Intrinsic value of Ally Financial - ALLY

Previous Close

$27.25

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$27.25

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as ALLY.

We calculate the intrinsic value of ALLY 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -100.00
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
Revenue, $m
  0
  6,111
  6,471
  6,847
  7,240
  7,649
  8,077
  8,524
  8,991
  9,479
  9,989
  10,524
  11,083
  11,668
  12,281
  12,924
  13,596
  14,301
  15,040
  15,815
  16,627
  17,479
  18,372
  19,308
  20,291
  21,322
  22,403
  23,538
  24,728
  25,978
  27,289
Variable operating expenses, $m
 
  3,190
  3,378
  3,574
  3,779
  3,993
  4,216
  4,449
  4,693
  4,948
  5,214
  5,493
  5,785
  6,091
  6,411
  6,746
  7,097
  7,465
  7,851
  8,255
  8,679
  9,124
  9,590
  10,079
  10,592
  11,130
  11,694
  12,287
  12,908
  13,560
  14,245
Fixed operating expenses, $m
 
  107
  110
  112
  115
  117
  120
  122
  125
  128
  131
  133
  136
  139
  142
  146
  149
  152
  155
  159
  162
  166
  169
  173
  177
  181
  185
  189
  193
  197
  202
Total operating expenses, $m
  0
  3,297
  3,488
  3,686
  3,894
  4,110
  4,336
  4,571
  4,818
  5,076
  5,345
  5,626
  5,921
  6,230
  6,553
  6,892
  7,246
  7,617
  8,006
  8,414
  8,841
  9,290
  9,759
  10,252
  10,769
  11,311
  11,879
  12,476
  13,101
  13,757
  14,447
Operating income, $m
  0
  2,814
  2,984
  3,161
  3,346
  3,539
  3,741
  3,952
  4,173
  4,403
  4,644
  4,897
  5,161
  5,438
  5,728
  6,032
  6,350
  6,684
  7,034
  7,401
  7,785
  8,189
  8,612
  9,056
  9,522
  10,011
  10,524
  11,062
  11,627
  12,220
  12,842
EBITDA, $m
  2,382
  20,350
  21,555
  22,811
  24,122
  25,490
  26,919
  28,412
  29,973
  31,604
  33,311
  35,097
  36,966
  38,923
  40,972
  43,119
  45,368
  47,725
  50,195
  52,785
  55,500
  58,348
  61,334
  64,466
  67,751
  71,198
  74,814
  78,608
  82,590
  86,768
  91,153
Interest expense (income), $m
  2,647
  8,393
  7,844
  8,110
  8,386
  8,675
  8,977
  9,292
  9,621
  9,965
  10,324
  10,700
  11,094
  11,505
  11,936
  12,388
  12,861
  13,356
  13,875
  14,419
  14,990
  15,588
  16,215
  16,872
  17,562
  18,286
  19,045
  19,841
  20,677
  21,553
  22,473
Earnings before tax, $m
  1,581
  -5,579
  -4,860
  -4,949
  -5,040
  -5,136
  -5,236
  -5,340
  -5,448
  -5,561
  -5,680
  -5,803
  -5,932
  -6,067
  -6,208
  -6,356
  -6,510
  -6,672
  -6,841
  -7,019
  -7,204
  -7,399
  -7,603
  -7,816
  -8,040
  -8,275
  -8,521
  -8,779
  -9,050
  -9,333
  -9,631
Tax expense, $m
  470
  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
  1,067
  -5,579
  -4,860
  -4,949
  -5,040
  -5,136
  -5,236
  -5,340
  -5,448
  -5,561
  -5,680
  -5,803
  -5,932
  -6,067
  -6,208
  -6,356
  -6,510
  -6,672
  -6,841
  -7,019
  -7,204
  -7,399
  -7,603
  -7,816
  -8,040
  -8,275
  -8,521
  -8,779
  -9,050
  -9,333
  -9,631

