Intrinsic value of Alimentation Couche-Tard Inc. Class B Su - ATD-B

Previous Close

$67.05

  Intrinsic Value

$100.76

stock screener

  Rating & Target

str. buy

+50%

Previous close

$67.05

 
Intrinsic value

$100.76

 
Up/down potential

+50%

 
Rating

str. buy

We calculate the intrinsic value of ATD-B 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 2017), $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 38.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.01
  16.90
  15.71
  14.64
  13.68
  12.81
  12.03
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.21
  6.98
  6.79
  6.61
  6.45
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
Revenue, $m
  51,212
  59,867
  69,272
  79,413
  90,272
  101,834
  114,082
  127,000
  140,579
  154,809
  169,687
  185,212
  201,389
  218,227
  235,739
  253,943
  272,863
  292,523
  312,954
  334,191
  356,273
  379,241
  403,141
  428,023
  453,938
  480,944
  509,100
  538,469
  569,119
  601,119
  634,544
Variable operating expenses, $m
 
  56,879
  65,765
  75,345
  85,605
  96,528
  108,098
  120,303
  133,132
  146,576
  160,631
  174,978
  190,261
  206,169
  222,714
  239,912
  257,786
  276,360
  295,663
  315,727
  336,588
  358,287
  380,867
  404,374
  428,857
  454,371
  480,971
  508,718
  537,674
  567,906
  599,484
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
  48,918
  56,879
  65,765
  75,345
  85,605
  96,528
  108,098
  120,303
  133,132
  146,576
  160,631
  174,978
  190,261
  206,169
  222,714
  239,912
  257,786
  276,360
  295,663
  315,727
  336,588
  358,287
  380,867
  404,374
  428,857
  454,371
  480,971
  508,718
  537,674
  567,906
  599,484
Operating income, $m
  2,294
  2,988
  3,507
  4,068
  4,668
  5,306
  5,983
  6,697
  7,447
  8,233
  9,055
  10,233
  11,127
  12,058
  13,025
  14,031
  15,076
  16,163
  17,291
  18,465
  19,685
  20,954
  22,275
  23,649
  25,081
  26,573
  28,129
  29,752
  31,445
  33,213
  35,060
EBITDA, $m
  3,179
  3,985
  4,612
  5,287
  6,010
  6,779
  7,595
  8,455
  9,358
  10,306
  11,296
  12,330
  13,407
  14,528
  15,693
  16,905
  18,165
  19,474
  20,834
  22,248
  23,718
  25,247
  26,838
  28,494
  30,219
  32,017
  33,891
  35,847
  37,887
  40,017
  42,242
Interest expense (income), $m
  138
  157
  220
  288
  362
  440
  524
  613
  706
  805
  908
  1,015
  1,128
  1,245
  1,367
  1,494
  1,625
  1,762
  1,905
  2,053
  2,206
  2,366
  2,532
  2,706
  2,886
  3,073
  3,269
  3,473
  3,685
  3,907
  4,139
Earnings before tax, $m
  2,151
  2,830
  3,287
  3,779
  4,306
  4,866
  5,459
  6,084
  6,741
  7,429
  8,148
  9,218
  10,000
  10,813
  11,658
  12,537
  13,451
  14,400
  15,387
  16,412
  17,479
  18,588
  19,742
  20,944
  22,196
  23,500
  24,860
  26,279
  27,760
  29,306
  30,921
Tax expense, $m
  518
  764
  888
  1,020
  1,163
  1,314
  1,474
  1,643
  1,820
  2,006
  2,200
  2,489
  2,700
  2,919
  3,148
  3,385
  3,632
  3,888
  4,154
  4,431
  4,719
  5,019
  5,330
  5,655
  5,993
  6,345
  6,712
  7,095
  7,495
  7,913
  8,349
Net income, $m
  1,633
  2,066
  2,400
  2,759
  3,143
  3,552
  3,985
  4,441
  4,921
  5,423
  5,948
  6,729
  7,300
  7,893
  8,511
  9,152
  9,819
  10,512
  11,232
  11,981
  12,759
  13,569
  14,412
  15,289
  16,203
  17,155
  18,148
  19,184
  20,265
  21,393
  22,572

