Intrinsic value of Bombardier Inc. Class B Subordinate Voti - BBD-B

Previous Close

$5.18

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$5.18

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of BBD-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

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, %
  -10.09
  2.60
  2.84
  3.06
  3.25
  3.43
  3.58
  3.72
  3.85
  3.97
  4.07
  4.16
  4.25
  4.32
  4.39
  4.45
  4.51
  4.56
  4.60
  4.64
  4.68
  4.71
  4.74
  4.76
  4.79
  4.81
  4.83
  4.84
  4.86
  4.87
  4.89
Revenue, $m
  22,075
  22,649
  23,292
  24,004
  24,784
  25,633
  26,552
  27,540
  28,601
  29,736
  30,946
  32,235
  33,604
  35,056
  36,595
  38,224
  39,946
  41,766
  43,687
  45,714
  47,851
  50,104
  52,478
  54,978
  57,610
  60,380
  63,295
  66,361
  69,587
  72,979
  76,545
Variable operating expenses, $m
 
  28,690
  29,497
  30,391
  31,371
  32,437
  33,590
  34,832
  36,164
  37,588
  39,108
  40,475
  42,194
  44,018
  45,950
  47,996
  50,158
  52,443
  54,855
  57,400
  60,084
  62,913
  65,894
  69,033
  72,337
  75,816
  79,476
  83,326
  87,377
  91,636
  96,114
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
  22,316
  28,690
  29,497
  30,391
  31,371
  32,437
  33,590
  34,832
  36,164
  37,588
  39,108
  40,475
  42,194
  44,018
  45,950
  47,996
  50,158
  52,443
  54,855
  57,400
  60,084
  62,913
  65,894
  69,033
  72,337
  75,816
  79,476
  83,326
  87,377
  91,636
  96,114
Operating income, $m
  -240
  -6,041
  -6,205
  -6,387
  -6,587
  -6,804
  -7,038
  -7,291
  -7,562
  -7,853
  -8,162
  -8,241
  -8,591
  -8,962
  -9,355
  -9,772
  -10,212
  -10,677
  -11,168
  -11,687
  -12,233
  -12,809
  -13,416
  -14,055
  -14,728
  -15,436
  -16,181
  -16,965
  -17,790
  -18,657
  -19,569
EBITDA, $m
  261
  -5,392
  -5,545
  -5,714
  -5,900
  -6,102
  -6,321
  -6,556
  -6,809
  -7,079
  -7,367
  -7,673
  -7,999
  -8,345
  -8,711
  -9,099
  -9,509
  -9,942
  -10,400
  -10,882
  -11,391
  -11,927
  -12,492
  -13,087
  -13,714
  -14,373
  -15,067
  -15,797
  -16,565
  -17,373
  -18,222
Interest expense (income), $m
  763
  756
  -143
  -100
  -52
  1
  58
  120
  186
  258
  334
  416
  503
  595
  693
  796
  906
  1,022
  1,145
  1,274
  1,411
  1,555
  1,707
  1,866
  2,035
  2,212
  2,399
  2,595
  2,802
  3,019
  3,248
Earnings before tax, $m
  -1,090
  -6,796
  -6,062
  -6,287
  -6,535
  -6,804
  -7,096
  -7,411
  -7,749
  -8,110
  -8,496
  -8,657
  -9,093
  -9,557
  -10,048
  -10,568
  -11,118
  -11,700
  -12,313
  -12,961
  -13,644
  -14,364
  -15,122
  -15,921
  -16,763
  -17,648
  -18,580
  -19,560
  -20,592
  -21,676
  -22,816
Tax expense, $m
  235
  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
  -1,381
  -6,796
  -6,062
  -6,287
  -6,535
  -6,804
  -7,096
  -7,411
  -7,749
  -8,110
  -8,496
  -8,657
  -9,093
  -9,557
  -10,048
  -10,568
  -11,118
  -11,700
  -12,313
  -12,961
  -13,644
  -14,364
  -15,122
  -15,921
  -16,763
  -17,648
  -18,580
  -19,560
  -20,592
  -21,676
  -22,816

