Intrinsic value of TELUS Corporation - T

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$44.80

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$44.80

 
Intrinsic value

$18.04

 
Up/down potential

-60%

 
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 T 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 26.6

 

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, %
  2.37
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
  4.92
Revenue, $m
  12,725
  13,132
  13,576
  14,057
  14,575
  15,132
  15,728
  16,364
  17,041
  17,761
  18,525
  19,335
  20,193
  21,100
  22,058
  23,070
  24,138
  25,265
  26,452
  27,703
  29,021
  30,408
  31,869
  33,406
  35,023
  36,724
  38,513
  40,393
  42,371
  44,449
  46,634
Variable operating expenses, $m
 
  11,124
  11,487
  11,881
  12,305
  12,760
  13,248
  13,768
  14,322
  14,911
  15,537
  15,821
  16,522
  17,265
  18,049
  18,877
  19,751
  20,672
  21,644
  22,668
  23,746
  24,881
  26,076
  27,334
  28,657
  30,049
  31,512
  33,051
  34,669
  36,370
  38,158
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
  11,018
  11,124
  11,487
  11,881
  12,305
  12,760
  13,248
  13,768
  14,322
  14,911
  15,537
  15,821
  16,522
  17,265
  18,049
  18,877
  19,751
  20,672
  21,644
  22,668
  23,746
  24,881
  26,076
  27,334
  28,657
  30,049
  31,512
  33,051
  34,669
  36,370
  38,158
Operating income, $m
  1,707
  2,008
  2,089
  2,176
  2,271
  2,372
  2,480
  2,596
  2,719
  2,850
  2,988
  3,514
  3,670
  3,835
  4,009
  4,193
  4,387
  4,592
  4,808
  5,035
  5,275
  5,527
  5,793
  6,072
  6,366
  6,675
  7,000
  7,342
  7,701
  8,079
  8,476
EBITDA, $m
  3,754
  4,175
  4,316
  4,469
  4,634
  4,811
  5,000
  5,202
  5,418
  5,646
  5,889
  6,147
  6,420
  6,708
  7,013
  7,334
  7,674
  8,032
  8,409
  8,807
  9,226
  9,667
  10,132
  10,620
  11,134
  11,675
  12,244
  12,842
  13,470
  14,131
  14,826
Interest expense (income), $m
  510
  517
  542
  570
  600
  632
  667
  704
  744
  786
  831
  879
  930
  983
  1,040
  1,100
  1,163
  1,230
  1,300
  1,374
  1,453
  1,535
  1,622
  1,713
  1,809
  1,910
  2,016
  2,128
  2,245
  2,369
  2,499
Earnings before tax, $m
  1,662
  1,492
  1,547
  1,606
  1,670
  1,739
  1,813
  1,891
  1,974
  2,063
  2,157
  2,635
  2,740
  2,852
  2,969
  3,093
  3,224
  3,362
  3,508
  3,661
  3,822
  3,992
  4,171
  4,359
  4,557
  4,765
  4,984
  5,214
  5,456
  5,710
  5,978
Tax expense, $m
  426
  403
  418
  434
  451
  470
  489
  511
  533
  557
  582
  711
  740
  770
  802
  835
  871
  908
  947
  988
  1,032
  1,078
  1,126
  1,177
  1,230
  1,287
  1,346
  1,408
  1,473
  1,542
  1,614
Net income, $m
  1,223
  1,089
  1,129
  1,173
  1,219
  1,270
  1,323
  1,381
  1,441
  1,506
  1,575
  1,924
  2,001
  2,082
  2,168
  2,258
  2,354
  2,454
  2,561
  2,672
  2,790
  2,914
  3,045
  3,182
  3,327
  3,479
  3,638
  3,806
  3,983
  4,169
  4,364

