Intrinsic value of Loblaw Companies Limited - L

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$73.09

  Intrinsic Value

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  Value-price divergence*

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$73.09

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

We calculate the intrinsic value of L 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 29.1

 

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, %
  2.18
  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
  46,385
  47,313
  48,401
  49,645
  51,041
  52,589
  54,287
  56,135
  58,137
  60,293
  62,607
  65,082
  67,723
  70,536
  73,525
  76,696
  80,057
  83,615
  87,378
  91,353
  95,551
  99,980
  104,650
  109,574
  114,761
  120,225
  125,977
  132,031
  138,403
  145,106
  152,156
Variable operating expenses, $m
 
  23,885
  24,426
  25,043
  25,737
  26,505
  27,348
  28,266
  29,260
  30,331
  31,480
  32,320
  33,632
  35,028
  36,513
  38,088
  39,757
  41,524
  43,392
  45,366
  47,451
  49,650
  51,970
  54,415
  56,991
  59,704
  62,560
  65,567
  68,731
  72,060
  75,561
Fixed operating expenses, $m
 
  21,947
  22,496
  23,058
  23,635
  24,226
  24,831
  25,452
  26,088
  26,741
  27,409
  28,094
  28,797
  29,517
  30,255
  31,011
  31,786
  32,581
  33,395
  34,230
  35,086
  35,963
  36,862
  37,784
  38,728
  39,697
  40,689
  41,706
  42,749
  43,818
  44,913
Total operating expenses, $m
  44,293
  45,832
  46,922
  48,101
  49,372
  50,731
  52,179
  53,718
  55,348
  57,072
  58,889
  60,414
  62,429
  64,545
  66,768
  69,099
  71,543
  74,105
  76,787
  79,596
  82,537
  85,613
  88,832
  92,199
  95,719
  99,401
  103,249
  107,273
  111,480
  115,878
  120,474
Operating income, $m
  2,092
  1,480
  1,479
  1,543
  1,670
  1,858
  2,107
  2,417
  2,788
  3,221
  3,717
  4,668
  5,295
  5,991
  6,758
  7,598
  8,514
  9,511
  10,590
  11,757
  13,014
  14,366
  15,818
  17,375
  19,042
  20,824
  22,727
  24,758
  26,923
  29,228
  31,682
EBITDA, $m
  3,635
  3,186
  3,215
  3,314
  3,479
  3,710
  4,006
  4,368
  4,794
  5,288
  5,848
  6,478
  7,179
  7,953
  8,803
  9,731
  10,741
  11,837
  13,021
  14,298
  15,672
  17,147
  18,729
  20,423
  22,234
  24,168
  26,231
  28,430
  30,772
  33,264
  35,914
Interest expense (income), $m
  474
  429
  446
  465
  487
  512
  540
  571
  604
  639
  678
  719
  764
  811
  861
  915
  972
  1,032
  1,096
  1,163
  1,234
  1,309
  1,388
  1,472
  1,560
  1,653
  1,751
  1,854
  1,962
  2,076
  2,196
Earnings before tax, $m
  1,439
  1,051
  1,034
  1,078
  1,182
  1,345
  1,567
  1,846
  2,184
  2,582
  3,039
  3,948
  4,531
  5,180
  5,896
  6,683
  7,543
  8,479
  9,495
  10,594
  11,780
  13,057
  14,430
  15,903
  17,482
  19,171
  20,977
  22,904
  24,960
  27,152
  29,486
Tax expense, $m
  449
  284
  279
  291
  319
  363
  423
  498
  590
  697
  821
  1,066
  1,223
  1,399
  1,592
  1,804
  2,037
  2,289
  2,564
  2,860
  3,181
  3,525
  3,896
  4,294
  4,720
  5,176
  5,664
  6,184
  6,739
  7,331
  7,961
Net income, $m
  983
  767
  755
  787
  863
  982
  1,144
  1,348
  1,595
  1,885
  2,219
  2,882
  3,308
  3,781
  4,304
  4,878
  5,506
  6,190
  6,931
  7,733
  8,599
  9,532
  10,534
  11,609
  12,762
  13,995
  15,313
  16,720
  18,221
  19,821
  21,524

