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

Previous Close

$65.99

  Intrinsic Value

$74.89

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  Rating & Target

hold

+13%

Previous close

$65.99

 
Intrinsic value

$74.89

 
Up/down potential

+13%

 
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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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
  71,562
  77,928
  84,558
  91,456
  98,628
  106,083
  113,830
  121,560
  129,926
  138,624
  147,670
  157,080
  166,875
  177,074
  187,699
  198,775
  210,324
  222,375
  234,954
  248,090
  261,813
  276,157
  291,154
  306,841
  323,253
  340,431
  358,415
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
  71,562
  77,928
  84,558
  91,456
  98,628
  106,083
  113,830
  121,560
  129,926
  138,624
  147,670
  157,080
  166,875
  177,074
  187,699
  198,775
  210,324
  222,375
  234,954
  248,090
  261,813
  276,157
  291,154
  306,841
  323,253
  340,431
  358,415
Operating income, $m
  2,294
  2,821
  3,147
  3,489
  3,846
  4,219
  4,606
  5,010
  5,429
  5,865
  6,318
  7,109
  7,599
  8,107
  8,636
  9,187
  9,759
  10,356
  10,977
  11,625
  12,301
  13,005
  13,741
  14,509
  15,312
  16,151
  17,028
  17,945
  18,905
  19,910
  20,961
EBITDA, $m
  3,179
  3,784
  4,178
  4,590
  5,020
  5,469
  5,936
  6,422
  6,927
  7,453
  7,998
  8,566
  9,155
  9,768
  10,405
  11,069
  11,759
  12,477
  13,226
  14,007
  14,820
  15,670
  16,556
  17,481
  18,449
  19,459
  20,516
  21,621
  22,778
  23,988
  25,256
Interest expense (income), $m
  138
  157
  198
  241
  286
  333
  381
  432
  485
  540
  597
  657
  718
  782
  849
  918
  991
  1,066
  1,144
  1,225
  1,310
  1,399
  1,491
  1,587
  1,688
  1,793
  1,903
  2,018
  2,138
  2,264
  2,396
Earnings before tax, $m
  2,151
  2,663
  2,949
  3,248
  3,560
  3,886
  4,225
  4,577
  4,944
  5,325
  5,721
  6,453
  6,880
  7,325
  7,787
  8,268
  8,769
  9,290
  9,834
  10,400
  10,991
  11,607
  12,250
  12,922
  13,624
  14,358
  15,125
  15,927
  16,767
  17,646
  18,566
Tax expense, $m
  518
  719
  796
  877
  961
  1,049
  1,141
  1,236
  1,335
  1,438
  1,545
  1,742
  1,858
  1,978
  2,103
  2,232
  2,368
  2,508
  2,655
  2,808
  2,967
  3,134
  3,308
  3,489
  3,678
  3,877
  4,084
  4,300
  4,527
  4,764
  5,013
Net income, $m
  1,633
  1,944
  2,153
  2,371
  2,599
  2,837
  3,084
  3,342
  3,609
  3,887
  4,176
  4,710
  5,023
  5,347
  5,685
  6,036
  6,401
  6,782
  7,179
  7,592
  8,023
  8,473
  8,943
  9,433
  9,945
  10,481
  11,041
  11,627
  12,240
  12,881
  13,553

