Intrinsic value of Silver Standard Resources Inc. - SSO

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$14.39

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$14.39

 
Intrinsic value

$3.42

 
Up/down potential

-76%

 
Rating

str. sell

 
Value-price divergence* premium content

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

We calculate the intrinsic value of SSO 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 1.8

 

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, %
  30.77
  41.00
  37.40
  34.16
  31.24
  28.62
  26.26
  24.13
  22.22
  20.50
  18.95
  17.55
  16.30
  15.17
  14.15
  13.24
  12.41
  11.67
  11.00
  10.40
  9.86
  9.38
  8.94
  8.55
  8.19
  7.87
  7.58
  7.33
  7.09
  6.88
  6.70
Revenue, $m
  663
  935
  1,284
  1,723
  2,262
  2,909
  3,673
  4,559
  5,572
  6,714
  7,986
  9,388
  10,918
  12,574
  14,353
  16,253
  18,270
  20,402
  22,648
  25,004
  27,470
  30,046
  32,731
  35,528
  38,438
  41,464
  44,609
  47,877
  51,273
  54,803
  58,472
Variable operating expenses, $m
 
  1,110
  1,522
  2,040
  2,675
  3,439
  4,340
  5,386
  6,581
  7,929
  9,430
  11,077
  12,882
  14,836
  16,935
  19,177
  21,557
  24,073
  26,722
  29,502
  32,411
  35,451
  38,619
  41,920
  45,353
  48,923
  52,634
  56,490
  60,497
  64,661
  68,991
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
  515
  1,110
  1,522
  2,040
  2,675
  3,439
  4,340
  5,386
  6,581
  7,929
  9,430
  11,077
  12,882
  14,836
  16,935
  19,177
  21,557
  24,073
  26,722
  29,502
  32,411
  35,451
  38,619
  41,920
  45,353
  48,923
  52,634
  56,490
  60,497
  64,661
  68,991
Operating income, $m
  149
  -175
  -238
  -317
  -414
  -530
  -667
  -827
  -1,009
  -1,215
  -1,443
  -1,689
  -1,964
  -2,262
  -2,582
  -2,924
  -3,287
  -3,670
  -4,074
  -4,498
  -4,942
  -5,405
  -5,888
  -6,391
  -6,915
  -7,459
  -8,025
  -8,613
  -9,224
  -9,859
  -10,519
EBITDA, $m
  252
  -30
  -42
  -56
  -73
  -94
  -119
  -148
  -181
  -218
  -259
  -305
  -354
  -408
  -466
  -528
  -593
  -662
  -735
  -812
  -892
  -975
  -1,063
  -1,153
  -1,248
  -1,346
  -1,448
  -1,554
  -1,665
  -1,779
  -1,898
Interest expense (income), $m
  11
  11
  23
  37
  55
  78
  104
  136
  173
  215
  262
  315
  373
  437
  506
  579
  658
  742
  830
  924
  1,021
  1,124
  1,231
  1,342
  1,458
  1,579
  1,705
  1,835
  1,971
  2,112
  2,258
Earnings before tax, $m
  109
  -186
  -260
  -354
  -469
  -608
  -772
  -963
  -1,182
  -1,429
  -1,706
  -2,004
  -2,337
  -2,699
  -3,088
  -3,503
  -3,945
  -4,412
  -4,905
  -5,422
  -5,963
  -6,529
  -7,119
  -7,733
  -8,373
  -9,038
  -9,729
  -10,448
  -11,194
  -11,970
  -12,777
Tax expense, $m
  21
  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
  88
  -186
  -260
  -354
  -469
  -608
  -772
  -963
  -1,182
  -1,429
  -1,706
  -2,004
  -2,337
  -2,699
  -3,088
  -3,503
  -3,945
  -4,412
  -4,905
  -5,422
  -5,963
  -6,529
  -7,119
  -7,733
  -8,373
  -9,038
  -9,729
  -10,448
  -11,194
  -11,970
  -12,777

