Intrinsic value of Bed Bath&Beyond - BBBY

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$39.80

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$39.80

 
Intrinsic value

$111.69

 
Up/down potential

+181%

 
Rating

str. buy

 
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 BBBY 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 5.9

 

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, %
  1.88
  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
  12,104
  12,346
  12,630
  12,955
  13,319
  13,723
  14,166
  14,648
  15,171
  15,733
  16,337
  16,983
  17,672
  18,406
  19,186
  20,014
  20,891
  21,819
  22,801
  23,838
  24,934
  26,089
  27,308
  28,593
  29,946
  31,372
  32,873
  34,453
  36,116
  37,865
  39,705
Variable operating expenses, $m
 
  10,728
  10,973
  11,254
  11,569
  11,919
  12,302
  12,719
  13,171
  13,658
  14,180
  14,690
  15,286
  15,921
  16,595
  17,311
  18,070
  18,873
  19,722
  20,620
  21,567
  22,567
  23,621
  24,732
  25,903
  27,136
  28,435
  29,801
  31,239
  32,752
  34,343
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
  10,689
  10,728
  10,973
  11,254
  11,569
  11,919
  12,302
  12,719
  13,171
  13,658
  14,180
  14,690
  15,286
  15,921
  16,595
  17,311
  18,070
  18,873
  19,722
  20,620
  21,567
  22,567
  23,621
  24,732
  25,903
  27,136
  28,435
  29,801
  31,239
  32,752
  34,343
Operating income, $m
  1,415
  1,618
  1,657
  1,700
  1,750
  1,804
  1,864
  1,929
  2,000
  2,076
  2,157
  2,293
  2,386
  2,485
  2,591
  2,702
  2,821
  2,946
  3,079
  3,219
  3,367
  3,523
  3,687
  3,861
  4,043
  4,236
  4,439
  4,652
  4,876
  5,113
  5,361
EBITDA, $m
  1,689
  1,883
  1,926
  1,976
  2,031
  2,093
  2,161
  2,234
  2,314
  2,400
  2,492
  2,590
  2,695
  2,807
  2,926
  3,053
  3,186
  3,328
  3,478
  3,636
  3,803
  3,979
  4,165
  4,361
  4,568
  4,785
  5,014
  5,255
  5,508
  5,775
  6,056
Interest expense (income), $m
  0
  52
  55
  58
  62
  66
  70
  75
  81
  87
  93
  100
  107
  115
  124
  132
  142
  152
  162
  174
  185
  198
  211
  225
  239
  255
  271
  288
  306
  325
  345
Earnings before tax, $m
  1,327
  1,566
  1,602
  1,642
  1,688
  1,738
  1,794
  1,854
  1,919
  1,989
  2,064
  2,193
  2,279
  2,370
  2,467
  2,570
  2,679
  2,794
  2,916
  3,045
  3,181
  3,325
  3,476
  3,636
  3,804
  3,981
  4,168
  4,364
  4,571
  4,788
  5,016
Tax expense, $m
  486
  423
  432
  443
  456
  469
  484
  500
  518
  537
  557
  592
  615
  640
  666
  694
  723
  754
  787
  822
  859
  898
  939
  982
  1,027
  1,075
  1,125
  1,178
  1,234
  1,293
  1,354
Net income, $m
  841
  1,143
  1,169
  1,199
  1,232
  1,269
  1,309
  1,353
  1,401
  1,452
  1,507
  1,601
  1,663
  1,730
  1,801
  1,876
  1,956
  2,040
  2,129
  2,223
  2,322
  2,427
  2,538
  2,654
  2,777
  2,906
  3,042
  3,186
  3,337
  3,495
  3,662

