Intrinsic value of Crew Energy Inc. - CR

Previous Close

$3.55

  Intrinsic Value

$1.38

stock screener

  Rating & Target

str. sell

-61%

Previous close

$3.55

 
Intrinsic value

$1.38

 
Up/down potential

-61%

 
Rating

str. sell

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

We calculate the intrinsic value of CR 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 0.5

 

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, %
  1.34
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  151
  242
  373
  558
  810
  1,143
  1,571
  2,109
  2,769
  3,563
  4,500
  5,588
  6,832
  8,235
  9,798
  11,521
  13,402
  15,438
  17,625
  19,962
  22,443
  25,066
  27,827
  30,726
  33,760
  36,929
  40,234
  43,675
  47,256
  50,979
  54,848
Variable operating expenses, $m
 
  386
  596
  891
  1,293
  1,824
  2,507
  3,366
  4,419
  5,686
  7,182
  8,919
  10,904
  13,143
  15,638
  18,387
  21,389
  24,638
  28,130
  31,859
  35,819
  40,005
  44,413
  49,039
  53,881
  58,939
  64,213
  69,706
  75,420
  81,362
  87,538
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
  218
  386
  596
  891
  1,293
  1,824
  2,507
  3,366
  4,419
  5,686
  7,182
  8,919
  10,904
  13,143
  15,638
  18,387
  21,389
  24,638
  28,130
  31,859
  35,819
  40,005
  44,413
  49,039
  53,881
  58,939
  64,213
  69,706
  75,420
  81,362
  87,538
Operating income, $m
  -67
  -144
  -222
  -333
  -483
  -681
  -936
  -1,257
  -1,650
  -2,123
  -2,682
  -3,331
  -4,072
  -4,908
  -5,840
  -6,866
  -7,987
  -9,201
  -10,505
  -11,897
  -13,376
  -14,939
  -16,585
  -18,313
  -20,121
  -22,010
  -23,979
  -26,030
  -28,164
  -30,383
  -32,690
EBITDA, $m
  18
  -8
  -13
  -19
  -28
  -39
  -54
  -72
  -95
  -122
  -154
  -191
  -234
  -282
  -335
  -394
  -459
  -529
  -603
  -683
  -768
  -858
  -953
  -1,052
  -1,156
  -1,264
  -1,378
  -1,495
  -1,618
  -1,745
  -1,878
Interest expense (income), $m
  15
  15
  32
  55
  88
  134
  193
  270
  367
  485
  628
  796
  992
  1,215
  1,467
  1,747
  2,057
  2,394
  2,760
  3,153
  3,572
  4,018
  4,489
  4,985
  5,505
  6,050
  6,619
  7,212
  7,830
  8,473
  9,141
Earnings before tax, $m
  -86
  -159
  -254
  -388
  -571
  -815
  -1,130
  -1,527
  -2,017
  -2,609
  -3,310
  -4,127
  -5,064
  -6,123
  -7,306
  -8,614
  -10,044
  -11,595
  -13,265
  -15,050
  -16,948
  -18,957
  -21,074
  -23,297
  -25,626
  -28,060
  -30,598
  -33,243
  -35,994
  -38,856
  -41,831
Tax expense, $m
  -21
  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
Net income, $m
  -65
  -159
  -254
  -388
  -571
  -815
  -1,130
  -1,527
  -2,017
  -2,609
  -3,310
  -4,127
  -5,064
  -6,123
  -7,306
  -8,614
  -10,044
  -11,595
  -13,265
  -15,050
  -16,948
  -18,957
  -21,074
  -23,297
  -25,626
  -28,060
  -30,598
  -33,243
  -35,994
  -38,856
  -41,831

