200
  1.210
  1.220
  1.220
  1.230
  1.240
  1.250
  1.250
  1.260
  1.260
Adjusted equity ratio
  0.397
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,633
  1,945
  2,153
  2,372
  2,600
  2,838
  3,086
  3,343
  3,611
  3,889
  4,179
  4,714
  5,026
  5,351
  5,689
  6,040
  6,406
  6,787
  7,184
  7,598
  8,029
  8,479
  8,949
  9,440
  9,953
  10,489
  11,049
  11,636
  12,249
  12,891
  13,563
Depreciation, amort., depletion, $m
  885
  1,097
  1,178
  1,262
  1,350
  1,442
  1,538
  1,638
  1,741
  1,849
  1,961
  1,756
  1,877
  2,003
  2,133
  2,269
  2,411
  2,558
  2,712
  2,872
  3,039
  3,213
  3,394
  3,584
  3,782
  3,990
  4,206
  4,433
  4,670
  4,918
  5,178
Funds from operations, $m
  2,624
  3,042
  3,331
  3,634
  3,951
  4,280
  4,624
  4,981
  5,353
  5,739
  6,140
  6,470
  6,903
  7,354
  7,822
  8,310
  8,817
  9,345
  9,896
  10,469
  11,068
  11,692
  12,344
  13,024
  13,735
  14,479
  15,256
  16,069
  16,919
  17,809
  18,741
Change in working capital, $m
  22
  -56
  -59
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -108
  -112
  -117
  -122
  -128
  -133
  -139
  -145
  -152
  -159
  -166
  -174
  -182
  -190
Cash from operations, $m
  2,602
  3,098
  3,390
  3,696
  4,015
  4,348
  4,694
  5,054
  5,428
  5,817
  6,222
  6,555
  6,992
  7,446
  7,918
  8,409
  8,921
  9,453
  10,008
  10,586
  11,190
  11,819
  12,477
  13,163
  13,881
  14,630
  15,415
  16,235
  17,093
  17,991
  18,932
Maintenance CAPEX, $m
  0
  -698
  -776
  -857
  -941
  -1,029
  -1,121
  -1,217
  -1,317
  -1,420
  -1,528
  -1,640
  -1,756
  -1,877
  -2,003
  -2,133
  -2,269
  -2,411
  -2,558
  -2,712
  -2,872
  -3,039
  -3,213
  -3,394
  -3,584
  -3,782
  -3,990
  -4,206
  -4,433
  -4,670
  -4,918
New CAPEX, $m
  -1,343
  -1,156
  -1,194
  -1,250
  -1,306
  -1,361
  -1,418
  -1,475
  -1,534
  -1,594
  -1,656
  -1,721
  -1,789
  -1,860
  -1,934
  -2,012
  -2,094
  -2,181
  -2,272
  -2,368
  -2,470
  -2,577
  -2,689
  -2,809
  -2,934
  -3,067
  -3,207
  -3,354
  -3,509
  -3,673
  -3,845
Cash from investing activities, $m
  -3,226
  -1,854
  -1,970
  -2,107
  -2,247
  -2,390
  -2,539
  -2,692
  -2,851
  -3,014
  -3,184
  -3,361
  -3,545
  -3,737
  -3,937
  -4,145
  -4,363
  -4,592
  -4,830
  -5,080
  -5,342
  -5,616
  -5,902
  -6,203
  -6,518
  -6,849
  -7,197
  -7,560
  -7,942
  -8,343
  -8,763
Free cash flow, $m
  -624
  1,244
  1,420
  1,590
  1,769
  1,957
  2,155
  2,362
  2,578
  2,803
  3,037
  3,194
  3,447
  3,709
  3,981
  4,264
  4,557
  4,862
  5,178
  5,507
  5,849
  6,204
  6,575
  6,960
  7,362
  7,781
  8,218
  8,674
  9,151
  9,648
  10,169
Issuance/(repayment) of debt, $m
  877
  1,160
  1,220
  1,276
  1,333
  1,390
  1,448
  1,506
  1,566
  1,628
  1,691
  1,758
  1,827
  1,899
  1,975
  2,055
  2,139
  2,227
  2,320
  2,418
  2,522
  2,631
  2,746
  2,868
  2,997
  3,132
  3,275
  3,425
  3,584
  3,751
  3,927
Issuance/(repurchase) of shares, $m
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  869
  1,160
  1,220
  1,276
  1,333
  1,390
  1,448
  1,506
  1,566
  1,628
  1,691
  1,758
  1,827
  1,899
  1,975
  2,055
  2,139
  2,227
  2,320
  2,418
  2,522
  2,631
  2,746
  2,868
  2,997
  3,132
  3,275
  3,425
  3,584
  3,751
  3,927
Total cash flow (excl. dividends), $m
  248
  2,405
  2,640
  2,866
  3,102
  3,347
  3,603
  3,868
  4,144
  4,431
  4,729
  4,952
  5,274
  5,608
  5,956
  6,318
  6,696
  7,088
  7,498
  7,925
  8,371
  8,836
  9,321
  9,828
  10,359
  10,913
  11,493
  12,100
  12,734
  13,399
  14,095
Retained Cash Flow (-), $m
  -1,308
  -853
  -890
  -932
  -973
  -1,015
  -1,057
  -1,100
  -1,143
  -1,188
  -1,235
  -1,283
  -1,334
  -1,387
  -1,442
  -1,500
  -1,561
  -1,626
  -1,694
  -1,766
  -1,841
  -1,921
  -2,005
  -2,094
  -2,188
  -2,287
  -2,391
  -2,501
  -2,616
  -2,738
  -2,867
Prev. year cash balance distribution, $m
 