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  602
  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
  6,490
  6,005
  6,143
  6,301
  6,478
  6,675
  6,890
  7,125
  7,379
  7,652
  7,946
  8,260
  8,595
  8,952
  9,332
  9,734
  10,161
  10,612
  11,090
  11,594
  12,127
  12,689
  13,282
  13,907
  14,565
  15,259
  15,989
  16,757
  17,566
  18,417
  19,312
Adjusted assets (=assets-cash), $m
  5,888
  6,005
  6,143
  6,301
  6,478
  6,675
  6,890
  7,125
  7,379
  7,652
  7,946
  8,260
  8,595
  8,952
  9,332
  9,734
  10,161
  10,612
  11,090
  11,594
  12,127
  12,689
  13,282
  13,907
  14,565
  15,259
  15,989
  16,757
  17,566
  18,417
  19,312
Revenue / Adjusted assets
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
  2.056
Average production assets, $m
  1,701
  1,728
  1,768
  1,814
  1,865
  1,921
  1,983
  2,051
  2,124
  2,203
  2,287
  2,378
  2,474
  2,577
  2,686
  2,802
  2,925
  3,055
  3,192
  3,337
  3,491
  3,653
  3,823
  4,003
  4,193
  4,392
  4,602
  4,823
  5,056
  5,301
  5,559
Working capital, $m
  1,959
  1,383
  1,415
  1,451
  1,492
  1,537
  1,587
  1,641
  1,699
  1,762
  1,830
  1,902
  1,979
  2,061
  2,149
  2,242
  2,340
  2,444
  2,554
  2,670
  2,793
  2,922
  3,059
  3,202
  3,354
  3,514
  3,682
  3,859
  4,045
  4,241
  4,447
Total debt, $m
  1,491
  1,566
  1,658
  1,764
  1,882
  2,013
  2,157
  2,313
  2,483
  2,665
  2,861
  3,071
  3,294
  3,532
  3,785
  4,054
  4,338
  4,639
  4,958
  5,295
  5,650
  6,025
  6,420
  6,837
  7,276
  7,739
  8,226
  8,738
  9,278
  9,845
  10,442
Total liabilities, $m
  3,931
  4,005
  4,097
  4,203
  4,321
  4,452
  4,596
  4,752
  4,922
  5,104
  5,300
  5,510
  5,733
  5,971
  6,224
  6,493
  6,777
  7,078
  7,397
  7,734
  8,089
  8,464
  8,859
  9,276
  9,715
  10,178
  10,665
  11,177
  11,717
  12,284
  12,881
Total equity, $m
  2,560
  2,000
  2,046
  2,098
  2,157
  2,223
  2,294
  2,373
  2,457
  2,548
  2,646
  2,751
  2,862
  2,981
  3,107
  3,242
  3,384
  3,534
  3,693
  3,861
  4,038
  4,226
  4,423
  4,631
  4,850
  5,081
  5,324
  5,580
  5,849
  6,133
  6,431
Total liabilities and equity, $m
  6,491
  6,005
  6,143
  6,301
  6,478
  6,675
  6,890
  7,125
  7,379
  7,652
  7,946
  8,261
  8,595
  8,952
  9,331
  9,735
  10,161
  10,612
  11,090
  11,595
  12,127
  12,690
  13,282
  13,907
  14,565
  15,259
  15,989
  16,757
  17,566
  18,417
  19,312
Debt-to-equity ratio
  0.582
  0.780
  0.810
  0.840
  0.870
  0.910
  0.940
  0.970
  1.010
  1.050
  1.080
  1.120
  1.150
  1.180
  1.220
  1.250
  1.280
  1.310
  1.340
  1.370
  1.400
  1.430
  1.450
  1.480
  1.500
  1.520
  1.540
  1.570
  1.590
  1.610
  1.620
Adjusted equity ratio
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  841
  1,143
  1,169
  1,199
  1,232
  1,269
  1,309
  1,353
  1,401
  1,452
  1,507
  1,601
  1,663
  1,730
  1,801
  1,876
  1,956
  2,040
  2,129
  2,223
  2,322
  2,427
  2,538
  2,654
  2,777
  2,906
  3,042
  3,186
  3,337
  3,495
  3,662