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  643
  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
  1,944
  1,833
  2,519
  3,379
  4,435
  5,704
  7,201
  8,939
  10,925
  13,165
  15,659
  18,408
  21,408
  24,655
  28,143
  31,868
  35,824
  40,005
  44,407
  49,027
  53,862
  58,913
  64,179
  69,663
  75,369
  81,302
  87,468
  93,876
  100,535
  107,456
  114,651
Adjusted assets (=assets-cash), $m
  1,301
  1,833
  2,519
  3,379
  4,435
  5,704
  7,201
  8,939
  10,925
  13,165
  15,659
  18,408
  21,408
  24,655
  28,143
  31,868
  35,824
  40,005
  44,407
  49,027
  53,862
  58,913
  64,179
  69,663
  75,369
  81,302
  87,468
  93,876
  100,535
  107,456
  114,651
Revenue / Adjusted assets
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
Average production assets, $m
  684
  965
  1,326
  1,778
  2,334
  3,002
  3,790
  4,705
  5,750
  6,929
  8,242
  9,688
  11,267
  12,976
  14,812
  16,773
  18,855
  21,055
  23,372
  25,804
  28,349
  31,007
  33,779
  36,665
  39,668
  42,791
  46,036
  49,409
  52,914
  56,556
  60,343
Working capital, $m
  756
  159
  218
  293
  384
  495
  624
  775
  947
  1,141
  1,358
  1,596
  1,856
  2,138
  2,440
  2,763
  3,106
  3,468
  3,850
  4,251
  4,670
  5,108
  5,564
  6,040
  6,535
  7,049
  7,583
  8,139
  8,716
  9,316
  9,940
Total debt, $m
  297
  593
  975
  1,454
  2,042
  2,749
  3,583
  4,551
  5,657
  6,905
  8,294
  9,825
  11,496
  13,305
  15,248
  17,323
  19,526
  21,855
  24,307
  26,880
  29,573
  32,386
  35,320
  38,374
  41,553
  44,857
  48,292
  51,861
  55,570
  59,425
  63,432
Total liabilities, $m
  725
  1,021
  1,403
  1,882
  2,470
  3,177
  4,011
  4,979
  6,085
  7,333
  8,722
  10,253
  11,924
  13,733
  15,676
  17,751
  19,954
  22,283
  24,735
  27,308
  30,001
  32,814
  35,748
  38,802
  41,981
  45,285
  48,720
  52,289
  55,998
  59,853
  63,860
Total equity, $m
  1,219
  812
  1,116
  1,497
  1,965
  2,527
  3,190
  3,960
  4,840
  5,832
  6,937
  8,155
  9,484
  10,922
  12,468
  14,118
  15,870
  17,722
  19,672
  21,719
  23,861
  26,098
  28,431
  30,861
  33,389
  36,017
  38,748
  41,587
  44,537
  47,603
  50,790
Total liabilities and equity, $m
  1,944
  1,833
  2,519
  3,379
  4,435
  5,704
  7,201
  8,939
  10,925
  13,165
  15,659
  18,408
  21,408
  24,655
  28,144
  31,869
  35,824
  40,005
  44,407
  49,027
  53,862
  58,912
  64,179
  69,663
  75,370
  81,302
  87,468
  93,876
  100,535
  107,456
  114,650
Debt-to-equity ratio
  0.244
  0.730
  0.870
  0.970
  1.040
  1.090
  1.120
  1.150
  1.170
  1.180
  1.200
  1.200
  1.210
  1.220
  1.220
  1.230
  1.230
  1.230
  1.240
  1.240
  1.240
  1.240
  1.240
  1.240
  1.240
  1.250
  1.250
  1.250
  1.250
  1.250
  1.250
Adjusted equity ratio
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443
  0.443

