Intrinsic value of ONEX Corporation Subordinate Voting Shar - ONEX

Previous Close

$97.38

  Intrinsic Value

$793.16

stock screener

  Rating & Target

str. buy

+714%

Previous close

$97.38

 
Intrinsic value

$793.16

 
Up/down potential

+714%

 
Rating

str. buy

We calculate the intrinsic value of ONEX 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 9.8

 

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, %
  46.50
  42.35
  38.62
  35.25
  32.23
  29.51
  27.05
  24.85
  22.86
  21.08
  19.47
  18.02
  16.72
  15.55
  14.49
  13.54
  12.69
  11.92
  11.23
  10.61
  10.05
  9.54
  9.09
  8.68
  8.31
  7.98
  7.68
  7.41
  7.17
  6.95
Revenue, $m
  44,580
  63,460
  87,964
  118,975
  157,318
  203,736
  258,856
  323,180
  397,073
  480,768
  574,375
  677,895
  791,244
  914,273
  1,046,787
  1,188,568
  1,339,398
  1,499,068
  1,667,397
  1,844,242
  2,029,504
  2,223,137
  2,425,149
  2,635,606
  2,854,633
  3,082,412
  3,319,183
  3,565,241
  3,820,937
  4,086,671
Variable operating expenses, $m
  39,323
  55,451
  76,385
  102,876
  135,632
  175,284
  222,372
  277,322
  340,446
  411,944
  490,669
  579,103
  675,934
  781,033
  894,235
  1,015,355
  1,144,204
  1,280,605
  1,424,403
  1,575,476
  1,733,739
  1,899,153
  2,071,725
  2,251,512
  2,438,619
  2,633,204
  2,835,469
  3,045,669
  3,264,101
  3,491,109
Fixed operating expenses, $m
  4,017
  4,106
  4,196
  4,289
  4,383
  4,479
  4,578
  4,679
  4,781
  4,887
  4,994
  5,104
  5,216
  5,331
  5,448
  5,568
  5,691
  5,816
  5,944
  6,075
  6,208
  6,345
  6,484
  6,627
  6,773
  6,922
  7,074
  7,230
  7,389
  7,551
Total operating expenses, $m
  43,340
  59,557
  80,581
  107,165
  140,015
  179,763
  226,950
  282,001
  345,227
  416,831
  495,663
  584,207
  681,150
  786,364
  899,683
  1,020,923
  1,149,895
  1,286,421
  1,430,347
  1,581,551
  1,739,947
  1,905,498
  2,078,209
  2,258,139
  2,445,392
  2,640,126
  2,842,543
  3,052,899
  3,271,490
  3,498,660
Operating income, $m
  1,240
  3,903
  7,384
  11,811
  17,304
  23,972
  31,907
  41,180
  51,846
  63,938
  78,711
  93,687
  110,094
  127,909
  147,103
  167,645
  189,504
  212,648
  237,051
  262,692
  289,557
  317,639
  346,939
  377,467
  409,241
  442,287
  476,640
  512,343
  549,447
  588,011
EBITDA, $m
  3,923
  7,197
  11,471
  16,902
  23,637
  31,808
  41,526
  52,882
  65,940
  80,742
  97,306
  115,634
  135,711
  157,508
  180,993
  206,125
  232,867
  261,180
  291,033
  322,399
  355,262
  389,613
  425,454
  462,795
  501,660
  542,080
  584,098
  627,768
  673,150
  720,317
Interest expense (income), $m
  1,302
  1,429
  2,080
  3,511
  5,369
  7,720
  10,626
  14,145
  18,324
  23,200
  28,801
  35,146
  42,242
  50,089
  58,682
  68,008
  78,054
  88,802
  100,236
  112,340
  125,100
  138,506
  152,550
  167,229
  182,543
  198,497
  215,100
  232,367
  250,316
  268,969
  288,352
Earnings before tax, $m
  -189
  1,823
  3,872
  6,442
  9,584
  13,346
  17,761
  22,856
  28,646
  35,136
  43,565
  51,446
  60,005
  69,226
  79,094
  89,591
  100,702
  112,412
  124,711
  137,592
  151,051
  165,089
  179,711
  194,925
  210,744
  227,187
  244,272
  262,027
  280,478
  299,659
Tax expense, $m
  0
  492
  1,046
  1,739
  2,588
  3,603
  4,796
  6,171
  7,734
  9,487
  11,763
  13,890
  16,201
  18,691
  21,355
  24,190
  27,189
  30,351
  33,672
  37,150
  40,784
  44,574
  48,522
  52,630
  56,901
  61,340
  65,954
  70,747
  75,729
  80,908
Net income, $m
  -189
  1,331
  2,827
  4,702
  6,997
  9,742
  12,966
  16,685
  20,912
  25,649
  31,803
  37,555
  43,803
  50,535
  57,739
  65,402
  73,512
  82,061
  91,039
  100,442
  110,267
  120,515
  131,189
  142,295
  153,843
  165,846
  178,319
  191,280
  204,749
  218,751

