Intrinsic value of Rogers Communications Inc. Class B Non-v - RCI-B

Previous Close

$64.91

  Intrinsic Value

$27.29

stock screener

  Rating & Target

str. sell

-58%

Previous close

$64.91

 
Intrinsic value

$27.29

 
Up/down potential

-58%

 
Rating

str. sell

We calculate the intrinsic value of RCI-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

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 33.4

 

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, %
  2.15
  2.50
  2.75
  2.97
  3.18
  3.36
  3.52
  3.67
  3.80
  3.92
  4.03
  4.13
  4.22
  4.29
  4.36
  4.43
  4.49
  4.54
  4.58
  4.62
  4.66
  4.70
  4.73
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
Revenue, $m
  13,702
  14,045
  14,431
  14,860
  15,332
  15,847
  16,406
  17,008
  17,655
  18,348
  19,088
  19,876
  20,713
  21,603
  22,546
  23,544
  24,600
  25,716
  26,895
  28,139
  29,450
  30,833
  32,291
  33,826
  35,442
  37,144
  38,934
  40,818
  42,800
  44,884
  47,075
Variable operating expenses, $m
 
  11,352
  11,654
  11,989
  12,357
  12,759
  13,195
  13,665
  14,170
  14,711
  15,288
  15,513
  16,167
  16,861
  17,597
  18,376
  19,200
  20,071
  20,991
  21,962
  22,986
  24,066
  25,203
  26,401
  27,663
  28,991
  30,388
  31,858
  33,405
  35,032
  36,742
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
  11,807
  11,352
  11,654
  11,989
  12,357
  12,759
  13,195
  13,665
  14,170
  14,711
  15,288
  15,513
  16,167
  16,861
  17,597
  18,376
  19,200
  20,071
  20,991
  21,962
  22,986
  24,066
  25,203
  26,401
  27,663
  28,991
  30,388
  31,858
  33,405
  35,032
  36,742
Operating income, $m
  1,895
  2,692
  2,777
  2,871
  2,975
  3,088
  3,211
  3,343
  3,485
  3,637
  3,799
  4,363
  4,547
  4,742
  4,949
  5,168
  5,400
  5,645
  5,903
  6,176
  6,464
  6,768
  7,088
  7,425
  7,780
  8,153
  8,546
  8,960
  9,394
  9,852
  10,333
EBITDA, $m
  4,242
  5,052
  5,191
  5,345
  5,515
  5,701
  5,901
  6,118
  6,351
  6,600
  6,866
  7,150
  7,451
  7,771
  8,110
  8,469
  8,849
  9,250
  9,674
  10,122
  10,594
  11,091
  11,615
  12,168
  12,749
  13,361
  14,005
  14,683
  15,396
  16,145
  16,933
Interest expense (income), $m
  756
  746
  772
  801
  833
  868
  906
  947
  992
  1,040
  1,091
  1,146
  1,204
  1,267
  1,333
  1,402
  1,477
  1,555
  1,638
  1,725
  1,817
  1,914
  2,017
  2,125
  2,239
  2,359
  2,485
  2,618
  2,757
  2,904
  3,059
Earnings before tax, $m
  1,159
  1,946
  2,005
  2,071
  2,142
  2,220
  2,305
  2,396
  2,493
  2,597
  2,708
  3,217
  3,342
  3,475
  3,616
  3,765
  3,923
  4,090
  4,266
  4,451
  4,647
  4,853
  5,071
  5,300
  5,541
  5,794
  6,061
  6,342
  6,637
  6,948
  7,274
Tax expense, $m
  324
  526
  541
  559
  578
  600
  622
  647
  673
  701
  731
  868
  902
  938
  976
  1,017
  1,059
  1,104
  1,152
  1,202
  1,255
  1,310
  1,369
  1,431
  1,496
  1,564
  1,636
  1,712
  1,792
  1,876
  1,964
Net income, $m
  835
  1,421
  1,464
  1,512
  1,564
  1,621
  1,683
  1,749
  1,820
  1,896
  1,977
  2,348
  2,440
  2,537
  2,640
  2,749
  2,864
  2,986
  3,114
  3,250
  3,392
  3,543
  3,702
  3,869
  4,045
  4,230
  4,425
  4,630
  4,845
  5,072
  5,310