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,555
  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
  34,436
  33,531
  34,303
  35,184
  36,174
  37,271
  38,474
  39,784
  41,202
  42,730
  44,370
  46,125
  47,997
  49,990
  52,108
  54,356
  56,738
  59,260
  61,926
  64,744
  67,718
  70,857
  74,168
  77,657
  81,333
  85,205
  89,282
  93,573
  98,088
  102,839
  107,835
Adjusted assets (=assets-cash), $m
  32,881
  33,531
  34,303
  35,184
  36,174
  37,271
  38,474
  39,784
  41,202
  42,730
  44,370
  46,125
  47,997
  49,990
  52,108
  54,356
  56,738
  59,260
  61,926
  64,744
  67,718
  70,857
  74,168
  77,657
  81,333
  85,205
  89,282
  93,573
  98,088
  102,839
  107,835
Revenue / Adjusted assets
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
  1.411
Average production assets, $m
  19,474
  19,871
  20,328
  20,851
  21,437
  22,087
  22,800
  23,577
  24,417
  25,323
  26,295
  27,334
  28,444
  29,625
  30,880
  32,212
  33,624
  35,118
  36,699
  38,368
  40,131
  41,991
  43,953
  46,021
  48,200
  50,494
  52,910
  55,453
  58,129
  60,944
  63,905
Working capital, $m
  3,262
  2,933
  3,001
  3,078
  3,165
  3,261
  3,366
  3,480
  3,604
  3,738
  3,882
  4,035
  4,199
  4,373
  4,559
  4,755
  4,964
  5,184
  5,417
  5,664
  5,924
  6,199
  6,488
  6,794
  7,115
  7,454
  7,811
  8,186
  8,581
  8,997
  9,434
Total debt, $m
  11,650
  10,871
  11,346
  11,889
  12,499
  13,175
  13,916
  14,723
  15,597
  16,538
  17,548
  18,629
  19,782
  21,010
  22,315
  23,699
  25,167
  26,720
  28,362
  30,098
  31,930
  33,864
  35,903
  38,053
  40,317
  42,702
  45,214
  47,857
  50,638
  53,565
  56,643
Total liabilities, $m
  21,434
  20,655
  21,130
  21,673
  22,283
  22,959
  23,700
  24,507
  25,381
  26,322
  27,332
  28,413
  29,566
  30,794
  32,099
  33,483
  34,951
  36,504
  38,146
  39,882
  41,714
  43,648
  45,687
  47,837
  50,101
  52,486
  54,998
  57,641
  60,422
  63,349
  66,427
Total equity, $m
  13,002
  12,876
  13,172
  13,511
  13,891
  14,312
  14,774
  15,277
  15,822
  16,409
  17,038
  17,712
  18,431
  19,196
  20,010
  20,873
  21,787
  22,756
  23,780
  24,862
  26,004
  27,209
  28,480
  29,820
  31,232
  32,719
  34,284
  35,932
  37,666
  39,490
  41,409
Total liabilities and equity, $m
  34,436
  33,531
  34,302
  35,184
  36,174
  37,271
  38,474
  39,784
  41,203
  42,731
  44,370
  46,125
  47,997
  49,990
  52,109
  54,356
  56,738
  59,260
  61,926
  64,744
  67,718
  70,857
  74,167
  77,657
  81,333
  85,205
  89,282
  93,573
  98,088
  102,839
  107,836
Debt-to-equity ratio
  0.896
  0.840
  0.860
  0.880
  0.900
  0.920
  0.940
  0.960
  0.990
  1.010
  1.030
  1.050
  1.070
  1.090
  1.120
  1.140
  1.160
  1.170
  1.190
  1.210
  1.230
  1.240
  1.260
  1.280
  1.290
  1.310
  1.320
  1.330
  1.340
  1.360
  1.370
Adjusted equity ratio
  0.372
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  983
  767
  755
  787
  863
  982
  1,144
  1,348
  1,595
  1,885
  2,219
  2,882
  3,308
  3,781
  4,304
  4,878
  5,506
  6,190
  6,931
  7,733
  8,599
  9,532
  10,534
  11,609
  12,762
  13,995
  15,313
  16,720
  18,221
  19,821
  21,524
Depreciation, amort., depletion, $m
  1,543
  1,705
  1,736
  1,770
  1,809
  1,852
  1,899
  1,951
  2,007
  2,067
