Intrinsic value of IAMGOLD Corporation - IMG

Previous Close

$6.72

  Intrinsic Value

$1.62

stock screener

  Rating & Target

str. sell

-76%

Previous close

$6.72

 
Intrinsic value

$1.62

 
Up/down potential

-76%

 
Rating

str. sell

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

We calculate the intrinsic value of IMG 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 3.1

 

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, %
  7.67
  18.20
  16.88
  15.69
  14.62
  13.66
  12.79
  12.02
  11.31
  10.68
  10.11
  9.60
  9.14
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
Revenue, $m
  1,334
  1,577
  1,843
  2,132
  2,444
  2,778
  3,133
  3,510
  3,907
  4,324
  4,761
  5,219
  5,696
  6,193
  6,710
  7,248
  7,808
  8,389
  8,993
  9,621
  10,274
  10,952
  11,658
  12,392
  13,157
  13,953
  14,783
  15,649
  16,551
  17,493
  18,476
Variable operating expenses, $m
 
  2,882
  3,369
  3,898
  4,467
  5,078
  5,727
  6,416
  7,141
  7,904
  8,704
  9,540
  10,412
  11,320
  12,266
  13,250
  14,273
  15,335
  16,440
  17,587
  18,780
  20,021
  21,311
  22,653
  24,051
  25,507
  27,024
  28,606
  30,256
  31,977
  33,775
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
  1,284
  2,882
  3,369
  3,898
  4,467
  5,078
  5,727
  6,416
  7,141
  7,904
  8,704
  9,540
  10,412
  11,320
  12,266
  13,250
  14,273
  15,335
  16,440
  17,587
  18,780
  20,021
  21,311
  22,653
  24,051
  25,507
  27,024
  28,606
  30,256
  31,977
  33,775
Operating income, $m
  49
  -1,306
  -1,526
  -1,765
  -2,024
  -2,300
  -2,594
  -2,906
  -3,235
  -3,580
  -3,942
  -4,321
  -4,716
  -5,128
  -5,556
  -6,002
  -6,465
  -6,946
  -7,446
  -7,966
  -8,507
  -9,068
  -9,653
  -10,261
  -10,894
  -11,553
  -12,241
  -12,957
  -13,704
  -14,484
  -15,299
EBITDA, $m
  405
  -887
  -1,037
  -1,199
  -1,375
  -1,563
  -1,762
  -1,974
  -2,198
  -2,432
  -2,678
  -2,935
  -3,204
  -3,483
  -3,775
  -4,077
  -4,392
  -4,719
  -5,059
  -5,412
  -5,779
  -6,161
  -6,558
  -6,971
  -7,401
  -7,849
  -8,316
  -8,802
  -9,310
  -9,840
  -10,393
Interest expense (income), $m
  33
  27
  39
  52
  66
  81
  98
  115
  134
  153
  173
  195
  217
  241
  265
  290
  317
  344
  373
  402
  433
  465
  498
  533
  569
  606
  645
  686
  728
  773
  819
Earnings before tax, $m
  129
  -1,332
  -1,565
  -1,817
  -2,090
  -2,381
  -2,692
  -3,021
  -3,368
  -3,733
  -4,116
  -4,516
  -4,933
  -5,368
  -5,821
  -6,292
  -6,782
  -7,290
  -7,819
  -8,368
  -8,940
  -9,533
  -10,151
  -10,794
  -11,463
  -12,160
  -12,886
  -13,643
  -14,433
  -15,257
  -16,117
Tax expense, $m
  46
  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
  71
  -1,332
  -1,565
  -1,817
  -2,090
  -2,381
  -2,692
  -3,021
  -3,368
  -3,733
  -4,116
  -4,516
  -4,933
  -5,368
  -5,821
  -6,292
  -6,782
  -7,290
  -7,819
  -8,368
  -8,940
  -9,533
  -10,151
  -10,794
  -11,463
  -12,160
  -12,886
  -13,643
  -14,433
  -15,257
  -16,117