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
  0
Total assets, $m
  1,239
  1,980
  3,060
  4,576
  6,639
  9,367
  12,877
  17,285
  22,696
  29,204
  36,887
  45,806
  56,002
  67,501
  80,313
  94,434
  109,849
  126,537
  144,470
  163,620
  183,958
  205,456
  228,094
  251,852
  276,722
  302,698
  329,785
  357,993
  387,343
  417,859
  449,577
Adjusted assets (=assets-cash), $m
  1,239
  1,980
  3,060
  4,576
  6,639
  9,367
  12,877
  17,285
  22,696
  29,204
  36,887
  45,806
  56,002
  67,501
  80,313
  94,434
  109,849
  126,537
  144,470
  163,620
  183,958
  205,456
  228,094
  251,852
  276,722
  302,698
  329,785
  357,993
  387,343
  417,859
  449,577
Revenue / Adjusted assets
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
Average production assets, $m
  1,205
  1,927
  2,978
  4,453
  6,461
  9,116
  12,532
  16,821
  22,088
  28,421
  35,899
  44,578
  54,501
  65,692
  78,160
  91,902
  106,905
  123,145
  140,598
  159,234
  179,027
  199,949
  221,979
  245,101
  269,304
  294,584
  320,945
  348,397
  376,959
  406,658
  437,526
Working capital, $m
  -28
  -45
  -69
  -103
  -150
  -211
  -291
  -390
  -512
  -659
  -833
  -1,034
  -1,264
  -1,523
  -1,813
  -2,131
  -2,479
  -2,856
  -3,261
  -3,693
  -4,152
  -4,637
  -5,148
  -5,684
  -6,246
  -6,832
  -7,443
  -8,080
  -8,742
  -9,431
  -10,147
Total debt, $m
  235
  485
  849
  1,360
  2,055
  2,975
  4,158
  5,643
  7,467
  9,660
  12,249
  15,255
  18,691
  22,566
  26,883
  31,642
  36,837
  42,461
  48,505
  54,958
  61,812
  69,057
  76,686
  84,692
  93,073
  101,827
  110,956
  120,462
  130,352
  140,636
  151,325
Total liabilities, $m
  417
  667
  1,031
  1,542
  2,237
  3,157
  4,340
  5,825
  7,649
  9,842
  12,431
  15,437
  18,873
  22,748
  27,065
  31,824
  37,019
  42,643
  48,687
  55,140
  61,994
  69,239
  76,868
  84,874
  93,255
  102,009
  111,138
  120,644
  130,534
  140,818
  151,507
Total equity, $m
  822
  1,313
  2,029
  3,034
  4,402
  6,210
  8,537
  11,460
  15,047
  19,362
  24,456
  30,369
  37,129
  44,753
  53,247
  62,610
  72,830
  83,894
  95,784
  108,480
  121,964
  136,218
  151,226
  166,978
  183,467
  200,689
  218,647
  237,350
  256,808
  277,041
  298,070
Total liabilities and equity, $m
  1,239
  1,980
  3,060
  4,576
  6,639
  9,367
  12,877
  17,285
  22,696
  29,204
  36,887
  45,806
  56,002
  67,501
  80,312
  94,434
  109,849
  126,537
  144,471
  163,620
  183,958
  205,457
  228,094
  251,852
  276,722
  302,698
  329,785
  357,994
  387,342
  417,859
  449,577
Debt-to-equity ratio
  0.286
  0.370
  0.420
  0.450
  0.470
  0.480
  0.490
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
Adjusted equity ratio
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -65
  -159
  -254
  -388
  -571
  -815
  -1,130
  -1,527
  -2,017
  -2,609
  -3,310
  -4,127
  -5,064
  -6,123
  -7,306
  -8,614
  -10,044
  -11,595
  -13,265
  -15,050
  -16,948
  -18,957
  -21,074
  -23,297
  -25,626
  -28,060
  -30,598
  -33,243
  -35,994
  -38,856
  -41,831
Depreciation, amort., depletion, $m
  85
  136
  210
  314
  455
  642
  883
  1,185
  1,555
  2,002
  2,528
  3,139
  3,838
  4,626
  5,504
  6,472
  7,528
  8,672
  9,901
  11,214
  12,608
  14,081
  15,632
  17,261
  18,965
  20,745
  22,602
  24,535
  26,546
  28,638
  30,812
Funds from operations, $m
  77
  -24
  -44
  -74
  -116
  -173
  -247
  -342
  -462
  -607
  -782
  -988