Depreciation, amort., depletion, $m
  274
  265
  270
  275
  282
  289
  297
  305
  314
  324
  335
  297
  309
  322
  336
  350
  366
  382
  399
  417
  436
  457
  478
  500
  524
  549
  575
  603
  632
  663
  695
Funds from operations, $m
  795
  1,408
  1,439
  1,474
  1,514
  1,558
  1,606
  1,658
  1,715
  1,776
  1,841
  1,898
  1,973
  2,052
  2,137
  2,226
  2,321
  2,422
  2,528
  2,640
  2,759
  2,884
  3,016
  3,155
  3,301
  3,455
  3,618
  3,789
  3,969
  4,158
  4,357
Change in working capital, $m
  -217
  27
  32
  36
  41
  45
  50
  54
  58
  63
  68
  72
  77
  82
  87
  93
  98
  104
  110
  116
  123
  129
  137
  144
  152
  160
  168
  177
  186
  196
  206
Cash from operations, $m
  1,012
  1,405
  1,407
  1,438
  1,473
  1,513
  1,556
  1,604
  1,656
  1,713
  1,774
  1,826
  1,896
  1,970
  2,049
  2,134
  2,223
  2,318
  2,418
  2,524
  2,636
  2,754
  2,879
  3,011
  3,150
  3,296
  3,450
  3,612
  3,782
  3,962
  4,151
Maintenance CAPEX, $m
  0
  -213
  -216
  -221
  -227
  -233
  -240
  -248
  -256
  -265
  -275
  -286
  -297
  -309
  -322
  -336
  -350
  -366
  -382
  -399
  -417
  -436
  -457
  -478
  -500
  -524
  -549
  -575
  -603
  -632
  -663
New CAPEX, $m
  -328
  -28
  -40
  -45
  -51
  -57
  -62
  -68
  -73
  -79
  -85
  -90
  -96
  -103
  -109
  -116
  -123
  -130
  -137
  -145
  -153
  -162
  -171
  -180
  -190
  -200
  -210
  -221
  -233
  -245
  -258
Cash from investing activities, $m
  -276
  -241
  -256
  -266
  -278
  -290
  -302
  -316
  -329
  -344
  -360
  -376
  -393
  -412
  -431
  -452
  -473
  -496
  -519
  -544
  -570
  -598
  -628
  -658
  -690
  -724
  -759
  -796
  -836
  -877
  -921
Free cash flow, $m
  736
  1,165
  1,151
  1,172
  1,195
  1,223
  1,254
  1,289
  1,327
  1,369
  1,414
  1,449
  1,502
  1,558
  1,618
  1,682
  1,750
  1,822
  1,899
  1,980
  2,066
  2,156
  2,252
  2,353
  2,460
  2,572
  2,691
  2,815
  2,947
  3,085
  3,231
Issuance/(repayment) of debt, $m
  0
  75
  92
  105
  118
  131
  144
  157
  169
  183
  196
  210
  224
  238
  253
  268
  285
  301
  319
  337
  355
  375
  395
  417
  439
  463
  487
  513
  539
  567
  597
Issuance/(repurchase) of shares, $m
  -1,091
  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  
  -1,089
  75
  92
  105
  118
  131
  144
  157
  169
  183
  196
  210
  224
  238
  253
  268
  285
  301
  319
  337
  355
  375
  395
  417
  439
  463
  487
  513
  539
  567
  597
Total cash flow (excl. dividends), $m
  -360
  1,240
  1,244
  1,277
  1,314
  1,354
  1,398
  1,445
  1,496
  1,551
  1,610
  1,659
  1,725
  1,796
  1,871
  1,950
  2,034
  2,123
  2,217
  2,316
  2,421
  2,531
  2,647
  2,770
  2,899
  3,035
  3,177
  3,328
  3,486
  3,652
  3,827
Retained Cash Flow (-), $m
  183
  -42
  -46
  -53
  -59
  -65
  -72
  -78
  -85
  -91
  -98
  -105
  -112
  -119
  -126
  -134
  -142
  -150
  -159
  -168
  -177
  -187
  -197
  -208
  -219
  -231
  -243
  -256
  -269
  -283
  -298
Prev. year cash balance distribution, $m
 
