Intrinsic value of Manitok Energy Inc - MEI

Previous Close

$0.07

  Intrinsic Value

$0.06

stock screener

  Rating & Target

hold

-17%

  Value-price divergence*

0%

Previous close

$0.07

 
Intrinsic value

$0.06

 
Up/down potential

-17%

 
Rating

hold

 
Value-price divergence*

0%

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

We calculate the intrinsic value of MEI 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 0.0

 

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, %
  -16.67
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  35
  56
  87
  129
  188
  265
  364
  489
  642
  826
  1,043
  1,295
  1,584
  1,909
  2,271
  2,670
  3,106
  3,578
  4,085
  4,627
  5,202
  5,810
  6,450
  7,122
  7,825
  8,560
  9,326
  10,123
  10,953
  11,816
  12,713
Variable operating expenses, $m
 
  122
  188
  281
  408
  575
  791
  1,061
  1,393
  1,793
  2,265
  2,812
  3,438
  4,144
  4,931
  5,797
  6,744
  7,768
  8,869
  10,045
  11,294
  12,613
  14,003
  15,462
  16,988
  18,583
  20,246
  21,978
  23,780
  25,653
  27,600
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
  72
  122
  188
  281
  408
  575
  791
  1,061
  1,393
  1,793
  2,265
  2,812
  3,438
  4,144
  4,931
  5,797
  6,744
  7,768
  8,869
  10,045
  11,294
  12,613
  14,003
  15,462
  16,988
  18,583
  20,246
  21,978
  23,780
  25,653
  27,600
Operating income, $m
  -37
  -66
  -101
  -152
  -220
  -310
  -426
  -572
  -752
  -967
  -1,221
  -1,517
  -1,854
  -2,235
  -2,659
  -3,127
  -3,638
  -4,190
  -4,784
  -5,418
  -6,092
  -6,803
  -7,553
  -8,340
  -9,163
  -10,023
  -10,920
  -11,854
  -12,826
  -13,837
  -14,887
EBITDA, $m
  -17
  -34
  -52
  -78
  -113
  -159
  -219
  -294
  -386
  -497
  -627
  -779
  -952
  -1,148
  -1,365
  -1,606
  -1,868
  -2,151
  -2,456
  -2,782
  -3,128
  -3,493
  -3,878
  -4,282
  -4,705
  -5,146
  -5,607
  -6,087
  -6,585
  -7,104
  -7,644
Interest expense (income), $m
  6
  6
  15
  28
  46
  71
  105
  147
  201
  267
  346
  440
  549
  673
  813
  969
  1,141
  1,329
  1,533
  1,751
  1,984
  2,232
  2,494
  2,770
  3,060
  3,363
  3,679
  4,009
  4,353
  4,711
  5,083
Earnings before tax, $m
  -32
  -71
  -116
  -179
  -266
  -382
  -531
  -720
  -953
  -1,234
  -1,568
  -1,957
  -2,403
  -2,908
  -3,473
  -4,096
  -4,779
  -5,519
  -6,317
  -7,169
  -8,076
  -9,036
  -10,047
  -11,110
  -12,223
  -13,386
  -14,600
  -15,864
  -17,180
  -18,548
  -19,970
Tax expense, $m
  -7
  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
  -25
  -71
  -116
  -179
  -266
  -382
  -531
  -720
  -953
  -1,234
  -1,568
  -1,957
  -2,403
  -2,908
  -3,473
  -4,096
  -4,779
  -5,519
  -6,317
  -7,169
  -8,076
  -9,036
  -10,047
  -11,110
  -12,223
  -13,386
  -14,600
  -15,864
  -17,180
  -18,548
  -19,970