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
  79,892
  113,727
  157,642
  213,217
  281,933
  365,118
  463,900
  579,176
  711,601
  861,592
  1,029,345
  1,214,865
  1,418,001
  1,638,482
  1,875,962
  2,130,051
  2,400,355
  2,686,502
  2,988,167
  3,305,093
  3,637,104
  3,984,116
  4,346,145
  4,723,309
  5,115,830
  5,524,036
  5,948,357
  6,389,321
  6,847,557
  7,323,784
Adjusted assets (=assets-cash), $m
  79,892
  113,727
  157,642
  213,217
  281,933
  365,118
  463,900
  579,176
  711,601
  861,592
  1,029,345
  1,214,865
  1,418,001
  1,638,482
  1,875,962
  2,130,051
  2,400,355
  2,686,502
  2,988,167
  3,305,093
  3,637,104
  3,984,116
  4,346,145
  4,723,309
  5,115,830
  5,524,036
  5,948,357
  6,389,321
  6,847,557
  7,323,784
Revenue / Adjusted assets
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
  0.558
Average production assets, $m
  23,092
  32,872
  45,566
  61,629
  81,491
  105,535
  134,087
  167,407
  205,684
  249,038
  297,526
  351,150
  409,865
  473,593
  542,235
  615,678
  693,808
  776,517
  863,712
  955,317
  1,051,283
  1,151,585
  1,256,227
  1,365,244
  1,478,700
  1,596,690
  1,719,337
  1,846,795
  1,979,245
  2,116,896
Working capital, $m
  3,076
  4,379
  6,070
  8,209
  10,855
  14,058
  17,861
  22,299
  27,398
  33,173
  39,632
  46,775
  54,596
  63,085
  72,228
  82,011
  92,418
  103,436
  115,050
  127,253
  140,036
  153,396
  167,335
  181,857
  196,970
  212,686
  229,024
  246,002
  263,645
  281,980
Total debt, $m
  44,256
  74,707
  114,231
  164,248
  226,092
  300,959
  389,863
  493,611
  612,794
  747,786
  898,763
  1,065,732
  1,248,554
  1,446,987
  1,660,718
  1,889,399
  2,132,672
  2,390,205
  2,661,704
  2,946,937
  3,245,747
  3,558,058
  3,883,884
  4,223,331
  4,576,600
  4,943,986
  5,325,874
  5,722,742
  6,135,154
  6,563,758
Total liabilities, $m
  71,903
  102,354
  141,878
  191,895
  253,739
  328,606
  417,510
  521,258
  640,441
  775,433
  926,410
  1,093,379
  1,276,201
  1,474,634
  1,688,365
  1,917,046
  2,160,319
  2,417,852
  2,689,351
  2,974,584
  3,273,394
  3,585,705
  3,911,531
  4,250,978
  4,604,247
  4,971,633
  5,353,521
  5,750,389
  6,162,801
  6,591,405
Total equity, $m
  7,989
  11,373
  15,764
  21,322
  28,193
  36,512
  46,390
  57,918
  71,160
  86,159
  102,934
  121,487
  141,800
  163,848
  187,596
  213,005
  240,035
  268,650
  298,817
  330,509
  363,710
  398,412
  434,615
  472,331
  511,583
  552,404
  594,836
  638,932
  684,756
  732,378
Total liabilities and equity, $m
  79,892
  113,727
  157,642
  213,217
  281,932
  365,118
  463,900
  579,176
  711,601
  861,592
  1,029,344
  1,214,866
  1,418,001
  1,638,482
  1,875,961
  2,130,051
  2,400,354
  2,686,502
  2,988,168
  3,305,093
  3,637,104
