Intrinsic value of Ameriprise Financial - AMP

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$127.85

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$127.85

 
Intrinsic value

$130.90

 
Up/down potential

+2%

 
Rating

hold

 
Value-price divergence* premium content

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

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

We calculate the intrinsic value of AMP 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 19.7

 

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, %
  -3.81
  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
  11,735
  11,970
  12,245
  12,560
  12,913
  13,304
  13,734
  14,202
  14,708
  15,254
  15,839
  16,465
  17,133
  17,845
  18,601
  19,404
  20,254
  21,154
  22,106
  23,112
  24,173
  25,294
  26,476
  27,721
  29,034
  30,416
  31,871
  33,403
  35,015
  36,710
  38,494
Variable operating expenses, $m
 
  9,490
  9,705
  9,952
  10,229
  10,536
  10,872
  11,239
  11,636
  12,063
  12,522
  12,902
  13,426
  13,983
  14,576
  15,204
  15,871
  16,576
  17,322
  18,110
  18,942
  19,820
  20,746
  21,722
  22,750
  23,834
  24,974
  26,174
  27,437
  28,766
  30,164
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
  9,902
  9,490
  9,705
  9,952
  10,229
  10,536
  10,872
  11,239
  11,636
  12,063
  12,522
  12,902
  13,426
  13,983
  14,576
  15,204
  15,871
  16,576
  17,322
  18,110
  18,942
  19,820
  20,746
  21,722
  22,750
  23,834
  24,974
  26,174
  27,437
  28,766
  30,164
Operating income, $m
  1,833
  2,480
  2,540
  2,608
  2,684
  2,769
  2,862
  2,963
  3,073
  3,191
  3,317
  3,563
  3,708
  3,862
  4,025
  4,199
  4,383
  4,578
  4,784
  5,002
  5,231
  5,474
  5,730
  5,999
  6,283
  6,582
  6,897
  7,229
  7,577
  7,944
  8,330
EBITDA, $m
  2,081
  2,662
  2,723
  2,793
  2,872
  2,959
  3,055
  3,159
  3,271
  3,393
  3,523
  3,662
  3,811
  3,969
  4,137
  4,315
  4,505
  4,705
  4,917
  5,140
  5,376
  5,626
  5,888
  6,165
  6,457
  6,765
  7,088
  7,429
  7,788
  8,165
  8,561
Interest expense (income), $m
  163
  455
  304
  406
  522
  653
  798
  958
  1,131
  1,319
  1,521
  1,738
  1,970
  2,217
  2,481
  2,761
  3,059
  3,374
  3,707
  4,060
  4,433
  4,826
  5,242
  5,680
  6,141
  6,627
  7,140
  7,679
  8,247
  8,844
  9,472
Earnings before tax, $m
  1,592
  2,025
  2,236
  2,202
  2,162
  2,115
  2,063
  2,005
  1,942
  1,872
  1,796
  1,825
  1,738
  1,644
  1,544
  1,438
  1,324
  1,204
  1,076
  941
  798
  647
  488
  320
  142
  -45
  -243
  -450
  -669
  -900
  -1,142
Tax expense, $m
  278
  547
  604
  594
  584
  571
  557
  541
  524
  505
  485
  493
  469
  444
  417
  388
  358
  325
  291
  254
  216
  175
  132
  86
  38
  0
  0
  0
  0
  0
  0
Net income, $m
  1,314
  1,479
  1,632
  1,607
  1,578
  1,544
  1,506
  1,464
  1,417
  1,367
  1,311
  1,333
  1,269
  1,200
  1,127
  1,050
  967
  879
  786
  687
  583
  473
  356
  233
  104
  -45
  -243
  -450
  -669
  -900
  -1,142

