Intrinsic value of CBS Cl B - CBS

Previous Close

$64.20

  Intrinsic Value

$43.61

stock screener

  Rating & Target

sell

-32%

  Value-price divergence*

-35%

Previous close

$64.20

 
Intrinsic value

$43.61

 
Up/down potential

-32%

 
Rating

sell

 
Value-price divergence*

-35%

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

We calculate the intrinsic value of CBS 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 28.6

 

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, %
  3.91
  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
  13,166
  13,429
  13,738
  14,091
  14,488
  14,927
  15,409
  15,934
  16,502
  17,114
  17,770
  18,473
  19,223
  20,021
  20,869
  21,770
  22,724
  23,734
  24,801
  25,930
  27,121
  28,378
  29,704
  31,102
  32,574
  34,125
  35,757
  37,476
  39,284
  41,187
  43,188
Variable operating expenses, $m
 
  10,599
  10,832
  11,098
  11,396
  11,727
  12,090
  12,485
  12,913
  13,374
  13,868
  13,911
  14,476
  15,077
  15,716
  16,394
  17,112
  17,873
  18,677
  19,527
  20,424
  21,371
  22,369
  23,421
  24,530
  25,698
  26,927
  28,222
  29,583
  31,016
  32,523
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
  10,545
  10,599
  10,832
  11,098
  11,396
  11,727
  12,090
  12,485
  12,913
  13,374
  13,868
  13,911
  14,476
  15,077
  15,716
  16,394
  17,112
  17,873
  18,677
  19,527
  20,424
  21,371
  22,369
  23,421
  24,530
  25,698
  26,927
  28,222
  29,583
  31,016
  32,523
Operating income, $m
  2,621
  2,830
  2,906
  2,993
  3,091
  3,200
  3,319
  3,448
  3,589
  3,740
  3,902
  4,562
  4,747
  4,944
  5,154
  5,376
  5,611
  5,861
  6,125
  6,403
  6,697
  7,008
  7,335
  7,680
  8,044
  8,427
  8,830
  9,254
  9,701
  10,171
  10,665
EBITDA, $m
  2,846
  3,500
  3,580
  3,672
  3,776
  3,890
  4,016
  4,152
  4,300
  4,460
  4,631
  4,814
  5,010
  5,218
  5,439
  5,673
  5,922
  6,185
  6,464
  6,758
  7,068
  7,396
  7,741
  8,105
  8,489
  8,893
  9,319
  9,767
  10,238
  10,734
  11,255
Interest expense (income), $m
  407
  409
  428
  449
  474
  502
  533
  566
  603
  643
  686
  732
  781
  834
  890
  949
  1,012
  1,079
  1,150
  1,225
  1,304
  1,388
  1,476
  1,569
  1,667
  1,770
  1,879
  1,993
  2,114
  2,240
  2,374
Earnings before tax, $m
  2,230
  2,420
  2,479
  2,544
  2,617
  2,698
  2,786
  2,882
  2,985
  3,097
  3,216
  3,830
  3,966
  4,110
  4,264
  4,427
  4,599
  4,782
  4,974
  5,178
  5,393
  5,620
  5,860
  6,112
  6,377
  6,657
  6,951
  7,261
  7,587
  7,930
  8,291
Tax expense, $m
  628
  654
  669
  687
  707
  728
  752
  778
  806
  836
  868
  1,034
  1,071
  1,110
  1,151
  1,195
  1,242
  1,291
  1,343
  1,398
  1,456
  1,517
  1,582
  1,650
  1,722
  1,797
  1,877
  1,961
  2,049
  2,141
  2,239
Net income, $m
  1,261
  1,767
  1,809
  1,857
  1,911
  1,969
  2,034
  2,104
  2,179
  2,261
  2,348
  2,796
  2,895
  3,000
  3,113
  3,231
  3,357
  3,491
  3,631
  3,780
  3,937
  4,103
  4,277
  4,461
  4,655
  4,860
  5,075
  5,301
  5,539
  5,789
  6,053

