Intrinsic value of ShawCor Ltd. - SCL

Previous Close

$28.07

  Intrinsic Value

$861.25

stock screener

  Rating & Target

str. buy

+999%

Previous close

$28.07

 
Intrinsic value

$861.25

 
Up/down potential

+999%

 
Rating

str. buy

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

We calculate the intrinsic value of SCL 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -33.24
  53.30
  48.47
  44.12
  40.21
  36.69
  33.52
  30.67
  28.10
  25.79
  23.71
  21.84
  20.16
  18.64
  17.28
  16.05
  14.94
  13.95
  13.06
  12.25
  11.52
  10.87
  10.28
  9.76
  9.28
  8.85
  8.47
  8.12
  7.81
  7.53
  7.27
Revenue, $m
  1,209
  1,853
  2,752
  3,966
  5,561
  7,601
  10,149
  13,261
  16,988
  21,369
  26,436
  32,210
  38,703
  45,917
  53,851
  62,493
  71,833
  81,853
  92,539
  103,875
  115,846
  128,441
  141,651
  155,471
  169,900
  184,941
  200,601
  216,891
  233,827
  251,429
  269,721
Variable operating expenses, $m
 
  895
  1,312
  1,875
  2,615
  3,562
  4,744
  6,188
  7,917
  9,950
  12,301
  14,944
  17,957
  21,304
  24,985
  28,995
  33,328
  37,977
  42,935
  48,195
  53,749
  59,593
  65,722
  72,134
  78,828
  85,807
  93,072
  100,630
  108,488
  116,655
  125,142
Fixed operating expenses, $m
 
  807
  827
  848
  869
  890
  913
  935
  959
  983
  1,007
  1,033
  1,058
  1,085
  1,112
  1,140
  1,168
  1,198
  1,227
  1,258
  1,290
  1,322
  1,355
  1,389
  1,423
  1,459
  1,496
  1,533
  1,571
  1,611
  1,651
Total operating expenses, $m
  1,364
  1,702
  2,139
  2,723
  3,484
  4,452
  5,657
  7,123
  8,876
  10,933
  13,308
  15,977
  19,015
  22,389
  26,097
  30,135
  34,496
  39,175
  44,162
  49,453
  55,039
  60,915
  67,077
  73,523
  80,251
  87,266
  94,568
  102,163
  110,059
  118,266
  126,793
Operating income, $m
  -155
  152
  613
  1,243
  2,077
  3,149
  4,492
  6,138
  8,112
  10,436
  13,128
  16,233
  19,687
  23,528
  27,754
  32,359
  37,336
  42,678
  48,377
  54,422
  60,808
  67,527
  74,575
  81,949
  89,649
  97,675
  106,033
  114,728
  123,768
  133,164
  142,928
EBITDA, $m
  -75
  264
  763
  1,444
  2,344
  3,501
  4,951
  6,727
  8,856
  11,364
  14,267
  17,578
  21,304
  25,446
  30,003
  34,969
  40,336
  46,097
  52,241
  58,760
  65,646
  72,891
  80,491
  88,442
  96,744
  105,399
  114,411
  123,786
  133,533
  143,665
  154,193
Interest expense (income), $m
  18
  13
  31
  56
  90
  135
  192
  264
  351
  456
  579
  721
  883
  1,066
  1,268
  1,491
  1,734
  1,996
  2,277
  2,577
  2,896
  3,232
  3,585
  3,956
  4,344
  4,750
  5,172
  5,612
  6,069
  6,545
  7,039
Earnings before tax, $m
  -174
  139
  582
  1,187
  1,987
  3,014
  4,300
  5,874
  7,761
  9,981
  12,549
  15,512
  18,804
  22,463
  26,485
  30,868
  35,603
  40,683
  46,099
  51,845
  57,912
  64,295
  70,989
  77,992
  85,304
  92,926
  100,861
  109,116
  117,698
  126,619
  135,889
Tax expense, $m
  7
  38
  157
  321
  536
  814
  1,161
  1,586
  2,095
  2,695
  3,388
  4,188
  5,077
  6,065
  7,151
  8,334
  9,613
  10,984
  12,447
  13,998
  15,636
  17,360
  19,167
  21,058
  23,032
  25,090
  27,232
  29,461
  31,779
  34,187
  36,690
Net income, $m
  -181
  102
  425
  867
  1,450
  2,200
  3,139
  4,288
  5,665
  7,286
  9,161
  11,324
  13,727
  16,398
  19,334
  22,533
  25,990
  29,698
  33,653
  37,847
  42,276
  46,935
  51,822
  56,934
  62,272
  67,836
  73,628
  79,655
  85,920
  92,432
  99,199

