Intrinsic value of BCE Inc. - BCE

Previous Close

$53.65

  Intrinsic Value

$35.50

stock screener

  Rating & Target

sell

-34%

Previous close

$53.65

 
Intrinsic value

$35.50

 
Up/down potential

-34%

 
Rating

sell

We calculate the intrinsic value of BCE 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 2016), $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 48.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
  5.00
Revenue, $m
  22,805
  23,945
  25,142
  26,400
  27,720
  29,106
  30,561
  32,089
  33,693
  35,378
  37,147
  39,004
  40,954
  43,002
  45,152
  47,410
  49,780
  52,269
  54,883
  57,627
  60,508
  63,534
  66,710
  70,046
  73,548
  77,226
  81,087
  85,141
  89,398
  93,868
Variable operating expenses, $m
  17,857
  18,705
  19,596
  20,531
  21,512
  22,543
  23,626
  24,762
  25,955
  27,208
  27,628
  29,010
  30,460
  31,983
  33,582
  35,261
  37,024
  38,876
  40,819
  42,860
  45,003
  47,254
  49,616
  52,097
  54,702
  57,437
  60,309
  63,324
  66,490
  69,815
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
  17,857
  18,705
  19,596
  20,531
  21,512
  22,543
  23,626
  24,762
  25,955
  27,208
  27,628
  29,010
  30,460
  31,983
  33,582
  35,261
  37,024
  38,876
  40,819
  42,860
  45,003
  47,254
  49,616
  52,097
  54,702
  57,437
  60,309
  63,324
  66,490
  69,815
Operating income, $m
  4,948
  5,240
  5,547
  5,869
  6,207
  6,562
  6,935
  7,327
  7,738
  8,170
  9,519
  9,995
  10,494
  11,019
  11,570
  12,149
  12,756
  13,394
  14,063
  14,767
  15,505
  16,280
  17,094
  17,949
  18,846
  19,789
  20,778
  21,817
  22,908
  24,053
EBITDA, $m
  8,782
  9,221
  9,682
  10,166
  10,674
  11,208
  11,768
  12,357
  12,975
  13,623
  14,304
  15,020
  15,771
  16,559
  17,387
  18,257
  19,169
  20,128
  21,134
  22,191
  23,300
  24,465
  25,689
  26,973
  28,322
  29,738
  31,225
  32,786
  34,425
  36,147
Interest expense (income), $m
  882
  865
  932
  1,002
  1,075
  1,153
  1,234
  1,319
  1,408
  1,502
  1,600
  1,703
  1,812
  1,926
  2,045
  2,171
  2,303
  2,441
  2,587
  2,739
  2,900
  3,068
  3,245
  3,430
  3,625
  3,830
  4,044
  4,270
  4,507
  4,755
  5,017
Earnings before tax, $m
  4,082
  4,308
  4,545
  4,793
  5,055
  5,329
  5,617
  5,919
  6,236
  6,570
  7,815
  8,183
  8,569
  8,974
  9,399
  9,846
  10,315
  10,807
  11,324
  11,867
  12,437
  13,036
  13,664
  14,324
  15,017
  15,744
  16,508
  17,310
  18,152
  19,037
Tax expense, $m
  1,102
  1,163
  1,227
  1,294
  1,365
  1,439
  1,517
  1,598
  1,684
  1,774
  2,110
  2,209
  2,314
  2,423
  2,538
  2,658
  2,785
  2,918
  3,058
  3,204
  3,358
  3,520
  3,689
  3,867
  4,055
  4,251
  4,457
  4,674
  4,901
  5,140
Net income, $m
  2,980
  3,145
  3,318
  3,499
  3,690
  3,890
  4,100
  4,321
  4,553
  4,796
  5,705
  5,973
  6,255
  6,551
  6,861
  7,187
  7,530
  7,889
  8,267
  8,663
  9,079
  9,516
  9,975
  10,456
  10,962
  11,493
  12,051
  12,636
  13,251
  13,897