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  881
  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
  4,594
  4,392
  5,134
  5,939
  6,808
  7,738
  8,728
  9,776
  10,882
  12,045
  13,263
  14,536
  15,865
  17,250
  18,691
  20,190
  21,749
  23,368
  25,051
  26,800
  28,618
  30,508
  32,474
  34,519
  36,649
  38,868
  41,179
  43,590
  46,104
  48,727
  51,467
Adjusted assets (=assets-cash), $m
  3,713
  4,392
  5,134
  5,939
  6,808
  7,738
  8,728
  9,776
  10,882
  12,045
  13,263
  14,536
  15,865
  17,250
  18,691
  20,190
  21,749
  23,368
  25,051
  26,800
  28,618
  30,508
  32,474
  34,519
  36,649
  38,868
  41,179
  43,590
  46,104
  48,727
  51,467
Revenue / Adjusted assets
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
Average production assets, $m
  2,515
  2,972
  3,474
  4,019
  4,607
  5,236
  5,906
  6,616
  7,364
  8,151
  8,975
  9,837
  10,736
  11,673
  12,649
  13,663
  14,718
  15,813
  16,952
  18,136
  19,366
  20,645
  21,975
  23,360
  24,801
  26,302
  27,867
  29,498
  31,199
  32,974
  34,828
Working capital, $m
  1,105
  265
  310
  358
  411
  467
  526
  590
  656
  726
  800
  877
  957
  1,040
  1,127
  1,218
  1,312
  1,409
  1,511
  1,616
  1,726
  1,840
  1,959
  2,082
  2,210
  2,344
  2,484
  2,629
  2,781
  2,939
  3,104
Total debt, $m
  656
  948
  1,266
  1,612
  1,984
  2,383
  2,808
  3,258
  3,732
  4,231
  4,754
  5,300
  5,870
  6,464
  7,083
  7,726
  8,394
  9,089
  9,811
  10,561
  11,341
  12,152
  12,995
  13,873
  14,787
  15,738
  16,730
  17,764
  18,842
  19,968
  21,143
Total liabilities, $m
  1,593
  1,884
  2,202
  2,548
  2,920
  3,319
  3,744
  4,194
  4,668
  5,167
  5,690
  6,236
  6,806
  7,400
  8,019
  8,662
  9,330
  10,025
  10,747
  11,497
  12,277
  13,088
  13,931
  14,809
  15,723
  16,674
  17,666
  18,700
  19,778
  20,904
  22,079
Total equity, $m
  3,002
  2,508
  2,931
  3,391
  3,887
  4,418
  4,983
  5,582
  6,214
  6,877
  7,573
  8,300
  9,059
  9,850
  10,673
  11,529
  12,418
  13,343
  14,304
  15,303
  16,341
  17,420
  18,542
  19,711
  20,927
  22,193
  23,513
  24,890
  26,325
  27,823
  29,387
Total liabilities and equity, $m
  4,595
  4,392
  5,133
  5,939
  6,807
  7,737
  8,727
  9,776
  10,882
  12,044
  13,263
  14,536
  15,865
  17,250
  18,692
  20,191
  21,748
  23,368
  25,051
  26,800
  28,618
  30,508
  32,473
  34,520
  36,650
  38,867
  41,179
  43,590
  46,103
  48,727
  51,466
Debt-to-equity ratio
  0.219
  0.380
  0.430
  0.480
  0.510
  0.540
  0.560
  0.580
  0.600
  0.620
  0.630
  0.640
  0.650
  0.660
  0.660
  0.670
  0.680
  0.680
  0.690
  0.690
  0.690
  0.700
  0.700
  0.700
  0.710
  0.710
  0.710
  0.710
  0.720
  0.720
  0.720
Adjusted equity ratio
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  71
  -1,332
  -1,565
  -1,817
  -2,090
  -2,381
  -2,692
  -3,021
  -3,368
  -3,733
  -4,116
  -4,516
  -4,933
  -5,368
  -5,821
  -6,292
  -6,782
  -7,290
  -7,819
  -8,368
  -8,940
  -9,533
  -10,151
  -10,794
  -11,463
  -12,160
  -12,886
  -13,643
  -14,433
  -15,257
  -16,117
Depreciation, amort., depletion, $m
  356
  419
  489
  566
  649
  737
  832
  932
  1,037
  1,148
  1,264
  1,385
  1,512
  1,644
  1,782
  1,924
  2,073
  2,227
  2,388
  2,554
  2,728
  2,908
  3,095
  3,290
  3,493
  3,705
  3,925
  4,155
  4,394
  4,644
  4,905
