Intrinsic value of CGI Group Inc. Class A Subordinate Voti - GIB-A

Previous Close

$66.51

  Intrinsic Value

$88.20

stock screener

  Rating & Target

buy

+33%

  Value-price divergence*

+24%

Previous close

$66.51

 
Intrinsic value

$88.20

 
Up/down potential

+33%

 
Rating

buy

 
Value-price divergence*

+24%

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

We calculate the intrinsic value of GIB-A 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 17.7

 

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, %
  3.85
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  10,683
  10,897
  11,147
  11,434
  11,755
  12,112
  12,503
  12,929
  13,390
  13,886
  14,419
  14,989
  15,597
  16,245
  16,934
  17,664
  18,438
  19,258
  20,124
  21,040
  22,006
  23,026
  24,102
  25,236
  26,431
  27,689
  29,014
  30,408
  31,876
  33,419
  35,043
Variable operating expenses, $m
 
  8,104
  8,275
  8,469
  8,688
  8,931
  9,197
  9,486
  9,800
  10,137
  10,500
  10,194
  10,608
  11,048
  11,517
  12,013
  12,540
  13,097
  13,686
  14,309
  14,967
  15,660
  16,392
  17,163
  17,976
  18,831
  19,732
  20,681
  21,679
  22,729
  23,833
Fixed operating expenses, $m
 
  1,253
  1,284
  1,316
  1,349
  1,383
  1,417
  1,453
  1,489
  1,526
  1,564
  1,603
  1,643
  1,685
  1,727
  1,770
  1,814
  1,859
  1,906
  1,954
  2,002
  2,052
  2,104
  2,156
  2,210
  2,266
  2,322
  2,380
  2,440
  2,501
  2,563
Total operating expenses, $m
  9,150
  9,357
  9,559
  9,785
  10,037
  10,314
  10,614
  10,939
  11,289
  11,663
  12,064
  11,797
  12,251
  12,733
  13,244
  13,783
  14,354
  14,956
  15,592
  16,263
  16,969
  17,712
  18,496
  19,319
  20,186
  21,097
  22,054
  23,061
  24,119
  25,230
  26,396
Operating income, $m
  1,533
  1,540
  1,589
  1,648
  1,718
  1,799
  1,889
  1,990
  2,101
  2,223
  2,355
  3,192
  3,346
  3,512
  3,690
  3,881
  4,084
  4,301
  4,532
  4,777
  5,037
  5,314
  5,606
  5,917
  6,245
  6,592
  6,959
  7,347
  7,757
  8,190
  8,647
EBITDA, $m
  1,933
  2,293
  2,343
  2,404
  2,476
  2,558
  2,650
  2,754
  2,867
  2,992
  3,127
  3,273
  3,431
  3,601
  3,782
  3,977
  4,184
  4,406
  4,641
  4,891
  5,157
  5,439
  5,738
  6,054
  6,389
  6,743
  7,117
  7,513
  7,931
  8,372
  8,838
Interest expense (income), $m
  82
  70
  75
  79
  85
  91
  98
  106
  114
  123
  132
  143
  154
  165
  178
  191
  205
  220
  236
  253
  271
  289
  309
  330
  352
  375
  399
  425
  452
  480
  510
Earnings before tax, $m
  1,453
  1,469
  1,514
  1,569
  1,633
  1,707
  1,791
  1,884
  1,987
  2,100
  2,223
  3,049
  3,192
  3,347
  3,512
  3,690
  3,879
  4,081
  4,296
  4,524
  4,767
  5,024
  5,297
  5,587
  5,893
  6,217
  6,560
  6,923
  7,305
  7,710
  8,137
Tax expense, $m
  384
  397
  409
  424
  441
  461
  484
  509
  537
  567
  600
  823
  862
  904
  948
  996
  1,047
  1,102
  1,160
  1,221
  1,287
  1,357
  1,430
  1,508
  1,591
  1,679
  1,771
  1,869
  1,972
  2,082
  2,197
Net income, $m
  1,069
  1,073
  1,105
  1,145
  1,192
  1,246
  1,307
  1,376
  1,451
  1,533
  1,623
  2,226
  2,330
  2,443
  2,564
  2,693
  2,832
  2,979
  3,136
  3,303
  3,480
  3,668
  3,867
  4,078
  4,302
  4,539
  4,789
  5,053
  5,333
  5,628
  5,940