  3,984,117
  4,346,146
  4,723,309
  5,115,830
  5,524,037
  5,948,357
  6,389,321
  6,847,557
  7,323,783
Debt-to-equity ratio
  5.540
  6.570
  7.250
  7.700
  8.020
  8.240
  8.400
  8.520
  8.610
  8.680
  8.730
  8.770
  8.810
  8.830
  8.850
  8.870
  8.880
  8.900
  8.910
  8.920
  8.920
  8.930
  8.940
  8.940
  8.950
  8.950
  8.950
  8.960
  8.960
  8.960
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -189
  1,331
  2,827
  4,702
  6,997
  9,742
  12,966
  16,685
  20,912
  25,649
  31,803
  37,555
  43,803
  50,535
  57,739
  65,402
  73,512
  82,061
  91,039
  100,442
  110,267
  120,515
  131,189
  142,295
  153,843
  165,846
  178,319
  191,280
  204,749
  218,751
Depreciation, amort., depletion, $m
  2,683
  3,294
  4,087
  5,091
  6,333
  7,835
  9,620
  11,702
  14,095
  16,804
  18,595
  21,947
  25,617
  29,600
  33,890
  38,480
  43,363
  48,532
  53,982
  59,707
  65,705
  71,974
  78,514
  85,328
  92,419
  99,793
  107,459
  115,425
  123,703
  132,306
Funds from operations, $m
  2,494
  4,625
  6,914
  9,794
  13,329
  17,578
  22,586
  28,388
  35,006
  42,454
  50,398
  59,502
  69,420
  80,135
  91,629
  103,882
  116,875
  130,593
  145,021
  160,149
  175,972
  192,489
  209,703
  227,623
  246,262
  265,639
  285,777
  306,704
  328,452
  351,057
Change in working capital, $m
  976
  1,303
  1,691
  2,140
  2,646
  3,203
  3,803
  4,438
  5,099
  5,775
  6,459
  7,143
  7,821
  8,489
  9,143
  9,783
  10,407
  11,017
  11,615
  12,202
  12,783
  13,361
  13,939
  14,522
  15,113
  15,717
  16,337
  16,978
  17,643
  18,336
Cash from operations, $m
  1,517
  3,322
  5,223
  7,654
  10,684
  14,375
  18,783
  23,949
  29,908
  36,679
  43,939
  52,359
  61,599
  71,646
  82,485
  94,099
  106,468
  119,576
  133,406
  147,947
  163,189
  179,128
  195,764
  213,101
  231,149
  249,923
  269,440
  289,726
  310,809
  332,721
Maintenance CAPEX, $m
  -986
  -1,443
  -2,055
  -2,848
  -3,852
  -5,093
  -6,596
  -8,380
  -10,463
  -12,855
  -15,565
  -18,595
  -21,947
  -25,617
  -29,600
  -33,890
  -38,480
  -43,363
  -48,532
  -53,982
  -59,707
  -65,705
  -71,974
  -78,514
  -85,328
  -92,419
  -99,793
  -107,459
  -115,425
  -123,703
New CAPEX, $m
  -7,315
  -9,780
  -12,694
  -16,063
  -19,862
  -24,044
  -28,552
  -33,320
  -38,277
  -43,354
  -48,488
  -53,624
  -58,715
  -63,729
  -68,642
  -73,443
  -78,130
  -82,709
  -87,195
  -91,606
  -95,966
  -100,302
  -104,642
  -109,017
  -113,456
  -117,990
  -122,647
  -127,458
  -132,450
  -137,651
Cash from investing activities, $m
  -8,301
  -11,223
  -14,749
  -18,911
  -23,714
  -29,137
  -35,148
  -41,700
  -48,740
  -56,209
  -64,053
  -72,219
  -80,662
  -89,346
  -98,242
  -107,333
  -116,610
  -126,072
  -135,727
  -145,588
  -155,673