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
  28,342
  29,078
  29,877
  30,766
  31,744
  32,810
  33,967
  35,214
  36,553
  37,987
  39,519
  41,150
  42,885
  44,726
  46,679
  48,746
  50,932
  53,243
  55,683
  58,258
  60,974
  63,837
  66,855
  70,033
  73,379
  76,902
  80,609
  84,509
  88,612
  92,927
  97,463
Adjusted assets (=assets-cash), $m
  28,342
  29,078
  29,877
  30,766
  31,744
  32,810
  33,967
  35,214
  36,553
  37,987
  39,519
  41,150
  42,885
  44,726
  46,679
  48,746
  50,932
  53,243
  55,683
  58,258
  60,974
  63,837
  66,855
  70,033
  73,379
  76,902
  80,609
  84,509
  88,612
  92,927
  97,463
Revenue / Adjusted assets
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
Average production assets, $m
  18,060
  18,511
  19,020
  19,586
  20,208
  20,887
  21,623
  22,417
  23,270
  24,183
  25,157
  26,196
  27,300
  28,473
  29,715
  31,031
  32,423
  33,894
  35,447
  37,087
  38,816
  40,639
  42,559
  44,582
  46,713
  48,955
  51,315
  53,798
  56,410
  59,156
  62,045
Working capital, $m
  -2,543
  -941
  -967
  -996
  -1,027
  -1,062
  -1,099
  -1,140
  -1,183
  -1,229
  -1,279
  -1,332
  -1,388
  -1,447
  -1,511
  -1,577
  -1,648
  -1,723
  -1,802
  -1,885
  -1,973
  -2,066
  -2,163
  -2,266
  -2,375
  -2,489
  -2,609
  -2,735
  -2,868
  -3,007
  -3,154
Total debt, $m
  16,951
  17,547
  18,198
  18,922
  19,717
  20,586
  21,527
  22,542
  23,632
  24,800
  26,046
  27,374
  28,786
  30,285
  31,874
  33,557
  35,337
  37,217
  39,204
  41,300
  43,511
  45,842
  48,298
  50,885
  53,609
  56,476
  59,494
  62,669
  66,008
  69,520
  73,213
Total liabilities, $m
  23,073
  23,669
  24,320
  25,044
  25,839
  26,708
  27,649
  28,664
  29,754
  30,922
  32,168
  33,496
  34,908
  36,407
  37,996
  39,679
  41,459
  43,339
  45,326
  47,422
  49,633
  51,964
  54,420
  57,007
  59,731
  62,598
  65,616
  68,791
  72,130
  75,642
  79,335
Total equity, $m
  5,269
  5,408
  5,557
  5,723
  5,904
  6,103
  6,318
  6,550
  6,799
  7,066
  7,351
  7,654
  7,977
  8,319
  8,682
  9,067
  9,473
  9,903
  10,357
  10,836
  11,341
  11,874
  12,435
  13,026
  13,649
  14,304
  14,993
  15,719
  16,482
  17,284
  18,128
Total liabilities and equity, $m
  28,342
  29,077
  29,877
  30,767
  31,743
  32,811
  33,967
  35,214
  36,553
  37,988
  39,519
  41,150
  42,885
  44,726
  46,678
  48,746
  50,932
  53,242
  55,683
  58,258
  60,974
  63,838
  66,855
  70,033
  73,380
  76,902
  80,609
  84,510
  88,612
  92,926
  97,463
Debt-to-equity ratio
  3.217
  3.240
  3.270
  3.310
  3.340
  3.370
  3.410
  3.440
  3.480
  3.510
  3.540
  3.580
  3.610
  3.640
  3.670
  3.700
  3.730
  3.760
  3.790
  3.810
  3.840
  3.860
  3.880
  3.910
  3.930
  3.950
  3.970
  3.990
  4.000
  4.020
  4.040
Adjusted equity ratio
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  835
  1,421
  1,464
  1,512
  1,564
  1,621
  1,683
  1,749
  1,820
  1,896
  1,977
  2,348
  2,440
  2,537
  2,640
  2,749
  2,864
  2,986
  3,114
  3,250
  3,392
  3,543
  3,702
  3,869
  4,045
  4,230
  4,425
  4,630
  4,845
  5,072
  5,310
Depreciation, amort., depletion, $m
  2,347
  2,360
  2,414
  2,474
  2,540
  2,613
  2,691
  2,775
  2,866
  2,963
  3,067
  2,787
  2,904
  3,029
  3,161
  3,301