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  432
  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
  27,729
  28,181
  29,133
  30,165
  31,278
  32,472
  33,750
  35,115
  36,569
  38,114
  39,754
  41,492
  43,332
  45,278
  47,335
  49,507
  51,799
  54,216
  56,764
  59,449
  62,277
  65,254
  68,388
  71,687
  75,157
  78,806
  82,645
  86,681
  90,924
  95,385
  100,073
Adjusted assets (=assets-cash), $m
  27,297
  28,181
  29,133
  30,165
  31,278
  32,472
  33,750
  35,115
  36,569
  38,114
  39,754
  41,492
  43,332
  45,278
  47,335
  49,507
  51,799
  54,216
  56,764
  59,449
  62,277
  65,254
  68,388
  71,687
  75,157
  78,806
  82,645
  86,681
  90,924
  95,385
  100,073
Revenue / Adjusted assets
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
Average production assets, $m
  20,275
  20,920
  21,627
  22,393
  23,218
  24,105
  25,054
  26,067
  27,146
  28,293
  29,511
  30,801
  32,167
  33,612
  35,139
  36,751
  38,452
  40,247
  42,138
  44,131
  46,230
  48,441
  50,767
  53,216
  55,792
  58,501
  61,350
  64,347
  67,497
  70,808
  74,288
Working capital, $m
  -2,477
  -1,523
  -1,575
  -1,631
  -1,691
  -1,755
  -1,824
  -1,898
  -1,977
  -2,060
  -2,149
  -2,243
  -2,342
  -2,448
  -2,559
  -2,676
  -2,800
  -2,931
  -3,068
  -3,214
  -3,366
  -3,527
  -3,697
  -3,875
  -4,063
  -4,260
  -4,467
  -4,686
  -4,915
  -5,156
  -5,410
Total debt, $m
  13,031
  13,227
  13,904
  14,636
  15,426
  16,274
  17,182
  18,151
  19,183
  20,280
  21,444
  22,678
  23,985
  25,367
  26,827
  28,369
  29,996
  31,712
  33,521
  35,428
  37,435
  39,549
  41,775
  44,116
  46,580
  49,172
  51,897
  54,763
  57,775
  60,942
  64,271
Total liabilities, $m
  19,812
  20,008
  20,685
  21,417
  22,207
  23,055
  23,963
  24,932
  25,964
  27,061
  28,225
  29,459
  30,766
  32,148
  33,608
  35,150
  36,777
  38,493
  40,302
  42,209
  44,216
  46,330
  48,556
  50,897
  53,361
  55,953
  58,678
  61,544
  64,556
  67,723
  71,052
Total equity, $m
  7,917
  8,172
  8,449
  8,748
  9,070
  9,417
  9,788
  10,183
  10,605
  11,053
  11,529
  12,033
  12,566
  13,131
  13,727
  14,357
  15,022
  15,723
  16,462
  17,240
  18,060
  18,924
  19,833
  20,789
  21,795
  22,854
  23,967
  25,138
  26,368
  27,662
  29,021
Total liabilities and equity, $m
  27,729
  28,180
  29,134
  30,165
  31,277
  32,472
  33,751
  35,115
  36,569
  38,114
  39,754
  41,492
  43,332
  45,279
  47,335
  49,507
  51,799
  54,216
  56,764
  59,449
  62,276
  65,254
  68,389
  71,686
  75,156
  78,807
  82,645
  86,682
  90,924
  95,385
  100,073
Debt-to-equity ratio
  1.646
  1.620
  1.650
  1.670
  1.700
  1.730
  1.760
  1.780
  1.810
  1.830
  1.860
  1.880
  1.910
  1.930
  1.950
  1.980
  2.000
  2.020
  2.040
  2.050
  2.070
  2.090
  2.110
  2.120
  2.140
  2.150
  2.170
  2.180
  2.190
  2.200
  2.210
Adjusted equity ratio
  0.278
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,223
  1,089
  1,129
  1,173
  1,219
  1,270
  1,323
  1,381
  1,441
  1,506
  1,575
  1,924
  2,001
  2,082
  2,168
  2,258
  2,354
  2,454
  2,561
  2,672
  2,790
  2,914
  3,045
  3,182
  3,327
  3,479
  3,638
  3,806
  3,983
  4,169
  4,364
Depreciation, amort., depletion, $m
  2,047
  2,167
  2,227
  2,293
  2,363
  2,439
  2,520
  2,607