  -166,007
  -176,616
  -187,531
  -198,784
  -210,409
  -222,440
  -234,917
  -247,875
  -261,354
Free cash flow, $m
  -6,784
  -7,901
  -9,525
  -11,257
  -13,030
  -14,762
  -16,366
  -17,751
  -18,832
  -19,530
  -20,114
  -19,860
  -19,063
  -17,699
  -15,756
  -13,234
  -10,142
  -6,496
  -2,321
  2,360
  7,516
  13,121
  19,148
  25,570
  32,366
  39,514
  47,000
  54,810
  62,934
  71,368
Issuance/(repayment) of debt, $m
  13,855
  30,451
  39,524
  50,017
  61,844
  74,867
  88,904
  103,748
  119,183
  134,992
  150,978
  166,968
  182,822
  198,433
  213,731
  228,680
  243,274
  257,532
  271,499
  285,233
  298,810
  312,311
  325,826
  339,447
  353,269
  367,386
  381,888
  396,868
  412,412
  428,605
Issuance/(repurchase) of shares, $m
  11,658
  2,053
  1,565
  855
  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  
  25,513
  32,504
  41,089
  50,872
  61,844
  74,867
  88,904
  103,748
  119,183
  134,992
  150,978
  166,968
  182,822
  198,433
  213,731
  228,680
  243,274
  257,532
  271,499
  285,233
  298,810
  312,311
  325,826
  339,447
  353,269
  367,386
  381,888
  396,868
  412,412
  428,605
Total cash flow (excl. dividends), $m
  18,729
  24,603
  31,564
  39,615
  48,814
  60,104
  72,538
  85,997
  100,351
  115,461
  130,864
  147,109
  163,759
  180,734
  197,975
  215,446
  233,132
  251,036
  269,178
  287,593
  306,326
  325,432
  344,974
  365,017
  385,635
  406,900
  428,888
  451,678
  475,346
  499,972
Retained Cash Flow (-), $m
  -11,658
  -3,383
  -4,392
  -5,557
  -6,872
  -8,319
  -9,878
  -11,528
  -13,243
  -14,999
  -16,775
  -18,552
  -20,314
  -22,048
  -23,748
  -25,409
  -27,030
  -28,615
  -30,167
  -31,693
  -33,201
  -34,701
  -36,203
  -37,716
  -39,252
  -40,821
  -42,432
  -44,096
  -45,824
  -47,623
Prev. year cash balance distribution, $m
  2,818
  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
  9,889
  21,219
  27,173
  34,057
  41,943
  51,786
  62,660
  74,470
  87,108
  100,462
  114,089
  128,557
  143,445
  158,686
  174,227
  190,037
  206,102
  222,421
  239,012
  255,900
  273,125
  290,731
  308,771
  327,301
  346,383
  366,079
  386,456
  407,581
  429,522
  452,349
Discount rate, %
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.71
  24.89
  26.14
  27.44
  28.81
  30.25
  31.77
  33.36
  35.02
  36.77
  38.61
  40.54
  42.57
  44.70
  46.93
  49.28
  51.75
  54.33
PV of cash for distribution, $m
  8,736
  16,368
  18,076
  19,283
  19,931
  20,347
  20,037
  19,058
  17,525
  15,593
  13,392
  11,174
  9,029
  7,065
  5,353
  3,925
  2,784
  1,909
  1,265
  809
  499
  296
  169
  93
  49
  25
  12
  5
  2
  1
Current shareholders' claim on cash, %
  50.0
  39.8
  35.0
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2
  33.2