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  51,712
  54,298
  57,012
  59,863
  62,856
  65,999
  69,299
  72,764
  76,402
  80,222
  84,233
  88,445
  92,867
  97,511
  102,386
  107,505
  112,881
  118,525
  124,451
  130,673
  137,207
  144,067
  151,271
  158,834
  166,776
  175,115
  183,871
  193,064
  202,717
  212,853
Adjusted assets (=assets-cash), $m
  51,712
  54,298
  57,012
  59,863
  62,856
  65,999
  69,299
  72,764
  76,402
  80,222
  84,233
  88,445
  92,867
  97,511
  102,386
  107,505
  112,881
  118,525
  124,451
  130,673
  137,207
  144,067
  151,271
  158,834
  166,776
  175,115
  183,871
  193,064
  202,717
  212,853
Revenue / Adjusted assets
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
Average production assets, $m
  35,256
  37,019
  38,870
  40,814
  42,854
  44,997
  47,247
  49,609
  52,090
  54,694
  57,429
  60,300
  63,316
  66,481
  69,805
  73,296
  76,960
  80,808
  84,849
  89,091
  93,546
  98,223
  103,134
  108,291
  113,706
  119,391
  125,360
  131,628
  138,210
  145,120
Working capital, $m
  -1,277
  -1,341
  -1,408
  -1,478
  -1,552
  -1,630
  -1,711
  -1,797
  -1,887
  -1,981
  -2,080
  -2,184
  -2,293
  -2,408
  -2,529
  -2,655
  -2,788
  -2,927
  -3,073
  -3,227
  -3,388
  -3,558
  -3,736
  -3,923
  -4,119
  -4,325
  -4,541
  -4,768
  -5,006
  -5,257
Total debt, $m
  22,193
  23,859
  25,607
  27,443
  29,370
  31,394
  33,519
  35,751
  38,094
  40,554
  43,137
  45,850
  48,697
  51,688
  54,828
  58,124
  61,586
  65,221
  69,037
  73,045
  77,252
  81,670
  86,309
  91,180
  96,295
  101,665
  107,304
  113,224
  119,441
  125,968
Total liabilities, $m
  33,302
  34,968
  36,716
  38,552
  40,479
  42,503
  44,628
  46,860
  49,203
  51,663
  54,246
  56,959
  59,806
  62,797
  65,937
  69,233
  72,695
  76,330
  80,146
  84,154
  88,361
  92,779
  97,418
  102,289
  107,404
  112,774
  118,413
  124,333
  130,550
  137,077
Total equity, $m
  18,409
  19,330
  20,296
  21,311
  22,377
  23,496
  24,670
  25,904
  27,199
  28,559
  29,987
  31,486
  33,061
  34,714
  36,449
  38,272
  40,185
  42,195
  44,305
  46,520
  48,846
  51,288
  53,852
  56,545
  59,372
  62,341
  65,458
  68,731
  72,167
  75,776
Total liabilities and equity, $m
  51,711
  54,298
  57,012
  59,863
  62,856
  65,999
  69,298
  72,764
  76,402
  80,222
  84,233
  88,445
  92,867
  97,511
  102,386
  107,505
  112,880
  118,525
  124,451
  130,674
  137,207
  144,067
  151,270
  158,834
  166,776
  175,115
  183,871
  193,064
  202,717
  212,853
Debt-to-equity ratio
  1.210
  1.230
  1.260
  1.290
  1.310
  1.340
  1.360
  1.380
  1.400
  1.420
  1.440
  1.460
  1.470
  1.490
  1.500
  1.520
  1.530
  1.550
  1.560
  1.570
  1.580
  1.590
  1.600
  1.610
  1.620
  1.630
  1.640
  1.650
  1.660
  1.660
Adjusted equity ratio
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356
  0.356