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  253
  406
  627
  938
  1,360
  1,919
  2,639
  3,542
  4,651
  5,984
  7,559
  9,386
  11,476
  13,832
  16,457
  19,351
  22,510
  25,929
  29,604
  33,528
  37,696
  42,101
  46,740
  51,608
  56,704
  62,027
  67,578
  73,358
  79,372
  85,625
  92,125
Adjusted assets (=assets-cash), $m
  253
  406
  627
  938
  1,360
  1,919
  2,639
  3,542
  4,651
  5,984
  7,559
  9,386
  11,476
  13,832
  16,457
  19,351
  22,510
  25,929
  29,604
  33,528
  37,696
  42,101
  46,740
  51,608
  56,704
  62,027
  67,578
  73,358
  79,372
  85,625
  92,125
Revenue / Adjusted assets
  0.138
  0.138
  0.139
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
Average production assets, $m
  172
  274
  424
  634
  920
  1,298
  1,784
  2,395
  3,145
  4,047
  5,111
  6,347
  7,760
  9,353
  11,128
  13,085
  15,221
  17,533
  20,018
  22,672
  25,490
  28,469
  31,605
  34,897
  38,343
  41,943
  45,696
  49,605
  53,671
  57,900
  62,295
Working capital, $m
  -46
  -21
  -32
  -48
  -70
  -98
  -135
  -181
  -238
  -306
  -387
  -481
  -588
  -708
  -843
  -991
  -1,152
  -1,328
  -1,516
  -1,717
  -1,930
  -2,155
  -2,393
  -2,642
  -2,903
  -3,176
  -3,460
  -3,756
  -4,064
  -4,384
  -4,717
Total debt, $m
  66
  174
  331
  551
  850
  1,246
  1,755
  2,395
  3,180
  4,124
  5,239
  6,532
  8,012
  9,680
  11,539
  13,587
  15,824
  18,245
  20,847
  23,625
  26,575
  29,694
  32,979
  36,426
  40,034
  43,802
  47,732
  51,824
  56,082
  60,510
  65,111
Total liabilities, $m
  179
  287
  444
  664
  963
  1,359
  1,868
  2,508
  3,293
  4,237
  5,352
  6,645
  8,125
  9,793
  11,652
  13,700
  15,937
  18,358
  20,960
  23,738
  26,688
  29,807
  33,092
  36,539
  40,147
  43,915
  47,845
  51,937
  56,195
  60,623
  65,224
Total equity, $m
  74
  118
  183
  274
  397
  560
  770
  1,034
  1,358
  1,747
  2,207
  2,741
  3,351
  4,039
  4,806
  5,650
  6,573
  7,571
  8,644
  9,790
  11,007
  12,293
  13,648
  15,070
  16,558
  18,112
  19,733
  21,421
  23,177
  25,003
  26,900
Total liabilities and equity, $m
  253
  405
  627
  938
  1,360
  1,919
  2,638
  3,542
  4,651
  5,984
  7,559
  9,386
  11,476
  13,832
  16,458
  19,350
  22,510
  25,929
  29,604
  33,528
  37,695
  42,100
  46,740
  51,609
  56,705
  62,027
  67,578
  73,358
  79,372
  85,626
  92,124
Debt-to-equity ratio
  0.892
  1.470
  1.810
  2.010
  2.140
  2.220
  2.280
  2.320
  2.340
  2.360
  2.370
  2.380
  2.390
  2.400
  2.400
  2.400
  2.410
  2.410
  2.410
  2.410
  2.410
  2.420
  2.420
  2.420
  2.420
  2.420
  2.420
  2.420
  2.420
  2.420
  2.420
Adjusted equity ratio
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -25
  -71
  -116
  -179
  -266
  -382
  -531
  -720
  -953
  -1,234
  -1,568
  -1,957
  -2,403
  -2,908
  -3,473
  -4,096
  -4,779
  -5,519
  -6,317
  -7,169
  -8,076
  -9,036
  -10,047
  -11,110
  -12,223
  -13,386
  -14,600
  -15,864
  -17,180
  -18,548
  -19,970
Depreciation, amort., depletion, $m
  20
  32
  49
  74
  107
  151
  207
  278
  366
  471
  594
  738
  902
  1,088
  1,294
  1,522
  1,770
  2,039
  2,328
  2,636
  2,964
  3,310
  3,675
  4,058
  4,459
  4,877
  5,313
  5,768
  6,241
  6,733
  7,244
Funds from operations, $m
  16
  -39
  -67
  -106
  -159
  -231
  -324
  -441
  -587
  -764
  -974
  -1,219
  -1,501
