Intrinsic value of Companhia Brasileira de Distribuicao Gru - CBD

Previous Close

$23.26

  Intrinsic Value

$29.38

stock screener

  Rating & Target

buy

+26%

  Value-price divergence*

+67%

Previous close

$23.26

 
Intrinsic value

$29.38

 
Up/down potential

+26%

 
Rating

buy

 
Value-price divergence*

+67%

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

We calculate the intrinsic value of CBD 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 8.3

 

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, %
  11.44
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
Revenue, $m
  13,107
  13,985
  14,898
  15,848
  16,837
  17,867
  18,940
  20,058
  21,224
  22,440
  23,710
  25,036
  26,421
  27,869
  29,383
  30,967
  32,623
  34,357
  36,173
  38,074
  40,065
  42,151
  44,337
  46,628
  49,029
  51,547
  54,188
  56,957
  59,861
  62,907
  66,103
Variable operating expenses, $m
 
  13,381
  14,253
  15,160
  16,103
  17,086
  18,110
  19,177
  20,289
  21,450
  22,662
  23,893
  25,215
  26,597
  28,041
  29,552
  31,134
  32,788
  34,521
  36,335
  38,235
  40,226
  42,312
  44,498
  46,790
  49,193
  51,713
  54,355
  57,127
  60,034
  63,084
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
  12,836
  13,381
  14,253
  15,160
  16,103
  17,086
  18,110
  19,177
  20,289
  21,450
  22,662
  23,893
  25,215
  26,597
  28,041
  29,552
  31,134
  32,788
  34,521
  36,335
  38,235
  40,226
  42,312
  44,498
  46,790
  49,193
  51,713
  54,355
  57,127
  60,034
  63,084
Operating income, $m
  271
  604
  645
  689
  734
  781
  830
  881
  934
  990
  1,048
  1,143
  1,207
  1,273
  1,342
  1,414
  1,490
  1,569
  1,652
  1,739
  1,830
  1,925
  2,025
  2,130
  2,239
  2,354
  2,475
  2,601
  2,734
  2,873
  3,019
EBITDA, $m
  615
  961
  1,023
  1,089
  1,157
  1,227
  1,301
  1,378
  1,458
  1,542
  1,629
  1,720
  1,815
  1,914
  2,018
  2,127
  2,241
  2,360
  2,485
  2,615
  2,752
  2,895
  3,046
  3,203
  3,368
  3,541
  3,722
  3,913
  4,112
  4,321
  4,541
Interest expense (income), $m
  0
  32
  56
  81
  107
  134
  162
  192
  222
  254
  287
  322
  358
  396
  436
  477
  521
  566
  613
  663
  715
  769
  827
  886
  949
  1,015
  1,084
  1,156
  1,231
  1,311
  1,394
Earnings before tax, $m
  -15
  571
  589
  608
  627
  647
  668
  689
  712
  736
  760
  821
  848
  876
  906
  937
  969
  1,003
  1,039
  1,076
  1,115
  1,156
  1,198
  1,243
  1,290
  1,340
  1,391
  1,445
  1,502
  1,562
  1,625
Tax expense, $m
  7
  154
  159
  164
  169
  175
  180
  186
  192
  199
  205
  222
  229
  237
  245
  253
  262
  271
  280
  290
  301
  312
  324
  336
  348
  362
  376
  390
  406
  422
  439
Net income, $m
  -152
  417
  430
  444
  458
  472
  487
  503
  520
  537
  555
  600
  619
  640
  661
  684
  708
  732
  758
  785
  814
  844
  875
  908
  942
  978
  1,016
  1,055
  1,097
  1,140
  1,186