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
  19,166
  20,309
  22,421
  24,632
  26,941
  29,349
  31,856
  34,464
  37,177
  39,996
  42,925
  45,970
  49,134
  52,423
  55,844
  59,402
  63,106
  66,963
  70,981
  75,170
  79,537
  84,094
  88,851
  93,819
  99,009
  104,433
  110,104
  116,036
  122,243
  128,739
  135,540
Adjusted assets (=assets-cash), $m
  18,294
  20,309
  22,421
  24,632
  26,941
  29,349
  31,856
  34,464
  37,177
  39,996
  42,925
  45,970
  49,134
  52,423
  55,844
  59,402
  63,106
  66,963
  70,981
  75,170
  79,537
  84,094
  88,851
  93,819
  99,009
  104,433
  110,104
  116,036
  122,243
  128,739
  135,540
Revenue / Adjusted assets
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
Average production assets, $m
  5,267
  5,855
  6,464
  7,101
  7,767
  8,461
  9,184
  9,936
  10,718
  11,531
  12,375
  13,253
  14,165
  15,113
  16,100
  17,125
  18,193
  19,305
  20,464
  21,671
  22,930
  24,244
  25,616
  27,048
  28,544
  30,108
  31,743
  33,453
  35,242
  37,115
  39,076
Working capital, $m
  -107
  -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
  4,954
  5,666
  6,889
  8,169
  9,506
  10,900
  12,352
  13,862
  15,432
  17,065
  18,761
  20,523
  22,355
  24,260
  26,240
  28,301
  30,445
  32,679
  35,005
  37,430
  39,959
  42,598
  45,352
  48,228
  51,233
  54,374
  57,657
  61,092
  64,686
  68,447
  72,385
Total liabilities, $m
  11,046
  11,759
  12,982
  14,262
  15,599
  16,993
  18,445
  19,955
  21,525
  23,158
  24,854
  26,616
  28,448
  30,353
  32,333
  34,394
  36,538
  38,772
  41,098
  43,523
  46,052
  48,691
  51,445
  54,321
  57,326
  60,467
  63,750
  67,185
  70,779
  74,540
  78,478
Total equity, $m
  8,119
  8,550
  9,439
  10,370
  11,342
  12,356
  13,411
  14,510
  15,651
  16,838
  18,072
  19,353
  20,685
  22,070
  23,510
  25,008
  26,568
  28,191
  29,883
  31,646
  33,485
  35,404
  37,406
  39,498
  41,683
  43,966
  46,354
  48,851
  51,464
  54,199
  57,062
Total liabilities and equity, $m
  19,165
  20,309
  22,421
  24,632
  26,941
  29,349
  31,856
  34,465
  37,176
  39,996
  42,926
  45,969
  49,133
  52,423
  55,843
  59,402
  63,106
  66,963
  70,981
  75,169
  79,537
  84,095
  88,851
  93,819
  99,009
  104,433
  110,104
  116,036
  122,243
  128,739
  135,540
Debt-to-equity ratio
  0.610
  0.660
  0.730
  0.790
  0.840
  0.880
  0.920
  0.960
  0.990
  1.010
  1.040
  1.060
  1.080
  1.100
  1.120
  1.130
  1.150
  1.160
  1.170
  1.180
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.240
  1.250
  1.260
  1.260
  1.270
Adjusted equity ratio
  0.396
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,633
  1,944
  2,153
  2,371
  2,599
  2,837
  3,084
  3,342
  3,609
  3,887
  4,176
  4,710
  5,023
  5,347
  5,685
  6,036
  6,401
  6,782
  7,179
  7,592
  8,023
  8,473
  8,943
  9,433
  9,945
  10,481
  11,041
  11,627
  12,240
  12,881
  13,553
Depreciation, amort., depletion, $m
  885
  964
  1,031
  1,101
  1,174
  1,250
  1,329
  1,412
  1,498
  1,587
  1,680
  1,456
  1,557
  1,661
  1,769
  1,882
  1,999
  2,121
  2,249
  2,381
  2,520
  2,664
  2,815
  2,972
  3,137
  3,309
  3,488
  3,676
  3,873
  4,079
  4,294
Funds from operations, $m
  2,624
  2,908
  3,183
  3,472
  3,773
  4,087
  4,414
  4,754
  5,107
  5,475
  5,856
  6,167
  6,579
  7,008
  7,454
  7,918
  8,401
  8,903
  9,427
  9,973
  10,543
  11,137
  11,757
  12,405
  13,082
  13,790
  14,529
  15,303
  16,113
  16,960
  17,847
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
  2,964
  3,242
  3,534
  3,837
  4,154
  4,484
  4,827
  5,183
  5,554
  5,938
  6,252
  6,668
  7,100
  7,550
  8,017
  8,504
