Intrinsic value of Magna International Inc. - MG

Previous Close

$76.59

  Intrinsic Value

$152.19

stock screener

  Rating & Target

str. buy

+99%

Previous close

$76.59

 
Intrinsic value

$152.19

 
Up/down potential

+99%

 
Rating

str. buy

We calculate the intrinsic value of MG 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 27.5

 

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, %
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.17
  5.15
  5.13
  5.12
  5.11
Revenue, $m
  52,835
  56,570
  60,452
  64,489
  68,686
  73,053
  77,599
  82,332
  87,264
  92,405
  97,766
  103,360
  109,200
  115,298
  121,670
  128,329
  135,293
  142,576
  150,197
  158,174
  166,525
  175,270
  184,431
  194,028
  204,086
  214,627
  225,677
  237,263
  249,411
  262,152
Variable operating expenses, $m
  48,430
  51,836
  55,376
  59,056
  62,883
  66,864
  71,009
  75,324
  79,821
  84,508
  89,136
  94,236
  99,560
  105,120
  110,929
  117,001
  123,350
  129,990
  136,938
  144,211
  151,825
  159,798
  168,150
  176,900
  186,070
  195,680
  205,755
  216,318
  227,394
  239,010
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
  48,430
  51,836
  55,376
  59,056
  62,883
  66,864
  71,009
  75,324
  79,821
  84,508
  89,136
  94,236
  99,560
  105,120
  110,929
  117,001
  123,350
  129,990
  136,938
  144,211
  151,825
  159,798
  168,150
  176,900
  186,070
  195,680
  205,755
  216,318
  227,394
  239,010
Operating income, $m
  4,404
  4,734
  5,077
  5,433
  5,804
  6,189
  6,590
  7,008
  7,444
  7,897
  8,630
  9,124
  9,640
  10,178
  10,741
  11,328
  11,943
  12,586
  13,259
  13,963
  14,700
  15,472
  16,281
  17,128
  18,016
  18,946
  19,922
  20,945
  22,017
  23,142
EBITDA, $m
  5,741
  6,147
  6,569
  7,007
  7,463
  7,938
  8,432
  8,946
  9,482
  10,041
  10,623
  11,231
  11,866
  12,528
  13,221
  13,944
  14,701
  15,492
  16,321
  17,187
  18,095
  19,045
  20,040
  21,083
  22,176
  23,322
  24,522
  25,781
  27,101
  28,486
Interest expense (income), $m
  134
  113
  154
  197
  242
  289
  337
  388
  440
  495
  552
  611
  673
  738
  805
  876
  949
  1,026
  1,107
  1,191
  1,279
  1,371
  1,467
  1,568
  1,674
  1,785
  1,901
  2,023
  2,150
  2,284
  2,425
Earnings before tax, $m
  4,291
  4,580
  4,879
  5,191
  5,515
  5,852
  6,203
  6,568
  6,949
  7,345
  8,019
  8,451
  8,902
  9,373
  9,865
  10,379
  10,917
  11,480
  12,068
  12,684
  13,329
  14,005
  14,713
  15,454
  16,231
  17,045
  17,899
  18,794
  19,733
  20,717
Tax expense, $m
  1,159
  1,237
  1,317
  1,402
  1,489
  1,580
  1,675
  1,773
  1,876
  1,983
  2,165
  2,282
  2,404
  2,531
  2,664
  2,802
  2,948
  3,099
  3,258
  3,425
  3,599
  3,781
  3,972
  4,173
  4,382
  4,602
  4,833
  5,074
  5,328
  5,594
Net income, $m
  3,132
  3,343
  3,562
  3,789
  4,026
  4,272
  4,528
  4,795
  5,072
  5,362
  5,854
  6,169
  6,498
  6,842
  7,201
  7,577
  7,969
  8,380
  8,810
  9,260
  9,730
  10,224
  10,740
  11,281
  11,849
  12,443
  13,066
  13,720
  14,405
  15,124