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
  163,728
  92,589
  98,052
  103,749
  109,693
  115,897
  122,376
  129,146
  136,220
  143,618
  151,355
  159,451
  167,924
  176,794
  186,083
  195,813
  206,007
  216,689
  227,885
  239,621
  251,926
  264,828
  278,359
  292,552
  307,438
  323,056
  339,440
  356,632
  374,671
  393,600
  413,466
Adjusted assets (=assets-cash), $m
  163,728
  92,589
  98,052
  103,749
  109,693
  115,897
  122,376
  129,146
  136,220
  143,618
  151,355
  159,451
  167,924
  176,794
  186,083
  195,813
  206,007
  216,689
  227,885
  239,621
  251,926
  264,828
  278,359
  292,552
  307,438
  323,056
  339,440
  356,632
  374,671
  393,600
  413,466
Revenue / Adjusted assets
  0.000
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
  0.066
Average production assets, $m
  14,176
  175,364
  185,711
  196,501
  207,758
  219,509
  231,781
  244,602
  258,002
  272,013
  286,667
  302,000
  318,048
  334,848
  352,442
  370,870
  390,177
  410,409
  431,614
  453,843
  477,148
  501,585
  527,213
  554,093
  582,289
  611,868
  642,901
  675,461
  709,627
  745,480
  783,105
Working capital, $m
  0
  -162,874
  -172,483
  -182,505
  -192,960
  -203,874
  -215,272
  -227,180
  -239,625
  -252,638
  -266,249
  -280,489
  -295,394
  -310,998
  -327,338
  -344,454
  -362,386
  -381,177
  -400,872
  -421,517
  -443,162
  -465,859
  -489,662
  -514,627
  -540,814
  -568,286
  -597,109
  -627,350
  -659,082
  -692,381
  -727,326
Total debt, $m
  58,926
  145,260
  150,177
  155,304
  160,654
  166,237
  172,069
  178,161
  184,528
  191,186
  198,150
  205,436
  213,061
  221,045
  229,405
  238,162
  247,336
  256,950
  267,026
  277,589
  288,663
  300,275
  312,454
  325,226
  338,625
  352,680
  367,426
  382,898
  399,134
  416,170
  434,049
Total liabilities, $m
  150,411
  83,330
  88,247
  93,374
  98,724
  104,307
  110,139
  116,231
  122,598
  129,256
  136,220
  143,506
  151,131
  159,115
  167,475
  176,232
  185,406
  195,020
  205,096
  215,659
  226,733
  238,345
  250,524
  263,296
  276,695
  290,750
  305,496
  320,968
  337,204
  354,240
  372,119
Total equity, $m
  13,317
  9,259
  9,805
  10,375
  10,969
  11,590
  12,238
  12,915
  13,622
  14,362
  15,136
  15,945
  16,792
  17,679
  18,608
  19,581
  20,601
  21,669
  22,788
  23,962
  25,193
  26,483
  27,836
  29,255
  30,744
  32,306
  33,944
  35,663
  37,467
  39,360
  41,347
Total liabilities and equity, $m
  163,728
  92,589
  98,052
  103,749
  109,693
  115,897
  122,377
  129,146
  136,220
  143,618
  151,356
  159,451
  167,923
  176,794
  186,083
  195,813
  206,007
  216,689
  227,884
  239,621
  251,926
  264,828
  278,360
  292,551
  307,439
  323,056
  339,440
  356,631
  374,671
  393,600
  413,466
Debt-to-equity ratio
  4.425
  15.690
  15.320
  14.970
  14.650
  14.340
  14.060
  13.800
  13.550
  13.310
  13.090
  12.880
  12.690
  12.500
  12.330
  12.160
  12.010
  11.860
  11.720
  11.580
  11.460
  11.340
  11.220
  11.120
  11.010
  10.920
  10.820
  10.740
  10.650
  10.570
  10.500
Adjusted equity ratio
  0.081
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,067
  -5,579
  -4,860
  -4,949
  -5,040
  -5,136
  -5,236
  -5,340
  -5,448
  -5,561
  -5,680
  -5,803
  -5,932
  -6,067
  -6,208
  -6,356
  -6,510
  -6,672
  -6,841
  -7,019
  -7,204
  -7,399
  -7,603
  -7,816
  -8,040
  -8,275
  -8,521
  -8,779
  -9,050
  -9,333
  -9,631
Depreciation, amort., depletion, $m
  2,382
  17,536
  18,571
  19,650
  20,776
  21,951
  23,178
  24,460
  25,800
  27,201
  28,667
  30,200
  31,805
  33,485
  35,244
  37,087
  39,018
  41,041
  43,161
  45,384
  47,715
  50,159
  52,721
  55,409
  58,229
  61,187
  64,290
  67,546
  70,963
  74,548
  78,310
Funds from operations, $m