  2,131
  1,810
  1,884
  1,962
  2,045
  2,133
  2,227
  2,326
  2,430
  2,541
  2,658
  2,781
  2,911
  3,048
  3,192
  3,344
  3,504
  3,672
  3,850
  4,036
  4,232
Funds from operations, $m
  3,264
  2,473
  2,490
  2,557
  2,672
  2,834
  3,043
  3,299
  3,601
  3,951
  4,350
  4,692
  5,192
  5,743
  6,349
  7,012
  7,733
  8,515
  9,362
  10,274
  11,257
  12,313
  13,445
  14,657
  15,954
  17,339
  18,817
  20,392
  22,071
  23,857
  25,757
Change in working capital, $m
  -255
  58
  67
  77
  87
  96
  105
  115
  124
  134
  143
  153
  164
  174
  185
  197
  208
  221
  233
  246
  260
  275
  290
  305
  322
  339
  357
  375
  395
  416
  437
Cash from operations, $m
  3,519
  2,245
  2,423
  2,480
  2,586
  2,738
  2,938
  3,184
  3,477
  3,817
  4,206
  4,539
  5,028
  5,569
  6,164
  6,815
  7,525
  8,295
  9,128
  10,028
  10,997
  12,038
  13,155
  14,352
  15,632
  17,000
  18,460
  20,017
  21,676
  23,441
  25,319
Maintenance CAPEX, $m
  0
  -1,290
  -1,316
  -1,346
  -1,381
  -1,420
  -1,463
  -1,510
  -1,561
  -1,617
  -1,677
  -1,741
  -1,810
  -1,884
  -1,962
  -2,045
  -2,133
  -2,227
  -2,326
  -2,430
  -2,541
  -2,658
  -2,781
  -2,911
  -3,048
  -3,192
  -3,344
  -3,504
  -3,672
  -3,850
  -4,036
New CAPEX, $m
  -1,224
  -397
  -457
  -522
  -587
  -650
  -713
  -777
  -841
  -906
  -972
  -1,040
  -1,109
  -1,181
  -1,255
  -1,332
  -1,412
  -1,494
  -1,580
  -1,670
  -1,763
  -1,860
  -1,962
  -2,068
  -2,179
  -2,295
  -2,416
  -2,543
  -2,676
  -2,815
  -2,961
Cash from investing activities, $m
  -1,437
  -1,687
  -1,773
  -1,868
  -1,968
  -2,070
  -2,176
  -2,287
  -2,402
  -2,523
  -2,649
  -2,781
  -2,919
  -3,065
  -3,217
  -3,377
  -3,545
  -3,721
  -3,906
  -4,100
  -4,304
  -4,518
  -4,743
  -4,979
  -5,227
  -5,487
  -5,760
  -6,047
  -6,348
  -6,665
  -6,997
Free cash flow, $m
  2,082
  558
  650
  611
  618
  669
  762
  898
  1,075
  1,295
  1,557
  1,758
  2,108
  2,504
  2,947
  3,438
  3,980
  4,574
  5,222
  5,928
  6,693
  7,520
  8,412
  9,373
  10,406
  11,513
  12,700
  13,970
  15,327
  16,777
  18,322
Issuance/(repayment) of debt, $m
  -147
  401
  475
  543
  610
  676
  741
  807
  874
  941
  1,010
  1,081
  1,153
  1,228
  1,305
  1,385
  1,467
  1,553
  1,643
  1,736
  1,832
  1,934
  2,039
  2,149
  2,265
  2,385
  2,511
  2,643
  2,781
  2,926
  3,078
Issuance/(repurchase) of shares, $m
  -756
  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  
  -1,357
  401
  475
  543
  610
  676
  741
  807
  874
  941
  1,010
  1,081
  1,153
  1,228
  1,305
  1,385
  1,467
  1,553
  1,643
  1,736
  1,832
  1,934
  2,039
  2,149
  2,265
  2,385
  2,511
  2,643
  2,781
  2,926
  3,078
Total cash flow (excl. dividends), $m
  721
  959
  1,125
  1,155
  1,228
  1,344
  1,503
  1,705
  1,949
  2,236
  2,567
  2,839
  3,261
  3,732
  4,252
  4,823
  5,447
  6,127
  6,865
  7,663
  8,525
  9,454
  10,452
  11,523
  12,670
  13,899
  15,212
  16,613
  18,109
  19,703
  21,400
Retained Cash Flow (-), $m
  109
  -249
  -296
  -339
  -380
  -421
  -462
  -503
  -545
  -587
  -630
  -674
  -719
  -765
  -813
  -863
  -915
  -968
  -1,024
  -1,082
  -1,142
  -1,205
  -1,271
  -1,340
  -1,412
  -1,487
  -1,565
  -1,648
  -1,734
  -1,824
  -1,919
Prev. year cash balance distribution, $m
 