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  872
  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
  19,166
  21,389
  24,749
  28,372
  32,252
  36,382
  40,758
  45,373
  50,225
  55,309
  60,624
  66,171
  71,950
  77,966
  84,223
  90,727
  97,486
  104,510
  111,809
  119,397
  127,286
  135,492
  144,031
  152,920
  162,179
  171,827
  181,886
  192,379
  203,329
  214,762
  226,704
Adjusted assets (=assets-cash), $m
  18,294
  21,389
  24,749
  28,372
  32,252
  36,382
  40,758
  45,373
  50,225
  55,309
  60,624
  66,171
  71,950
  77,966
  84,223
  90,727
  97,486
  104,510
  111,809
  119,397
  127,286
  135,492
  144,031
  152,920
  162,179
  171,827
  181,886
  192,379
  203,329
  214,762
  226,704
Revenue / Adjusted assets
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
  2.799
Average production assets, $m
  5,267
  6,166
  7,135
  8,179
  9,298
  10,489
  11,750
  13,081
  14,480
  15,945
  17,478
  19,077
  20,743
  22,477
  24,281
  26,156
  28,105
  30,130
  32,234
  34,422
  36,696
  39,062
  41,524
  44,086
  46,756
  49,537
  52,437
  55,462
  58,619
  61,915
  65,358
Working capital, $m
  -107
  -599
  -693
  -794
  -903
  -1,018
  -1,141
  -1,270
  -1,406
  -1,548
  -1,697
  -1,852
  -2,014
  -2,182
  -2,357
  -2,539
  -2,729
  -2,925
  -3,130
  -3,342
  -3,563
  -3,792
  -4,031
  -4,280
  -4,539
  -4,809
  -5,091
  -5,385
  -5,691
  -6,011
  -6,345
Total debt, $m
  4,954
  6,291
  8,237
  10,334
  12,581
  14,972
  17,506
  20,178
  22,987
  25,931
  29,008
  32,220
  35,566
  39,049
  42,672
  46,438
  50,351
  54,418
  58,645
  63,038
  67,606
  72,357
  77,301
  82,448
  87,808
  93,395
  99,219
  105,295
  111,635
  118,254
  125,169
Total liabilities, $m
  11,046
  12,384
  14,330
  16,427
  18,674
  21,065
  23,599
  26,271
  29,080
  32,024
  35,101
  38,313
  41,659
  45,142
  48,765
  52,531
  56,444
  60,511
  64,738
  69,131
  73,699
  78,450
  83,394
  88,541
  93,901
  99,488
  105,312
  111,388
  117,728
  124,347
  131,262
Total equity, $m
  8,119
  9,005
  10,419
  11,945
  13,578
  15,317
  17,159
  19,102
  21,145
  23,285
  25,523
  27,858
  30,291
  32,824
  35,458
  38,196
  41,041
  43,999
  47,072
  50,266
  53,587
  57,042
  60,637
  64,379
  68,277
  72,339
  76,574
  80,992
  85,602
  90,415
  95,442
Total liabilities and equity, $m
  19,165
  21,389
  24,749
  28,372
  32,252
  36,382
  40,758
  45,373
  50,225
  55,309
  60,624
  66,171
  71,950
  77,966
  84,223
  90,727
  97,485
  104,510
  111,810
  119,397
  127,286
  135,492
  144,031
  152,920
  162,178
  171,827
  181,886
  192,380
  203,330
  214,762
  226,704
Debt-to-equity ratio
  0.610
  0.700
  0.790
  0.870
  0.930
  0.980
  1.020
  1.060
  1.090
  1.110
  1.140
  1.160
  1.170
  1.190
  1.200
  1.220
  1.230
  1.240
  1.250
  1.250
  1.260
  1.270
  1.270
  1.280
  1.290
  1.290
  1.300
  1.300
  1.300
  1.310
  1.310
Adjusted equity ratio
  0.396
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,633
  2,066
  2,400
  2,759
  3,143
  3,552
  3,985
  4,441
  4,921
  5,423
  5,948
  6,729
  7,300
  7,893
  8,511
  9,152
  9,819
  10,512
  11,232
  11,981
  12,759
  13,569
  14,412
  15,289
  16,203
  17,155
  18,148
  19,184
  20,265
  21,393
  22,572
Depreciation, amort., depletion, $m
  885
  998
  1,104
  1,219
  1,342
  1,473
  1,611
  1,758
  1,911
  2,072
  2,241
  2,096
  2,279
  2,470
  2,668