Onex Corporation is a private equity company. Its segments include Electronics Manufacturing Services, including Celestica Inc. that provides electronics manufacturing services; Healthcare Imaging, including Carestream Health, Inc. that provides healthcare information technology solutions; Health and Human Services, including Res-Care, Inc. that provides residential, educational and support services; Building Products, including JELD-WEN Holding, Inc. that manufactures windows and related products; Insurance Services, including USI Insurance Services and York Risk Services Holding Corp.; Packaging Products and Services, including SGS International, LLC and SIG Combibloc Group Holdings S.a r.l.; Business and Information Services, including Clarivate Analytics and Emerald Expositions, LLC; Food Retail and Restaurants, including Jack's Family Restaurants and Save-A-Lot; Credit Strategies, including Onex Credit Manager, and Other, including Survitec Group Limited.

FINANCIAL RATIOS  of  ONEX Corporation Subordinate Voting Shar (ONEX)

Valuation Ratios
P/E Ratio -56.9
Price to Sales 0.3
Price to Book -15.1
Price to Tangible Book
Price to Cash Flow 3.9
Price to Free Cash Flow 5.5
Growth Rates
Sales Growth Rate 14.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -19.1%
Cap. Spend. - 3 Yr. Gr. Rate 0.1%
Financial Strength
Quick Ratio 6
Current Ratio 0.1
LT Debt to Equity -4592.3%
Total Debt to Equity -4681.9%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.4%
Ret/ On Assets - 3 Yr. Avg. 1.7%
Return On Total Capital -0.6%
Ret/ On T. Cap. - 3 Yr. Avg. -1.7%
Return On Equity 39.9%
Return On Equity - 3 Yr. Avg. -50%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 30%
Gross Margin - 3 Yr. Avg. 29.5%
EBITDA Margin 7.8%
EBITDA Margin - 3 Yr. Avg. 5.7%
Operating Margin -2.1%
Oper. Margin - 3 Yr. Avg. -3.4%
Pre-Tax Margin -2.1%
Pre-Tax Margin - 3 Yr. Avg. -3.4%
Net Profit Margin -0.6%
Net Profit Margin - 3 Yr. Avg. -1.4%
Effective Tax Rate -9.8%
Eff/ Tax Rate - 3 Yr. Avg. -11.3%
Payout Ratio -15.3%

ONEX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ONEX stock intrinsic value calculation we used $30430 million for the last fiscal year's total revenue generated by ONEX Corporation Subordinate Voting Shar. The default revenue input number comes from 2016 income statement of ONEX Corporation Subordinate Voting Shar. 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 ONEX stock valuation model: a) initial revenue growth rate of 46.5% 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 13.2%, whose default value for ONEX is calculated based on our internal credit rating of ONEX Corporation Subordinate Voting Shar, 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 ONEX Corporation Subordinate Voting Shar.
    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 ONEX stock the variable cost ratio is equal to 89.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3931 million in the base year in the intrinsic value calculation for ONEX 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 4.7% for ONEX Corporation Subordinate Voting Shar.

Corporate tax rate of 27% is the nominal tax rate for ONEX Corporation Subordinate Voting Shar. 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 ONEX 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 ONEX are equal to 51.8%.

Life of production assets of 16 years is the average useful life of capital assets used in ONEX Corporation Subordinate Voting Shar 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 ONEX is equal to 6.9%. 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 - $-662 million for ONEX Corporation Subordinate Voting Shar - 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 100.987 million for ONEX Corporation Subordinate Voting Shar 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 ONEX Corporation Subordinate Voting Shar at the current share price and the inputted number of shares is $9.8 billion.

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