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  598
  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
  24,238
  24,110
  24,665
  25,299
  26,010
  26,799
  27,664
  28,606
  29,626
  30,725
  31,904
  33,165
  34,511
  35,944
  37,467
  39,084
  40,796
  42,610
  44,527
  46,553
  48,692
  50,949
  53,329
  55,838
  58,481
  61,265
  64,197
  67,282
  70,529
  73,944
  77,537
Adjusted assets (=assets-cash), $m
  23,640
  24,110
  24,665
  25,299
  26,010
  26,799
  27,664
  28,606
  29,626
  30,725
  31,904
  33,165
  34,511
  35,944
  37,467
  39,084
  40,796
  42,610
  44,527
  46,553
  48,692
  50,949
  53,329
  55,838
  58,481
  61,265
  64,197
  67,282
  70,529
  73,944
  77,537
Revenue / Adjusted assets
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
Average production assets, $m
  5,397
  5,506
  5,633
  5,777
  5,940
  6,120
  6,318
  6,533
  6,766
  7,017
  7,286
  7,574
  7,881
  8,209
  8,556
  8,926
  9,317
  9,731
  10,169
  10,631
  11,120
  11,635
  12,179
  12,752
  13,355
  13,991
  14,661
  15,365
  16,107
  16,887
  17,707
Working capital, $m
  2,355
  2,270
  2,322
  2,381
  2,448
  2,523
  2,604
  2,693
  2,789
  2,892
  3,003
  3,122
  3,249
  3,384
  3,527
  3,679
  3,840
  4,011
  4,191
  4,382
  4,583
  4,796
  5,020
  5,256
  5,505
  5,767
  6,043
  6,333
  6,639
  6,961
  7,299
Total debt, $m
  9,375
  9,295
  9,766
  10,304
  10,909
  11,578
  12,313
  13,113
  13,978
  14,911
  15,912
  16,983
  18,126
  19,343
  20,636
  22,008
  23,462
  25,001
  26,629
  28,349
  30,165
  32,081
  34,102
  36,232
  38,476
  40,840
  43,329
  45,948
  48,705
  51,605
  54,655
Total liabilities, $m
  20,549
  20,469
  20,940
  21,478
  22,083
  22,752
  23,487
  24,287
  25,152
  26,085
  27,086
  28,157
  29,300
  30,517
  31,810
  33,182
  34,636
  36,175
  37,803
  39,523
  41,339
  43,255
  45,276
  47,406
  49,650
  52,014
  54,503
  57,122
  59,879
  62,779
  65,829
Total equity, $m
  3,689
  3,641
  3,724
  3,820
  3,928
  4,047
  4,177
  4,320
  4,474
  4,639
  4,817
  5,008
  5,211
  5,428
  5,658
  5,902
  6,160
  6,434
  6,724
  7,029
  7,352
  7,693
  8,053
  8,431
  8,831
  9,251
  9,694
  10,160
  10,650
  11,166
  11,708
Total liabilities and equity, $m
  24,238
  24,110
  24,664
  25,298
  26,011
  26,799
  27,664
  28,607
  29,626
  30,724
  31,903
  33,165
  34,511
  35,945
  37,468
  39,084
  40,796
  42,609
  44,527
  46,552
  48,691
  50,948
  53,329
  55,837
  58,481
  61,265
  64,197
  67,282
  70,529
  73,945
  77,537
Debt-to-equity ratio
  2.541
  2.550
  2.620
  2.700
  2.780
  2.860
  2.950
  3.040
  3.120
  3.210
  3.300
  3.390
  3.480
  3.560
  3.650
  3.730
  3.810
  3.890
  3.960
  4.030
  4.100
  4.170
  4.230
  4.300
  4.360
  4.410
  4.470
  4.520
  4.570
  4.620
  4.670
Adjusted equity ratio
  0.150
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151
  0.151