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,486
  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
  139,821
  140,820
  144,059
  147,761
  151,918
  156,523
  161,577
  167,080
  173,036
  179,453
  186,340
  193,708
  201,570
  209,941
  218,837
  228,277
  238,280
  248,870
  260,068
  271,901
  284,394
  297,576
  311,478
  326,132
  341,571
  357,832
  374,953
  392,974
  411,937
  431,888
  452,872
Adjusted assets (=assets-cash), $m
  137,335
  140,820
  144,059
  147,761
  151,918
  156,523
  161,577
  167,080
  173,036
  179,453
  186,340
  193,708
  201,570
  209,941
  218,837
  228,277
  238,280
  248,870
  260,068
  271,901
  284,394
  297,576
  311,478
  326,132
  341,571
  357,832
  374,953
  392,974
  411,937
  431,888
  452,872
Revenue / Adjusted assets
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
Average production assets, $m
  358
  359
  367
  377
  387
  399
  412
  426
  441
  458
  475
  494
  514
  535
  558
  582
  608
  635
  663
  693
  725
  759
  794
  832
  871
  912
  956
  1,002
  1,050
  1,101
  1,155
Working capital, $m
  0
  5,985
  6,123
  6,280
  6,457
  6,652
  6,867
  7,101
  7,354
  7,627
  7,919
  8,233
  8,567
  8,922
  9,301
  9,702
  10,127
  10,577
  11,053
  11,556
  12,087
  12,647
  13,238
  13,861
  14,517
  15,208
  15,936
  16,701
  17,507
  18,355
  19,247
Total debt, $m
  15,472
  8,681
  11,596
  14,928
  18,669
  22,814
  27,362
  32,315
  37,676
  43,451
  49,649
  56,280
  63,356
  70,889
  78,896
  87,392
  96,395
  105,926
  116,004
  126,653
  137,897
  149,761
  162,273
  175,462
  189,357
  203,992
  219,401
  235,620
  252,687
  270,642
  289,527
Total liabilities, $m
  133,529
  126,738
  129,653
  132,985
  136,726
  140,871
  145,419
  150,372
  155,733
  161,508
  167,706
  174,337
  181,413
  188,946
  196,953
  205,449
  214,452
  223,983
  234,061
  244,710
  255,954
  267,818
  280,330
  293,519
  307,414
  322,049
  337,458
  353,677
  370,744
  388,699
  407,584
Total equity, $m
  6,292
  14,082
  14,406
  14,776
  15,192
  15,652
  16,158
  16,708
  17,304
  17,945
  18,634
  19,371
  20,157
  20,994
  21,884
  22,828
  23,828
  24,887
  26,007
  27,190
  28,439
  29,758
  31,148
  32,613
  34,157
  35,783
  37,495
  39,297
  41,194
  43,189
  45,287
Total liabilities and equity, $m
  139,821
  140,820
  144,059
  147,761
  151,918
  156,523
  161,577
  167,080
  173,037
  179,453
  186,340
  193,708
  201,570
  209,940
  218,837
  228,277
  238,280
  248,870
  260,068
  271,900
  284,393
  297,576
  311,478
  326,132
  341,571
  357,832
  374,953
  392,974
  411,938
  431,888
  452,871
Debt-to-equity ratio
  2.459
  0.620
  0.800
  1.010
  1.230
  1.460
  1.690
  1.930
  2.180
  2.420
  2.660
  2.910
  3.140
  3.380
  3.610
  3.830
  4.050
  4.260
  4.460
  4.660
  4.850
  5.030
  5.210
  5.380
  5.540
  5.700
  5.850
  6.000
  6.130
  6.270
  6.390
Adjusted equity ratio
  0.046
  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
  1,314
  1,479
  1,632
  1,607
  1,578
  1,544
  1,506
  1,464
  1,417
  1,367
  1,311
  1,333
  1,269
  1,200
  1,127
  1,050
  967
  879
  786
  687
  583
  473
  356
  233
  104
  -45