  602
  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
 
  1,801
  1,198
  1,224
  1,255
  1,289
  1,326
  1,367
  1,412
  1,460
  1,512
  1,554
  1,614
  1,677
  1,745
  1,816
  1,892
  1,973
  2,058
  2,148
  2,243
  2,344
  2,450
  2,562
  2,680
  2,804
  2,934
  3,072
  3,217
  3,369
  3,529
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
 
  1,726
  1,096
  1,065
  1,033
  999
  962
  924
  882
  839
  793
  738
  689
  638
  586
  533
  481
  429
  379
  331
  285
  242
  203
  168
  136
  109
  86
  66
  50
  37
  27
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

Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. It sells a range of domestics merchandise, including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and juvenile products. It also provides various textile products, amenities, and other goods to institutional customers in the hospitality, cruise line, healthcare, and other industries. The company operates stores under the Bed Bath & Beyond (BBB); Christmas Tree Shops; Christmas Tree Shops andThat! or andThat! (CTS); Harmon or Harmon Face Values (Harmon); buybuy BABY (Baby); and World Market, Cost Plus World Market, and Cost Plus (Cost Plus World Market) names. As of February 27, 2016, the company had a total of 1,530 stores, including 1,020 BBB stores; 276 stores under the names of Cost Plus World Market; 105 Baby stores; 78 stores under the CTS names; and 51 stores under the Harmon names in 50 states, the District of Columbia, Puerto Rico, and Canada, as well as through bedbathandbeyond.com, bedbathandbeyond.ca, christmastreeshops.com, andthat.com, harmondiscount.com, facevalues.com, buybuybaby.com, buybuybaby.ca, worldmarket.com, and ofakind.com Websites. In addition, it operates PersonalizationMall.com that offers personalized gifts. Bed Bath & Beyond Inc. was founded in 1971 and is based in Union, New Jersey.

FINANCIAL RATIOS  of  Bed Bath&Beyond (BBBY)

Valuation Ratios
P/E Ratio 7.4
Price to Sales 0.5
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 6.2
Price to Free Cash Flow 9.1
Growth Rates
Sales Growth Rate 1.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -0.9%
Cap. Spend. - 3 Yr. Gr. Rate -1.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 58.2%
Total Debt to Equity 58.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 12.7%
Ret/ On Assets - 3 Yr. Avg. 14.5%
Return On Total Capital 20.3%
Ret/ On T. Cap. - 3 Yr. Avg. 23%
Return On Equity 31.7%
Return On Equity - 3 Yr. Avg. 28.6%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 38.2%
Gross Margin - 3 Yr. Avg. 38.9%
EBITDA Margin 13.2%
EBITDA Margin - 3 Yr. Avg. 14.6%
Operating Margin 11.7%
Oper. Margin - 3 Yr. Avg. 12.9%
Pre-Tax Margin 11%
Pre-Tax Margin - 3 Yr. Avg. 12.5%
Net Profit Margin 6.9%
Net Profit Margin - 3 Yr. Avg. 8%
Effective Tax Rate 36.6%
Eff/ Tax Rate - 3 Yr. Avg. 36.5%
Payout Ratio 0%

BBBY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BBBY stock intrinsic value calculation we used $12104 million for the last fiscal year's total revenue generated by Bed Bath&Beyond. The default revenue input number comes from 2016 income statement of Bed Bath&Beyond. 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 BBBY 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 4.3%, whose default value for BBBY is calculated based on our internal credit rating of Bed Bath&Beyond, 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 Bed Bath&Beyond.
    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 BBBY stock the variable cost ratio is equal to 86.9%.

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 BBBY 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 Bed Bath&Beyond.

Corporate tax rate of 27% is the nominal tax rate for Bed Bath&Beyond. 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 BBBY 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 BBBY are equal to 14%.

Life of production assets of 8 years is the average useful life of capital assets used in Bed Bath&Beyond 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 BBBY is equal to 11.2%. 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 in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2560 million for Bed Bath&Beyond - 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 148.505 million for Bed Bath&Beyond 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 Bed Bath&Beyond at the current share price and the inputted number of shares is $5.9 billion.


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Stock chart of BBBY Financial statements of BBBY
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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