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,980
  3,145
  3,318
  3,499
  3,690
  3,890
  4,100
  4,321
  4,553
  4,796
  5,705
  5,973
  6,255
  6,551
  6,861
  7,187
  7,530
  7,889
  8,267
  8,663
  9,079
  9,516
  9,975
  10,456
  10,962
  11,493
  12,051
  12,636
  13,251
  13,897
Depreciation, amort., depletion, $m
  3,834
  3,981
  4,135
  4,297
  4,467
  4,646
  4,833
  5,030
  5,237
  5,454
  4,786
  5,025
  5,276
  5,540
  5,817
  6,108
  6,413
  6,734
  7,071
  7,424
  7,795
  8,185
  8,595
  9,024
  9,475
  9,949
  10,447
  10,969
  11,517
  12,093
Funds from operations, $m
  6,814
  7,126
  7,453
  7,796
  8,157
  8,536
  8,933
  9,351
  9,789
  10,250
  10,491
  10,999
  11,531
  12,091
  12,678
  13,295
  13,943
  14,623
  15,337
  16,087
  16,875
  17,701
  18,569
  19,481
  20,438
  21,443
  22,498
  23,606
  24,769
  25,990
Change in working capital, $m
  -61
  -64
  -67
  -70
  -74
  -78
  -81
  -86
  -90
  -94
  -99
  -104
  -109
  -115
  -120
  -126
  -133
  -139
  -146
  -154
  -161
  -169
  -178
  -187
  -196
  -206
  -216
  -227
  -238
  -250
Cash from operations, $m
  6,875
  7,189
  7,520
  7,867
  8,231
  8,613
  9,015
  9,436
  9,879
  10,344
  10,590
  11,103
  11,641
  12,206
  12,799
  13,422
  14,076
  14,763
  15,484
  16,241
  17,036
  17,871
  18,747
  19,668
  20,634
  21,649
  22,714
  23,833
  25,007
  26,241
Maintenance CAPEX, $m
  -2,798
  -2,938
  -3,085
  -3,239
  -3,401
  -3,571
  -3,750
  -3,937
  -4,134
  -4,341
  -4,558
  -4,786
  -5,025
  -5,276
  -5,540
  -5,817
  -6,108
  -6,413
  -6,734
  -7,071
  -7,424
  -7,795
  -8,185
  -8,595
  -9,024
  -9,475
  -9,949
  -10,447
  -10,969
  -11,517
New CAPEX, $m
  -1,681
  -1,763
  -1,851
  -1,944
  -2,041
  -2,143
  -2,250
  -2,362
  -2,480
  -2,604
  -2,735
  -2,871
  -3,015
  -3,166
  -3,324
  -3,490
  -3,665
  -3,848
  -4,040
  -4,242
  -4,455
  -4,677
  -4,911
  -5,157
  -5,415
  -5,685
  -5,970
  -6,268
  -6,581
  -6,910
Cash from investing activities, $m
  -4,479
  -4,701
  -4,936
  -5,183
  -5,442
  -5,714
  -6,000
  -6,299
  -6,614
  -6,945
  -7,293
  -7,657
  -8,040
  -8,442
  -8,864
  -9,307
  -9,773
  -10,261
  -10,774
  -11,313
  -11,879
  -12,472
  -13,096
  -13,752
  -14,439
  -15,160
  -15,919
  -16,715
  -17,550
  -18,427
Free cash flow, $m
  2,395
  2,489
  2,584
  2,684
  2,789
  2,899
  3,015
  3,137
  3,264
  3,399
  3,297
  3,445
  3,601
  3,764
  3,935
  4,114
  4,303
  4,501
  4,709
  4,928
  5,157
  5,398
  5,651
  5,916
  6,195
  6,488
  6,795
  7,118
  7,457
  7,813
Issuance/(repayment) of debt, $m
  1,587
  1,665
  1,748
  1,836
  1,928
  2,024
  2,125
  2,231
  2,343
  2,460
  2,583
  2,712
  2,848
  2,990
  3,140
  3,297
  3,462
  3,635
  3,816
  4,007
  4,208
  4,418
  4,639
  4,871
  5,114
  5,370
  5,639
  5,921
  6,217
  6,527
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  1,587
  1,665
  1,748
  1,836
  1,928
  2,024
  2,125
  2,231
  2,343
  2,460
  2,583
  2,712
  2,848
  2,990
  3,140
  3,297
  3,462
  3,635
  3,816
  4,007
  4,208
  4,418
  4,639
  4,871
  5,114
  5,370
  5,639
  5,921
  6,217
  6,527
Total cash flow (excl. dividends), $m
  3,983
  4,154
  4,332
  4,520
  4,717
  4,923
  5,140
  5,368
  5,607
  5,859
  5,881
  6,158
  6,449
  6,754
  7,075
  7,411
  7,765
  8,136
  8,526
  8,935
  9,365
  9,816
  10,290
  10,787
  11,310
  11,858
  12,434
  13,038
  13,673
  14,340
Retained Cash Flow (-), $m
  -869
  -920
  -966
  -1,015
  -1,066
  -1,119
  -1,175
  -1,234
  -1,295
  -1,360
  -1,428
  -1,499
  -1,574
  -1,653
  -1,736
  -1,822
  -1,914
  -2,009
  -2,110
  -2,215
  -2,326
  -2,442
  -2,564
  -2,693
  -2,827
  -2,969
  -3,117
  -3,273
  -3,437
  -3,608
Prev. year cash balance distribution, $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 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
  3,113
  3,233
  3,366
  3,505
  3,651
  3,804
  3,965
  4,135
  4,312
  4,499
  4,453
  4,658
  4,874
  5,101
  5,339
  5,589
  5,851
  6,127
  6,416
  6,720
  7,039
  7,374
  7,725
  8,095
  8,482
  8,889
  9,317
  9,766
  10,237
  10,732
Discount rate, %
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
  2,915
  2,817
  2,709
  2,588
  2,454
  2,309
  2,154
  1,990
  1,822
  1,650
  1,402
  1,244
  1,090
  942
  803
  674
  556
  452
  360
  282
  216
  162
  119
  85
  60
  41
  27
  17
  11
  7
Current shareholders' claim on cash, %
  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