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
  31,300
  33,513
  35,813
  38,204
  40,691
  43,278
  45,971
  48,775
  51,697
  54,742
  57,918
  61,232
  64,692
  68,305
  72,079
  76,024
  80,150
  84,465
  88,979
  93,705
  98,652
  103,833
  109,260
  114,946
  120,904
  127,149
  133,695
  140,559
  147,756
  155,303
Adjusted assets (=assets-cash), $m
  31,300
  33,513
  35,813
  38,204
  40,691
  43,278
  45,971
  48,775
  51,697
  54,742
  57,918
  61,232
  64,692
  68,305
  72,079
  76,024
  80,150
  84,465
  88,979
  93,705
  98,652
  103,833
  109,260
  114,946
  120,904
  127,149
  133,695
  140,559
  147,756
  155,303
Revenue / Adjusted assets
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
  1.688
Average production assets, $m
  5,600
  5,996
  6,408
  6,836
  7,281
  7,744
  8,225
  8,727
  9,250
  9,795
  10,363
  10,956
  11,575
  12,222
  12,897
  13,603
  14,341
  15,113
  15,921
  16,766
  17,652
  18,579
  19,550
  20,567
  21,633
  22,750
  23,922
  25,150
  26,438
  27,788
Working capital, $m
  1,796
  1,923
  2,055
  2,193
  2,335
  2,484
  2,638
  2,799
  2,967
  3,142
  3,324
  3,514
  3,713
  3,920
  4,137
  4,363
  4,600
  4,848
  5,107
  5,378
  5,662
  5,959
  6,271
  6,597
  6,939
  7,297
  7,673
  8,067
  8,480
  8,913
Total debt, $m
  4,407
  5,640
  6,921
  8,253
  9,638
  11,079
  12,579
  14,141
  15,768
  17,464
  19,234
  21,079
  23,006
  25,019
  27,121
  29,319
  31,616
  34,020
  36,535
  39,167
  41,922
  44,808
  47,831
  50,998
  54,316
  57,795
  61,441
  65,264
  69,273
  73,477
Total liabilities, $m
  17,434
  18,667
  19,948
  21,280
  22,665
  24,106
  25,606
  27,168
  28,795
  30,491
  32,261
  34,106
  36,033
  38,046
  40,148
  42,346
  44,643
  47,047
  49,562
  52,194
  54,949
  57,835
  60,858
  64,025
  67,343
  70,822
  74,468
  78,291
  82,300
  86,504
Total equity, $m
  13,866
  14,846
  15,865
  16,924
  18,026
  19,172
  20,365
  21,607
  22,902
  24,251
  25,658
  27,126
  28,658
  30,259
  31,931
  33,679
  35,506
  37,418
  39,418
  41,511
  43,703
  45,998
  48,402
  50,921
  53,560
  56,327
  59,227
  62,267
  65,456
  68,799
Total liabilities and equity, $m
  31,300
  33,513
  35,813
  38,204
  40,691
  43,278
  45,971
  48,775
  51,697
  54,742
  57,919
  61,232
  64,691
  68,305
  72,079
  76,025
  80,149
  84,465
  88,980
  93,705
  98,652
  103,833
  109,260
  114,946
  120,903
  127,149
  133,695
  140,558
  147,756
  155,303
Debt-to-equity ratio
  0.320
  0.380
  0.440
  0.490
  0.530
  0.580
  0.620
  0.650
  0.690
  0.720
  0.750
  0.780
  0.800
  0.830
  0.850
  0.870
  0.890
  0.910
  0.930
  0.940
  0.960
  0.970
  0.990
  1.000
  1.010
  1.030
  1.040
  1.050
  1.060
  1.070
Adjusted equity ratio
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,132
  3,343
  3,562
  3,789
  4,026
  4,272
  4,528
  4,795
  5,072
  5,362
  5,854
  6,169
  6,498
  6,842
  7,201
  7,577
  7,969
  8,380
  8,810
  9,260
  9,730
  10,224
  10,740
  11,281
  11,849
  12,443
  13,066
  13,720
  14,405
  15,124
Depreciation, amort., depletion, $m
  1,337
  1,413
  1,492
  1,574
  1,660
  1,749
  1,842
  1,938
  2,039
  2,143
  1,993
  2,107
  2,226
  2,350
  2,480
  2,616
  2,758
  2,906
  3,062
  3,224
  3,395
  3,573
  3,760
  3,955
  4,160
  4,375
  4,600
  4,837
  5,084
  5,344
Funds from operations, $m
  4,469
  4,756
  5,054
  5,364
  5,686
  6,021
  6,370
  6,733
  7,111
  7,506
  7,847
  8,276
  8,724
  9,192
  9,682
  10,193
  10,727
  11,286
  11,871
  12,484