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  197
  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
  1,778
  2,423
  3,597
  5,184
  7,269
  9,936
  13,266
  17,335
  22,206
  27,933
  34,557
  42,105
  50,592
  60,023
  70,393
  81,691
  93,899
  106,998
  120,966
  135,784
  151,433
  167,897
  185,165
  203,230
  222,092
  241,753
  262,223
  283,518
  305,657
  328,666
  352,576
Adjusted assets (=assets-cash), $m
  1,581
  2,423
  3,597
  5,184
  7,269
  9,936
  13,266
  17,335
  22,206
  27,933
  34,557
  42,105
  50,592
  60,023
  70,393
  81,691
  93,899
  106,998
  120,966
  135,784
  151,433
  167,897
  185,165
  203,230
  222,092
  241,753
  262,223
  283,518
  305,657
  328,666
  352,576
Revenue / Adjusted assets
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
Average production assets, $m
  687
  1,053
  1,563
  2,253
  3,158
  4,317
  5,764
  7,532
  9,649
  12,138
  15,016
  18,295
  21,983
  26,081
  30,587
  35,496
  40,801
  46,493
  52,562
  59,001
  65,801
  72,955
  80,458
  88,308
  96,503
  105,047
  113,941
  123,194
  132,814
  142,812
  153,201
Working capital, $m
  280
  132
  195
  282
  395
  540
  721
  942
  1,206
  1,517
  1,877
  2,287
  2,748
  3,260
  3,823
  4,437
  5,100
  5,812
  6,570
  7,375
  8,225
  9,119
  10,057
  11,038
  12,063
  13,131
  14,243
  15,399
  16,602
  17,851
  19,150
Total debt, $m
  278
  668
  1,217
  1,958
  2,932
  4,177
  5,732
  7,632
  9,907
  12,582
  15,675
  19,200
  23,163
  27,568
  32,410
  37,686
  43,388
  49,505
  56,028
  62,948
  70,256
  77,945
  86,009
  94,446
  103,254
  112,436
  121,995
  131,940
  142,279
  153,024
  164,190
Total liabilities, $m
  741
  1,131
  1,680
  2,421
  3,395
  4,640
  6,195
  8,095
  10,370
  13,045
  16,138
  19,663
  23,626
  28,031
  32,873
  38,149
  43,851
  49,968
  56,491
  63,411
  70,719
  78,408
  86,472
  94,909
  103,717
  112,899
  122,458
  132,403
  142,742
  153,487
  164,653
Total equity, $m
  1,037
  1,291
  1,917
  2,763
  3,874
  5,296
  7,071
  9,239
  11,836
  14,888
  18,419
  22,442
  26,965
  31,992
  37,519
  43,541
  50,048
  57,030
  64,475
  72,373
  80,714
  89,489
  98,693
  108,322
  118,375
  128,854
  139,765
  151,115
  162,915
  175,179
  187,923
Total liabilities and equity, $m
  1,778
  2,422
  3,597
  5,184
  7,269
  9,936
  13,266
  17,334
  22,206
  27,933
  34,557
  42,105
  50,591
  60,023
  70,392
  81,690
  93,899
  106,998
  120,966
  135,784
  151,433
  167,897
  185,165
  203,231
  222,092
  241,753
  262,223
  283,518
  305,657
  328,666
  352,576
Debt-to-equity ratio
  0.268
  0.520
  0.630
  0.710
  0.760
  0.790
  0.810
  0.830
  0.840
  0.850
  0.850
  0.860
  0.860
  0.860
  0.860
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
Adjusted equity ratio
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -181
  102
  425
  867
  1,450
  2,200
  3,139
  4,288
  5,665
  7,286
  9,161
  11,324
  13,727
  16,398
  19,334
  22,533
  25,990
  29,698
  33,653
  37,847
  42,276
  46,935
  51,822
  56,934
  62,272
  67,836
  73,628
  79,655
  85,920
  92,432
  99,199
Depreciation, amort., depletion, $m
  80
  113
  150
  201
  267
  353
  459
  589
  745
  928
  1,139
  1,345
  1,616
  1,918
  2,249
  2,610
  3,000
  3,419
  3,865
  4,338
  4,838
  5,364
  5,916
