Intrinsic value of Potash Corporation of Saskatchewan Inc. - POT

Previous Close

$21.96

  Intrinsic Value

$3.27

stock screener

  Rating & Target

str. sell

-85%

  Value-price divergence*

-39%

Previous close

$21.96

 
Intrinsic value

$3.27

 
Up/down potential

-85%

 
Rating

str. sell

 
Value-price divergence*

-39%

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

We calculate the intrinsic value of POT 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 18.4

 

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, %
  -29.03
  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
  6,020
  6,140
  6,282
  6,443
  6,624
  6,825
  7,045
  7,285
  7,545
  7,825
  8,125
  8,447
  8,789
  9,154
  9,542
  9,954
  10,390
  10,852
  11,340
  11,856
  12,401
  12,976
  13,582
  14,221
  14,894
  15,603
  16,350
  17,135
  17,962
  18,832
  19,747
Variable operating expenses, $m
 
  1,658
  1,695
  1,739
  1,787
  1,841
  1,900
  1,964
  2,034
  2,109
  2,189
  2,262
  2,354
  2,452
  2,556
  2,666
  2,783
  2,906
  3,037
  3,175
  3,321
  3,475
  3,638
  3,809
  3,989
  4,179
  4,379
  4,589
  4,811
  5,044
  5,289
Fixed operating expenses, $m
 
  3,791
  3,886
  3,983
  4,083
  4,185
  4,290
  4,397
  4,507
  4,620
  4,735
  4,853
  4,975
  5,099
  5,227
  5,357
  5,491
  5,628
  5,769
  5,913
  6,061
  6,213
  6,368
  6,527
  6,690
  6,858
  7,029
  7,205
  7,385
  7,570
  7,759
Total operating expenses, $m
  5,234
  5,449
  5,581
  5,722
  5,870
  6,026
  6,190
  6,361
  6,541
  6,729
  6,924
  7,115
  7,329
  7,551
  7,783
  8,023
  8,274
  8,534
  8,806
  9,088
  9,382
  9,688
  10,006
  10,336
  10,679
  11,037
  11,408
  11,794
  12,196
  12,614
  13,048
Operating income, $m
  786
  691
  700
  721
  754
  799
  856
  924
  1,004
  1,097
  1,201
  1,331
  1,461
  1,604
  1,760
  1,931
  2,116
  2,317
  2,534
  2,767
  3,018
  3,288
  3,576
  3,885
  4,215
  4,567
  4,942
  5,341
  5,767
  6,219
  6,700
EBITDA, $m
  1,725
  1,654
  1,684
  1,730
  1,791
  1,867
  1,958
  2,064
  2,184
  2,320
  2,470
  2,637
  2,820
  3,019
  3,235
  3,470
  3,723
  3,995
  4,287
  4,600
  4,936
  5,294
  5,676
  6,084
  6,517
  6,979
  7,470
  7,991
  8,544
  9,131
  9,753
Interest expense (income), $m
  255
  265
  275
  287
  301
  317
  334
  354
  374
  397
  421
  447
  475
  505
  537
  571
  607
  645
  685
  727
  772
  819
  869
  922
  978
  1,036
  1,098
  1,163
  1,231
  1,303
  1,379
Earnings before tax, $m
  494
  426
  425
  434
  453
  482
  521
  571
  630
  700
  780
  883
  985
  1,098
  1,223
  1,360
  1,510
  1,672
  1,849
  2,040
  2,246
  2,468
  2,707
  2,963
  3,237
  3,530
  3,844
  4,178
  4,535
  4,916
  5,321
Tax expense, $m
  58
  115
  115
  117
  122
  130
  141
  154
  170
  189
  211
  239
  266
  297
  330
  367
  408
  452
  499
  551
  607
  666
  731
  800
  874
  953
  1,038
  1,128
  1,225
  1,327
  1,437
Net income, $m
  436
  311
  310
  317
  331
  352
  381
  417
  460
  511
  569
  645
  719
  802
  893
  993
  1,102
  1,221
  1,350
  1,489
  1,640
  1,802
  1,976
  2,163
  2,363
  2,577
  2,806
  3,050
  3,311
  3,588
  3,884