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,616
  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
  14,296
  13,525
  14,409
  15,327
  16,284
  17,279
  18,317
  19,398
  20,526
  21,702
  22,930
  24,213
  25,553
  26,953
  28,417
  29,948
  31,551
  33,228
  34,983
  36,822
  38,747
  40,765
  42,879
  45,095
  47,417
  49,852
  52,406
  55,084
  57,892
  60,838
  63,929
Adjusted assets (=assets-cash), $m
  12,680
  13,525
  14,409
  15,327
  16,284
  17,279
  18,317
  19,398
  20,526
  21,702
  22,930
  24,213
  25,553
  26,953
  28,417
  29,948
  31,551
  33,228
  34,983
  36,822
  38,747
  40,765
  42,879
  45,095
  47,417
  49,852
  52,406
  55,084
  57,892
  60,838
  63,929
Revenue / Adjusted assets
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
  1.034
Average production assets, $m
  3,894
  4,154
  4,425
  4,707
  5,001
  5,306
  5,625
  5,957
  6,303
  6,665
  7,042
  7,436
  7,847
  8,277
  8,727
  9,197
  9,689
  10,204
  10,743
  11,308
  11,899
  12,519
  13,168
  13,848
  14,562
  15,310
  16,094
  16,916
  17,779
  18,683
  19,632
Working capital, $m
  1,286
  643
  685
  729
  775
  822
  871
  923
  976
  1,032
  1,091
  1,152
  1,215
  1,282
  1,352
  1,424
  1,501
  1,580
  1,664
  1,751
  1,843
  1,939
  2,039
  2,145
  2,255
  2,371
  2,493
  2,620
  2,754
  2,894
  3,041
Total debt, $m
  1,856
  1,605
  2,319
  3,061
  3,834
  4,639
  5,477
  6,351
  7,262
  8,213
  9,205
  10,241
  11,324
  12,455
  13,638
  14,875
  16,170
  17,525
  18,943
  20,429
  21,985
  23,615
  25,323
  27,113
  28,990
  30,958
  33,021
  35,185
  37,454
  39,834
  42,332
Total liabilities, $m
  11,179
  10,928
  11,642
  12,384
  13,157
  13,962
  14,800
  15,674
  16,585
  17,536
  18,528
  19,564
  20,647
  21,778
  22,961
  24,198
  25,493
  26,848
  28,266
  29,752
  31,308
  32,938
  34,646
  36,436
  38,313
  40,281
  42,344
  44,508
  46,777
  49,157
  51,655
Total equity, $m
  3,117
  2,597
  2,766
  2,943
  3,126
  3,318
  3,517
  3,724
  3,941
  4,167
  4,403
  4,649
  4,906
  5,175
  5,456
  5,750
  6,058
  6,380
  6,717
  7,070
  7,439
  7,827
  8,233
  8,658
  9,104
  9,572
  10,062
  10,576
  11,115
  11,681
  12,274
Total liabilities and equity, $m
  14,296
  13,525
  14,408
  15,327
  16,283
  17,280
  18,317
  19,398
  20,526
  21,703
  22,931
  24,213
  25,553
  26,953
  28,417
  29,948
  31,551
  33,228
  34,983
  36,822
  38,747
  40,765
  42,879
  45,094
  47,417
  49,853
  52,406
  55,084
  57,892
  60,838
  63,929
Debt-to-equity ratio
  0.595
  0.620
  0.840
  1.040
  1.230
  1.400
  1.560
  1.710
  1.840
  1.970
  2.090
  2.200
  2.310
  2.410
  2.500
  2.590
  2.670
  2.750
  2.820
  2.890
  2.960
  3.020
  3.080
  3.130
  3.180
  3.230
  3.280
  3.330
  3.370
  3.410
  3.450
Adjusted equity ratio
  0.118
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -152
  417
  430
  444
  458
  472
  487
  503
  520
  537
  555
  600
  619
  640
  661
  684
  708
  732
  758
  785
  814
  844
  875
  908
  942
  978
  1,016
  1,055
  1,097
  1,140
  1,186