BCE Inc. is a communications company. The Company's segments include Bell Wireless, Bell Wireline and Bell Media. Its Bell Wireless segment provides wireless voice and data communications products and services to its residential, small and medium-sized business and large enterprise customers across Canada. Its Bell Wireline segment provides data, including Internet access and Internet protocol television (IPTV), local telephone, long distance, as well as other communications services and products to its residential, small and medium-sized business and large enterprise customers, primarily in Ontario, Quebec and the Atlantic provinces, while Satellite television (TV) service and connectivity to business customers are available nationally across Canada. Its Bell Media segment provides conventional, specialty and pay Television, digital media, and radio broadcasting services and out of home (OOH) advertising services to customers across Canada.

FINANCIAL RATIOS  of  BCE Inc. (BCE)

Valuation Ratios
P/E Ratio 15.4
Price to Sales 2.2
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 7
Price to Free Cash Flow 16.3
Growth Rates
Sales Growth Rate 1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4%
Cap. Spend. - 3 Yr. Gr. Rate 1.1%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 94.5%
Total Debt to Equity 122.3%
Interest Coverage 6
Management Effectiveness
Return On Assets 7.5%
Ret/ On Assets - 3 Yr. Avg. 7.2%
Return On Total Capital 7.9%
Ret/ On T. Cap. - 3 Yr. Avg. 7.5%
Return On Equity 17.5%
Return On Equity - 3 Yr. Avg. 17%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 69.1%
Gross Margin - 3 Yr. Avg. 69.6%
EBITDA Margin 39.5%
EBITDA Margin - 3 Yr. Avg. 38.2%
Operating Margin 23.6%
Oper. Margin - 3 Yr. Avg. 22.2%
Pre-Tax Margin 19.3%
Pre-Tax Margin - 3 Yr. Avg. 17.9%
Net Profit Margin 14%
Net Profit Margin - 3 Yr. Avg. 12.8%
Effective Tax Rate 26.4%
Eff/ Tax Rate - 3 Yr. Avg. 25.7%
Payout Ratio 80.2%

BCE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BCE stock intrinsic value calculation we used $21719 million for the last fiscal year's total revenue generated by BCE Inc.. The default revenue input number comes from 2016 income statement of BCE Inc.. 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 BCE stock valuation model: a) initial revenue growth rate of 5% 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 6.8%, whose default value for BCE is calculated based on our internal credit rating of BCE Inc., 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 BCE Inc..
    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 BCE stock the variable cost ratio is equal to 78.5%.

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 BCE 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 4.2% for BCE Inc..

Corporate tax rate of 27% is the nominal tax rate for BCE Inc.. 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 BCE 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 BCE are equal to 154.6%.

Life of production assets of 12 years is the average useful life of capital assets used in BCE Inc. 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 BCE is equal to -5.6%. 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 - $17540 million for BCE Inc. - 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 900.464 million for BCE Inc. 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 BCE Inc. at the current share price and the inputted number of shares is $48.3 billion.

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