  -1,225
  -1,497
  -1,802
  -2,142
  -2,516
  -2,923
  -3,363
  -3,836
  -4,341
  -4,876
  -5,441
  -6,037
  -6,661
  -7,314
  -7,996
  -8,708
  -9,448
  -10,218
  -11,019
Change in working capital, $m
  0
  -17
  -24
  -34
  -47
  -62
  -79
  -99
  -122
  -147
  -173
  -201
  -230
  -260
  -289
  -319
  -348
  -377
  -405
  -432
  -459
  -485
  -511
  -536
  -561
  -586
  -611
  -637
  -662
  -689
  -716
Cash from operations, $m
  77
  -7
  -20
  -40
  -70
  -111
  -168
  -243
  -339
  -460
  -609
  -786
  -995
  -1,237
  -1,513
  -1,823
  -2,168
  -2,546
  -2,959
  -3,404
  -3,882
  -4,391
  -4,931
  -5,500
  -6,100
  -6,728
  -7,385
  -8,071
  -8,786
  -9,530
  -10,303
Maintenance CAPEX, $m
  0
  -85
  -136
  -210
  -314
  -455
  -642
  -883
  -1,185
  -1,555
  -2,002
  -2,528
  -3,139
  -3,838
  -4,626
  -5,504
  -6,472
  -7,528
  -8,672
  -9,901
  -11,214
  -12,608
  -14,081
  -15,632
  -17,261
  -18,965
  -20,745
  -22,602
  -24,535
  -26,546
  -28,638
New CAPEX, $m
  -112
  -723
  -1,050
  -1,475
  -2,008
  -2,655
  -3,416
  -4,290
  -5,266
  -6,334
  -7,477
  -8,679
  -9,923
  -11,191
  -12,468
  -13,742
  -15,002
  -16,241
  -17,453
  -18,637
  -19,792
  -20,922
  -22,030
  -23,122
  -24,203
  -25,280
  -26,361
  -27,452
  -28,562
  -29,698
  -30,868
Cash from investing activities, $m
  -110
  -808
  -1,186
  -1,685
  -2,322
  -3,110
  -4,058
  -5,173
  -6,451
  -7,889
  -9,479
  -11,207
  -13,062
  -15,029
  -17,094
  -19,246
  -21,474
  -23,769
  -26,125
  -28,538
  -31,006
  -33,530
  -36,111
  -38,754
  -41,464
  -44,245
  -47,106
  -50,054
  -53,097
  -56,244
  -59,506
Free cash flow, $m
  -33
  -814
  -1,206
  -1,725
  -2,391
  -3,221
  -4,226
  -5,415
  -6,790
  -8,350
  -10,087
  -11,994
  -14,057
  -16,266
  -18,608
  -21,070
  -23,642
  -26,315
  -29,084
  -31,942
  -34,888
  -37,921
  -41,042
  -44,255
  -47,563
  -50,973
  -54,491
  -58,125
  -61,883
  -65,775
  -69,809
Issuance/(repayment) of debt, $m
  7
  250
  364
  511
  695
  919
  1,183
  1,485
  1,824
  2,193
  2,589
  3,005
  3,436
  3,875
  4,318
  4,759
  5,195
  5,624
  6,044
  6,453
  6,854
  7,245
  7,629
  8,007
  8,381
  8,754
  9,128
  9,506
  9,891
  10,284
  10,689
Issuance/(repurchase) of shares, $m
  26
  650
  970
  1,393
  1,939
  2,623
  3,457
  4,449
  5,605
  6,924
  8,404
  10,040
  11,824
  13,747
  15,801
  17,976
  20,264
  22,659
  25,155
  27,746
  30,432
  33,210
  36,082
  39,049
  42,114
  45,282
  48,557
  51,945
  55,453
  59,089
  62,860
Cash from financing (excl. dividends), $m  
  33
  900
  1,334
  1,904
  2,634
  3,542
  4,640
  5,934
  7,429
  9,117
  10,993
  13,045
  15,260
  17,622
  20,119
  22,735
  25,459
  28,283
  31,199
  34,199
  37,286
  40,455
  43,711
  47,056
  50,495
  54,036
  57,685
  61,451
  65,344
  69,373
  73,549
Total cash flow (excl. dividends), $m
  0
  86
  127
  179
  243
  322
  414
  520
  638
  767
  906
  1,052
  1,202
  1,356
  1,511
  1,665
  1,818
  1,968
  2,115
  2,258
  2,398
  2,535
  2,669
  2,801
  2,932
  3,063
  3,194
  3,326
  3,461
  3,598
  3,740
Retained Cash Flow (-), $m
  24
  -650
  -970
  -1,393
  -1,939
  -2,623
  -3,457
  -4,449
  -5,605
  -6,924
  -8,404
  -10,040
  -11,824
  -13,747
  -15,801
  -17,976
  -20,264
  -22,659
  -25,155
  -27,746
  -30,432
  -33,210
  -36,082
  -39,049
  -42,114
  -45,282
  -48,557
  -51,945
  -55,453
  -59,089
  -62,860
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
 