Depreciation, amort., depletion, $m
  344
  357
  378
  400
  423
  446
  471
  497
  524
  552
  581
  576
  608
  642
  676
  713
  751
  791
  833
  877
  922
  970
  1,021
  1,074
  1,129
  1,187
  1,248
  1,311
  1,378
  1,448
  1,522
Funds from operations, $m
  -1,643
  774
  808
  843
  880
  919
  958
  1,000
  1,043
  1,089
  1,136
  1,176
  1,228
  1,281
  1,338
  1,397
  1,459
  1,523
  1,591
  1,662
  1,736
  1,814
  1,896
  1,981
  2,071
  2,165
  2,263
  2,367
  2,475
  2,589
  2,708
Change in working capital, $m
  -1,231
  40
  42
  44
  45
  47
  49
  51
  54
  56
  58
  61
  64
  67
  70
  73
  76
  80
  84
  87
  92
  96
  101
  105
  110
  116
  121
  127
  134
  140
  147
Cash from operations, $m
  -412
  734
  766
  800
  835
  871
  909
  949
  990
  1,033
  1,078
  1,115
  1,164
  1,215
  1,268
  1,324
  1,382
  1,444
  1,508
  1,574
  1,645
  1,718
  1,795
  1,876
  1,960
  2,049
  2,142
  2,239
  2,341
  2,449
  2,561
Maintenance CAPEX, $m
  0
  -302
  -322
  -343
  -365
  -388
  -411
  -436
  -462
  -489
  -517
  -546
  -576
  -608
  -642
  -676
  -713
  -751
  -791
  -833
  -877
  -922
  -970
  -1,021
  -1,074
  -1,129
  -1,187
  -1,248
  -1,311
  -1,378
  -1,448
New CAPEX, $m
  -488
  -260
  -271
  -282
  -294
  -306
  -319
  -332
  -346
  -361
  -377
  -394
  -411
  -430
  -450
  -470
  -492
  -515
  -539
  -565
  -591
  -620
  -649
  -680
  -713
  -748
  -784
  -822
  -863
  -905
  -949
Cash from investing activities, $m
  -639
  -562
  -593
  -625
  -659
  -694
  -730
  -768
  -808
  -850
  -894
  -940
  -987
  -1,038
  -1,092
  -1,146
  -1,205
  -1,266
  -1,330
  -1,398
  -1,468
  -1,542
  -1,619
  -1,701
  -1,787
  -1,877
  -1,971
  -2,070
  -2,174
  -2,283
  -2,397
Free cash flow, $m
  -1,051
  172
  173
  175
  176
  178
  179
  180
  182
  183
  184
  175
  176
  177
  177
  177
  177
  177
  177
  177
  177
  176
  175
  174
  173
  172
  171
  169
  167
  166
  163
Issuance/(repayment) of debt, $m
  491
  684
  714
  742
  773
  805
  838
  874
  911
  951
  992
  1,036
  1,083
  1,131
  1,183
  1,237
  1,295
  1,355
  1,419
  1,485
  1,556
  1,630
  1,708
  1,790
  1,877
  1,968
  2,063
  2,164
  2,269
  2,380
  2,497
Issuance/(repurchase) of shares, $m
  2
  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  
  467
  684
  714
  742
  773
  805
  838
  874
  911
  951
  992
  1,036
  1,083
  1,131
  1,183
  1,237
  1,295
  1,355
  1,419
  1,485
  1,556
  1,630
  1,708
  1,790
  1,877
  1,968
  2,063
  2,164
  2,269
  2,380
  2,497
Total cash flow (excl. dividends), $m
  -591
  856
  887
  917
  949
  982
  1,017
  1,054
  1,093
  1,133
  1,176
  1,211
  1,259
  1,308
  1,360
  1,415
  1,472
  1,532
  1,596
  1,663
  1,733
  1,806
  1,884
  1,965
  2,050
  2,140
  2,234
  2,333
  2,437
  2,546
  2,661
Retained Cash Flow (-), $m
  157
  -161
  -170
  -176
  -184
  -191
  -199
  -208
  -217
  -226
  -236
  -246
  -257
  -269
  -281
  -294
  -308
  -322
  -337
  -353
  -370
  -387
  -406
  -425
  -446
  -468
  -490
  -514
  -539
  -566
  -593
Prev. year cash balance distribution, $m
 
