Apogee Enterprises, Inc. designs and develops glass solutions for enclosing commercial buildings and framing art in the United States, Canada, and Brazil. The company operates through four segments: Architectural Glass, Architectural Services, Architectural Framing Systems, and LargeScale Optical Technologies (LSO). The Architectural Glass segment fabricates coated and highperformance glass used in customized windows and wall systems comprising the outside skin of commercial, institutional, and multifamily residential buildings. The Architectural Services segment designs, engineers, fabricates, and installs the walls of glass, windows, and other curtain wall products making up the outside skin of commercial and institutional buildings. The Architectural Framing Systems segment designs, engineers, fabricates, and finishes the aluminum frames used in customized aluminum and glass windows, curtain walls, storefronts, and entrance systems comprising the outside skin, as well as entrances of commercial, institutional, and multifamily residential buildings. The LSO segment manufactures valueadded glass and acrylic products for the custom picture framing and fine art markets. The companys products and services are primarily used in commercial buildings, such as office towers, hotels, and retail centers; and institutional buildings, including education facilities and dormitories, health care facilities, and government buildings, as well as multifamily buildings. It markets its architectural products and services through direct sales force, independent sales representatives, and distributors to general contractors and glazing subcontractors, architects, and building owners; and valueadded glass and acrylics through retail chains, picture framing shops, and independent distributors to museums, and public and private galleries. Apogee Enterprises, Inc. was founded in 1949 and is headquartered in Minneapolis, Minnesota.
FINANCIAL RATIOS of Apogee Enterprises (APOG)
Valuation Ratios 

P/E Ratio  17.5 
Price to Sales  1.3 
Price to Book  3.2 
Price to Tangible Book  
Price to Cash Flow  12.1 
Price to Free Cash Flow  26.9 
Growth Rates 

Sales Growth Rate  13.7% 
Sales  3 Yr. Growth Rate  % 
EPS Growth Rate  % 
EPS  3 Yr. Growth Rate  % 
Capital Spending Gr. Rate  61.9% 
Cap. Spend.  3 Yr. Gr. Rate  10.1% 
Financial Strength 

Quick Ratio  NaN 
Current Ratio  0.1 
LT Debt to Equity  13.8% 
Total Debt to Equity  13.8% 
Interest Coverage  124 
Management Effectiveness 

Return On Assets  12% 
Ret/ On Assets  3 Yr. Avg.  10.4% 
Return On Total Capital  17.9% 
Ret/ On T. Cap.  3 Yr. Avg.  15.5% 
Return On Equity  19.6% 
Return On Equity  3 Yr. Avg.  16.6% 
Asset Turnover  1.5 
Profitability Ratios 

Gross Margin  26.2% 
Gross Margin  3 Yr. Avg.  24.5% 
EBITDA Margin  14.3% 
EBITDA Margin  3 Yr. Avg.  12.6% 
Operating Margin  11% 
Oper. Margin  3 Yr. Avg.  9.3% 
PreTax Margin  11% 
PreTax Margin  3 Yr. Avg.  9.3% 
Net Profit Margin  7.7% 
Net Profit Margin  3 Yr. Avg.  6.6% 
Effective Tax Rate  30.1% 
Eff/ Tax Rate  3 Yr. Avg.  28.2% 
Payout Ratio  17.4% 
APOG stock valuation input parameters
Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the APOG stock intrinsic value calculation we used $1115 million for the last fiscal year's total revenue generated by Apogee Enterprises. The default revenue input number comes from 2017 income statement of Apogee Enterprises. 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 APOG stock valuation model: a) initial revenue growth rate of 13.7% 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 APOG is calculated based on our internal credit rating of Apogee Enterprises, 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 Apogee Enterprises.
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 APOG stock the variable cost ratio is equal to 80.6%.
Fixed operating expenses is just that  expenses that are not dependant on the volume of production. They are set to $95 million in the base year in the intrinsic value calculation for APOG stock. These expenses increase with the level of inflation in subsequent years.
Interest rate on debt is the average allin rate of interest paid by the company on its debt. It is set at 3.5% for Apogee Enterprises.
Corporate tax rate of 27% is the nominal tax rate for Apogee Enterprises. 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 optionsrelated 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 APOG 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 APOG are equal to 25.8%.
Life of production assets of 10.4 years is the average useful life of capital assets used in Apogee Enterprises 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 APOG is equal to 8.2%. 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 inkind financing to others or is not good at managing its inventories.
Book value of equity  $471 million for Apogee Enterprises  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 28.969 million for Apogee Enterprises 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 Apogee Enterprises at the current share price and the inputted number of shares is $1.5 billion.
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