  2,699
  2,797
  2,901
  2,633
  2,749
  2,873
  3,003
  3,141
  3,287
  3,440
  3,602
  3,772
  3,951
  4,140
  4,339
  4,548
  4,769
  5,000
  5,244
  5,500
  5,769
  6,052
  6,349
Funds from operations, $m
  3,276
  3,256
  3,356
  3,465
  3,583
  3,709
  3,843
  3,987
  4,140
  4,303
  4,476
  4,556
  4,750
  4,955
  5,171
  5,399
  5,640
  5,894
  6,162
  6,444
  6,742
  7,055
  7,384
  7,730
  8,095
  8,479
  8,882
  9,306
  9,752
  10,221
  10,713
Change in working capital, $m
  57
  -47
  -51
  -56
  -60
  -65
  -69
  -74
  -79
  -84
  -89
  -94
  -99
  -105
  -111
  -117
  -124
  -131
  -138
  -145
  -153
  -161
  -169
  -178
  -188
  -197
  -207
  -218
  -229
  -241
  -253
Cash from operations, $m
  3,219
  3,856
  3,408
  3,521
  3,643
  3,773
  3,912
  4,061
  4,219
  4,386
  4,564
  4,650
  4,849
  5,060
  5,282
  5,517
  5,764
  6,025
  6,300
  6,590
  6,894
  7,215
  7,553
  7,909
  8,283
  8,676
  9,089
  9,524
  9,981
  10,462
  10,967
Maintenance CAPEX, $m
  0
  -1,733
  -1,788
  -1,848
  -1,914
  -1,984
  -2,060
  -2,141
  -2,228
  -2,320
  -2,418
  -2,522
  -2,633
  -2,749
  -2,873
  -3,003
  -3,141
  -3,287
  -3,440
  -3,602
  -3,772
  -3,951
  -4,140
  -4,339
  -4,548
  -4,769
  -5,000
  -5,244
  -5,500
  -5,769
  -6,052
New CAPEX, $m
  -3,132
  -645
  -707
  -766
  -826
  -887
  -949
  -1,013
  -1,079
  -1,147
  -1,217
  -1,290
  -1,366
  -1,445
  -1,527
  -1,612
  -1,701
  -1,794
  -1,892
  -1,993
  -2,099
  -2,210
  -2,327
  -2,448
  -2,576
  -2,709
  -2,849
  -2,996
  -3,150
  -3,311
  -3,480
Cash from investing activities, $m
  -2,923
  -2,378
  -2,495
  -2,614
  -2,740
  -2,871
  -3,009
  -3,154
  -3,307
  -3,467
  -3,635
  -3,812
  -3,999
  -4,194
  -4,400
  -4,615
  -4,842
  -5,081
  -5,332
  -5,595
  -5,871
  -6,161
  -6,467
  -6,787
  -7,124
  -7,478
  -7,849
  -8,240
  -8,650
  -9,080
  -9,532
Free cash flow, $m
  296
  1,478
  913
  906
  903
  902
  903
  907
  912
  919
  929
  838
  851
  866
  882
  901
  922
  944
  969
  995
  1,023
  1,054
  1,086
  1,121
  1,158
  1,198
  1,240
  1,284
  1,332
  1,381
  1,434
Issuance/(repayment) of debt, $m
  883
  628
  676
  733
  790
  848
  908
  969
  1,032
  1,097
  1,164
  1,234
  1,307
  1,382
  1,460
  1,542
  1,627
  1,716
  1,809
  1,906
  2,008
  2,114
  2,225
  2,342
  2,464
  2,591
  2,725
  2,866
  3,013
  3,167
  3,329
Issuance/(repurchase) of shares, $m
  -179
  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  
  983
  628
  676
  733
  790
  848
  908
  969
  1,032
  1,097
  1,164
  1,234
  1,307
  1,382
  1,460
  1,542
  1,627
  1,716
  1,809
  1,906
  2,008
  2,114
  2,225
  2,342
  2,464
  2,591
  2,725
  2,866
  3,013
  3,167
  3,329
Total cash flow (excl. dividends), $m
  1,279
  2,107
  1,589
  1,639
  1,693
  1,750
  1,811
  1,875
  1,944
  2,016
  2,093
  2,072
  2,157
  2,248
  2,343
  2,443
  2,549
  2,660
  2,778
  2,901
  3,031
  3,168
  3,312
  3,463
  3,622
  3,789
  3,965
  4,150
  4,344
  4,548
  4,763
Retained Cash Flow (-), $m
  -245
  -255
  -276
  -299
  -323
  -346
  -371
  -396
  -421
  -448
  -476
  -504
  -534
  -564
  -596
  -630
  -665
  -701
  -739
  -779
  -820
  -863
  -909
  -956
  -1,006
  -1,058
  -1,113
  -1,170
  -1,231
  -1,294
  -1,360
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
 
