Intrinsic value of Corus Entertainment Inc. Class B Non-Vot - CJR-B

Previous Close

$13.73

  Intrinsic Value

$78.81

stock screener

  Rating & Target

str. buy

+474%

Previous close

$13.73

 
Intrinsic value

$78.81

 
Up/down potential

+474%

 
Rating

str. buy

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

We calculate the intrinsic value of CJR-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 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 2.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   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, %
  43.68
  43.70
  39.83
  36.35
  33.21
  30.39
  27.85
  25.57
  23.51
  21.66
  19.99
  18.49
  17.14
  15.93
  14.84
  13.85
  12.97
  12.17
  11.45
  10.81
  10.23
  9.71
  9.23
  8.81
  8.43
  8.09
  7.78
  7.50
  7.25
  7.03
  6.82
Revenue, $m
  1,171
  1,683
  2,353
  3,208
  4,274
  5,573
  7,125
  8,946
  11,049
  13,443
  16,130
  19,113
  22,390
  25,957
  29,808
  33,937
  38,338
  43,005
  47,930
  53,111
  58,543
  64,225
  70,156
  76,337
  82,772
  89,466
  96,425
  103,657
  111,173
  118,983
  127,101
Variable operating expenses, $m
 
  757
  963
  1,227
  1,555
  1,954
  2,432
  2,993
  3,640
  4,377
  5,204
  5,883
  6,892
  7,990
  9,175
  10,446
  11,801
  13,237
  14,754
  16,348
  18,020
  19,769
  21,595
  23,498
  25,479
  27,539
  29,681
  31,907
  34,221
  36,625
  39,124
Fixed operating expenses, $m
 
  407
  417
  428
  438
  449
  460
  472
  484
  496
  508
  521
  534
  547
  561
  575
  589
  604
  619
  635
  651
  667
  683
  701
  718
  736
  754
  773
  793
  812
  833
Total operating expenses, $m
  986
  1,164
  1,380
  1,655
  1,993
  2,403
  2,892
  3,465
  4,124
  4,873
  5,712
  6,404
  7,426
  8,537
  9,736
  11,021
  12,390
  13,841
  15,373
  16,983
  18,671
  20,436
  22,278
  24,199
  26,197
  28,275
  30,435
  32,680
  35,014
  37,437
  39,957
Operating income, $m
  185
  519
  972
  1,554
  2,281
  3,169
  4,232
  5,481
  6,925
  8,570
  10,418
  12,709
  14,964
  17,420
  20,072
  22,916
  25,948
  29,163
  32,558
  36,128
  39,872
  43,789
  47,877
  52,139
  56,576
  61,191
  65,989
  70,977
  76,159
  81,546
  87,145
EBITDA, $m
  595
  1,088
  1,673
  2,422
  3,358
  4,500
  5,868
  7,474
  9,330
  11,444
  13,818
  16,455
  19,353
  22,507
  25,914
  29,568
  33,462
  37,592
  41,952
  46,538
  51,347
  56,377
  61,628
  67,101
  72,799
  78,726
  84,889
  91,293
  97,949
  104,866
  112,056
Interest expense (income), $m
  67
  96
  169
  265
  387
  539
  724
  945
  1,205
  1,505
  1,847
  2,230
  2,656
  3,123
  3,632
  4,181
  4,770
  5,398
  6,064
  6,766
  7,505
  8,280
  9,091
  9,937
  10,819
  11,737
  12,692
  13,684
  14,716
  15,788
  16,902
Earnings before tax, $m
  185
  423
  803
  1,289
  1,894
  2,630
  3,508
  4,536
  5,720
  7,065
  8,571
  10,479
  12,309
  14,297
  16,440
  18,735
  21,178
  23,765
  26,494
  29,362
  32,367
  35,508
  38,786
  42,202
  45,757
  49,454
  53,298
  57,292
  61,443
  65,758
  70,242
Tax expense, $m
  41
  114
  217
  348
  511
  710
  947
  1,225
  1,544
  1,907
  2,314
  2,829
  3,323
  3,860
  4,439
  5,058
  5,718
  6,417
  7,153
  7,928
  8,739
  9,587
  10,472
  11,394
  12,354
  13,353
  14,390
  15,469
  16,590
  17,755
  18,965
Net income, $m
  126
  309
  587
  941
  1,383
  1,920
  2,561
  3,311
  4,176
  5,157
  6,257
  7,650
  8,985
  10,437
  12,001
  13,676
  15,460
  17,348
  19,340
  21,434
  23,628
  25,921
  28,314
  30,807
  33,402
  36,102
  38,907
  41,823
  44,854
  48,003
  51,277