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  43
  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
  23,313
  23,708
  24,253
  24,877
  25,576
  26,352
  27,203
  28,129
  29,132
  30,212
  31,372
  32,612
  33,936
  35,345
  36,843
  38,432
  40,116
  41,899
  43,784
  45,777
  47,880
  50,099
  52,440
  54,907
  57,506
  60,244
  63,126
  66,160
  69,353
  72,712
  76,244
Adjusted assets (=assets-cash), $m
  23,270
  23,708
  24,253
  24,877
  25,576
  26,352
  27,203
  28,129
  29,132
  30,212
  31,372
  32,612
  33,936
  35,345
  36,843
  38,432
  40,116
  41,899
  43,784
  45,777
  47,880
  50,099
  52,440
  54,907
  57,506
  60,244
  63,126
  66,160
  69,353
  72,712
  76,244
Revenue / Adjusted assets
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
Average production assets, $m
  18,149
  18,513
  18,939
  19,426
  19,972
  20,578
  21,242
  21,966
  22,749
  23,592
  24,498
  25,466
  26,500
  27,600
  28,770
  30,011
  31,326
  32,718
  34,191
  35,746
  37,389
  39,122
  40,949
  42,876
  44,906
  47,043
  49,294
  51,663
  54,157
  56,779
  59,538
Working capital, $m
  -410
  755
  773
  792
  815
  839
  867
  896
  928
  962
  999
  1,039
  1,081
  1,126
  1,174
  1,224
  1,278
  1,335
  1,395
  1,458
  1,525
  1,596
  1,671
  1,749
  1,832
  1,919
  2,011
  2,108
  2,209
  2,316
  2,429
Total debt, $m
  6,203
  6,391
  6,677
  7,003
  7,370
  7,776
  8,222
  8,708
  9,233
  9,799
  10,407
  11,057
  11,750
  12,489
  13,274
  14,106
  14,989
  15,923
  16,911
  17,955
  19,057
  20,220
  21,446
  22,739
  24,101
  25,536
  27,046
  28,636
  30,309
  32,069
  33,920
Total liabilities, $m
  12,235
  12,423
  12,709
  13,035
  13,402
  13,808
  14,254
  14,740
  15,265
  15,831
  16,439
  17,089
  17,782
  18,521
  19,306
  20,138
  21,021
  21,955
  22,943
  23,987
  25,089
  26,252
  27,478
  28,771
  30,133
  31,568
  33,078
  34,668
  36,341
  38,101
  39,952
Total equity, $m
  11,078
  11,285
  11,545
  11,841
  12,174
  12,544
  12,948
  13,389
  13,867
  14,381
  14,933
  15,523
  16,153
  16,824
  17,537
  18,294
  19,095
  19,944
  20,841
  21,790
  22,791
  23,847
  24,961
  26,136
  27,373
  28,676
  30,048
  31,492
  33,012
  34,611
  36,292
Total liabilities and equity, $m
  23,313
  23,708
  24,254
  24,876
  25,576
  26,352
  27,202
  28,129
  29,132
  30,212
  31,372
  32,612
  33,935
  35,345
  36,843
  38,432
  40,116
  41,899
  43,784
  45,777
  47,880
  50,099
  52,439
  54,907
  57,506
  60,244
  63,126
  66,160
  69,353
  72,712
  76,244
Debt-to-equity ratio
  0.560
  0.570
  0.580
  0.590
  0.610
  0.620
  0.630
  0.650
  0.670
  0.680
  0.700
  0.710
  0.730
  0.740
  0.760
  0.770
  0.780
  0.800
  0.810
  0.820
  0.840
  0.850
  0.860
  0.870
  0.880
  0.890
  0.900
  0.910
  0.920
  0.930
  0.930
Adjusted equity ratio
  0.474
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  436
  311
  310
  317
  331
  352
  381
  417
  460
  511
  569
  645
  719
  802
  893
  993
  1,102
  1,221
  1,350
  1,489
  1,640
  1,802
  1,976
  2,163
  2,363
  2,577
  2,806
  3,050
  3,311
  3,588
  3,884
Depreciation, amort., depletion, $m
  939
  963
  984
  1,009
  1,037
  1,068