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  5,026
  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
  30,840
  26,490
  27,242
  28,075
  28,987
  29,980
  31,054
  32,211
  33,452
  34,779
  36,194
  37,701
  39,302
  41,001
  42,801
  44,706
  46,721
  48,849
  51,096
  53,466
  55,966
  58,601
  61,378
  64,301
  67,380
  70,620
  74,029
  77,616
  81,388
  85,355
  89,527
Adjusted assets (=assets-cash), $m
  25,814
  26,490
  27,242
  28,075
  28,987
  29,980
  31,054
  32,211
  33,452
  34,779
  36,194
  37,701
  39,302
  41,001
  42,801
  44,706
  46,721
  48,849
  51,096
  53,466
  55,966
  58,601
  61,378
  64,301
  67,380
  70,620
  74,029
  77,616
  81,388
  85,355
  89,527
Revenue / Adjusted assets
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
Average production assets, $m
  8,889
  9,128
  9,387
  9,674
  9,988
  10,330
  10,700
  11,099
  11,526
  11,984
  12,471
  12,991
  13,542
  14,128
  14,748
  15,404
  16,098
  16,832
  17,606
  18,423
  19,284
  20,192
  21,149
  22,156
  23,217
  24,333
  25,508
  26,744
  28,043
  29,410
  30,848
Working capital, $m
  1,842
  -3,216
  -3,307
  -3,409
  -3,519
  -3,640
  -3,770
  -3,911
  -4,061
  -4,223
  -4,394
  -4,577
  -4,772
  -4,978
  -5,196
  -5,428
  -5,672
  -5,931
  -6,204
  -6,491
  -6,795
  -7,115
  -7,452
  -7,807
  -8,181
  -8,574
  -8,988
  -9,423
  -9,881
  -10,363
  -10,869
Total debt, $m
  11,848
  -2,235
  -1,558
  -809
  13
  906
  1,873
  2,914
  4,031
  5,225
  6,499
  7,855
  9,296
  10,825
  12,445
  14,159
  15,972
  17,888
  19,910
  22,044
  24,294
  26,665
  29,164
  31,795
  34,566
  37,482
  40,550
  43,778
  47,173
  50,744
  54,498
Total liabilities, $m
  37,923
  23,841
  24,518
  25,267
  26,089
  26,982
  27,949
  28,990
  30,107
  31,301
  32,575
  33,931
  35,372
  36,901
  38,521
  40,235
  42,048
  43,964
  45,986
  48,120
  50,370
  52,741
  55,240
  57,871
  60,642
  63,558
  66,626
  69,854
  73,249
  76,820
  80,574
Total equity, $m
  -7,084
  2,649
  2,724
  2,807
  2,899
  2,998
  3,105
  3,221
  3,345
  3,478
  3,619
  3,770
  3,930
  4,100
  4,280
  4,471
  4,672
  4,885
  5,110
  5,347
  5,597
  5,860
  6,138
  6,430
  6,738
  7,062
  7,403
  7,762
  8,139
  8,536
  8,953
Total liabilities and equity, $m
  30,839
  26,490
  27,242
  28,074
  28,988
  29,980
  31,054
  32,211
  33,452
  34,779
  36,194
  37,701
  39,302
  41,001
  42,801
  44,706
  46,720
  48,849
  51,096
  53,467
  55,967
  58,601
  61,378
  64,301
  67,380
  70,620
  74,029
  77,616
  81,388
  85,356
  89,527
Debt-to-equity ratio
  -1.673
  -0.840
  -0.570
  -0.290
  0.000
  0.300
  0.600
  0.900
  1.200
  1.500
  1.800
  2.080
  2.370
  2.640
  2.910
  3.170
  3.420
  3.660
  3.900
  4.120
  4.340
  4.550
  4.750
  4.940
  5.130
  5.310
  5.480
  5.640
  5.800
  5.950
  6.090
Adjusted equity ratio
  -0.469
  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
  -1,381
  -6,796
  -6,062
  -6,287
  -6,535
  -6,804
  -7,096
  -7,411
  -7,749
  -8,110
  -8,496
  -8,657
  -9,093
  -9,557
  -10,048
  -10,568
  -11,118
  -11,700
  -12,313
  -12,961
  -13,644
  -14,364
  -15,122
  -15,921
  -16,763
  -17,648
  -18,580
  -19,560
  -20,592
  -21,676
  -22,816
Depreciation, amort., depletion, $m
  501
  649
  661
  673
  687
  702
  718
  735
  754
  774
  795
  567
  591
  617
  644
  673
  703
  735
  769
  804
  842
  882
  924
  968
  1,014
  1,063
  1,114
  1,168
  1,225
  1,284
  1,347
Funds from operations, $m
  825