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  71
  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
  6,093
  8,674
  12,129
  16,537
  22,029
  28,724
  36,725
  46,114
  56,955
  69,291
  83,145
  98,522
  115,413
  133,798
  153,649
  174,935
  197,621
  221,673
  247,064
  273,768
  301,769
  331,055
  361,627
  393,490
  426,661
  461,165
  497,036
  534,315
  573,055
  613,315
  655,160
Adjusted assets (=assets-cash), $m
  6,022
  8,674
  12,129
  16,537
  22,029
  28,724
  36,725
  46,114
  56,955
  69,291
  83,145
  98,522
  115,413
  133,798
  153,649
  174,935
  197,621
  221,673
  247,064
  273,768
  301,769
  331,055
  361,627
  393,490
  426,661
  461,165
  497,036
  534,315
  573,055
  613,315
  655,160
Revenue / Adjusted assets
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
Average production assets, $m
  2,066
  2,968
  4,151
  5,659
  7,539
  9,830
  12,568
  15,781
  19,491
  23,713
  28,454
  33,716
  39,496
  45,788
  52,581
  59,866
  67,629
  75,860
  84,549
  93,688
  103,270
  113,292
  123,754
  134,659
  146,010
  157,818
  170,094
  182,851
  196,109
  209,886
  224,206
Working capital, $m
  -62
  -25
  -35
  -48
  -64
  -84
  -107
  -134
  -166
  -202
  -242
  -287
  -336
  -389
  -447
  -509
  -575
  -645
  -719
  -797
  -878
  -963
  -1,052
  -1,145
  -1,242
  -1,342
  -1,446
  -1,555
  -1,668
  -1,785
  -1,907
Total debt, $m
  2,196
  3,755
  5,880
  8,591
  11,969
  16,086
  21,007
  26,781
  33,449
  41,035
  49,555
  59,012
  69,400
  80,707
  92,915
  106,006
  119,958
  134,750
  150,365
  166,789
  184,009
  202,020
  220,822
  240,417
  260,818
  282,037
  304,098
  327,025
  350,850
  375,610
  401,344
Total liabilities, $m
  3,775
  5,334
  7,459
  10,170
  13,548
  17,665
  22,586
  28,360
  35,028
  42,614
  51,134
  60,591
  70,979
  82,286
  94,494
  107,585
  121,537
  136,329
  151,944
  168,368
  185,588
  203,599
  222,401
  241,996
  262,397
  283,616
  305,677
  328,604
  352,429
  377,189
  402,923
Total equity, $m
  2,318
  3,339
  4,670
  6,367
  8,481
  11,059
  14,139
  17,754
  21,928
  26,677
  32,011
  37,931
  44,434
  51,512
  59,155
  67,350
  76,084
  85,344
  95,120
  105,401
  116,181
  127,456
  139,226
  151,494
  164,265
  177,549
  191,359
  205,711
  220,626
  236,126
  252,237
Total liabilities and equity, $m
  6,093
  8,673
  12,129
  16,537
  22,029
  28,724
  36,725
  46,114
  56,956
  69,291
  83,145
  98,522
  115,413
  133,798
  153,649
  174,935
  197,621
  221,673
  247,064
  273,769
  301,769
  331,055
  361,627
  393,490
  426,662
  461,165
  497,036
  534,315
  573,055
  613,315
  655,160
Debt-to-equity ratio
  0.947
  1.120
  1.260
  1.350
  1.410
  1.450
  1.490
  1.510
  1.530
  1.540
  1.550
  1.560
  1.560
  1.570
  1.570
  1.570
  1.580
  1.580
  1.580
  1.580
  1.580
  1.590
  1.590
  1.590
  1.590
  1.590
  1.590
  1.590
  1.590
  1.590
  1.590
Adjusted equity ratio
  0.373
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  126
  309
  587
  941
  1,383
  1,920
  2,561
  3,311
  4,176
  5,157
  6,257
  7,650
  8,985
  10,437
  12,001
  13,676
  15,460
  17,348
  19,340
  21,434
  23,628
  25,921
  28,314
  30,807
  33,402
  36,102
  38,907
  41,823
  44,854
  48,003
  51,277
Depreciation, amort., depletion, $m
  410
  569
  700
  868
  1,077
  1,331
  1,636
  1,993
  2,405
  2,874
  3,401
  3,746
  4,388
  5,088
  5,842
  6,652
  7,514
  8,429
  9,394
  10,410
  11,474
  12,588
  13,750