  1,102
  1,140
  1,180
  1,223
  1,269
  1,306
  1,359
  1,415
  1,475
  1,539
  1,606
  1,678
  1,753
  1,833
  1,917
  2,006
  2,100
  2,199
  2,303
  2,412
  2,528
  2,649
  2,777
  2,912
  3,053
Funds from operations, $m
  1,783
  1,274
  1,295
  1,326
  1,368
  1,420
  1,483
  1,556
  1,640
  1,734
  1,839
  1,951
  2,078
  2,217
  2,368
  2,532
  2,709
  2,899
  3,103
  3,322
  3,557
  3,808
  4,076
  4,362
  4,666
  4,989
  5,334
  5,700
  6,088
  6,500
  6,937
Change in working capital, $m
  81
  15
  17
  20
  22
  25
  27
  30
  32
  34
  37
  40
  42
  45
  48
  51
  54
  57
  60
  63
  67
  71
  75
  79
  83
  87
  92
  97
  102
  107
  113
Cash from operations, $m
  1,702
  1,259
  1,277
  1,306
  1,346
  1,396
  1,456
  1,527
  1,608
  1,699
  1,802
  1,911
  2,036
  2,172
  2,320
  2,481
  2,655
  2,842
  3,043
  3,259
  3,490
  3,737
  4,001
  4,283
  4,583
  4,902
  5,242
  5,603
  5,986
  6,393
  6,825
Maintenance CAPEX, $m
  0
  -931
  -949
  -971
  -996
  -1,024
  -1,055
  -1,089
  -1,126
  -1,167
  -1,210
  -1,256
  -1,306
  -1,359
  -1,415
  -1,475
  -1,539
  -1,606
  -1,678
  -1,753
  -1,833
  -1,917
  -2,006
  -2,100
  -2,199
  -2,303
  -2,412
  -2,528
  -2,649
  -2,777
  -2,912
New CAPEX, $m
  -1,207
  -365
  -426
  -487
  -546
  -606
  -664
  -723
  -783
  -844
  -905
  -969
  -1,034
  -1,100
  -1,170
  -1,241
  -1,315
  -1,392
  -1,472
  -1,556
  -1,642
  -1,733
  -1,828
  -1,926
  -2,030
  -2,138
  -2,251
  -2,369
  -2,493
  -2,623
  -2,759
Cash from investing activities, $m
  -1,209
  -1,296
  -1,375
  -1,458
  -1,542
  -1,630
  -1,719
  -1,812
  -1,909
  -2,011
  -2,115
  -2,225
  -2,340
  -2,459
  -2,585
  -2,716
  -2,854
  -2,998
  -3,150
  -3,309
  -3,475
  -3,650
  -3,834
  -4,026
  -4,229
  -4,441
  -4,663
  -4,897
  -5,142
  -5,400
  -5,671
Free cash flow, $m
  493
  -37
  -98
  -152
  -197
  -234
  -264
  -286
  -302
  -311
  -314
  -314
  -304
  -287
  -264
  -235
  -199
  -157
  -107
  -50
  15
  87
  167
  256
  354
  462
  579
  706
  844
  993
  1,154
Issuance/(repayment) of debt, $m
  486
  231
  286
  327
  367
  406
  446
  485
  525
  566
  608
  650
  694
  738
  785
  833
  883
  934
  988
  1,044
  1,102
  1,163
  1,226
  1,293
  1,362
  1,435
  1,510
  1,590
  1,673
  1,760
  1,851
Issuance/(repurchase) of shares, $m
  34
  0
  0
  0
  2
  17
  24
  24
  17
  4
  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  
  520
  231
  286
  327
  369
  423
  470
  509
  542
  570
  608
  650
  694
  738
  785
  833
  883
  934
  988
  1,044
  1,102
  1,163
  1,226
  1,293
  1,362
  1,435
  1,510
  1,590
  1,673
  1,760
  1,851
Total cash flow (excl. dividends), $m
  1,013
  195
  188
  175
  172
  189
  206
  224
  241
  259
  294
  336
  390
  451
  520
  598
  683
  778
  881
  994
  1,117
  1,250
  1,394
  1,549
  1,716
  1,896
  2,089
  2,296
  2,517
  2,753
  3,005
Retained Cash Flow (-), $m
  247
  -207
  -260
  -297
  -333
  -369
  -405
  -441
  -477
  -514
  -552
  -590
  -630
  -671
  -713
  -757
  -802
  -849
  -897
  -948
  -1,001
  -1,056
  -1,114
  -1,174
  -1,237
  -1,303
  -1,372
  -1,444
  -1,520
  -1,599
  -1,682
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
 