  2,874
  3,088
  3,311
  3,542
  3,783
  4,033
  4,293
  4,563
  4,845
  5,138
  5,444
  5,762
  6,095
  6,442
  6,804
  7,182
Funds from operations, $m
  2,624
  3,064
  3,504
  3,978
  4,485
  5,025
  5,597
  6,199
  6,832
  7,495
  8,189
  8,826
  9,579
  10,363
  11,179
  12,027
  12,908
  13,823
  14,775
  15,764
  16,792
  17,862
  18,975
  20,134
  21,341
  22,599
  23,910
  25,278
  26,706
  28,197
  29,755
Change in working capital, $m
  22
  -87
  -94
  -101
  -109
  -116
  -122
  -129
  -136
  -142
  -149
  -155
  -162
  -168
  -175
  -182
  -189
  -197
  -204
  -212
  -221
  -230
  -239
  -249
  -259
  -270
  -282
  -294
  -306
  -320
  -334
Cash from operations, $m
  2,602
  3,151
  3,598
  4,079
  4,594
  5,141
  5,719
  6,328
  6,968
  7,638
  8,338
  8,981
  9,741
  10,532
  11,354
  12,209
  13,097
  14,020
  14,979
  15,976
  17,013
  18,091
  19,214
  20,382
  21,600
  22,869
  24,192
  25,572
  27,013
  28,517
  30,089
Maintenance CAPEX, $m
  0
  -579
  -678
  -784
  -899
  -1,022
  -1,153
  -1,291
  -1,437
  -1,591
  -1,752
  -1,921
  -2,096
  -2,279
  -2,470
  -2,668
  -2,874
  -3,088
  -3,311
  -3,542
  -3,783
  -4,033
  -4,293
  -4,563
  -4,845
  -5,138
  -5,444
  -5,762
  -6,095
  -6,442
  -6,804
New CAPEX, $m
  -1,343
  -899
  -969
  -1,044
  -1,119
  -1,191
  -1,261
  -1,331
  -1,399
  -1,466
  -1,532
  -1,599
  -1,666
  -1,734
  -1,804
  -1,875
  -1,949
  -2,025
  -2,104
  -2,187
  -2,274
  -2,366
  -2,462
  -2,563
  -2,669
  -2,782
  -2,900
  -3,025
  -3,157
  -3,296
  -3,443
Cash from investing activities, $m
  -3,226
  -1,478
  -1,647
  -1,828
  -2,018
  -2,213
  -2,414
  -2,622
  -2,836
  -3,057
  -3,284
  -3,520
  -3,762
  -4,013
  -4,274
  -4,543
  -4,823
  -5,113
  -5,415
  -5,729
  -6,057
  -6,399
  -6,755
  -7,126
  -7,514
  -7,920
  -8,344
  -8,787
  -9,252
  -9,738
  -10,247
Free cash flow, $m
  -624
  1,672
  1,952
  2,251
  2,576
  2,928
  3,305
  3,706
  4,132
  4,581
  5,053
  5,461
  5,978
  6,518
  7,080
  7,665
  8,274
  8,906
  9,564
  10,246
  10,956
  11,693
  12,460
  13,257
  14,086
  14,949
  15,848
  16,785
  17,761
  18,780
  19,842
Issuance/(repayment) of debt, $m
  877
  1,799
  1,946
  2,098
  2,246
  2,392
  2,533
  2,672
  2,809
  2,944
  3,078
  3,212
  3,346
  3,483
  3,623
  3,766
  3,914
  4,067
  4,226
  4,393
  4,568
  4,751
  4,944
  5,147
  5,361
  5,586
  5,824
  6,075
  6,340
  6,620
  6,914
Issuance/(repurchase) of shares, $m
  4
  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  
  869
  1,799
  1,946
  2,098
  2,246
  2,392
  2,533
  2,672
  2,809
  2,944
  3,078
  3,212
  3,346
  3,483
  3,623
  3,766
  3,914
  4,067
  4,226
  4,393
  4,568
  4,751
  4,944
  5,147
  5,361
  5,586
  5,824
  6,075
  6,340
  6,620
  6,914
Total cash flow (excl. dividends), $m
  248
  3,471
  3,897
  4,348
  4,823
  5,320
  5,838
  6,379
  6,941
  7,525
  8,130
  8,673
  9,325
  10,001
  10,703
  11,431
  12,187
  12,973
  13,790
  14,639
  15,524
  16,444
  17,403
  18,404
  19,447
  20,536
  21,672
  22,860
  24,101
  25,399
  26,757
Retained Cash Flow (-), $m
  -1,308
  -1,296
  -1,415
  -1,525
  -1,633
  -1,739
  -1,842
  -1,943
  -2,042
  -2,140
  -2,238
  -2,335
  -2,433
  -2,533
  -2,634
  -2,738
  -2,846
  -2,957
  -3,073
  -3,194
  -3,321
  -3,455
  -3,595
  -3,742
  -3,898
  -4,062
  -4,235
  -4,417
  -4,610
  -4,813
  -5,028
Prev. year cash balance distribution, $m
 