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  597
  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
  11,693
  11,315
  11,576
  11,873
  12,207
  12,577
  12,983
  13,425
  13,904
  14,420
  14,973
  15,565
  16,197
  16,869
  17,584
  18,343
  19,147
  19,997
  20,897
  21,848
  22,852
  23,911
  25,028
  26,206
  27,446
  28,753
  30,129
  31,577
  33,100
  34,704
  36,390
Adjusted assets (=assets-cash), $m
  11,096
  11,315
  11,576
  11,873
  12,207
  12,577
  12,983
  13,425
  13,904
  14,420
  14,973
  15,565
  16,197
  16,869
  17,584
  18,343
  19,147
  19,997
  20,897
  21,848
  22,852
  23,911
  25,028
  26,206
  27,446
  28,753
  30,129
  31,577
  33,100
  34,704
  36,390
Revenue / Adjusted assets
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
  0.963
Average production assets, $m
  1,196
  1,220
  1,248
  1,281
  1,317
  1,357
  1,400
  1,448
  1,500
  1,555
  1,615
  1,679
  1,747
  1,819
  1,897
  1,978
  2,065
  2,157
  2,254
  2,356
  2,465
  2,579
  2,699
  2,826
  2,960
  3,101
  3,250
  3,406
  3,570
  3,743
  3,925
Working capital, $m
  425
  22
  22
  23
  24
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  37
  39
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  64
  67
  70
Total debt, $m
  1,911
  1,820
  1,938
  2,073
  2,225
  2,393
  2,577
  2,778
  2,995
  3,230
  3,481
  3,750
  4,036
  4,342
  4,666
  5,011
  5,376
  5,762
  6,170
  6,602
  7,058
  7,539
  8,046
  8,580
  9,144
  9,737
  10,361
  11,019
  11,711
  12,438
  13,204
Total liabilities, $m
  5,229
  5,137
  5,255
  5,390
  5,542
  5,710
  5,894
  6,095
  6,312
  6,547
  6,798
  7,067
  7,353
  7,659
  7,983
  8,328
  8,693
  9,079
  9,487
  9,919
  10,375
  10,856
  11,363
  11,897
  12,461
  13,054
  13,678
  14,336
  15,028
  15,755
  16,521
Total equity, $m
  6,465
  6,178
  6,320
  6,483
  6,665
  6,867
  7,089
  7,330
  7,592
  7,873
  8,175
  8,499
  8,843
  9,211
  9,601
  10,015
  10,454
  10,919
  11,410
  11,929
  12,477
  13,055
  13,665
  14,308
  14,986
  15,699
  16,450
  17,241
  18,073
  18,948
  19,869
Total liabilities and equity, $m
  11,694
  11,315
  11,575
  11,873
  12,207
  12,577
  12,983
  13,425
  13,904
  14,420
  14,973
  15,566
  16,196
  16,870
  17,584
  18,343
  19,147
  19,998
  20,897
  21,848
  22,852
  23,911
  25,028
  26,205
  27,447
  28,753
  30,128
  31,577
  33,101
  34,703
  36,390
Debt-to-equity ratio
  0.296
  0.290
  0.310
  0.320
  0.330
  0.350
  0.360
  0.380
  0.390
  0.410
  0.430
  0.440
  0.460
  0.470
  0.490
  0.500
  0.510
  0.530
  0.540
  0.550
  0.570
  0.580
  0.590
  0.600
  0.610
  0.620
  0.630
  0.640
  0.650
  0.660
  0.660
Adjusted equity ratio
  0.529
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546
  0.546