  3,449
  3,606
  3,771
  3,945
  4,129
  4,323
  4,528
  4,743
  4,969
  5,208
  5,459
  5,723
  6,001
  6,293
  6,600
Funds from operations, $m
  2,920
  3,781
  3,878
  3,986
  4,104
  4,233
  4,373
  4,524
  4,686
  4,859
  5,044
  5,135
  5,344
  5,566
  5,801
  6,050
  6,313
  6,591
  6,885
  7,195
  7,522
  7,866
  8,229
  8,612
  9,014
  9,438
  9,884
  10,353
  10,846
  11,365
  11,911
Change in working capital, $m
  -1,037
  -23
  -26
  -29
  -32
  -35
  -37
  -40
  -43
  -46
  -50
  -53
  -56
  -60
  -63
  -67
  -71
  -75
  -79
  -83
  -88
  -93
  -98
  -103
  -108
  -114
  -120
  -126
  -133
  -140
  -147
Cash from operations, $m
  3,957
  3,804
  3,903
  4,014
  4,136
  4,268
  4,411
  4,564
  4,729
  4,905
  5,093
  5,188
  5,400
  5,626
  5,864
  6,117
  6,384
  6,666
  6,964
  7,278
  7,610
  7,959
  8,327
  8,714
  9,122
  9,552
  10,004
  10,479
  10,979
  11,505
  12,057
Maintenance CAPEX, $m
  0
  -1,921
  -1,969
  -2,023
  -2,084
  -2,150
  -2,222
  -2,300
  -2,385
  -2,475
  -2,573
  -2,676
  -2,787
  -2,904
  -3,029
  -3,161
  -3,301
  -3,449
  -3,606
  -3,771
  -3,945
  -4,129
  -4,323
  -4,528
  -4,743
  -4,969
  -5,208
  -5,459
  -5,723
  -6,001
  -6,293
New CAPEX, $m
  -2,398
  -451
  -509
  -566
  -622
  -679
  -736
  -794
  -853
  -913
  -975
  -1,039
  -1,104
  -1,172
  -1,243
  -1,316
  -1,392
  -1,471
  -1,553
  -1,639
  -1,729
  -1,823
  -1,921
  -2,023
  -2,130
  -2,242
  -2,360
  -2,483
  -2,612
  -2,747
  -2,888
Cash from investing activities, $m
  -2,456
  -2,372
  -2,478
  -2,589
  -2,706
  -2,829
  -2,958
  -3,094
  -3,238
  -3,388
  -3,548
  -3,715
  -3,891
  -4,076
  -4,272
  -4,477
  -4,693
  -4,920
  -5,159
  -5,410
  -5,674
  -5,952
  -6,244
  -6,551
  -6,873
  -7,211
  -7,568
  -7,942
  -8,335
  -8,748
  -9,181
Free cash flow, $m
  1,501
  1,431
  1,425
  1,425
  1,430
  1,439
  1,453
  1,470
  1,492
  1,517
  1,546
  1,473
  1,509
  1,549
  1,593
  1,640
  1,691
  1,746
  1,805
  1,868
  1,935
  2,007
  2,083
  2,164
  2,249
  2,340
  2,436
  2,537
  2,644
  2,757
  2,876
Issuance/(repayment) of debt, $m
  -538
  596
  651
  724
  796
  868
  941
  1,015
  1,090
  1,168
  1,247
  1,328
  1,412
  1,499
  1,589
  1,683
  1,780
  1,881
  1,986
  2,096
  2,211
  2,331
  2,456
  2,587
  2,724
  2,867
  3,018
  3,175
  3,340
  3,512
  3,693
Issuance/(repurchase) of shares, $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
Cash from financing (excl. dividends), $m  
  -595
  596
  651
  724
  796
  868
  941
  1,015
  1,090
  1,168
  1,247
  1,328
  1,412
  1,499
  1,589
  1,683
  1,780
  1,881
  1,986
  2,096
  2,211
  2,331
  2,456
  2,587
  2,724
  2,867
  3,018
  3,175
  3,340
  3,512
  3,693
Total cash flow (excl. dividends), $m
  906
  2,027
  2,076
  2,149
  2,226
  2,307
  2,394
  2,485
  2,582
  2,684
  2,792
  2,801
  2,921
  3,048
  3,182
  3,322
  3,471
  3,627
  3,791
  3,964
  4,146
  4,338
  4,539
  4,751
  4,973
  5,207
  5,453
  5,712
  5,983
  6,269
  6,569
Retained Cash Flow (-), $m
  367
  -139
  -149
  -165
  -182
  -198
  -215
  -232
  -249
  -267
  -285
  -303
  -323
  -343
  -363
  -384
  -407
  -430
  -454
  -479
  -505
  -533
  -561
  -591
  -622
  -655
  -690
  -725
  -763
  -803
  -844
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
 