  5,222
  11,957
  13,711
  14,702
  15,735
  16,815
  17,942
  19,120
  20,352
  21,640
  22,987
  24,397
  25,873
  27,418
  29,036
  30,731
  32,507
  34,369
  36,320
  38,366
  40,510
  42,760
  45,119
  47,593
  50,189
  52,912
  55,769
  58,767
  61,913
  65,215
  68,680
Change in working capital, $m
  655
  -9,219
  -9,610
  -10,021
  -10,456
  -10,914
  -11,398
  -11,908
  -12,446
  -13,013
  -13,611
  -14,241
  -14,905
  -15,604
  -16,340
  -17,116
  -17,932
  -18,791
  -19,695
  -20,645
  -21,645
  -22,697
  -23,803
  -24,965
  -26,187
  -27,472
  -28,822
  -30,241
  -31,732
  -33,299
  -34,945
Cash from operations, $m
  4,567
  21,177
  23,320
  24,723
  26,191
  27,729
  29,340
  31,028
  32,798
  34,653
  36,598
  38,638
  40,777
  43,022
  45,376
  47,847
  50,439
  53,160
  56,015
  59,011
  62,156
  65,457
  68,921
  72,558
  76,376
  80,384
  84,591
  89,008
  93,645
  98,514
  103,625
Maintenance CAPEX, $m
  0
  -16,544
  -17,536
  -18,571
  -19,650
  -20,776
  -21,951
  -23,178
  -24,460
  -25,800
  -27,201
  -28,667
  -30,200
  -31,805
  -33,485
  -35,244
  -37,087
  -39,018
  -41,041
  -43,161
  -45,384
  -47,715
  -50,159
  -52,721
  -55,409
  -58,229
  -61,187
  -64,290
  -67,546
  -70,963
  -74,548
New CAPEX, $m
  -3,274
  -9,926
  -10,347
  -10,790
  -11,258
  -11,751
  -12,272
  -12,821
  -13,400
  -14,011
  -14,654
  -15,333
  -16,048
  -16,801
  -17,594
  -18,428
  -19,307
  -20,232
  -21,205
  -22,229
  -23,305
  -24,437
  -25,628
  -26,880
  -28,196
  -29,579
  -31,033
  -32,560
  -34,166
  -35,853
  -37,625
Cash from investing activities, $m
  -8,684
  -26,470
  -27,883
  -29,361
  -30,908
  -32,527
  -34,223
  -35,999
  -37,860
  -39,811
  -41,855
  -44,000
  -46,248
  -48,606
  -51,079
  -53,672
  -56,394
  -59,250
  -62,246
  -65,390
  -68,689
  -72,152
  -75,787
  -79,601
  -83,605
  -87,808
  -92,220
  -96,850
  -101,712
  -106,816
  -112,173
Free cash flow, $m
  -4,117
  -5,294
  -4,563
  -4,638
  -4,716
  -4,798
  -4,883
  -4,971
  -5,063
  -5,158
  -5,258
  -5,362
  -5,470
  -5,584
  -5,702
  -5,826
  -5,955
  -6,090
  -6,231
  -6,379
  -6,534
  -6,696
  -6,865
  -7,043
  -7,229
  -7,424
  -7,628
  -7,842
  -8,066
  -8,302
  -8,548
Issuance/(repayment) of debt, $m
  -7,693
  -10,161
  4,916
  5,127
  5,349
  5,584
  5,831
  6,092
  6,367
  6,658
  6,964
  7,286
  7,626
  7,983
  8,360
  8,757
  9,174
  9,614
  10,076
  10,563
  11,074
  11,612
  12,178
  12,773
  13,398
  14,055
  14,746
  15,472
  16,235
  17,037
  17,879
Issuance/(repurchase) of shares, $m
  -1,037
  21,479
  5,407
  5,518
  5,635
  5,756
  5,884
  6,017
  6,156
  6,301
  6,453
  6,613
  6,779
  6,954
  7,137
  7,329
  7,530
  7,740
  7,961
  8,192
  8,435
  8,689
  8,956
  9,235
  9,529
  9,837
  10,159
  10,498
  10,853
  11,226
  11,617
Cash from financing (excl. dividends), $m  
  3,778
  11,318
  10,323
  10,645
  10,984
  11,340
  11,715
  12,109
  12,523
  12,959
  13,417
  13,899
  14,405
  14,937
  15,497
  16,086
  16,704
  17,354
  18,037
  18,755
  19,509
  20,301
  21,134
  22,008
  22,927
  23,892
  24,905
  25,970
  27,088
  28,263
  29,496
Total cash flow (excl. dividends), $m
  -338
  6,025
  5,760
  6,007
  6,268
  6,542
  6,832
  7,138
  7,461
  7,801
  8,159
  8,537
  8,935
  9,354
  9,795
  10,260
  10,749
  11,264
  11,806
  12,376
  12,975
  13,606
  14,269
  14,966
  15,698
  16,468
  17,278
  18,128
  19,022
  19,961
  20,948
Retained Cash Flow (-), $m
  122
  -21,479
  -5,407
  -5,518
  -5,635
  -5,756
  -5,884
  -6,017
  -6,156
  -6,301
  -6,453
  -6,613
  -6,779
  -6,954
  -7,137
  -7,329
  -7,530
  -7,740
  -7,961
  -8,192
  -8,435
  -8,689
  -8,956
  -9,235
  -9,529
  -9,837
  -10,159
  -10,498
  -10,853
  -11,226
  -11,617
Prev. year cash balance distribution, $m
 