  -1,821
  -2,179
  -2,575
  -3,009
  -3,481
  -3,989
  -4,533
  -5,112
  -5,725
  -6,372
  -7,052
  -7,765
  -8,509
  -9,286
  -10,096
  -10,939
  -11,815
  -12,726
Change in working capital, $m
  -4
  -8
  -11
  -16
  -22
  -29
  -37
  -46
  -57
  -68
  -81
  -94
  -107
  -121
  -134
  -148
  -162
  -175
  -188
  -201
  -213
  -226
  -237
  -249
  -261
  -273
  -284
  -296
  -308
  -320
  -333
Cash from operations, $m
  20
  -31
  -55
  -90
  -137
  -202
  -287
  -395
  -530
  -695
  -893
  -1,125
  -1,394
  -1,700
  -2,044
  -2,427
  -2,847
  -3,305
  -3,801
  -4,332
  -4,899
  -5,500
  -6,135
  -6,803
  -7,504
  -8,237
  -9,002
  -9,800
  -10,631
  -11,495
  -12,394
Maintenance CAPEX, $m
  0
  -20
  -32
  -49
  -74
  -107
  -151
  -207
  -278
  -366
  -471
  -594
  -738
  -902
  -1,088
  -1,294
  -1,522
  -1,770
  -2,039
  -2,328
  -2,636
  -2,964
  -3,310
  -3,675
  -4,058
  -4,459
  -4,877
  -5,313
  -5,768
  -6,241
  -6,733
New CAPEX, $m
  -20
  -103
  -150
  -210
  -286
  -378
  -486
  -611
  -750
  -902
  -1,065
  -1,236
  -1,413
  -1,593
  -1,775
  -1,957
  -2,136
  -2,312
  -2,485
  -2,653
  -2,818
  -2,979
  -3,137
  -3,292
  -3,446
  -3,599
  -3,753
  -3,909
  -4,067
  -4,228
  -4,395
Cash from investing activities, $m
  -23
  -123
  -182
  -259
  -360
  -485
  -637
  -818
  -1,028
  -1,268
  -1,536
  -1,830
  -2,151
  -2,495
  -2,863
  -3,251
  -3,658
  -4,082
  -4,524
  -4,981
  -5,454
  -5,943
  -6,447
  -6,967
  -7,504
  -8,058
  -8,630
  -9,222
  -9,835
  -10,469
  -11,128
Free cash flow, $m
  -3
  -154
  -237
  -349
  -497
  -687
  -924
  -1,213
  -1,559
  -1,963
  -2,428
  -2,955
  -3,545
  -4,196
  -4,907
  -5,677
  -6,505
  -7,388
  -8,324
  -9,313
  -10,353
  -11,443
  -12,582
  -13,770
  -15,007
  -16,295
  -17,632
  -19,022
  -20,466
  -21,964
  -23,521
Issuance/(repayment) of debt, $m
  -32
  108
  157
  220
  299
  396
  509
  639
  785
  944
  1,115
  1,294
  1,479
  1,668
  1,859
  2,049
  2,236
  2,421
  2,602
  2,778
  2,951
  3,119
  3,284
  3,447
  3,608
  3,769
  3,930
  4,092
  4,258
  4,427
  4,602
Issuance/(repurchase) of shares, $m
  29
  116
  181
  270
  390
  545
  741
  984
  1,276
  1,624
  2,028
  2,490
  3,013
  3,596
  4,239
  4,941
  5,701
  6,518
  7,390
  8,315
  9,293
  10,322
  11,402
  12,532
  13,711
  14,941
  16,221
  17,552
  18,936
  20,374
  21,868
Cash from financing (excl. dividends), $m  
  3
  224
  338
  490
  689
  941
  1,250
  1,623
  2,061
  2,568
  3,143
  3,784
  4,492
  5,264
  6,098
  6,990
  7,937
  8,939
  9,992
  11,093
  12,244
  13,441
  14,686
  15,979
  17,319
  18,710
  20,151
  21,644
  23,194
  24,801
  26,470
Total cash flow (excl. dividends), $m
  0
  70
  100
  141
  192
  254
  326
  410
  503
  605
  714
  829
  948
  1,069
  1,191
  1,313
  1,433
  1,551
  1,667
  1,780
  1,890
  1,998
  2,104
  2,208
  2,312
  2,415
  2,518
  2,622
  2,728
  2,837
  2,948
Retained Cash Flow (-), $m
  7
  -116
  -181
  -270
  -390
  -545
  -741
  -984
  -1,276
  -1,624
  -2,028
  -2,490
  -3,013
  -3,596
  -4,239
  -4,941
  -5,701
  -6,518
  -7,390
  -8,315
  -9,293
  -10,322
  -11,402
  -12,532
  -13,711
  -14,941
  -16,221
  -17,552
  -18,936
  -20,374
  -21,868
Prev. year cash balance distribution, $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 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
 