  6,493
  7,096
  7,724
  8,378
  9,058
  9,766
  10,501
  11,265
Funds from operations, $m
  227
  214
  575
  1,067
  1,718
  2,553
  3,598
  4,877
  6,410
  8,214
  10,300
  12,669
  15,343
  18,316
  21,583
  25,143
  28,990
  33,117
  37,517
  42,185
  47,114
  52,300
  57,738
  63,428
  69,368
  75,560
  82,007
  88,713
  95,686
  102,933
  110,464
Change in working capital, $m
  95
  46
  64
  86
  113
  145
  181
  221
  265
  311
  360
  410
  461
  512
  563
  614
  663
  711
  759
  805
  850
  894
  938
  981
  1,024
  1,068
  1,112
  1,157
  1,202
  1,250
  1,299
Cash from operations, $m
  132
  168
  511
  981
  1,604
  2,408
  3,417
  4,656
  6,145
  7,902
  9,940
  12,259
  14,883
  17,803
  21,020
  24,530
  28,327
  32,405
  36,759
  41,380
  46,264
  51,405
  56,800
  62,446
  68,343
  74,492
  80,895
  87,556
  94,483
  101,683
  109,165
Maintenance CAPEX, $m
  0
  -50
  -77
  -115
  -166
  -232
  -317
  -424
  -554
  -709
  -892
  -1,104
  -1,345
  -1,616
  -1,918
  -2,249
  -2,610
  -3,000
  -3,419
  -3,865
  -4,338
  -4,838
  -5,364
  -5,916
  -6,493
  -7,096
  -7,724
  -8,378
  -9,058
  -9,766
  -10,501
New CAPEX, $m
  -89
  -366
  -510
  -690
  -906
  -1,159
  -1,447
  -1,768
  -2,117
  -2,489
  -2,878
  -3,280
  -3,688
  -4,098
  -4,506
  -4,909
  -5,305
  -5,692
  -6,070
  -6,439
  -6,800
  -7,154
  -7,503
  -7,850
  -8,196
  -8,543
  -8,895
  -9,253
  -9,620
  -9,998
  -10,390
Cash from investing activities, $m
  -111
  -416
  -587
  -805
  -1,072
  -1,391
  -1,764
  -2,192
  -2,671
  -3,198
  -3,770
  -4,384
  -5,033
  -5,714
  -6,424
  -7,158
  -7,915
  -8,692
  -9,489
  -10,304
  -11,138
  -11,992
  -12,867
  -13,766
  -14,689
  -15,639
  -16,619
  -17,631
  -18,678
  -19,764
  -20,891
Free cash flow, $m
  21
  -248
  -76
  177
  533
  1,017
  1,652
  2,464
  3,475
  4,704
  6,170
  7,875
  9,849
  12,089
  14,596
  17,372
  20,412
  23,714
  27,270
  31,077
  35,126
  39,413
  43,933
  48,681
  53,654
  58,853
  64,276
  69,926
  75,805
  81,919
  88,275
Issuance/(repayment) of debt, $m
  -201
  393
  548
  741
  974
  1,245
  1,555
  1,900
  2,275
  2,675
  3,093
  3,525
  3,963
  4,404
  4,843
  5,276
  5,701
  6,117
  6,523
  6,920
  7,308
  7,689
  8,064
  8,437
  8,808
  9,182
  9,560
  9,944
  10,339
  10,745
  11,166
Issuance/(repurchase) of shares, $m
  168
  347
  201
  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  
  -34
  740
  749
  741
  974
  1,245
  1,555
  1,900
  2,275
  2,675
  3,093
  3,525
  3,963
  4,404
  4,843
  5,276
  5,701
  6,117
  6,523
  6,920
  7,308
  7,689
  8,064
  8,437
  8,808
  9,182
  9,560
  9,944
  10,339
  10,745
  11,166
Total cash flow (excl. dividends), $m
  -27
  492
  673
  918
  1,507
  2,262
  3,208
  4,364
  5,750
  7,379
  9,263
  11,400
  13,813
  16,493
  19,439
  22,648
  26,113
  29,831
  33,794
  37,997
  42,434
  47,102
  51,997
  57,117
  62,463
  68,035
  73,836
  79,870
  86,144
  92,664
  99,441
Retained Cash Flow (-), $m
  81
  -448
  -626
  -846
  -1,111
  -1,421
  -1,775
  -2,169
  -2,596
  -3,053
  -3,530
  -4,023
  -4,524
  -5,027
  -5,527
  -6,022
  -6,507
  -6,982
  -7,445
  -7,898
  -8,341
  -8,775
  -9,204
  -9,629
  -10,053
  -10,479
  -10,911
  -11,350
  -11,800
  -12,264
  -12,744
Prev. year cash balance distribution, $m
 