  -6,147
  -5,402
  -5,614
  -5,848
  -6,103
  -6,379
  -6,676
  -6,995
  -7,337
  -7,701
  -8,089
  -8,502
  -8,940
  -9,404
  -9,896
  -10,415
  -10,965
  -11,544
  -12,156
  -12,802
  -13,482
  -14,199
  -14,954
  -15,749
  -16,586
  -17,466
  -18,392
  -19,367
  -20,392
  -21,469
Change in working capital, $m
  640
  -82
  -91
  -101
  -111
  -121
  -130
  -140
  -151
  -161
  -172
  -183
  -194
  -206
  -219
  -231
  -245
  -258
  -273
  -288
  -304
  -320
  -337
  -355
  -374
  -393
  -414
  -435
  -458
  -482
  -506
Cash from operations, $m
  185
  -6,066
  -5,310
  -5,513
  -5,737
  -5,982
  -6,248
  -6,535
  -6,844
  -7,175
  -7,529
  -7,906
  -8,308
  -8,734
  -9,186
  -9,664
  -10,171
  -10,706
  -11,272
  -11,869
  -12,498
  -13,162
  -13,862
  -14,599
  -15,375
  -16,192
  -17,052
  -17,957
  -18,909
  -19,910
  -20,963
Maintenance CAPEX, $m
  0
  -388
  -399
  -410
  -422
  -436
  -451
  -467
  -485
  -503
  -523
  -545
  -567
  -591
  -617
  -644
  -673
  -703
  -735
  -769
  -804
  -842
  -882
  -924
  -968
  -1,014
  -1,063
  -1,114
  -1,168
  -1,225
  -1,284
New CAPEX, $m
  -1,696
  -239
  -259
  -287
  -314
  -342
  -370
  -399
  -428
  -457
  -488
  -519
  -552
  -585
  -620
  -656
  -694
  -733
  -774
  -817
  -861
  -908
  -957
  -1,007
  -1,061
  -1,116
  -1,175
  -1,236
  -1,300
  -1,367
  -1,437
Cash from investing activities, $m
  -1,615
  -627
  -658
  -697
  -736
  -778
  -821
  -866
  -913
  -960
  -1,011
  -1,064
  -1,119
  -1,176
  -1,237
  -1,300
  -1,367
  -1,436
  -1,509
  -1,586
  -1,665
  -1,750
  -1,839
  -1,931
  -2,029
  -2,130
  -2,238
  -2,350
  -2,468
  -2,592
  -2,721
Free cash flow, $m
  -1,430
  -6,692
  -5,968
  -6,210
  -6,474
  -6,761
  -7,069
  -7,401
  -7,757
  -8,136
  -8,540
  -8,970
  -9,427
  -9,910
  -10,423
  -10,965
  -11,538
  -12,142
  -12,781
  -13,454
  -14,164
  -14,912
  -15,700
  -16,530
  -17,403
  -18,322
  -19,290
  -20,307
  -21,377
  -22,502
  -23,684
Issuance/(repayment) of debt, $m
  -269
  -14,041
  677
  749
  821
  894
  967
  1,041
  1,117
  1,194
  1,274
  1,356
  1,441
  1,529
  1,620
  1,715
  1,813
  1,915
  2,022
  2,134
  2,250
  2,372
  2,499
  2,631
  2,770
  2,916
  3,068
  3,228
  3,395
  3,570
  3,754
Issuance/(repurchase) of shares, $m
  -58
  21,513
  6,137
  6,371
  6,626
  6,904
  7,204
  7,527
  7,873
  8,243
  8,638
  8,807
  9,254
  9,727
  10,228
  10,759
  11,320
  11,912
  12,538
  13,198
  13,894
  14,627
  15,400
  16,214
  17,070
  17,972
  18,921
  19,919
  20,969
  22,073
  23,233
Cash from financing (excl. dividends), $m  
  2,690
  7,472
  6,814
  7,120
  7,447
  7,798
  8,171
  8,568
  8,990
  9,437
  9,912
  10,163
  10,695
  11,256
  11,848
  12,474
  13,133
  13,827
  14,560
  15,332
  16,144
  16,999
  17,899
  18,845
  19,840
  20,888
  21,989
  23,147
  24,364
  25,643
  26,987
Total cash flow (excl. dividends), $m
  920
  780
  846
  910
  973
  1,037
  1,101
  1,167
  1,233
  1,301
  1,372
  1,193
  1,268
  1,345
  1,425
  1,509
  1,595
  1,685
  1,779
  1,877
  1,980
  2,087
  2,198
  2,315
  2,438
  2,566
  2,700
  2,840
  2,987
  3,142
  3,303
Retained Cash Flow (-), $m
  1,589
  -21,513
  -6,137
  -6,371
  -6,626
  -6,904
  -7,204
  -7,527
  -7,873
  -8,243
  -8,638
  -8,807
  -9,254
  -9,727
  -10,228
  -10,759
  -11,320
  -11,912
  -12,538
  -13,198
  -13,894
  -14,627
  -15,400
  -16,214
  -17,070
  -17,972
  -18,921
  -19,919
  -20,969
  -22,073
  -23,233
Prev. year cash balance distribution, $m
 