  13,125
  13,796
  14,500
  15,237
  16,009
  16,818
  17,667
  18,556
  19,489
  20,467
Change in working capital, $m
  122
  127
  132
  137
  143
  148
  155
  161
  168
  175
  182
  190
  199
  207
  217
  226
  237
  248
  259
  271
  284
  297
  311
  326
  342
  358
  376
  394
  413
  433
Cash from operations, $m
  4,347
  4,629
  4,922
  5,226
  5,543
  5,872
  6,215
  6,572
  6,943
  7,331
  7,665
  8,086
  8,526
  8,985
  9,465
  9,966
  10,491
  11,039
  11,612
  12,213
  12,841
  13,499
  14,188
  14,910
  15,667
  16,460
  17,291
  18,162
  19,076
  20,034
Maintenance CAPEX, $m
  -1,007
  -1,077
  -1,153
  -1,232
  -1,315
  -1,400
  -1,489
  -1,582
  -1,678
  -1,779
  -1,884
  -1,993
  -2,107
  -2,226
  -2,350
  -2,480
  -2,616
  -2,758
  -2,906
  -3,062
  -3,224
  -3,395
  -3,573
  -3,760
  -3,955
  -4,160
  -4,375
  -4,600
  -4,837
  -5,084
New CAPEX, $m
  -362
  -396
  -412
  -428
  -445
  -463
  -482
  -502
  -523
  -545
  -568
  -593
  -619
  -646
  -675
  -706
  -738
  -772
  -808
  -846
  -885
  -927
  -971
  -1,017
  -1,066
  -1,117
  -1,171
  -1,228
  -1,288
  -1,351
Cash from investing activities, $m
  -1,369
  -1,473
  -1,565
  -1,660
  -1,760
  -1,863
  -1,971
  -2,084
  -2,201
  -2,324
  -2,452
  -2,586
  -2,726
  -2,872
  -3,025
  -3,186
  -3,354
  -3,530
  -3,714
  -3,908
  -4,109
  -4,322
  -4,544
  -4,777
  -5,021
  -5,277
  -5,546
  -5,828
  -6,125
  -6,435
Free cash flow, $m
  2,978
  3,156
  3,357
  3,566
  3,783
  4,009
  4,244
  4,488
  4,742
  5,007
  5,213
  5,500
  5,800
  6,113
  6,439
  6,780
  7,136
  7,509
  7,898
  8,305
  8,732
  9,178
  9,644
  10,133
  10,646
  11,182
  11,745
  12,334
  12,952
  13,600
Issuance/(repayment) of debt, $m
  1,173
  1,233
  1,281
  1,332
  1,385
  1,441
  1,500
  1,562
  1,627
  1,696
  1,769
  1,846
  1,927
  2,012
  2,102
  2,198
  2,298
  2,403
  2,515
  2,632
  2,756
  2,886
  3,023
  3,167
  3,319
  3,478
  3,646
  3,823
  4,009
  4,204
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  
  1,173
  1,233
  1,281
  1,332
  1,385
  1,441
  1,500
  1,562
  1,627
  1,696
  1,769
  1,846
  1,927
  2,012
  2,102
  2,198
  2,298
  2,403
  2,515
  2,632
  2,756
  2,886
  3,023
  3,167
  3,319
  3,478
  3,646
  3,823
  4,009
  4,204
Total cash flow (excl. dividends), $m
  4,151
  4,389
  4,638
  4,898
  5,169
  5,450
  5,744
  6,050
  6,370
  6,703
  6,982
  7,346
  7,727
  8,125
  8,542
  8,978
  9,434
  9,912
  10,413
  10,937
  11,487
  12,063
  12,667
  13,300
  13,964
  14,661
  15,391
  16,157
  16,961
  17,804
Retained Cash Flow (-), $m
  -955
  -980
  -1,019
  -1,059
  -1,102
  -1,146
  -1,193
  -1,242
  -1,294
  -1,349
  -1,407
  -1,468
  -1,533
  -1,600
  -1,672
  -1,748
  -1,827
  -1,912
  -2,000
  -2,093
  -2,192
  -2,295
  -2,404
  -2,519
  -2,639
  -2,766
  -2,900
  -3,041
  -3,188
  -3,344
Prev. year cash balance distribution, $m
  286
  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
  3,482
  3,408
  3,620
  3,839
  4,067
  4,304
  4,551
  4,808
  5,075
  5,354
  5,575
  5,878
  6,194
  6,525
  6,870
  7,230
  7,607
  8,001
  8,413
  8,844
  9,296
  9,768
  10,263
  10,782
  11,325
  11,894
  12,491
  13,116
  13,772
  14,460
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
  3,338
  3,120
  3,150
  3,161
  3,152
  3,124
  3,075
  3,005
  2,916
  2,807
  2,647
  2,508
  2,355
  2,190
  2,017
  1,837
  1,655
  1,473
  1,295
  1,124
  961
  810
  673
  549
  441
  347
  268
  203
  150
  109
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