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  88
  -186
  -260
  -354
  -469
  -608
  -772
  -963
  -1,182
  -1,429
  -1,706
  -2,004
  -2,337
  -2,699
  -3,088
  -3,503
  -3,945
  -4,412
  -4,905
  -5,422
  -5,963
  -6,529
  -7,119
  -7,733
  -8,373
  -9,038
  -9,729
  -10,448
  -11,194
  -11,970
  -12,777
Depreciation, amort., depletion, $m
  103
  145
  196
  261
  340
  436
  548
  679
  828
  997
  1,184
  1,384
  1,610
  1,854
  2,116
  2,396
  2,694
  3,008
  3,339
  3,686
  4,050
  4,430
  4,826
  5,238
  5,667
  6,113
  6,577
  7,058
  7,559
  8,079
  8,620
Funds from operations, $m
  205
  -42
  -64
  -93
  -129
  -172
  -224
  -284
  -354
  -433
  -522
  -620
  -728
  -845
  -972
  -1,107
  -1,251
  -1,404
  -1,566
  -1,735
  -1,913
  -2,099
  -2,293
  -2,496
  -2,706
  -2,925
  -3,153
  -3,389
  -3,635
  -3,891
  -4,156
Change in working capital, $m
  -26
  46
  59
  75
  92
  110
  130
  151
  172
  194
  216
  238
  260
  282
  302
  323
  343
  362
  382
  401
  419
  438
  457
  475
  495
  514
  535
  556
  577
  600
  624
Cash from operations, $m
  231
  125
  -124
  -168
  -220
  -282
  -354
  -435
  -526
  -627
  -738
  -858
  -988
  -1,127
  -1,274
  -1,430
  -1,594
  -1,767
  -1,947
  -2,136
  -2,333
  -2,537
  -2,750
  -2,971
  -3,201
  -3,440
  -3,687
  -3,945
  -4,213
  -4,491
  -4,780
Maintenance CAPEX, $m
  0
  -98
  -138
  -189
  -254
  -333
  -429
  -541
  -672
  -821
  -990
  -1,177
  -1,384
  -1,610
  -1,854
  -2,116
  -2,396
  -2,694
  -3,008
  -3,339
  -3,686
  -4,050
  -4,430
  -4,826
  -5,238
  -5,667
  -6,113
  -6,577
  -7,058
  -7,559
  -8,079
New CAPEX, $m
  -65
  -281
  -361
  -453
  -556
  -668
  -788
  -915
  -1,045
  -1,179
  -1,313
  -1,447
  -1,579
  -1,709
  -1,836
  -1,961
  -2,082
  -2,201
  -2,317
  -2,432
  -2,545
  -2,658
  -2,772
  -2,886
  -3,003
  -3,123
  -3,245
  -3,373
  -3,505
  -3,643
  -3,787
Cash from investing activities, $m
  -58
  -379
  -499
  -642
  -810
  -1,001
  -1,217
  -1,456
  -1,717
  -2,000
  -2,303
  -2,624
  -2,963
  -3,319
  -3,690
  -4,077
  -4,478
  -4,895
  -5,325
  -5,771
  -6,231
  -6,708
  -7,202
  -7,712
  -8,241
  -8,790
  -9,358
  -9,950
  -10,563
  -11,202
  -11,866
Free cash flow, $m
  173
  -253
  -622
  -810
  -1,030
  -1,283
  -1,571
  -1,891
  -2,244
  -2,627
  -3,041
  -3,482
  -3,951
  -4,445
  -4,964
  -5,507
  -6,072
  -6,661
  -7,272
  -7,906
  -8,564
  -9,245
  -9,951
  -10,683
  -11,442
  -12,229
  -13,046
  -13,894
  -14,776
  -15,693
  -16,647
Issuance/(repayment) of debt, $m
  -24
  296
  382
  479
  588
  707
  834
  968
  1,106
  1,247
  1,389
  1,531
  1,671
  1,809
  1,943
  2,075
  2,203
  2,329
  2,452
  2,573
  2,693
  2,813
  2,933
  3,055
  3,178
  3,305
  3,435
  3,569
  3,709
  3,855
  4,008
Issuance/(repurchase) of shares, $m
  9
  0
  544
  712
  910
  1,139
  1,400
  1,693
  2,017
  2,372
  2,756
  3,169
  3,609
  4,075
  4,566
  5,082
  5,621
  6,184
  6,770
  7,380
  8,013
  8,669
  9,351
  10,058
  10,791
  11,553
  12,343
  13,164
  14,017
  14,904
  15,826
Cash from financing (excl. dividends), $m  
  -15
  296
  926
  1,191
  1,498
  1,846
  2,234
  2,661
  3,123
  3,619
  4,145
  4,700
  5,280
  5,884
  6,509
  7,157
  7,824
  8,513
  9,222
  9,953
  10,706
  11,482
  12,284
  13,113
  13,969
  14,858
  15,778
  16,733
  17,726
  18,759
  19,834
Total cash flow (excl. dividends), $m
  156
  43
  -240
  -331
  -442
  -577
  -736
  -923
  -1,137
  -1,380
  -1,651
  -1,951
  -2,280
  -2,637
  -3,021
  -3,432
  -3,869
  -4,332
  -4,820
  -5,333
  -5,870
  -6,432
  -7,018
  -7,628
  -8,264
  -8,924
  -9,611
  -10,325
  -11,067
  -11,838
  -12,639
Retained Cash Flow (-), $m
  -615
  -236
  -304
  -381
  -468
  -562
  -663
  -770
  -880
  -992
  -1,105
  -1,218
  -1,329
  -1,438
  -1,546
  -1,650
  -1,752
  -1,852
  -1,950
  -2,047
  -2,142
  -2,237
  -2,333
  -2,430
  -2,528
  -2,628
  -2,732
  -2,839
  -2,950
  -3,066
  -3,187
Prev. year cash balance distribution, $m
 