  410
  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
 
  2,586
  2,482
  2,823
  3,189
  3,581
  3,996
  4,436
  4,898
  5,384
  5,893
  6,337
  6,891
  7,468
  8,069
  8,693
  9,342
  10,016
  10,717
  11,445
  12,202
  12,990
  13,809
  14,661
  15,549
  16,474
  17,437
  18,443
  19,491
  20,586
  21,729
Discount rate, %
 
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
PV of cash for distribution, $m
 
  2,477
  2,268
  2,449
  2,615
  2,760
  2,879
  2,970
  3,029
  3,055
  3,045
  2,960
  2,885
  2,779
  2,644
  2,483
  2,303
  2,107
  1,901
  1,691
  1,482
  1,278
  1,085
  905
  742
  597
  471
  364
  276
  204
  147
Current shareholders' claim on cash, %
  100
  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

Alimentation Couche Tard Inc is a Canada-based company, which is engaged in the convenience store industry. It focuses on the sale of goods for immediate consumption, road transportation fuel and other products through stores and franchise operations. It operates its convenience store and road transportation fuel retailing chain under several banners, including Circle K, Couche-Tard, Mac's, Kangaroo Express, Statoil, Ingo, Topaz and Re.Store. The Company focuses on various categories, including merchandise and services, road transportation fuel and other. The Company holds contracts with franchisees and independent operators. Its merchandise sales primarily consist of the sale of tobacco products, grocery items, candy and snacks, beverages, beer, wine and fresh food offerings, including quick service restaurants. Its merchandise sales in Europe also include the sale of merchandise and goods to certain independent operators and franchisees made from the Company's distribution center.

FINANCIAL RATIOS  of  Alimentation Couche-Tard Inc. Class B Su (ATD-B)

Valuation Ratios
P/E Ratio 23.3
Price to Sales 0.7
Price to Book 4.7
Price to Tangible Book
Price to Cash Flow 14.6
Price to Free Cash Flow 30.3
Growth Rates
Sales Growth Rate 11%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 9.7%
Cap. Spend. - 3 Yr. Gr. Rate 13.4%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 55.3%
Total Debt to Equity 61%
Interest Coverage 17
Management Effectiveness
Return On Assets 9.7%
Ret/ On Assets - 3 Yr. Avg. 9.9%
Return On Total Capital 13.6%
Ret/ On T. Cap. - 3 Yr. Avg. 14.3%
Return On Equity 21.9%
Return On Equity - 3 Yr. Avg. 24.1%
Asset Turnover 2.9
Profitability Ratios
Gross Margin 17.1%
Gross Margin - 3 Yr. Avg. 16.7%
EBITDA Margin 6.2%
EBITDA Margin - 3 Yr. Avg. 6%
Operating Margin 4.5%
Oper. Margin - 3 Yr. Avg. 4.4%
Pre-Tax Margin 4.2%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 3.2%
Net Profit Margin - 3 Yr. Avg. 3.1%
Effective Tax Rate 24.1%
Eff/ Tax Rate - 3 Yr. Avg. 24.6%
Payout Ratio 12%

ATD-B stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATD-B stock intrinsic value calculation we used $51212 million for the last fiscal year's total revenue generated by Alimentation Couche-Tard Inc. Class B Su. The default revenue input number comes from 2017 income statement of Alimentation Couche-Tard Inc. Class B Su. 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 ATD-B stock valuation model: a) initial revenue growth rate of 16.9% 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 4.4%, whose default value for ATD-B is calculated based on our internal credit rating of Alimentation Couche-Tard Inc. Class B Su, 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 Alimentation Couche-Tard Inc. Class B Su.
    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 ATD-B stock the variable cost ratio is equal to 95.1%.

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 ATD-B 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 Alimentation Couche-Tard Inc. Class B Su.

Corporate tax rate of 27% is the nominal tax rate for Alimentation Couche-Tard Inc. Class B Su. 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 ATD-B 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 ATD-B are equal to 10.3%.

Life of production assets of 9.1 years is the average useful life of capital assets used in Alimentation Couche-Tard Inc. Class B Su 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 ATD-B is equal to -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 - $8119 million for Alimentation Couche-Tard Inc. Class B Su - 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 567.188 million for Alimentation Couche-Tard Inc. Class B Su 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 Alimentation Couche-Tard Inc. Class B Su at the current share price and the inputted number of shares is $38.0 billion.

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Financial statements of ATD-B
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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