Funds from operations, $m
  451
  -914
  -1,076
  -1,251
  -1,441
  -1,644
  -1,860
  -2,089
  -2,331
  -2,585
  -2,852
  -3,130
  -3,421
  -3,724
  -4,040
  -4,368
  -4,709
  -5,063
  -5,431
  -5,814
  -6,212
  -6,626
  -7,056
  -7,504
  -7,970
  -8,455
  -8,961
  -9,488
  -10,038
  -10,613
  -11,212
Change in working capital, $m
  26
  41
  45
  49
  52
  56
  60
  63
  67
  70
  73
  77
  80
  84
  87
  90
  94
  98
  101
  105
  110
  114
  119
  123
  128
  134
  139
  145
  152
  158
  165
Cash from operations, $m
  425
  -955
  -1,120
  -1,300
  -1,493
  -1,700
  -1,920
  -2,153
  -2,398
  -2,655
  -2,925
  -3,207
  -3,501
  -3,808
  -4,126
  -4,458
  -4,803
  -5,161
  -5,533
  -5,920
  -6,322
  -6,740
  -7,175
  -7,627
  -8,098
  -8,589
  -9,100
  -9,634
  -10,190
  -10,771
  -11,377
Maintenance CAPEX, $m
  0
  -354
  -419
  -489
  -566
  -649
  -737
  -832
  -932
  -1,037
  -1,148
  -1,264
  -1,385
  -1,512
  -1,644
  -1,782
  -1,924
  -2,073
  -2,227
  -2,388
  -2,554
  -2,728
  -2,908
  -3,095
  -3,290
  -3,493
  -3,705
  -3,925
  -4,155
  -4,394
  -4,644
New CAPEX, $m
  -370
  -458
  -502
  -545
  -588
  -629
  -670
  -710
  -748
  -787
  -824
  -862
  -899
  -937
  -975
  -1,014
  -1,054
  -1,096
  -1,139
  -1,183
  -1,230
  -1,279
  -1,330
  -1,384
  -1,441
  -1,501
  -1,564
  -1,631
  -1,701
  -1,775
  -1,854
Cash from investing activities, $m
  -223
  -812
  -921
  -1,034
  -1,154
  -1,278
  -1,407
  -1,542
  -1,680
  -1,824
  -1,972
  -2,126
  -2,284
  -2,449
  -2,619
  -2,796
  -2,978
  -3,169
  -3,366
  -3,571
  -3,784
  -4,007
  -4,238
  -4,479
  -4,731
  -4,994
  -5,269
  -5,556
  -5,856
  -6,169
  -6,498
Free cash flow, $m
  202
  -1,767
  -2,041
  -2,334
  -2,647
  -2,978
  -3,327
  -3,694
  -4,078
  -4,479
  -4,898
  -5,333
  -5,786
  -6,257
  -6,746
  -7,254
  -7,782
  -8,330
  -8,899
  -9,491
  -10,106
  -10,746
  -11,413
  -12,107
  -12,830
  -13,583
  -14,369
  -15,190
  -16,046
  -16,940
  -17,875
Issuance/(repayment) of debt, $m
  -193
  292
  318
  346
  373
  399
  425
  450
  474
  499
  523
  546
  570
  594
  618
  643
  668
  695
  722
  750
  780
  811
  843
  878
  914
  952
  992
  1,034
  1,079
  1,126
  1,175
Issuance/(repurchase) of shares, $m
  356
  1,719
  1,988
  2,277
  2,586
  2,912
  3,257
  3,620
  4,000
  4,397
  4,811
  5,243
  5,692
  6,159
  6,644
  7,148
  7,671
  8,215
  8,780
  9,367
  9,978
  10,613
  11,274
  11,962
  12,679
  13,426
  14,206
  15,019
  15,868
  16,755
  17,681
Cash from financing (excl. dividends), $m  
  30
  2,011
  2,306
  2,623
  2,959
  3,311
  3,682
  4,070
  4,474
  4,896
  5,334
  5,789
  6,262
  6,753
  7,262
  7,791
  8,339
  8,910
  9,502
  10,117
  10,758
  11,424
  12,117
  12,840
  13,593
  14,378
  15,198
  16,053
  16,947
  17,881
  18,856
Total cash flow (excl. dividends), $m
  231
  245
  266
  289
  311
  333
  355
  376
  396
  416
  436
  456
  476
  496
  516
  537
  558
  580
  603
  627
  651
  677
  704
  733
  763
  795
  828
  864
  901
  940
  981
Retained Cash Flow (-), $m
  -441
  -1,719
  -1,988
  -2,277
  -2,586
  -2,912
  -3,257
  -3,620
  -4,000
  -4,397
  -4,811
  -5,243
  -5,692
  -6,159
  -6,644
  -7,148
  -7,671
  -8,215
  -8,780
  -9,367
  -9,978
  -10,613
  -11,274
  -11,962
  -12,679
  -13,426
  -14,206
  -15,019
  -15,868
  -16,755
  -17,681
Prev. year cash balance distribution, $m
 