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,069
  1,073
  1,105
  1,145
  1,192
  1,246
  1,307
  1,376
  1,451
  1,533
  1,623
  2,226
  2,330
  2,443
  2,564
  2,693
  2,832
  2,979
  3,136
  3,303
  3,480
  3,668
  3,867
  4,078
  4,302
  4,539
  4,789
  5,053
  5,333
  5,628
  5,940
Depreciation, amort., depletion, $m
  400
  753
  754
  755
  757
  759
  761
  764
  766
  769
  772
  81
  85
  88
  92
  96
  100
  105
  109
  114
  120
  125
  131
  137
  144
  151
  158
  165
  173
  182
  191
Funds from operations, $m
  1,146
  1,825
  1,859
  1,901
  1,950
  2,006
  2,069
  2,139
  2,217
  2,302
  2,394
  2,307
  2,415
  2,531
  2,656
  2,789
  2,932
  3,084
  3,245
  3,417
  3,599
  3,793
  3,998
  4,216
  4,446
  4,689
  4,947
  5,219
  5,506
  5,810
  6,131
Change in working capital, $m
  -187
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
Cash from operations, $m
  1,333
  1,825
  1,859
  1,900
  1,949
  2,005
  2,068
  2,138
  2,216
  2,301
  2,393
  2,306
  2,414
  2,530
  2,655
  2,788
  2,930
  3,082
  3,243
  3,415
  3,597
  3,791
  3,996
  4,213
  4,443
  4,687
  4,944
  5,216
  5,503
  5,807
  6,127
Maintenance CAPEX, $m
  0
  -58
  -59
  -61
  -62
  -64
  -66
  -68
  -70
  -73
  -75
  -78
  -81
  -85
  -88
  -92
  -96
  -100
  -105
  -109
  -114
  -120
  -125
  -131
  -137
  -144
  -151
  -158
  -165
  -173
  -182
New CAPEX, $m
  -370
  -25
  -28
  -32
  -36
  -40
  -44
  -48
  -52
  -56
  -60
  -64
  -68
  -73
  -77
  -82
  -87
  -92
  -97
  -103
  -108
  -114
  -120
  -127
  -134
  -141
  -148
  -156
  -164
  -173
  -182
Cash from investing activities, $m
  -383
  -83
  -87
  -93
  -98
  -104
  -110
  -116
  -122
  -129
  -135
  -142
  -149
  -158
  -165
  -174
  -183
  -192
  -202
  -212
  -222
  -234
  -245
  -258
  -271
  -285
  -299
  -314
  -329
  -346
  -364
Free cash flow, $m
  950
  1,742
  1,771
  1,807
  1,851
  1,901
  1,958
  2,023
  2,094
  2,172
  2,258
  2,164
  2,264
  2,373
  2,489
  2,614
  2,747
  2,890
  3,042
  3,203
  3,375
  3,557
  3,750
  3,955
  4,172
  4,402
  4,645
  4,902
  5,174
  5,461
  5,764
Issuance/(repayment) of debt, $m
  -183
  101
  118
  135
  152
  168
  184
  201
  217
  234
  251
  269
  287
  305
  325
  344
  365
  386
  409
  432
  456
  481
  507
  535
  563
  593
  625
  657
  692
  728
  766
Issuance/(repurchase) of shares, $m
  -460
  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  
  -666
  101
  118
  135
  152
  168
  184
  201
  217
  234
  251
  269
  287
  305
  325
  344
  365
  386
  409
  432
  456
  481
  507
  535
  563
  593
  625
  657
  692
  728
  766
Total cash flow (excl. dividends), $m
  291
  1,843
  1,890
  1,943
  2,002
  2,069
  2,143
  2,223
  2,311
  2,406
  2,509
  2,433
  2,551
  2,678
  2,814
  2,958
  3,112
  3,276
  3,450
  3,635
  3,831
  4,038
  4,257
  4,490
  4,735
  4,995
  5,270
  5,559
  5,865
  6,188
  6,529
Retained Cash Flow (-), $m
  -383
  -118
  -142
  -162
  -182
  -202
  -222
  -241
  -261
  -282
  -302
  -323
  -345
  -367
  -390
  -414
  -439
  -465
  -491
  -519
  -548
  -578
  -610
  -643
  -677
  -713
  -751
  -791
  -832
  -875
  -921
Prev. year cash balance distribution, $m
 
  405
  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
 
  2,130
  1,748
  1,780
  1,820
  1,867
  1,921
  1,982
  2,050
  2,125
  2,207
  2,109
  2,206
  2,311
  2,424
  2,544
  2,674
  2,812
  2,959
  3,116
  3,282
  3,460
  3,648
  3,847
  4,058
  4,282
  4,518
  4,769
  5,034
  5,313
  5,609
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
 
