Intrinsic value of Companhia Energetica de Minas Gerais-Cem - CIG

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$2.35

  Intrinsic Value

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  Value-price divergence*

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$2.35

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

We calculate the intrinsic value of CIG 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 3.3

 

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, %
  -14.16
  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
  4.87
Revenue, $m
  5,935
  21,782
  22,342
  22,970
  23,666
  24,430
  25,262
  26,163
  27,133
  28,175
  29,289
  30,477
  31,743
  33,088
  34,515
  36,028
  37,629
  39,322
  41,111
  43,000
  44,994
  47,096
  49,311
  51,646
  54,104
  56,693
  59,418
  62,285
  65,301
  68,474
  71,811
Variable operating expenses, $m
 
  15,552
  15,952
  16,401
  16,898
  17,443
  18,037
  18,680
  19,373
  20,117
  20,912
  21,761
  22,665
  23,625
  24,644
  25,724
  26,867
  28,076
  29,354
  30,702
  32,125
  33,626
  35,208
  36,875
  38,630
  40,479
  42,424
  44,471
  46,625
  48,891
  51,273
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
  5,365
  15,552
  15,952
  16,401
  16,898
  17,443
  18,037
  18,680
  19,373
  20,117
  20,912
  21,761
  22,665
  23,625
  24,644
  25,724
  26,867
  28,076
  29,354
  30,702
  32,125
  33,626
  35,208
  36,875
  38,630
  40,479
  42,424
  44,471
  46,625
  48,891
  51,273
Operating income, $m
  571
  6,230
  6,390
  6,569
  6,769
  6,987
  7,225
  7,483
  7,760
  8,058
  8,377
  8,717
  9,079
  9,463
  9,871
  10,304
  10,762
  11,246
  11,758
  12,298
  12,868
  13,469
  14,103
  14,771
  15,474
  16,214
  16,993
  17,814
  18,676
  19,584
  20,538
EBITDA, $m
  835
  7,080
  7,262
  7,467
  7,693
  7,941
  8,212
  8,505
  8,820
  9,159
  9,521
  9,907
  10,319
  10,756
  11,220
  11,711
  12,232
  12,782
  13,364
  13,978
  14,626
  15,309
  16,029
  16,788
  17,587
  18,429
  19,315
  20,247
  21,227
  22,259
  23,343
Interest expense (income), $m
  749
  1,099
  1,151
  1,211
  1,278
  1,353
  1,434
  1,523
  1,620
  1,724
  1,835
  1,955
  2,082
  2,217
  2,361
  2,514
  2,676
  2,848
  3,029
  3,221
  3,423
  3,636
  3,861
  4,099
  4,349
  4,612
  4,889
  5,181
  5,488
  5,811
  6,151
Earnings before tax, $m
  116
  5,131
  5,239
  5,359
  5,491
  5,635
  5,791
  5,959
  6,140
  6,334
  6,541
  6,762
  6,997
  7,246
  7,510
  7,790
  8,086
  8,398
  8,729
  9,078
  9,445
  9,833
  10,242
  10,672
  11,125
  11,602
  12,104
  12,633
  13,188
  13,773
  14,387
Tax expense, $m
  10
  1,385
  1,415
  1,447
  1,482
  1,521
  1,563
  1,609
  1,658
  1,710
  1,766
  1,826
  1,889
  1,956
  2,028
  2,103
  2,183
  2,268
  2,357
  2,451
  2,550
  2,655
  2,765
  2,881
  3,004
  3,133
  3,268
  3,411
  3,561
  3,719
  3,885
Net income, $m
  106
  3,745
  3,824
  3,912
  4,008
  4,113
  4,227
  4,350
  4,482
  4,624
  4,775
  4,936
  5,108
  5,289
  5,482
  5,686
  5,903
  6,131
  6,372
  6,627
  6,895
  7,178
  7,476
  7,791
  8,121
  8,470
  8,836
  9,222
  9,627
  10,054
  10,503