  1,851
  1,313
  1,340
  1,370
  1,404
  1,440
  1,480
  1,522
  1,568
  1,617
  1,568
  1,624
  1,683
  1,746
  1,813
  1,884
  1,959
  2,039
  2,123
  2,211
  2,304
  2,403
  2,507
  2,616
  2,731
  2,852
  2,980
  3,114
  3,255
  3,403
Discount rate, %
 
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
  34.58
PV of cash for distribution, $m
 
  1,708
  1,108
  1,027
  945
  863
  782
  701
  623
  547
  475
  382
  324
  271
  223
  180
  143
  112
  86
  64
  47
  34
  24
  16
  11
  7
  4
  3
  2
  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

TELUS Corporation provides a range of telecommunications products and services in Canada. The company operates through Wireless and Wireline segments. The company’s telecommunications products and services include wireless and wireline voice and data; data services, such as Internet protocol; television; hosting, managed information technology, and cloud-based services; healthcare solutions; and business process outsourcing solutions. It also holds spectrum licenses; and offers wireless handsets. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was founded in 1993 and is based in Vancouver, Canada.

FINANCIAL RATIOS  of  TELUS Corporation (T)

Valuation Ratios
P/E Ratio 21.6
Price to Sales 2.1
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 8.2
Price to Free Cash Flow 303.8
Growth Rates
Sales Growth Rate 2.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -32.3%
Cap. Spend. - 3 Yr. Gr. Rate 7.5%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 146.6%
Total Debt to Equity 164.6%
Interest Coverage 4
Management Effectiveness
Return On Assets 5.9%
Ret/ On Assets - 3 Yr. Avg. 6.9%
Return On Total Capital 6%
Ret/ On T. Cap. - 3 Yr. Avg. 7.4%
Return On Equity 15.7%
Return On Equity - 3 Yr. Avg. 17.5%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 55.7%
Gross Margin - 3 Yr. Avg. 55.6%
EBITDA Margin 33.2%
EBITDA Margin - 3 Yr. Avg. 34.2%
Operating Margin 13.4%
Oper. Margin - 3 Yr. Avg. 16.6%
Pre-Tax Margin 13.1%
Pre-Tax Margin - 3 Yr. Avg. 14.8%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 10.9%
Effective Tax Rate 25.6%
Eff/ Tax Rate - 3 Yr. Avg. 26.4%
Payout Ratio 87.5%

T stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the T stock intrinsic value calculation we used $12725 million for the last fiscal year's total revenue generated by TELUS Corporation. The default revenue input number comes from 2016 income statement of TELUS Corporation. 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 T stock valuation model: a) initial revenue growth rate of 3.2% 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 8.4%, whose default value for T is calculated based on our internal credit rating of TELUS Corporation, 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 TELUS Corporation.
    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 T stock the variable cost ratio is equal to 84.8%.

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 T 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 TELUS Corporation.

Corporate tax rate of 27% is the nominal tax rate for TELUS Corporation. 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 T 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 T are equal to 159.3%.

Life of production assets of 11.7 years is the average useful life of capital assets used in TELUS Corporation 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 T is equal to -11.6%. 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 - $7917 million for TELUS Corporation - 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 594.096 million for TELUS Corporation 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 TELUS Corporation at the current share price and the inputted number of shares is $26.6 billion.


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Stock chart of T Financial statements of T
Valuation of Stocks

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