  643
  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
 
  450
  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
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
 
  431
  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
Current shareholders' claim on cash, %
  100
  100.0
  69.0
  48.3
  34.3
  24.7
  18.0
  13.3
  9.9
  7.4
  5.6
  4.3
  3.3
  2.6
  2.0
  1.6
  1.3
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1

Silver Standard Resources Inc. engages in the acquisition, exploration, development, and operation of precious metal resource properties in the Americas. The company primarily explores for gold, silver, zinc, and lead deposits. Its principal projects include the Marigold mine located in Humboldt County, Nevada, the United States; and the Pirquitas mine located in the province of Jujuy, northern Argentina. The company was formerly known as Consolidated Silver Standard Mines Limited and changed its name to Silver Standard Resources Inc. in April 1990. Silver Standard Resources Inc. was founded in 1946 and is based in Vancouver, Canada.

FINANCIAL RATIOS  of  Silver Standard Resources Inc. (SSO)

Valuation Ratios
P/E Ratio 19.5
Price to Sales 2.6
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 7.4
Price to Free Cash Flow 10.4
Growth Rates
Sales Growth Rate 30.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -3%
Cap. Spend. - 3 Yr. Gr. Rate 5.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 24.4%
Total Debt to Equity 24.4%
Interest Coverage 11
Management Effectiveness
Return On Assets 6.2%
Ret/ On Assets - 3 Yr. Avg. -5.9%
Return On Total Capital 7.3%
Ret/ On T. Cap. - 3 Yr. Avg. -8.4%
Return On Equity 9.7%
Return On Equity - 3 Yr. Avg. -11.5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 32.6%
Gross Margin - 3 Yr. Avg. 17%
EBITDA Margin 33.6%
EBITDA Margin - 3 Yr. Avg. 3.9%
Operating Margin 22.3%
Oper. Margin - 3 Yr. Avg. -5.4%
Pre-Tax Margin 16.4%
Pre-Tax Margin - 3 Yr. Avg. -15.3%
Net Profit Margin 13.3%
Net Profit Margin - 3 Yr. Avg. -20.7%
Effective Tax Rate 19.3%
Eff/ Tax Rate - 3 Yr. Avg. -7.5%
Payout Ratio 0%

SSO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SSO stock intrinsic value calculation we used $663 million for the last fiscal year's total revenue generated by Silver Standard Resources Inc.. The default revenue input number comes from 2016 income statement of Silver Standard Resources 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 SSO stock valuation model: a) initial revenue growth rate of 41% 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 SSO is calculated based on our internal credit rating of Silver Standard Resources 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 Silver Standard Resources 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 SSO stock the variable cost ratio is equal to 119%.

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 SSO 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 3.8% for Silver Standard Resources Inc..

Corporate tax rate of 27% is the nominal tax rate for Silver Standard Resources 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 SSO 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 SSO are equal to 103.2%.

Life of production assets of 7 years is the average useful life of capital assets used in Silver Standard Resources 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 SSO is equal to 17%. 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 - $1219 million for Silver Standard Resources 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 126.181 million for Silver Standard Resources 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 Silver Standard Resources Inc. at the current share price and the inputted number of shares is $1.8 billion.


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