  -13
  -72
  -122
  -161
  -180
  -198
  -217
  -236
  -256
  -258
  -254
  -240
  -220
  -193
  -159
  -119
  -71
  -16
  46
  116
  193
  280
  375
  479
  593
  717
  851
  997
  1,154
  1,324
Discount rate, %
 
  6.50
  6.83
  7.17
  7.52
  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
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
 
  -12
  -63
  -99
  -120
  -123
  -123
  -121
  -117
  -112
  -99
  -84
  -68
  -52
  -38
  -26
  -16
  -7
  -1
  3
  6
  7
  7
  7
  6
  5
  4
  3
  2
  2
  1
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  99.9
  99.8
  99.7
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6

Potash Corporation of Saskatchewan Inc., together with its subsidiaries, produces and sells fertilizers, and related industrial and feed products worldwide. It operates in three segments: Potash, Nitrogen, and Phosphate. The company’s products primarily include standard and granular potash; diammonium phosphate, monoammonium phosphate, and phosphoric acid; and ammonia, urea, nitric acid, ammonium nitrate, and nitrogen solutions, as well as purified acids and metal finishing products. It owns and operates five potash mines in Saskatchewan and one potash mine in New Brunswick. The company sells its products to wholesalers, retailers, and cooperatives. Potash Corporation of Saskatchewan Inc. was founded in 1953 and is headquartered in Saskatoon, Canada.

FINANCIAL RATIOS  of  Potash Corporation of Saskatchewan Inc. (POT)

Valuation Ratios
P/E Ratio 42.3
Price to Sales 3.1
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 10.8
Price to Free Cash Flow 37.3
Growth Rates
Sales Growth Rate -29%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -26.6%
Cap. Spend. - 3 Yr. Gr. Rate -11.3%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 45.2%
Total Debt to Equity 56%
Interest Coverage 3
Management Effectiveness
Return On Assets 2.8%
Ret/ On Assets - 3 Yr. Avg. 6.7%
Return On Total Capital 2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 8%
Return On Equity 3.9%
Return On Equity - 3 Yr. Avg. 11.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 18.6%
Gross Margin - 3 Yr. Avg. 30.7%
EBITDA Margin 28%
EBITDA Margin - 3 Yr. Avg. 37.4%
Operating Margin 13.1%
Oper. Margin - 3 Yr. Avg. 25.5%
Pre-Tax Margin 8.2%
Pre-Tax Margin - 3 Yr. Avg. 22%
Net Profit Margin 7.2%
Net Profit Margin - 3 Yr. Avg. 16.4%
Effective Tax Rate 11.7%
Eff/ Tax Rate - 3 Yr. Avg. 22.3%
Payout Ratio 250.7%

POT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the POT stock intrinsic value calculation we used $6020 million for the last fiscal year's total revenue generated by Potash Corporation of Saskatchewan Inc.. The default revenue input number comes from 2016 income statement of Potash Corporation of Saskatchewan 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 POT 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 6.5%, whose default value for POT is calculated based on our internal credit rating of Potash Corporation of Saskatchewan 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 Potash Corporation of Saskatchewan 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 POT stock the variable cost ratio is equal to 27%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3699 million in the base year in the intrinsic value calculation for POT 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 4.3% for Potash Corporation of Saskatchewan Inc..

Corporate tax rate of 27% is the nominal tax rate for Potash Corporation of Saskatchewan 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 POT 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 POT are equal to 301.5%.

Life of production assets of 19.5 years is the average useful life of capital assets used in Potash Corporation of Saskatchewan 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 POT is equal to 12.3%. 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 - $11078 million for Potash Corporation of Saskatchewan 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 837.911 million for Potash Corporation of Saskatchewan 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 Potash Corporation of Saskatchewan Inc. at the current share price and the inputted number of shares is $18.4 billion.

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Stock chart of POT Financial statements of POT
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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