  194
  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
 
  237
  47
  72
  395
  841
  1,433
  2,196
  3,153
  4,326
  5,733
  7,377
  9,289
  11,466
  13,912
  16,626
  19,606
  22,849
  26,349
  30,099
  34,093
  38,327
  42,793
  47,488
  52,410
  57,555
  62,925
  68,520
  74,344
  80,401
  86,697
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
 
  228
  43
  63
  326
  652
  1,040
  1,483
  1,971
  2,485
  3,005
  3,503
  3,964
  4,360
  4,670
  4,881
  4,982
  4,972
  4,852
  4,634
  4,332
  3,964
  3,551
  3,112
  2,669
  2,239
  1,836
  1,471
  1,150
  878
  653
Current shareholders' claim on cash, %
  100
  82.2
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9
  75.9

Shawcor Ltd is a Canada-based energy services company. The Company is engaged in designing, engineering, marketing and selling products and services, such as pipe coating services; flexible composite pipe; onshore and offshore pipeline corrosion and thermal protection; ultrasonic and radiographic inspection services; tubular management services; heat-shrinkable polymer tubing, and control and instrumentation wire and cable. The Company operates through the following segments: Pipeline and Pipe Services, and Petrochemical and Industrial. The Pipeline and Pipe Services segment includes the Bredero Shaw, Canusa-CPS, Shaw Pipeline Services, Flexpipe Systems, Guardian, Desert NDT and Lake Superior Consulting divisions. The Petrochemical and Industrial segment consists of the Connection Systems division. The Company is an applicator of pipeline coatings for the oil and gas industry for both onshore and offshore pipelines.

FINANCIAL RATIOS  of  ShawCor Ltd. (SCL)

Valuation Ratios
P/E Ratio -10.8
Price to Sales 1.6
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 14.9
Price to Free Cash Flow 45.6
Growth Rates
Sales Growth Rate -33.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 45.9%
Cap. Spend. - 3 Yr. Gr. Rate 2.9%
Financial Strength
Quick Ratio 66
Current Ratio 0
LT Debt to Equity 26.5%
Total Debt to Equity 26.8%
Interest Coverage -9
Management Effectiveness
Return On Assets -8.3%
Ret/ On Assets - 3 Yr. Avg. 1.1%
Return On Total Capital -12.3%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity -16.8%
Return On Equity - 3 Yr. Avg. 1.4%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 32.4%
Gross Margin - 3 Yr. Avg. 34.7%
EBITDA Margin -6.3%
EBITDA Margin - 3 Yr. Avg. 5.7%
Operating Margin -12.8%
Oper. Margin - 3 Yr. Avg. 1.1%
Pre-Tax Margin -14.4%
Pre-Tax Margin - 3 Yr. Avg. -0.4%
Net Profit Margin -15%
Net Profit Margin - 3 Yr. Avg. -1.5%
Effective Tax Rate -4%
Eff/ Tax Rate - 3 Yr. Avg. 12.6%
Payout Ratio -21.5%

SCL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SCL stock intrinsic value calculation we used $1209 million for the last fiscal year's total revenue generated by ShawCor Ltd.. The default revenue input number comes from 2016 income statement of ShawCor Ltd.. 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 SCL stock valuation model: a) initial revenue growth rate of 53.3% 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 SCL is calculated based on our internal credit rating of ShawCor Ltd., 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 ShawCor Ltd..
    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 SCL stock the variable cost ratio is equal to 49.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $787 million in the base year in the intrinsic value calculation for SCL 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 4.6% for ShawCor Ltd..

Corporate tax rate of 27% is the nominal tax rate for ShawCor Ltd.. 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 SCL 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 SCL are equal to 56.8%.

Life of production assets of 13.6 years is the average useful life of capital assets used in ShawCor Ltd. 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 SCL is equal to 7.1%. 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 - $1037 million for ShawCor Ltd. - 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 70.022 million for ShawCor Ltd. 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 ShawCor Ltd. at the current share price and the inputted number of shares is $2.0 billion.

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Financial statements of SCL
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