  2,042
  1,600
  1,549
  1,499
  1,447
  1,394
  1,339
  1,281
  1,221
  1,157
  1,002
  942
  879
  814
  747
  679
  612
  545
  480
  417
  358
  303
  252
  207
  167
  132
  102
  78
  58
  42
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

CGI Group Inc. provides information technology and business process services in Canada and internationally. It offers agile, business transformation, change management, CIO advisory, cybersecurity, data analytics, digital enterprise, project management, and industry-specific business consulting services; application development and maintenance, portfolio management, quality assurance and testing, modernization, and migration services; business-to-business and customer operations support, purchase management, revenue management, and supplier payment services; and data center facilities and management, technical service desk, printing and document management, remote infrastructure, transformation, storage as a service, data vaulting, disaster recovery and archiving as a service, bottomless edge-to-core storage, and file sync and share as a service, as well as infrastructure solutions and consulting services. The company also provides IT outsourcing services; and data analytics, enterprise application integration, enterprise architecture and content management, enterprise resource planning (ERP), and geospatial solutions. In addition, it offers Asset & Resource Management, a solution suite for the utilities industry; Atlas360, a customer relationship management and business process solution; Collections360, a collections and debt management solution; Trade360, a trade solution; CommunityCare360; FlexProperty, an ERP solution for property management; Payments360; mobile workforce and outage management solutions, such as PragmaCAD and PragmaLINE; Ratabase, a solution for insurance companies; Sm@rtering, a meter infrastructure management solution; and Unify360. The company serves communication, financial service, health, manufacturing, oil and gas, post and logistic, retail and consumer service, transportation, and utility industries, as well as government. The company was founded in 1976 and is headquartered in Montreal, Canada.

FINANCIAL RATIOS  of  CGI Group Inc. Class A Subordinate Voti (GIB-A)

Valuation Ratios
P/E Ratio 19
Price to Sales 1.9
Price to Book 3.1
Price to Tangible Book
Price to Cash Flow 15.2
Price to Free Cash Flow 21.1
Growth Rates
Sales Growth Rate 3.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 35.5%
Cap. Spend. - 3 Yr. Gr. Rate 11.7%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 26.6%
Total Debt to Equity 29.6%
Interest Coverage 19
Management Effectiveness
Return On Assets 9.6%
Ret/ On Assets - 3 Yr. Avg. 9.1%
Return On Total Capital 12.9%
Ret/ On T. Cap. - 3 Yr. Avg. 12.3%
Return On Equity 17%
Return On Equity - 3 Yr. Avg. 17.9%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 30.3%
Gross Margin - 3 Yr. Avg. 29.9%
EBITDA Margin 18.1%
EBITDA Margin - 3 Yr. Avg. 17.3%
Operating Margin 14.3%
Oper. Margin - 3 Yr. Avg. 13.4%
Pre-Tax Margin 13.6%
Pre-Tax Margin - 3 Yr. Avg. 12.4%
Net Profit Margin 10%
Net Profit Margin - 3 Yr. Avg. 9.2%
Effective Tax Rate 26.4%
Eff/ Tax Rate - 3 Yr. Avg. 25.6%
Payout Ratio 0%

GIB-A stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GIB-A stock intrinsic value calculation we used $10683 million for the last fiscal year's total revenue generated by CGI Group Inc. Class A Subordinate Voti. The default revenue input number comes from 2016 income statement of CGI Group Inc. Class A 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 GIB-A stock valuation model: a) initial revenue growth rate of 2% 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 GIB-A is calculated based on our internal credit rating of CGI Group Inc. Class A 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 CGI Group Inc. Class A 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 GIB-A stock the variable cost ratio is equal to 74.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1222 million in the base year in the intrinsic value calculation for GIB-A 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 4.1% for CGI Group Inc. Class A Subordinate Voti.

Corporate tax rate of 27% is the nominal tax rate for CGI Group Inc. Class A 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 GIB-A 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 GIB-A are equal to 11.2%.

Life of production assets of 20.6 years is the average useful life of capital assets used in CGI Group Inc. Class A 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 GIB-A is equal to 0.2%. 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 - $6465 million for CGI Group Inc. Class A 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 265.663 million for CGI Group Inc. Class A 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 CGI Group Inc. Class A Subordinate Voti at the current share price and the inputted number of shares is $17.7 billion.

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Stock chart of GIB-A Financial statements of GIB-A
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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