  -46
  -80
  -129
  -198
  -291
  -415
  -574
  -773
  -1,019
  -1,313
  -1,661
  -2,065
  -2,527
  -3,048
  -3,629
  -4,268
  -4,967
  -5,723
  -6,535
  -7,402
  -8,324
  -9,298
  -10,323
  -11,399
  -12,526
  -13,703
  -14,930
  -16,208
  -17,537
  -18,919
Discount rate, %
 
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
 
  -43
  -70
  -105
  -147
  -198
  -255
  -317
  -380
  -441
  -496
  -540
  -572
  -589
  -590
  -575
  -546
  -504
  -453
  -397
  -339
  -281
  -227
  -178
  -136
  -101
  -72
  -50
  -34
  -22
  -14
Current shareholders' claim on cash, %
  100
  30.9
  9.7
  3.1
  1.0
  0.3
  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

Manitok Energy Inc is a Canada-based junior oil and gas exploration, development and production company. It focuses on conventional oil and gas reservoirs in the Canadian Foothills along with crude oil in Southeast Alberta. It conducts its operations in the Western Canadian Sedimentary Basin and in Alberta. It is engaged in the exploration for, and the development, production and acquisition of petroleum and natural gas reserves in Western Canada. Its properties include Cordel/Stolberg, Entice, Fallen Timber, Quirk Creek and Southern Alberta Foothills. The Carseland area is located approximately 70 kilometers from Calgary, Alberta. The Wayne area is over 120 kilometers from of Calgary, Alberta. Rockyford is located approximately 90 kilometers from Calgary and over 30 kilometers south of the Wayne area, and The Cordel/Stolberg property is approximately 20 kilometers north of the hamlet of Nordegg, Alberta. The Company owns Craft Oil Ltd, producer of crude petroleum and natural gas.

FINANCIAL RATIOS  of  Manitok Energy Inc (MEI)

Valuation Ratios
P/E Ratio -0.7
Price to Sales 0.5
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 0.9
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -16.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 25%
Cap. Spend. - 3 Yr. Gr. Rate -24.8%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 44.6%
Total Debt to Equity 89.2%
Interest Coverage -4
Management Effectiveness
Return On Assets -8.9%
Ret/ On Assets - 3 Yr. Avg. -7%
Return On Total Capital -16.8%
Ret/ On T. Cap. - 3 Yr. Avg. -12.6%
Return On Equity -32.3%
Return On Equity - 3 Yr. Avg. -23%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 37.1%
Gross Margin - 3 Yr. Avg. 57.8%
EBITDA Margin -17.1%
EBITDA Margin - 3 Yr. Avg. 3.5%
Operating Margin -105.7%
Oper. Margin - 3 Yr. Avg. -84.8%
Pre-Tax Margin -91.4%
Pre-Tax Margin - 3 Yr. Avg. -59.1%
Net Profit Margin -71.4%
Net Profit Margin - 3 Yr. Avg. -47%
Effective Tax Rate 21.9%
Eff/ Tax Rate - 3 Yr. Avg. -18.4%
Payout Ratio 0%

MEI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MEI stock intrinsic value calculation we used $35 million for the last fiscal year's total revenue generated by Manitok Energy Inc. The default revenue input number comes from 2016 income statement of Manitok Energy Inc. 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 MEI stock valuation model: a) initial revenue growth rate of 60% 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 6.6%, whose default value for MEI is calculated based on our internal credit rating of Manitok Energy Inc, 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 Manitok Energy Inc.
    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 MEI stock the variable cost ratio is equal to 217.1%.

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 MEI 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 8.4% for Manitok Energy Inc.

Corporate tax rate of 27% is the nominal tax rate for Manitok Energy Inc. 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 MEI 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 MEI are equal to 490%.

Life of production assets of 8.6 years is the average useful life of capital assets used in Manitok Energy Inc 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 MEI is equal to -37.1%. 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 - $74 million for Manitok Energy Inc - 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 319.733 million for Manitok Energy Inc 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 Manitok Energy Inc at the current share price and the inputted number of shares is $0.0 billion.

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Financial statements of MEI
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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