  1,888
  1,927
  1,983
  2,044
  2,109
  2,179
  2,253
  2,333
  2,418
  2,507
  2,497
  2,598
  2,705
  2,818
  2,938
  3,064
  3,197
  3,337
  3,485
  3,641
  3,805
  3,978
  4,160
  4,351
  4,552
  4,764
  4,986
  5,220
  5,466
  5,725
Discount rate, %
 
  9.50
  9.98
  10.47
  11.00
  11.55
  12.12
  12.73
  13.37
  14.04
  14.74
  15.47
  16.25
  17.06
  17.91
  18.81
  19.75
  20.74
  21.77
  22.86
  24.01
  25.21
  26.47
  27.79
  29.18
  30.64
  32.17
  33.78
  35.47
  37.24
  39.10
PV of cash for distribution, $m
 
  1,724
  1,594
  1,471
  1,346
  1,221
  1,096
  974
  855
  741
  634
  513
  427
  349
  281
  221
  171
  130
  96
  70
  49
  34
  23
  15
  9
  6
  3
  2
  1
  1
  0
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

Rogers Communications Inc. is a communications and media company. The Company provides wireless communications services, and cable television, Internet, information technology (IT) and telephony services to consumers and businesses. Its segments include Wireless, Cable, Business Solutions and Media. The Wireless segment is engaged in wireless telecommunications operations for Canadian consumers and businesses. The Cable segment include cable telecommunications operations, including Internet, television and telephony (phone) services for Canadian consumers and businesses. The Business Solutions segment is engaged in network connectivity through its fiber network and data center assets to support a range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector and carrier wholesale markets. The Media segment has a portfolio of media properties, including sports media and entertainment, multi-platform shopping, digital media and publishing.

FINANCIAL RATIOS  of  Rogers Communications Inc. Class B Non-v (RCI-B)

Valuation Ratios
P/E Ratio 40
Price to Sales 2.4
Price to Book 6.3
Price to Tangible Book
Price to Cash Flow 8.4
Price to Free Cash Flow 21.4
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -4.2%
Cap. Spend. - 3 Yr. Gr. Rate 0.8%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 290.9%
Total Debt to Equity 321.7%
Interest Coverage 3
Management Effectiveness
Return On Assets 4.8%
Ret/ On Assets - 3 Yr. Avg. 6.4%
Return On Total Capital 3.7%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity 15.3%
Return On Equity - 3 Yr. Avg. 22%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 51.8%
Gross Margin - 3 Yr. Avg. 52.5%
EBITDA Margin 31.1%
EBITDA Margin - 3 Yr. Avg. 35.2%
Operating Margin 13.8%
Oper. Margin - 3 Yr. Avg. 17.8%
Pre-Tax Margin 8.5%
Pre-Tax Margin - 3 Yr. Avg. 12.1%
Net Profit Margin 6.1%
Net Profit Margin - 3 Yr. Avg. 8.8%
Effective Tax Rate 28%
Eff/ Tax Rate - 3 Yr. Avg. 27.2%
Payout Ratio 118.3%

RCI-B stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RCI-B stock intrinsic value calculation we used $13702 million for the last fiscal year's total revenue generated by Rogers Communications Inc. Class B Non-v. The default revenue input number comes from 2016 income statement of Rogers Communications Inc. Class B Non-v. 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 RCI-B stock valuation model: a) initial revenue growth rate of 2.5% 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 9.5%, whose default value for RCI-B is calculated based on our internal credit rating of Rogers Communications Inc. Class B Non-v, 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 Rogers Communications Inc. Class B Non-v.
    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 RCI-B stock the variable cost ratio is equal to 80.9%.

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 RCI-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 4.4% for Rogers Communications Inc. Class B Non-v.

Corporate tax rate of 27% is the nominal tax rate for Rogers Communications Inc. Class B Non-v. 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 RCI-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 RCI-B are equal to 131.8%.

Life of production assets of 9.4 years is the average useful life of capital assets used in Rogers Communications Inc. Class B Non-v 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 RCI-B is equal to -6.7%. 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 - $5269 million for Rogers Communications Inc. Class B Non-v - 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 515.097 million for Rogers Communications Inc. Class B Non-v 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 Rogers Communications Inc. Class B Non-v at the current share price and the inputted number of shares is $33.4 billion.

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Financial statements of RCI-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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