  375
  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
 
  1,085
  829
  816
  848
  923
  1,041
  1,202
  1,404
  1,649
  1,938
  2,165
  2,542
  2,966
  3,438
  3,959
  4,532
  5,159
  5,841
  6,581
  7,383
  8,248
  9,180
  10,183
  11,259
  12,412
  13,646
  14,966
  16,375
  17,879
  19,482
Discount rate, %
 
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
 
  1,023
  732
  671
  645
  646
  664
  693
  727
  759
  785
  764
  773
  768
  749
  716
  671
  616
  554
  488
  420
  353
  291
  233
  183
  139
  103
  75
  52
  36
  23
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

Loblaw Companies Limited, a food and pharmacy company, provides grocery, pharmacy, health and beauty, apparel, general merchandise, financial, and wireless mobile products and services in Canada and the United States. It operates through three segments: Retail, Financial Services, and Choice Properties. The Retail segment operates retail food and associate-owned drug stores, including in-store pharmacies and other health and beauty products, gas bars, apparel, and other general merchandise stores. The Financial Services segment provides credit card services, loyalty programs, personal banking services, deposit taking services, and telecommunication services, as well as auto, home, travel, and pet insurance services. The Choice Properties segment owns, leases, and manages commercial properties. The company was founded in 1956 and is headquartered in Brampton, Canada.

FINANCIAL RATIOS  of  Loblaw Companies Limited (L)

Valuation Ratios
P/E Ratio 29.8
Price to Sales 0.6
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 8.3
Price to Free Cash Flow 12.8
Growth Rates
Sales Growth Rate 2.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -1.4%
Cap. Spend. - 3 Yr. Gr. Rate 6.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 80.5%
Total Debt to Equity 89.6%
Interest Coverage 4
Management Effectiveness
Return On Assets 3.8%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. 2.2%
Return On Equity 7.5%
Return On Equity - 3 Yr. Avg. 4.2%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 28.4%
Gross Margin - 3 Yr. Avg. 26.9%
EBITDA Margin 7.5%
EBITDA Margin - 3 Yr. Avg. 6.3%
Operating Margin 4.5%
Oper. Margin - 3 Yr. Avg. 3.2%
Pre-Tax Margin 3.1%
Pre-Tax Margin - 3 Yr. Avg. 1.8%
Net Profit Margin 2.1%
Net Profit Margin - 3 Yr. Avg. 1.2%
Effective Tax Rate 31.2%
Eff/ Tax Rate - 3 Yr. Avg. 33.9%
Payout Ratio 43.2%

L stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the L stock intrinsic value calculation we used $46385 million for the last fiscal year's total revenue generated by Loblaw Companies Limited. The default revenue input number comes from 2016 income statement of Loblaw Companies Limited. 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 L 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 6.1%, whose default value for L is calculated based on our internal credit rating of Loblaw Companies Limited, 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 Loblaw Companies Limited.
    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 L stock the variable cost ratio is equal to 50.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $21412 million in the base year in the intrinsic value calculation for L 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 Loblaw Companies Limited.

Corporate tax rate of 27% is the nominal tax rate for Loblaw Companies Limited. 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 L 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 L are equal to 42%.

Life of production assets of 15.1 years is the average useful life of capital assets used in Loblaw Companies Limited 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 L is equal to 6.2%. 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 - $13002 million for Loblaw Companies Limited - 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 397.947 million for Loblaw Companies Limited 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 Loblaw Companies Limited at the current share price and the inputted number of shares is $29.1 billion.


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Stock chart of L Financial statements of L
Valuation of Stocks

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