  6,641
  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
 
  -8,813
  354
  489
  633
  786
  949
  1,121
  1,305
  1,499
  1,706
  1,924
  2,155
  2,400
  2,658
  2,931
  3,220
  3,524
  3,845
  4,184
  4,541
  4,917
  5,313
  5,730
  6,169
  6,632
  7,118
  7,630
  8,169
  8,735
  9,331
Discount rate, %
 
  15.10
  15.86
  16.65
  17.48
  18.35
  19.27
  20.24
  21.25
  22.31
  23.43
  24.60
  25.83
  27.12
  28.47
  29.90
  31.39
  32.96
  34.61
  36.34
  38.16
  40.06
  42.07
  44.17
  46.38
  48.70
  51.13
  53.69
  56.38
  59.19
  62.15
PV of cash for distribution, $m
 
  -7,657
  264
  308
  332
  338
  330
  309
  279
  245
  208
  171
  137
  106
  80
  58
  41
  28
  18
  12
  7
  4
  2
  1
  1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  31.6
  20.2
  13.1
  8.6
  5.7
  3.8
  2.6
  1.8
  1.2
  0.8
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Ally Financial Inc. is a digital financial services company. The Company is a bank and financial holding company. Its segments include Automotive Finance operations, Insurance operations, Mortgage Finance operations, Corporate Finance operations, and Corporate and Other. The Automotive Finance operations segment provides the United States-based automotive financing services to consumers and automotive dealers, and automotive and equipment financing services to companies and municipalities. The Insurance operations segment offers both consumer finance protection and insurance products sold through the automotive dealer channel, and commercial insurance products sold directly to dealers. The Mortgage Finance operations segment consists of the management of a held-for-investment consumer mortgage finance loan portfolio. The Corporate Finance operations segment provides senior secured leveraged cash flow and asset-based loans to mostly the United States-based middle market companies.