  14,962
  16,223
  17,535
  18,899
  20,317
  21,790
  23,321
  24,912
Funds from operations, $m
  -157
  878
  1,287
  1,809
  2,460
  3,251
  4,196
  5,304
  6,581
  8,031
  9,658
  11,396
  13,374
  15,524
  17,843
  20,328
  22,974
  25,777
  28,735
  31,844
  35,102
  38,509
  42,064
  45,769
  49,626
  53,637
  57,807
  62,140
  66,643
  71,324
  76,189
Change in working capital, $m
  -357
  -8
  -10
  -13
  -16
  -19
  -23
  -27
  -32
  -36
  -40
  -45
  -49
  -54
  -58
  -62
  -66
  -70
  -74
  -78
  -81
  -85
  -89
  -93
  -97
  -100
  -104
  -108
  -113
  -117
  -122
Cash from operations, $m
  200
  885
  1,297
  1,822
  2,476
  3,271
  4,220
  5,331
  6,612
  8,067
  9,698
  11,441
  13,423
  15,578
  17,901
  20,390
  23,040
  25,847
  28,809
  31,921
  35,184
  38,594
  42,153
  45,862
  49,722
  53,737
  57,911
  62,249
  66,756
  71,441
  76,310
Maintenance CAPEX, $m
  0
  -230
  -330
  -461
  -629
  -838
  -1,092
  -1,396
  -1,753
  -2,166
  -2,635
  -3,162
  -3,746
  -4,388
  -5,088
  -5,842
  -6,652
  -7,514
  -8,429
  -9,394
  -10,410
  -11,474
  -12,588
  -13,750
  -14,962
  -16,223
  -17,535
  -18,899
  -20,317
  -21,790
  -23,321
New CAPEX, $m
  -23
  -903
  -1,182
  -1,509
  -1,880
  -2,291
  -2,738
  -3,213
  -3,710
  -4,222
  -4,741
  -5,262
  -5,780
  -6,292
  -6,794
  -7,284
  -7,763
  -8,231
  -8,689
  -9,139
  -9,582
  -10,022
  -10,462
  -10,904
  -11,352
  -11,808
  -12,276
  -12,758
  -13,257
  -13,777
  -14,320
Cash from investing activities, $m
  -1,658
  -1,133
  -1,512
  -1,970
  -2,509
  -3,129
  -3,830
  -4,609
  -5,463
  -6,388
  -7,376
  -8,424
  -9,526
  -10,680
  -11,882
  -13,126
  -14,415
  -15,745
  -17,118
  -18,533
  -19,992
  -21,496
  -23,050
  -24,654
  -26,314
  -28,031
  -29,811
  -31,657
  -33,574
  -35,567
  -37,641
Free cash flow, $m
  -1,458
  -247
  -215
  -148
  -33
  142
  390
  722
  1,149
  1,680
  2,322
  3,017
  3,896
  4,897
  6,020
  7,263
  8,625
  10,102
  11,691
  13,388
  15,192
  17,097
  19,103
  21,208
  23,409
  25,706
  28,100
  30,592
  33,182
  35,874
  38,670
Issuance/(repayment) of debt, $m
  1,409
  1,630
  2,125
  2,711
  3,378
  4,117
  4,920
  5,774
  6,667
  7,587
  8,520
  9,457
  10,388
  11,307
  12,209
  13,091
  13,952
  14,792
  15,615
  16,423
  17,220
  18,011
  18,801
  19,596
  20,400
  21,220
  22,060
  22,927
  23,825
  24,759
  25,735
Issuance/(repurchase) of shares, $m
  0
  713
  744
  756
  732
  657
  519
  304
  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  
  1,582
  2,343
  2,869
  3,467
  4,110
  4,774
  5,439
  6,078
  6,667
  7,587
  8,520
  9,457
  10,388
  11,307
  12,209
  13,091
  13,952
  14,792
  15,615
  16,423
  17,220
  18,011
  18,801
  19,596
  20,400
  21,220
  22,060
  22,927
  23,825
  24,759
  25,735
Total cash flow (excl. dividends), $m
  124
  2,096
  2,653
  3,319
  4,077
  4,917
  5,829
  6,800
  7,816
  9,266
  10,842
  12,474
  14,284
  16,204
  18,229
  20,354
  22,577
  24,894
  27,306
  29,812
  32,412
  35,109
  37,905
  40,803
  43,809
  46,926
  50,161
  53,519
  57,007
  60,633
  64,404
Retained Cash Flow (-), $m
  -1,115
  -1,021
  -1,330
  -1,697
  -2,115
  -2,578
  -3,080
  -3,615
  -4,174
  -4,749
  -5,334
  -5,920
  -6,503
  -7,078
  -7,643
  -8,195
  -8,734
  -9,260
  -9,775
  -10,281
  -10,780
  -11,275
  -11,770
  -12,267
  -12,771
  -13,284
  -13,810
  -14,353
  -14,915
  -15,500
  -16,110
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
 