  411
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,962
  1,749
  1,934
  2,128
  2,332
  2,546
  2,769
  3,001
  3,243
  3,494
  3,668
  3,940
  4,222
  4,514
  4,818
  5,134
  5,463
  5,804
  6,159
  6,529
  6,915
  7,316
  7,734
  8,171
  8,626
  9,102
  9,599
  10,118
  10,661
  11,228
Discount rate, %
 
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
PV of cash for distribution, $m
 
  1,880
  1,598
  1,678
  1,745
  1,798
  1,834
  1,854
  1,856
  1,840
  1,805
  1,713
  1,649
  1,571
  1,479
  1,376
  1,266
  1,149
  1,030
  910
  793
  680
  575
  478
  390
  313
  246
  190
  143
  106
  76
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Alimentation Couche Tard Inc is a Canada-based company, which is engaged in the convenience store industry. It focuses on the sale of goods for immediate consumption, road transportation fuel and other products through stores and franchise operations. It operates its convenience store and road transportation fuel retailing chain under several banners, including Circle K, Couche-Tard, Mac's, Kangaroo Express, Statoil, Ingo, Topaz and Re.Store. The Company focuses on various categories, including merchandise and services, road transportation fuel and other. The Company holds contracts with franchisees and independent operators. Its merchandise sales primarily consist of the sale of tobacco products, grocery items, candy and snacks, beverages, beer, wine and fresh food offerings, including quick service restaurants. Its merchandise sales in Europe also include the sale of merchandise and goods to certain independent operators and franchisees made from the Company's distribution center.

FINANCIAL RATIOS  of  Alimentation Couche-Tard Inc. Class B Su (ATD-B)

Valuation Ratios
P/E Ratio 20.9
Price to Sales 0.7
Price to Book 4.2
Price to Tangible Book
Price to Cash Flow 13.1
Price to Free Cash Flow 27.2
Growth Rates
Sales Growth Rate 11%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 9.7%
Cap. Spend. - 3 Yr. Gr. Rate 13.4%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 55.2%
Total Debt to Equity 60.9%
Interest Coverage 17
Management Effectiveness
Return On Assets 9.7%
Ret/ On Assets - 3 Yr. Avg. 9.9%
Return On Total Capital 13.6%
Ret/ On T. Cap. - 3 Yr. Avg. 14.3%
Return On Equity 21.9%
Return On Equity - 3 Yr. Avg. 24.1%
Asset Turnover 2.9
Profitability Ratios
Gross Margin 17.1%
Gross Margin - 3 Yr. Avg. 16.7%
EBITDA Margin 6.2%
EBITDA Margin - 3 Yr. Avg. 6%
Operating Margin 4.5%
Oper. Margin - 3 Yr. Avg. 4.4%
Pre-Tax Margin 4.2%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 3.2%
Net Profit Margin - 3 Yr. Avg. 3.1%
Effective Tax Rate 24.1%
Eff/ Tax Rate - 3 Yr. Avg. 24.6%
Payout Ratio 12%

ATD-B stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATD-B stock intrinsic value calculation we used $51212 million for the last fiscal year's total revenue generated by Alimentation Couche-Tard Inc. Class B Su. The default revenue input number comes from 2017 income statement of Alimentation Couche-Tard Inc. Class B Su. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ATD-B stock valuation model: a) initial revenue growth rate of 11% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.4%, whose default value for ATD-B is calculated based on our internal credit rating of Alimentation Couche-Tard Inc. Class B Su, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Alimentation Couche-Tard Inc. Class B Su.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ATD-B stock the variable cost ratio is equal to 95.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ATD-B stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Alimentation Couche-Tard Inc. Class B Su.

Corporate tax rate of 27% is the nominal tax rate for Alimentation Couche-Tard Inc. Class B Su. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ATD-B stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ATD-B are equal to 20.2%.

Life of production assets of 14.8 years is the average useful life of capital assets used in Alimentation Couche-Tard Inc. Class B Su operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ATD-B is equal to -1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $8119 million for Alimentation Couche-Tard Inc. Class B Su - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 570.882 million for Alimentation Couche-Tard Inc. Class B Su is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Alimentation Couche-Tard Inc. Class B Su at the current share price and the inputted number of shares is $34.3 billion.

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Financial statements of ATD-B
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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