  9,011
  9,540
  10,091
  10,665
  11,265
  11,891
  12,544
  13,227
  13,941
  14,688
  15,469
  16,286
  17,142
  18,037
Maintenance CAPEX, $m
  0
  -579
  -643
  -710
  -780
  -854
  -930
  -1,009
  -1,092
  -1,178
  -1,267
  -1,360
  -1,456
  -1,557
  -1,661
  -1,769
  -1,882
  -1,999
  -2,121
  -2,249
  -2,381
  -2,520
  -2,664
  -2,815
  -2,972
  -3,137
  -3,309
  -3,488
  -3,676
  -3,873
  -4,079
New CAPEX, $m
  -1,343
  -588
  -609
  -637
  -666
  -694
  -723
  -752
  -782
  -813
  -845
  -878
  -912
  -948
  -986
  -1,026
  -1,068
  -1,112
  -1,158
  -1,207
  -1,259
  -1,314
  -1,371
  -1,432
  -1,496
  -1,564
  -1,635
  -1,710
  -1,789
  -1,873
  -1,961
Cash from investing activities, $m
  -3,226
  -1,167
  -1,252
  -1,347
  -1,446
  -1,548
  -1,653
  -1,761
  -1,874
  -1,991
  -2,112
  -2,238
  -2,368
  -2,505
  -2,647
  -2,795
  -2,950
  -3,111
  -3,279
  -3,456
  -3,640
  -3,834
  -4,035
  -4,247
  -4,468
  -4,701
  -4,944
  -5,198
  -5,465
  -5,746
  -6,040
Free cash flow, $m
  -624
  1,797
  1,990
  2,186
  2,391
  2,606
  2,831
  3,065
  3,309
  3,563
  3,827
  4,014
  4,299
  4,595
  4,903
  5,222
  5,555
  5,900
  6,260
  6,634
  7,025
  7,431
  7,855
  8,297
  8,759
  9,241
  9,744
  10,271
  10,821
  11,396
  11,998
Issuance/(repayment) of debt, $m
  877
  1,174
  1,223
  1,280
  1,337
  1,394
  1,452
  1,510
  1,570
  1,632
  1,696
  1,763
  1,832
  1,904
  1,981
  2,060
  2,145
  2,233
  2,327
  2,425
  2,529
  2,639
  2,754
  2,876
  3,005
  3,141
  3,284
  3,435
  3,594
  3,761
  3,938
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
  1,174
  1,223
  1,280
  1,337
  1,394
  1,452
  1,510
  1,570
  1,632
  1,696
  1,763
  1,832
  1,904
  1,981
  2,060
  2,145
  2,233
  2,327
  2,425
  2,529
  2,639
  2,754
  2,876
  3,005
  3,141
  3,284
  3,435
  3,594
  3,761
  3,938
Total cash flow (excl. dividends), $m
  248
  2,971
  3,213
  3,466
  3,728
  4,000
  4,283
  4,576
  4,880
  5,195
  5,523
  5,777
  6,131
  6,500
  6,883
  7,283
  7,699
  8,133
  8,586
  9,059
  9,553
  10,070
  10,609
  11,173
  11,764
  12,382
  13,028
  13,705
  14,414
  15,157
  15,936
Retained Cash Flow (-), $m
  -1,308
  -841
  -889
  -931
  -972
  -1,014
  -1,056
  -1,098
  -1,142
  -1,187
  -1,233
  -1,282
  -1,332
  -1,385
  -1,440
  -1,498
  -1,559
  -1,624
  -1,692
  -1,763
  -1,839
  -1,919
  -2,003
  -2,091
  -2,185
  -2,284
  -2,388
  -2,497
  -2,613
  -2,735
  -2,863
Prev. year cash balance distribution, $m
 
  410
  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
 
  2,540
  2,324
  2,535
  2,756
  2,987
  3,227
  3,478
  3,738
  4,008
  4,290
  4,495
  4,799
  5,115
  5,443
  5,784
  6,140
  6,510
  6,895
  7,296
  7,715
  8,151
  8,607
  9,082
  9,579
  10,098
  10,641
  11,208
  11,801
  12,423
  13,073
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
 
  2,433
  2,123
  2,199
  2,259
  2,302
  2,325
  2,329
  2,312
  2,274
  2,216
  2,099
  2,009
  1,903
  1,783
  1,652
  1,513
  1,369
  1,223
  1,078
  937
  802
  676
  561
  457
  366
  288
  221
  167
  123
  89
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 23
Price to Sales 0.7
Price to Book 4.6
Price to Tangible Book
Price to Cash Flow 14.4
Price to Free Cash Flow 29.8
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 55.3%
Total Debt to Equity 61%
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 10.3%.

Life of production assets of 9.1 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 564.415 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 $37.2 billion.

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Financial statements of ATD-B
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