  -243
  -450
  -669
  -900
  -1,142
Depreciation, amort., depletion, $m
  248
  182
  184
  186
  188
  190
  193
  196
  199
  202
  205
  99
  103
  107
  112
  116
  122
  127
  133
  139
  145
  152
  159
  166
  174
  182
  191
  200
  210
  220
  231
Funds from operations, $m
  2,282
  1,661
  1,816
  1,793
  1,766
  1,734
  1,699
  1,659
  1,616
  1,568
  1,517
  1,431
  1,372
  1,307
  1,239
  1,166
  1,088
  1,006
  918
  826
  728
  624
  515
  400
  278
  137
  -51
  -250
  -459
  -679
  -911
Change in working capital, $m
  311
  117
  138
  157
  177
  196
  215
  234
  253
  273
  293
  313
  334
  356
  378
  401
  425
  450
  476
  503
  531
  560
  591
  623
  656
  691
  728
  766
  806
  848
  892
Cash from operations, $m
  1,971
  1,901
  1,678
  1,636
  1,589
  1,539
  1,484
  1,426
  1,363
  1,296
  1,224
  1,118
  1,037
  952
  861
  765
  663
  556
  443
  323
  197
  64
  -76
  -223
  -378
  -554
  -779
  -1,016
  -1,265
  -1,527
  -1,803
Maintenance CAPEX, $m
  0
  -72
  -72
  -73
  -75
  -77
  -80
  -82
  -85
  -88
  -92
  -95
  -99
  -103
  -107
  -112
  -116
  -122
  -127
  -133
  -139
  -145
  -152
  -159
  -166
  -174
  -182
  -191
  -200
  -210
  -220
New CAPEX, $m
  -92
  -2
  -8
  -9
  -11
  -12
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -21
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -44
  -46
  -48
  -51
  -54
Cash from investing activities, $m
  -804
  -74
  -80
  -82
  -86
  -89
  -93
  -96
  -100
  -104
  -110
  -114
  -119
  -124
  -130
  -136
  -142
  -149
  -156
  -163
  -171
  -179
  -187
  -196
  -205
  -215
  -226
  -237
  -248
  -261
  -274
Free cash flow, $m
  1,167
  1,828
  1,598
  1,553
  1,503
  1,449
  1,391
  1,329
  1,262
  1,191
  1,115
  1,004
  919
  828
  731
  629
  521
  407
  287
  160
  26
  -115
  -263
  -419
  -584
  -770
  -1,005
  -1,253
  -1,514
  -1,788
  -2,077
Issuance/(repayment) of debt, $m
  816
  -4,305
  2,915
  3,332
  3,741
  4,145
  4,548
  4,953
  5,361
  5,775
  6,198
  6,631
  7,076
  7,534
  8,006
  8,496
  9,003
  9,530
  10,079
  10,649
  11,244
  11,864
  12,512
  13,188
  13,895
  14,635
  15,409
  16,219
  17,067
  17,955
  18,886
Issuance/(repurchase) of shares, $m
  -1,698
  10,267
  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  
  -652
  5,962
  2,915
  3,332
  3,741
  4,145
  4,548
  4,953
  5,361
  5,775
  6,198
  6,631
  7,076
  7,534
  8,006
  8,496
  9,003
  9,530
  10,079
  10,649
  11,244
  11,864
  12,512
  13,188
  13,895
  14,635
  15,409
  16,219
  17,067
  17,955
  18,886
Total cash flow (excl. dividends), $m
  440
  -2,477
  4,513
  4,885
  5,244
  5,595
  5,940
  6,282
  6,623
  6,967
  7,313
  7,635
  7,994
  8,361
  8,738
  9,125
  9,525
  9,938
  10,366
  10,809
  11,270
  11,750
  12,249
  12,769
  13,311
  13,865
  14,404
  14,966
  15,553
  16,167
  16,809
Retained Cash Flow (-), $m
  925
  -7,790
  -324
  -370
  -416
  -461
  -505
  -550
  -596
  -642
  -689
  -737
  -786
  -837
  -890
  -944
  -1,000
  -1,059
  -1,120
  -1,183
  -1,249
  -1,318
  -1,390
  -1,465
  -1,544
  -1,626
  -1,712
  -1,802
  -1,896
  -1,995
  -2,098
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
 