  -564
  -842
  -1,214
  -1,696
  -2,301
  -3,043
  -3,930
  -4,967
  -6,156
  -7,498
  -8,988
  -10,621
  -12,391
  -14,290
  -16,311
  -18,447
  -20,692
  -23,040
  -25,488
  -28,034
  -30,676
  -33,413
  -36,248
  -39,182
  -42,219
  -45,363
  -48,619
  -51,992
  -55,490
  -59,120
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  -536
  -756
  -1,024
  -1,336
  -1,684
  -2,055
  -2,431
  -2,794
  -3,124
  -3,402
  -3,615
  -3,749
  -3,800
  -3,766
  -3,651
  -3,464
  -3,218
  -2,926
  -2,605
  -2,270
  -1,936
  -1,615
  -1,317
  -1,050
  -817
  -621
  -460
  -331
  -233
  -159
Current shareholders' claim on cash, %
  100
  46.9
  22.8
  11.5
  6.0
  3.3
  1.8
  1.0
  0.6
  0.4
  0.2
  0.1
  0.1
  0.1
  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
  0.0
  0.0

Crew Energy Inc is a Canada-based oil and gas exploration, development and production company. It is a growth-oriented oil and natural gas producer. The Company's activities are primarily focused in the Montney Resource situated in northeast British Columbia. Its Montney Resource is complemented by its Lloydminster heavy oil property in Alberta and Saskatchewan. Its Montney area assets include: Septimus/West Septimus, Tower, Groundbirch, Attachie and Portage, which are situated south and west of Fort Staint John, British Columbia. Its operations include liquid rich natural gas and light oil production from the siltstone Montney formation. The Montney property is developed with long-reach horizontal wells. Production from Lloydminster property is comprised of a range of 12 to 14 degrees American Petroleum Institute (API) heavy oil, which is conventionally produced.

FINANCIAL RATIOS  of  Crew Energy Inc. (CR)

Valuation Ratios
P/E Ratio -8
Price to Sales 3.5
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow 6.8
Price to Free Cash Flow -14.9
Growth Rates
Sales Growth Rate 1.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -54.8%
Cap. Spend. - 3 Yr. Gr. Rate -16.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 28.6%
Total Debt to Equity 28.6%
Interest Coverage -5
Management Effectiveness
Return On Assets -4.3%
Ret/ On Assets - 3 Yr. Avg. -9.8%
Return On Total Capital -6.1%
Ret/ On T. Cap. - 3 Yr. Avg. -13.4%
Return On Equity -7.8%
Return On Equity - 3 Yr. Avg. -17.1%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 67.5%
Gross Margin - 3 Yr. Avg. 67.9%
EBITDA Margin 9.3%
EBITDA Margin - 3 Yr. Avg. -12.8%
Operating Margin -44.4%
Oper. Margin - 3 Yr. Avg. -48.5%
Pre-Tax Margin -57%
Pre-Tax Margin - 3 Yr. Avg. -75.6%
Net Profit Margin -43%
Net Profit Margin - 3 Yr. Avg. -57.9%
Effective Tax Rate 24.4%
Eff/ Tax Rate - 3 Yr. Avg. 22.4%
Payout Ratio 0%

CR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CR stock intrinsic value calculation we used $151 million for the last fiscal year's total revenue generated by Crew Energy Inc.. The default revenue input number comes from 2016 income statement of Crew Energy 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 CR stock valuation model: a) initial revenue growth rate of 60% 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 5.3%, whose default value for CR is calculated based on our internal credit rating of Crew Energy 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 Crew Energy 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 CR stock the variable cost ratio is equal to 159.6%.

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 CR 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 6.5% for Crew Energy Inc..

Corporate tax rate of 27% is the nominal tax rate for Crew Energy 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 CR 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 CR are equal to 797.7%.

Life of production assets of 14.2 years is the average useful life of capital assets used in Crew Energy 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 CR is equal to -18.5%. 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 - $822 million for Crew Energy 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 148.956 million for Crew Energy 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 Crew Energy Inc. at the current share price and the inputted number of shares is $0.5 billion.

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Financial statements of CR
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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