  4,984
  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
 
  -15,749
  -5,291
  -5,461
  -5,653
  -5,867
  -6,103
  -6,360
  -6,640
  -6,942
  -7,266
  -7,614
  -7,986
  -8,382
  -8,803
  -9,250
  -9,725
  -10,227
  -10,759
  -11,321
  -11,914
  -12,541
  -13,202
  -13,898
  -14,633
  -15,406
  -16,221
  -17,079
  -17,981
  -18,931
  -19,930
Discount rate, %
 
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.65
  23.79
  24.98
  26.23
  27.54
  28.91
  30.36
  31.88
  33.47
  35.14
  36.90
  38.75
  40.68
  42.72
  44.85
  47.10
  49.45
  51.92
  54.52
  57.25
  60.11
  63.11
  66.27
PV of cash for distribution, $m
 
  -13,565
  -3,871
  -3,345
  -2,854
  -2,401
  -1,989
  -1,620
  -1,296
  -1,017
  -782
  -588
  -431
  -309
  -215
  -146
  -96
  -61
  -38
  -22
  -13
  -7
  -4
  -2
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  15.1
  4.5
  1.3
  0.4
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Bombardier Inc is a Canada-based manufacturer of both planes and trains. It operates through four segments: Business Aircraft, Commercial Aircraft, Aerostructures and Engineering Services, and Transportation. The Business Aircraft segment is engaged in the design, manufacture and aftermarket support for three families of business jets (Learjet, Challenger and Global). The Commercial Aircraft segment manufactures a portfolio of commercial aircraft in the 60- to 150-seat categories, including the Q400 turboprops, the CRJ Series family of regional jets, as well as the all-new C Series mainline jets. The Aerostructures and Engineering Services segment designs and manufactures aircraft structural components, such as engine nacelles, fuselages and wings. The Transportation segment offers a portfolio of products and services in the rail industry, covering the full spectrum of rail solutions, ranging from trains to sub-systems, services, system integration, signaling and e-mobility solutions.

FINANCIAL RATIOS  of  Bombardier Inc. Class B Subordinate Voti (BBD-B)

Valuation Ratios
P/E Ratio -8.2
Price to Sales 0.5
Price to Book -1.6
Price to Tangible Book
Price to Cash Flow 61.4
Price to Free Cash Flow -7.5
Growth Rates
Sales Growth Rate -10.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -33.2%
Cap. Spend. - 3 Yr. Gr. Rate -11.8%
Financial Strength
Quick Ratio 120
Current Ratio 0
LT Debt to Equity -166.7%
Total Debt to Equity -167.3%
Interest Coverage 0
Management Effectiveness
Return On Assets -1.5%
Ret/ On Assets - 3 Yr. Avg. -7.7%
Return On Total Capital -24.2%
Ret/ On T. Cap. - 3 Yr. Avg. -41.1%
Return On Equity 22%
Return On Equity - 3 Yr. Avg. 61.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 10.5%
Gross Margin - 3 Yr. Avg. 11.4%
EBITDA Margin 0.8%
EBITDA Margin - 3 Yr. Avg. -7.6%
Operating Margin -1.1%
Oper. Margin - 3 Yr. Avg. -10.3%
Pre-Tax Margin -4.9%
Pre-Tax Margin - 3 Yr. Avg. -12.4%
Net Profit Margin -6.3%
Net Profit Margin - 3 Yr. Avg. -14%
Effective Tax Rate -21.6%
Eff/ Tax Rate - 3 Yr. Avg. -30.9%
Payout Ratio -1.7%

BBD-B stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BBD-B stock intrinsic value calculation we used $22075 million for the last fiscal year's total revenue generated by Bombardier Inc. Class B Subordinate Voti. The default revenue input number comes from 2016 income statement of Bombardier Inc. Class B Subordinate Voti. 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 BBD-B stock valuation model: a) initial revenue growth rate of 2.6% 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 16.1%, whose default value for BBD-B is calculated based on our internal credit rating of Bombardier Inc. Class B Subordinate Voti, 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 Bombardier Inc. Class B Subordinate Voti.
    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 BBD-B stock the variable cost ratio is equal to 126.7%.

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 BBD-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 6.4% for Bombardier Inc. Class B Subordinate Voti.

Corporate tax rate of 27% is the nominal tax rate for Bombardier Inc. Class B Subordinate Voti. 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 BBD-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 BBD-B are equal to 40.3%.

Life of production assets of 22.9 years is the average useful life of capital assets used in Bombardier Inc. Class B Subordinate Voti 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 BBD-B is equal to -14.2%. 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 - $-7084 million for Bombardier Inc. Class B Subordinate Voti - 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 2247.52 million for Bombardier Inc. Class B Subordinate Voti 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 Bombardier Inc. Class B Subordinate Voti at the current share price and the inputted number of shares is $11.6 billion.

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Financial statements of BBD-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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