  0
  4,189
  4,515
  4,828
  5,134
  5,434
  5,731
  6,028
  6,325
  6,625
  6,899
  7,208
  7,524
  7,848
  8,181
  8,524
  8,879
  9,246
  9,626
  10,021
  10,431
  10,859
  11,304
  11,767
  12,239
  12,692
  13,164
  13,657
  14,172
  14,711
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
 
  0
  3,464
  3,348
  3,181
  2,973
  2,735
  2,477
  2,209
  1,939
  1,675
  1,417
  1,184
  971
  781
  617
  477
  361
  267
  193
  136
  93
  62
  40
  25
  15
  9
  5
  3
  1
  1
Current shareholders' claim on cash, %
  100
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7

Ameriprise Financial, Inc., through its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. The company’s Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage services primarily to retail clients through its advisors. Its Asset Management segment offers investment management and advice, and investment products to retail, high net worth, and institutional clients through unaffiliated third party financial institutions and institutional sales force. This segment’s products include U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds, variable product funds underlying insurance, and annuity separate accounts; and institutional asset management products, such as traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds, and property funds. The company’s Annuities segment provides variable and fixed annuity products to individual clients through affiliated and unaffiliated advisors, and financial institutions. Its Protection segment offers various products to address the protection and risk management needs of retail clients, including life, disability income, and property casualty insurance through advisors and affinity relationships. The company was formerly known as American Express Financial Corporation and changed its name to Ameriprise Financial, Inc. in September 2005. Ameriprise Financial, Inc. was founded in 1894 and is headquartered in Minneapolis, Minnesota.

FINANCIAL RATIOS  of  Ameriprise Financial (AMP)

Valuation Ratios
P/E Ratio 15.1
Price to Sales 1.7
Price to Book 3.1
Price to Tangible Book
Price to Cash Flow 10
Price to Free Cash Flow 10.5
Growth Rates
Sales Growth Rate -3.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -30.8%
Cap. Spend. - 3 Yr. Gr. Rate -2.6%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 83.2%
Total Debt to Equity 245.9%
Interest Coverage 11
Management Effectiveness
Return On Assets 1%
Ret/ On Assets - 3 Yr. Avg. 1.1%
Return On Total Capital 5.5%
Ret/ On T. Cap. - 3 Yr. Avg. 6%
Return On Equity 19.5%
Return On Equity - 3 Yr. Avg. 19.9%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 44.5%
Gross Margin - 3 Yr. Avg. 48.3%
EBITDA Margin 17.1%
EBITDA Margin - 3 Yr. Avg. 20.8%
Operating Margin 15.6%
Oper. Margin - 3 Yr. Avg. 19.9%
Pre-Tax Margin 13.6%
Pre-Tax Margin - 3 Yr. Avg. 17.3%
Net Profit Margin 11.2%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 17.5%
Eff/ Tax Rate - 3 Yr. Avg. 20%
Payout Ratio 36.5%

AMP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AMP stock intrinsic value calculation we used $11735 million for the last fiscal year's total revenue generated by Ameriprise Financial. The default revenue input number comes from 2016 income statement of Ameriprise 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 AMP 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 9.5%, whose default value for AMP is calculated based on our internal credit rating of Ameriprise 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 Ameriprise 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 AMP stock the variable cost ratio is equal to 79.3%.

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 AMP 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 3.5% for Ameriprise Financial.

Corporate tax rate of 27% is the nominal tax rate for Ameriprise 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 AMP 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 AMP are equal to 3%.

Life of production assets of 3.7 years is the average useful life of capital assets used in Ameriprise 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 AMP is equal to 50%. 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 - $6292 million for Ameriprise 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 153.917 million for Ameriprise 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 Ameriprise Financial at the current share price and the inputted number of shares is $19.7 billion.


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Stock chart of AMP Financial statements of AMP
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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