  881
  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
 
  -593
  -1,723
  -1,989
  -2,274
  -2,579
  -2,903
  -3,244
  -3,604
  -3,981
  -4,375
  -4,787
  -5,216
  -5,663
  -6,128
  -6,611
  -7,113
  -7,635
  -8,177
  -8,741
  -9,326
  -9,935
  -10,569
  -11,229
  -11,916
  -12,632
  -13,378
  -14,156
  -14,967
  -15,815
  -16,700
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  -569
  -1,577
  -1,731
  -1,873
  -1,999
  -2,107
  -2,192
  -2,252
  -2,287
  -2,294
  -2,273
  -2,226
  -2,153
  -2,057
  -1,941
  -1,808
  -1,661
  -1,506
  -1,346
  -1,185
  -1,028
  -877
  -736
  -607
  -491
  -390
  -304
  -232
  -173
  -126
Current shareholders' claim on cash, %
  100
  56.1
  31.8
  18.2
  10.5
  6.1
  3.5
  2.1
  1.2
  0.7
  0.4
  0.3
  0.2
  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

IAMGOLD Corporation (IAMGOLD) is engaged primarily in the exploration for, and the development and production of, mineral resource properties throughout the world. Through its holdings, IAMGOLD has interests in various operations, exploration and development properties. IAMGOLD is a mid-tier mining company with approximately four operating gold mines on over three continents. The Company's gold mine segment is divided into geographic segments, such as Burkina Faso - Essakane mine; Suriname-Rosebel mine; Canada-Doyon division, which includes the Westwood mine and the Doyon mine, and Joint ventures (Mali)-Sadiola mine (41%) and Yatela mine (40%). The Company's non-gold segments are divided into Exploration and evaluation, and Corporate, which includes royalty interests located in Canada and investments in associates and joint ventures. In Canada, the Company owns the Westwood mine in Quebec and the Cote Gold project, a development project located in Ontario.

FINANCIAL RATIOS  of  IAMGOLD Corporation (IMG)

Valuation Ratios
P/E Ratio 43
Price to Sales 2.3
Price to Book 1
Price to Tangible Book
Price to Cash Flow 7.2
Price to Free Cash Flow 55.4
Growth Rates
Sales Growth Rate 7.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36.5%
Cap. Spend. - 3 Yr. Gr. Rate -15%
Financial Strength
Quick Ratio NaN
Current Ratio 0.5
LT Debt to Equity 21.9%
Total Debt to Equity 21.9%
Interest Coverage 5
Management Effectiveness
Return On Assets 2.1%
Ret/ On Assets - 3 Yr. Avg. -7.1%
Return On Total Capital 2%
Ret/ On T. Cap. - 3 Yr. Avg. -10%
Return On Equity 2.6%
Return On Equity - 3 Yr. Avg. -12.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 10.3%
Gross Margin - 3 Yr. Avg. 5.3%
EBITDA Margin 38.8%
EBITDA Margin - 3 Yr. Avg. -1.1%
Operating Margin 3.7%
Oper. Margin - 3 Yr. Avg. -27.7%
Pre-Tax Margin 9.7%
Pre-Tax Margin - 3 Yr. Avg. -30%
Net Profit Margin 5.3%
Net Profit Margin - 3 Yr. Avg. -32.5%
Effective Tax Rate 35.7%
Eff/ Tax Rate - 3 Yr. Avg. -15.9%
Payout Ratio 0%

IMG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IMG stock intrinsic value calculation we used $1334 million for the last fiscal year's total revenue generated by IAMGOLD Corporation. The default revenue input number comes from 2016 income statement of IAMGOLD Corporation. 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 IMG stock valuation model: a) initial revenue growth rate of 18.2% 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 4.3%, whose default value for IMG is calculated based on our internal credit rating of IAMGOLD Corporation, 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 IAMGOLD Corporation.
    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 IMG stock the variable cost ratio is equal to 182.8%.

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 IMG 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 4.1% for IAMGOLD Corporation.

Corporate tax rate of 27% is the nominal tax rate for IAMGOLD Corporation. 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 IMG 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 IMG are equal to 188.5%.

Life of production assets of 7.1 years is the average useful life of capital assets used in IAMGOLD Corporation 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 IMG is equal to 16.8%. 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 - $3002 million for IAMGOLD Corporation - 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 462.937 million for IAMGOLD Corporation 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 IAMGOLD Corporation at the current share price and the inputted number of shares is $3.1 billion.

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Financial statements of IMG
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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