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,261
  1,767
  1,809
  1,857
  1,911
  1,969
  2,034
  2,104
  2,179
  2,261
  2,348
  2,796
  2,895
  3,000
  3,113
  3,231
  3,357
  3,491
  3,631
  3,780
  3,937
  4,103
  4,277
  4,461
  4,655
  4,860
  5,075
  5,301
  5,539
  5,789
  6,053
Depreciation, amort., depletion, $m
  225
  670
  674
  679
  684
  690
  697
  704
  712
  720
  729
  252
  263
  274
  285
  298
  311
  324
  339
  354
  371
  388
  406
  425
  445
  466
  489
  512
  537
  563
  590
Funds from operations, $m
  1,018
  2,437
  2,484
  2,536
  2,595
  2,660
  2,731
  2,808
  2,891
  2,981
  3,077
  3,048
  3,158
  3,274
  3,398
  3,529
  3,668
  3,815
  3,970
  4,135
  4,308
  4,491
  4,683
  4,887
  5,101
  5,326
  5,563
  5,813
  6,076
  6,352
  6,643
Change in working capital, $m
  -667
  45
  52
  60
  67
  74
  81
  89
  96
  103
  111
  119
  127
  135
  143
  152
  161
  171
  180
  191
  201
  212
  224
  236
  249
  262
  276
  290
  306
  322
  338
Cash from operations, $m
  1,685
  2,392
  2,431
  2,477
  2,528
  2,586
  2,649
  2,719
  2,795
  2,877
  2,966
  2,929
  3,031
  3,139
  3,254
  3,377
  3,507
  3,644
  3,790
  3,944
  4,106
  4,278
  4,459
  4,650
  4,852
  5,064
  5,287
  5,523
  5,770
  6,031
  6,305
Maintenance CAPEX, $m
  0
  -180
  -184
  -188
  -193
  -198
  -204
  -211
  -218
  -226
  -234
  -243
  -252
  -263
  -274
  -285
  -298
  -311
  -324
  -339
  -354
  -371
  -388
  -406
  -425
  -445
  -466
  -489
  -512
  -537
  -563
New CAPEX, $m
  -196
  -110
  -127
  -145
  -163
  -180
  -198
  -215
  -233
  -251
  -269
  -288
  -307
  -327
  -348
  -369
  -391
  -414
  -438
  -463
  -488
  -515
  -544
  -573
  -604
  -636
  -669
  -705
  -741
  -780
  -820
Cash from investing activities, $m
  -340
  -290
  -311
  -333
  -356
  -378
  -402
  -426
  -451
  -477
  -503
  -531
  -559
  -590
  -622
  -654
  -689
  -725
  -762
  -802
  -842
  -886
  -932
  -979
  -1,029
  -1,081
  -1,135
  -1,194
  -1,253
  -1,317
  -1,383
Free cash flow, $m
  1,345
  2,103
  2,121
  2,144
  2,173
  2,208
  2,248
  2,294
  2,345
  2,401
  2,463
  2,399
  2,471
  2,549
  2,633
  2,722
  2,818
  2,920
  3,028
  3,142
  3,264
  3,392
  3,528
  3,671
  3,823
  3,983
  4,152
  4,329
  4,516
  4,714
  4,921
Issuance/(repayment) of debt, $m
  2,259
  393
  471
  538
  604
  669
  735
  800
  866
  933
  1,001
  1,071
  1,143
  1,217
  1,293
  1,372
  1,454
  1,539
  1,628
  1,720
  1,816
  1,916
  2,021
  2,130
  2,244
  2,364
  2,489
  2,619
  2,756
  2,900
  3,050
Issuance/(repurchase) of shares, $m
  -2,976
  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  
  -758
  393
  471
  538
  604
  669
  735
  800
  866
  933
  1,001
  1,071
  1,143
  1,217
  1,293
  1,372
  1,454
  1,539
  1,628
  1,720
  1,816
  1,916
  2,021
  2,130
  2,244
  2,364
  2,489
  2,619
  2,756
  2,900
  3,050
Total cash flow (excl. dividends), $m
  587
  2,496
  2,592
  2,682
  2,777
  2,877
  2,982
  3,093
  3,210
  3,334
  3,464
  3,470
  3,614
  3,766
  3,926
  4,095
  4,272
  4,459
  4,655
  4,862
  5,080
  5,308
  5,549
  5,802
  6,067
  6,347
  6,640
  6,949
  7,273
  7,614
  7,972
Retained Cash Flow (-), $m
  1,874
  -77
  -84
  -96
  -107
  -119
  -131
  -142
  -154
  -166
  -178
  -190
  -203
  -216
  -230
  -244
  -259
  -274
  -290
  -306
  -323
  -341
  -359
  -379
  -399
  -420
  -443
  -466
  -490
  -516
  -543
Prev. year cash balance distribution, $m
 