  1,075
  1,323
  1,622
  1,962
  2,339
  2,749
  3,185
  3,642
  4,517
  5,509
  6,554
  7,781
  9,126
  10,586
  12,159
  13,843
  15,634
  17,531
  19,530
  21,632
  23,833
  26,135
  28,536
  31,038
  33,642
  36,350
  39,166
  42,092
  45,133
  48,294
Discount rate, %
 
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
 
  1,002
  1,141
  1,286
  1,418
  1,529
  1,611
  1,657
  1,666
  1,797
  1,884
  1,904
  1,896
  1,840
  1,740
  1,605
  1,443
  1,266
  1,082
  902
  732
  579
  445
  333
  242
  170
  116
  77
  49
  31
  18
Current shareholders' claim on cash, %
  100
  79.5
  67.0
  58.9
  53.8
  50.5
  48.6
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7
  47.7

Corus Entertainment Inc. is a media and content company. The Company creates and delivers quality brands and content across platforms for audiences around the world. The Company’s portfolio of multimedia offerings encompasses 45 specialty television services, 39 radio stations, 15 conventional television stations, a global content business, digital assets, live events, children’s book publishing, animation software, technology and media services. Corus’ roster of premium brands includes Global Television, W Network, OWN: Oprah Winfrey Network Canada, HGTV Canada, Food Network Canada, HISTORY, Showcase, National Geographic Channel, Q107, CKNW, Fresh Radio, Disney Channel Canada, YTV and Nickelodeon Canada.

FINANCIAL RATIOS  of  Corus Entertainment Inc. Class B Non-Vot (CJR-B)

Valuation Ratios
P/E Ratio 21.4
Price to Sales 2.3
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 13.5
Price to Free Cash Flow 15.2
Growth Rates
Sales Growth Rate 43.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 35.3%
Cap. Spend. - 3 Yr. Gr. Rate 12.1%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 89.8%
Total Debt to Equity 94.7%
Interest Coverage 4
Management Effectiveness
Return On Assets 4.1%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital 3.9%
Ret/ On T. Cap. - 3 Yr. Avg. 3.4%
Return On Equity 7.2%
Return On Equity - 3 Yr. Avg. 5.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 98.1%
Gross Margin - 3 Yr. Avg. 97.3%
EBITDA Margin 56.5%
EBITDA Margin - 3 Yr. Avg. 51.4%
Operating Margin 15.8%
Oper. Margin - 3 Yr. Avg. 14.1%
Pre-Tax Margin 15.8%
Pre-Tax Margin - 3 Yr. Avg. 14.1%
Net Profit Margin 10.8%
Net Profit Margin - 3 Yr. Avg. 8.6%
Effective Tax Rate 22.2%
Eff/ Tax Rate - 3 Yr. Avg. 109.9%
Payout Ratio 71.4%

CJR-B stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CJR-B stock intrinsic value calculation we used $1171 million for the last fiscal year's total revenue generated by Corus Entertainment Inc. Class B Non-Vot. The default revenue input number comes from 2016 income statement of Corus Entertainment Inc. Class B Non-Vot. 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 CJR-B stock valuation model: a) initial revenue growth rate of 43.7% 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 7.3%, whose default value for CJR-B is calculated based on our internal credit rating of Corus Entertainment Inc. Class B Non-Vot, 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 Corus Entertainment Inc. Class B Non-Vot.
    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 CJR-B stock the variable cost ratio is equal to 51.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $397 million in the base year in the intrinsic value calculation for CJR-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 4.5% for Corus Entertainment Inc. Class B Non-Vot.

Corporate tax rate of 27% is the nominal tax rate for Corus Entertainment Inc. Class B Non-Vot. 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 CJR-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 CJR-B are equal to 176.4%.

Life of production assets of 9 years is the average useful life of capital assets used in Corus Entertainment Inc. Class B Non-Vot 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 CJR-B is equal to -1.5%. 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 - $2318 million for Corus Entertainment Inc. Class B Non-Vot - 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 201.02 million for Corus Entertainment Inc. Class B Non-Vot 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 Corus Entertainment Inc. Class B Non-Vot at the current share price and the inputted number of shares is $2.8 billion.

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Financial statements of CJR-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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