FINANCIAL RATIOS  of  Ally Financial (ALLY)

Valuation Ratios
P/E Ratio 11.9
Price to Sales 0
Price to Book 1
Price to Tangible Book
Price to Cash Flow 2.8
Price to Free Cash Flow 9.8
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -30.1%
Cap. Spend. - 3 Yr. Gr. Rate -18.7%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 442.5%
Total Debt to Equity 442.5%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.8%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 1.4%
Ret/ On T. Cap. - 3 Yr. Avg. 1.4%
Return On Equity 8%
Return On Equity - 3 Yr. Avg. 8.2%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 29.7%
Eff/ Tax Rate - 3 Yr. Avg. 30.4%
Payout Ratio 10.1%

ALLY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALLY stock intrinsic value calculation we used $5765 million for the last fiscal year's total revenue generated by Ally Financial. The default revenue input number comes from 2016 income statement of Ally Financial. 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 ALLY stock valuation model: a) initial revenue growth rate of 6% 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 15.1%, whose default value for ALLY is calculated based on our internal credit rating of Ally Financial, 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 Ally Financial.
    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 ALLY stock the variable cost ratio is equal to 52.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $105 million in the base year in the intrinsic value calculation for ALLY 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 5.4% for Ally Financial.

Corporate tax rate of 27% is the nominal tax rate for Ally Financial. 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 ALLY 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 ALLY are equal to 2869.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Ally Financial 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 ALLY is equal to -2665.3%. 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 - $0 million for Ally Financial - 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 442 million for Ally Financial 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 Ally Financial at the current share price and the inputted number of shares is $12.0 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Ally Financial Declares Dividend on Common Stock   [Jul-16-18 04:15PM  PR Newswire]
▶ Ally Invest: Bullish Sentiment Is Back   [Jul-13-18 10:30AM  Investopedia]
▶ [$$] Elite business schools are tone deaf to criticism   [Jul-05-18 11:00PM  Financial Times]
▶ Charlotte's largest banks plan dividend increases, billions in buybacks   [Jun-29-18 12:35PM  American City Business Journals]
▶ Ally Announces Non-Objection to 2018 Capital Plan   [Jun-28-18 04:45PM  PR Newswire]
▶ Ally Chooses New Ad Agency for Marketing Blitz   [Jun-19-18 11:39AM  Investopedia]
▶ Westlake Announces Agreement with Allys SmartAuction   [May-08-18 02:02PM  Business Wire]
▶ Ally Financial reports a strong first quarter in 2018   [Apr-26-18 02:47PM  American City Business Journals]
▶ Ally Financial: 1Q Earnings Snapshot   [09:54AM  Associated Press]
▶ Ally Financial Named Best Company to Work for in Detroit   [Apr-24-18 12:48PM  Investopedia]
▶ Ally Financial promotes Charlotte-area exec in leadership changes   [02:59PM  American City Business Journals]
▶ Ally Announces Leadership Changes   [09:00AM  PR Newswire]
▶ Ally Financial Declares Dividend on Common Stock   [Apr-12-18 04:15PM  PR Newswire]
▶ Ally and Fair Announce Strategic Alliance   [Apr-10-18 12:00PM  PR Newswire]
▶ Charles Schwab Looks for New Ad Firm With $100M Spend   [Apr-09-18 01:38PM  Investopedia]
▶ Ally Financial to Open Innovation Hub   [Mar-27-18 12:44PM  Investopedia]
▶ Publicly traded financial services firm signs on for studio space at Camp North End   [Mar-26-18 11:45AM  American City Business Journals]
▶ TIME and Ally Financial Honor North Carolina Auto Dealer   [Mar-23-18 06:50PM  PR Newswire]
▶ Millennials are scared to invest: study   [08:32AM  Fox Business Videos]
▶ 8 Stocks David Tepper Continues to Buy   [Feb-27-18 04:19PM  GuruFocus.com]
▶ Pro: Three hot stocks to watch   [08:44AM  CNBC Videos]
▶ Ally Financial to Host Financial Outlook Conference Call   [Feb-07-18 09:00AM  PR Newswire]
Financial statements of ALLY
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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