  125
  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
 
  2,545
  2,508
  2,586
  2,670
  2,758
  2,852
  2,951
  3,056
  3,168
  3,286
  3,279
  3,411
  3,550
  3,696
  3,851
  4,014
  4,185
  4,366
  4,556
  4,757
  4,967
  5,189
  5,423
  5,668
  5,926
  6,198
  6,483
  6,783
  7,098
  7,429
Discount rate, %
 
  8.90
  9.35
  9.81
  10.30
  10.82
  11.36
  11.93
  12.52
  13.15
  13.81
  14.50
  15.22
  15.98
  16.78
  17.62
  18.50
  19.43
  20.40
  21.42
  22.49
  23.61
  24.80
  26.03
  27.34
  28.70
  30.14
  31.65
  33.23
  34.89
  36.63
PV of cash for distribution, $m
 
  2,337
  2,098
  1,953
  1,803
  1,650
  1,495
  1,341
  1,189
  1,042
  901
  740
  623
  516
  421
  337
  265
  205
  154
  114
  82
  58
  40
  26
  17
  11
  7
  4
  2
  1
  1
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

CBS Corporation operates as a mass media company worldwide. The company operates through four segments: Entertainment, Cable Networks, Publishing, and Local Media. The Entertainment segment distributes a schedule of news and public affairs broadcasts, and sports and entertainment programming; produces, acquires, and/or distributes programming, including series, specials, news, and public affairs; operates online content networks for information and entertainment; produces, acquires, and distributes theatrical motion pictures; and digital streaming services. The Cable Networks segment offers subscription program services, such as original series, theatrical feature films, documentaries, boxing and other sports-related programming, and special events. This segment also operates CBS Sports Network, a 24-hour cable program service that provides college sports and related content; and Smithsonian Networks, which operates a channel featuring cultural, historical, scientific, and educational programs. The Publishing segment publishes and distributes adult and children’s consumer books in printed, digital, and audio formats; develops special imprints and publishes titles based on the products of the company, as well as that of third parties; and distributes products for other publishers. This segment also delivers content; and promotes its products on its Websites, social media, and general Internet sites, as well as those related to individual titles. The Local Media segment owns 30 broadcast television stations; and operates local Websites, including content from the company’s television stations, and news and sports radio stations. The company was founded in 1986 and is headquartered in New York, New York.

FINANCIAL RATIOS  of  CBS Cl B (CBS)

Valuation Ratios
P/E Ratio 21
Price to Sales 2
Price to Book 7.2
Price to Tangible Book
Price to Cash Flow 15.7
Price to Free Cash Flow 17.8
Growth Rates
Sales Growth Rate 3.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1.6%
Cap. Spend. - 3 Yr. Gr. Rate -1.6%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 241.3%
Total Debt to Equity 254.1%
Interest Coverage 6
Management Effectiveness
Return On Assets 6.5%
Ret/ On Assets - 3 Yr. Avg. 9%
Return On Total Capital 9.3%
Ret/ On T. Cap. - 3 Yr. Avg. 12.9%
Return On Equity 27.3%
Return On Equity - 3 Yr. Avg. 28.3%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 39.6%
Gross Margin - 3 Yr. Avg. 39.5%
EBITDA Margin 21.7%
EBITDA Margin - 3 Yr. Avg. 22.4%
Operating Margin 19.9%
Oper. Margin - 3 Yr. Avg. 19.8%
Pre-Tax Margin 16.9%
Pre-Tax Margin - 3 Yr. Avg. 16.8%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 14.1%
Effective Tax Rate 28.2%
Eff/ Tax Rate - 3 Yr. Avg. 31.1%
Payout Ratio 22.8%

CBS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBS stock intrinsic value calculation we used $13166 million for the last fiscal year's total revenue generated by CBS Cl B. The default revenue input number comes from 2016 income statement of CBS Cl B. 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 CBS 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 8.9%, whose default value for CBS is calculated based on our internal credit rating of CBS Cl B, 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 CBS Cl B.
    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 CBS stock the variable cost ratio is equal to 79%.