  681
  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
 
  1,376
  717
  741
  765
  791
  818
  847
  876
  908
  940
  965
  1,001
  1,039
  1,079
  1,121
  1,164
  1,210
  1,259
  1,310
  1,363
  1,419
  1,478
  1,539
  1,604
  1,672
  1,744
  1,819
  1,898
  1,980
  2,067
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
 
  1,320
  656
  644
  630
  613
  594
  572
  548
  521
  493
  458
  427
  395
  362
  329
  296
  263
  232
  202
  173
  147
  123
  101
  82
  65
  51
  39
  29
  22
  16
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

Companhia Brasileira de Distribuição engages in the retail of food, clothing, home appliances, electronics, and other products through its chain of hypermarkets, supermarkets, specialized stores, and department stores primarily in Brazil. The company operates through four segments: Food Retail, Cash and Carry, Home Appliances, and E-Commerce. It sells non-perishable food products, beverages, fruits, vegetables, meat, bread, cold cuts, dairy products, cleaning products, disposable products, and personal care products; non-food products, which include clothing items, baby items, shoes and accessories, household articles, books, magazines, CDs and DVDs, stationery, handcraft, toys, sports and camping gear, furniture, mattresses, pet products, and gardening products; and electronic products, such as personal computers, software, computer accessories, and sound and image systems. The company also provides medications and cosmetics at its drugstores; and non-food products at gas stations. In addition, it is involved in e-commerce operations through the Websites, including Extra.com.br, PontoFrio.com.br, CasasBahia.com.br, Barateiro.com.br, PartiuViagens.com.br, and Cdiscount.com primarily in France; wholesale activities, such as B2B; E-Hub operations; and the rental of commercial spaces. The company operates its stores primarily under the Pão de Açúcar, Barateiro, Extra Supermercado, Minuto Pão de Açúcar, Pontofrio, Extra Hiper, Extra Super, Minimercado Extra, Assaí, Ponto Frio, Casas Bahia, and Conviva names. As of December 31, 2015, it operated 1,941 stores, 83 gas stations, and 157 drugstores in 20 Brazilian states and the Federal District. Companhia Brasileira de Distribuição was founded in 1948 and is headquartered in São Paulo, Brazil.

FINANCIAL RATIOS  of  Companhia Brasileira de Distribuicao Gru (CBD)

Valuation Ratios
P/E Ratio -40.7
Price to Sales 0.5
Price to Book 2
Price to Tangible Book
Price to Cash Flow -15
Price to Free Cash Flow -6.9
Growth Rates
Sales Growth Rate 11.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -22.3%
Cap. Spend. - 3 Yr. Gr. Rate -3.6%
Financial Strength
Quick Ratio 2
Current Ratio 0.7
LT Debt to Equity 29.5%
Total Debt to Equity 59.5%
Interest Coverage 0
Management Effectiveness
Return On Assets -1%
Ret/ On Assets - 3 Yr. Avg. 0.8%
Return On Total Capital -2.8%
Ret/ On T. Cap. - 3 Yr. Avg. 1.6%
Return On Equity -4.8%
Return On Equity - 3 Yr. Avg. 3.3%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 23%
Gross Margin - 3 Yr. Avg. 24.3%
EBITDA Margin 2.5%
EBITDA Margin - 3 Yr. Avg. 4.2%
Operating Margin 2.1%
Oper. Margin - 3 Yr. Avg. 4.1%
Pre-Tax Margin -0.1%
Pre-Tax Margin - 3 Yr. Avg. 1.9%
Net Profit Margin -1.2%
Net Profit Margin - 3 Yr. Avg. 0.5%
Effective Tax Rate -46.7%
Eff/ Tax Rate - 3 Yr. Avg. 4.1%
Payout Ratio -0.7%

CBD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBD stock intrinsic value calculation we used $13107 million for the last fiscal year's total revenue generated by Companhia Brasileira de Distribuicao Gru. The default revenue input number comes from 2016 income statement of Companhia Brasileira de Distribuicao Gru. 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 CBD stock valuation model: a) initial revenue growth rate of 6.7% 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 CBD is calculated based on our internal credit rating of Companhia Brasileira de Distribuicao Gru, 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 Companhia Brasileira de Distribuicao Gru.
    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 CBD stock the variable cost ratio is equal to 95.7%.

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 CBD 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 Companhia Brasileira de Distribuicao Gru.

Corporate tax rate of 27% is the nominal tax rate for Companhia Brasileira de Distribuicao Gru. 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 CBD 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 CBD are equal to 29.7%.

Life of production assets of 12.9 years is the average useful life of capital assets used in Companhia Brasileira de Distribuicao Gru 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 CBD is equal to 4.6%. 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 - $3117 million for Companhia Brasileira de Distribuicao Gru - 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 355.185 million for Companhia Brasileira de Distribuicao Gru 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 Companhia Brasileira de Distribuicao Gru at the current share price and the inputted number of shares is $8.3 billion.

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