Magna International Inc. (Magna) is a global automotive supplier. The Company's segments are North America, Europe, Asia, Rest of World, and Corporate and Other. The Company's product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure, and roof systems and modules, as well as vehicle engineering and contract manufacturing. The Company has over 320 manufacturing operations and approximately 100 product development, engineering and sales centers in over 30 countries. It provides a range of body, chassis and engineering solutions to its original equipment manufacturer (OEM) customers. It has capabilities in powertrain design, development, testing and manufacturing. It offers bumper fascia systems, exterior trim and modular systems. It offers exterior and interior mirror systems. It offers sealing, trim, engineered glass and module systems. It offers softtops, retractable hardtops, modular tops and hardtops.

FINANCIAL RATIOS  of  Magna International Inc. (MG)

Valuation Ratios
P/E Ratio 10.7
Price to Sales 0.6
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 6.4
Price to Free Cash Flow 13.7
Growth Rates
Sales Growth Rate 13.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.5%
Cap. Spend. - 3 Yr. Gr. Rate 9.1%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 24.5%
Total Debt to Equity 32.3%
Interest Coverage 29
Management Effectiveness
Return On Assets 10%
Ret/ On Assets - 3 Yr. Avg. 10.5%
Return On Total Capital 16.6%
Ret/ On T. Cap. - 3 Yr. Avg. 18.2%
Return On Equity 21.7%
Return On Equity - 3 Yr. Avg. 21.7%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 14.6%
Gross Margin - 3 Yr. Avg. 14.4%
EBITDA Margin 10.8%
EBITDA Margin - 3 Yr. Avg. 10.6%
Operating Margin 7.6%
Oper. Margin - 3 Yr. Avg. 7.8%
Pre-Tax Margin 7.6%
Pre-Tax Margin - 3 Yr. Avg. 7.8%
Net Profit Margin 5.6%
Net Profit Margin - 3 Yr. Avg. 5.8%
Effective Tax Rate 25.4%
Eff/ Tax Rate - 3 Yr. Avg. 26.1%
Payout Ratio 19%

MG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MG stock intrinsic value calculation we used $49240 million for the last fiscal year's total revenue generated by Magna International Inc.. The default revenue input number comes from 2016 income statement of Magna International 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 MG stock valuation model: a) initial revenue growth rate of 7.3% 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 MG is calculated based on our internal credit rating of Magna International 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 Magna International 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 MG stock the variable cost ratio is equal to 91.7%.

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 MG 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 Magna International Inc..

Corporate tax rate of 27% is the nominal tax rate for Magna International 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 MG 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 MG are equal to 10.6%.

Life of production assets of 5.2 years is the average useful life of capital assets used in Magna International 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 MG is equal to 3.4%. 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 - $13197 million for Magna International 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 359.349 million for Magna International 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 Magna International Inc. at the current share price and the inputted number of shares is $27.5 billion.

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