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 CBS 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 4.6% for CBS Cl B.

Corporate tax rate of 27% is the nominal tax rate for CBS Cl B. 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 CBS 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 CBS are equal to 41%.

Life of production assets of 49.2 years is the average useful life of capital assets used in CBS Cl B 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 CBS is equal to 16.9%. 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 - $3689 million for CBS Cl B - 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 445.733 million for CBS Cl B 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 CBS Cl B at the current share price and the inputted number of shares is $28.6 billion.

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TWX Time Warner 99.10 163.69  str.buy
AMZN Amazon.com 1,024.45 870.28  hold
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GOOGL Alphabet Cl A 986.95 981.76  hold

COMPANY NEWS

▶ Stryker leading the June 14th IQ100   [Jul-14-17 01:08PM  CNBC Videos]
▶ CBS, BBC Form Partnership to Bolster Global News Reporting   [12:34AM  The Wall Street Journal]
▶ CBS, BBC Form Partnership to Bolster Global News Reporting   [11:47AM  The Wall Street Journal]
▶ Why Verizon May Need to Buy CBS and Viacom   [Jul-10-17 01:00PM  Investopedia]
▶ CBS Corp. Value Analysis (NYSE:CBS) : June 27, 2017   [Jun-27-17 04:20PM  Capital Cube]
▶ [$$] CBS Can Keep Laughing Its Way to the Bank   [Jun-23-17 07:39AM  Barrons.com]
▶ Disney, Netflix and 28 more content companies band together to ACE out piracy   [Jun-13-17 04:10PM  American City Business Journals]
▶ [$$] The melancholic allure of Blues Run the Game   [Jun-05-17 11:58AM  Financial Times]
▶ Why Shari Redstone called off the Viacom-CBS merger   [Jun-01-17 02:15PM  American City Business Journals]
▶ Business Highlights   [05:36PM  Associated Press]
▶ CBS Entertainment reveals new leadership structure   [May-30-17 11:25PM  American City Business Journals]
▶ CBS Entertainment president elects to step down after heart attack   [04:20PM  American City Business Journals]
▶ The Highest Paid CEOs   [May-29-17 06:35AM  Investopedia]
▶ Colbert Cleared by FCC for Trump Joke   [08:31AM  TheStreet.com]
▶ CBS extends CEO Moonves through June 2021   [May-22-17 04:23PM  CNBC Videos]
▶ CBS chief Leslie Moonves extends contract through 2021   [04:15PM  American City Business Journals]
▶ CBS' CEO Moonves says Viacom undervalued   [May-19-17 03:20PM  Reuters]
▶ CBS Declares 18 Cent Quarterly Dividend   [02:12PM  TheStreet.com]
▶ CBS pairs 'Big Bang' & spin-off; O'Brien re-ups with TBS   [May-17-17 06:58PM  Associated Press]
▶ ETFs with exposure to CBS Corp. : May 16, 2017   [May-16-17 12:48PM  Capital Cube]
▶ Colbert has good week in ratings despite controversy   [May-09-17 04:02PM  Associated Press]
▶ Mario Gabelli Comments on CBS Corp   [01:43PM  GuruFocus.com]
▶ These Stocks Are Changing Course   [May-08-17 12:33PM  TheStreet.com]
▶ Faber Report: Rough week in media   [09:40AM  CNBC Videos]
▶ New Challenges Mount for Media Stocks   [May-04-17 05:57PM  Bloomberg Video]
▶ Media having its retail moment?   [05:43PM  CNBC Videos]
▶ CBS call underway   [05:06PM  CNBC Videos]
▶ Analyst: CBS has a nice populist posture   [04:56PM  CNBC Videos]
Stock chart of CBS Financial statements of CBS Annual reports of CBS
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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