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  751
  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
  13,291
  38,348
  39,334
  40,440
  41,666
  43,011
  44,476
  46,062
  47,770
  49,603
  51,565
  53,657
  55,886
  58,254
  60,767
  63,430
  66,248
  69,229
  72,379
  75,705
  79,214
  82,915
  86,815
  90,925
  95,254
  99,812
  104,609
  109,657
  114,967
  120,553
  126,428
Adjusted assets (=assets-cash), $m
  12,540
  38,348
  39,334
  40,440
  41,666
  43,011
  44,476
  46,062
  47,770
  49,603
  51,565
  53,657
  55,886
  58,254
  60,767
  63,430
  66,248
  69,229
  72,379
  75,705
  79,214
  82,915
  86,815
  90,925
  95,254
  99,812
  104,609
  109,657
  114,967
  120,553
  126,428
Revenue / Adjusted assets
  0.473
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
Average production assets, $m
  4,555
  11,827
  12,131
  12,473
  12,851
  13,266
  13,718
  14,207
  14,733
  15,299
  15,904
  16,549
  17,236
  17,967
  18,742
  19,563
  20,433
  21,352
  22,323
  23,349
  24,431
  25,573
  26,776
  28,044
  29,379
  30,784
  32,264
  33,821
  35,459
  37,182
  38,993
Working capital, $m
  -999
  -762
  -782
  -804
  -828
  -855
  -884
  -916
  -950
  -986
  -1,025
  -1,067
  -1,111
  -1,158
  -1,208
  -1,261
  -1,317
  -1,376
  -1,439
  -1,505
  -1,575
  -1,648
  -1,726
  -1,808
  -1,894
  -1,984
  -2,080
  -2,180
  -2,286
  -2,397
  -2,513
Total debt, $m
  4,799
  12,374
  13,018
  13,742
  14,544
  15,423
  16,381
  17,418
  18,536
  19,735
  21,017
  22,386
  23,843
  25,392
  27,035
  28,777
  30,621
  32,570
  34,630
  36,805
  39,100
  41,520
  44,071
  46,759
  49,590
  52,571
  55,708
  59,009
  62,483
  66,136
  69,978
Total liabilities, $m
  9,202
  25,080
  25,724
  26,448
  27,250
  28,129
  29,087
  30,124
  31,242
  32,441
  33,723
  35,092
  36,549
  38,098
  39,741
  41,483
  43,327
  45,276
  47,336
  49,511
  51,806
  54,226
  56,777
  59,465
  62,296
  65,277
  68,414
  71,715
  75,189
  78,842
  82,684
Total equity, $m
  4,088
  13,268
  13,609
  13,992
  14,416
  14,882
  15,389
  15,937
  16,528
  17,163
  17,841
  18,565
  19,336
  20,156
  21,025
  21,947
  22,922
  23,953
  25,043
  26,194
  27,408
  28,688
  30,038
  31,460
  32,958
  34,535
  36,195
  37,941
  39,779
  41,711
  43,744
Total liabilities and equity, $m
  13,290
  38,348
  39,333
  40,440
  41,666
  43,011
  44,476
  46,061
  47,770
  49,604
  51,564
  53,657
  55,885
  58,254
  60,766
  63,430
  66,249
  69,229
  72,379
  75,705
  79,214
  82,914
  86,815
  90,925
  95,254
  99,812
  104,609
  109,656
  114,968
  120,553
  126,428
Debt-to-equity ratio
  1.174
  0.930
  0.960
  0.980
  1.010
  1.040
  1.060
  1.090
  1.120
  1.150
  1.180
  1.210
  1.230
  1.260
  1.290
  1.310
  1.340
  1.360
  1.380
  1.410
  1.430
  1.450
  1.470
  1.490
  1.500
  1.520
  1.540
  1.560
  1.570
  1.590
  1.600
Adjusted equity ratio
  0.266
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  106
  3,745
  3,824
  3,912
  4,008
  4,113
  4,227
  4,350
  4,482
  4,624
  4,775
  4,936
  5,108
  5,289
  5,482
  5,686
  5,903
  6,131
  6,372
  6,627
  6,895
  7,178
  7,476
  7,791
  8,121
  8,470
  8,836
  9,222
  9,627
  10,054
  10,503
Depreciation, amort., depletion, $m
  264
  851
  873
  897
  925
  954
  987
  1,022
  1,060
  1,101
  1,144
  1,191
  1,240
  1,293
  1,348
  1,407
  1,470
  1,536
  1,606
  1,680
  1,758
  1,840
  1,926
  2,018
  2,114
  2,215
  2,321
  2,433
  2,551
  2,675
  2,805
Funds from operations, $m
  -504
  4,596
  4,697
  4,809
  4,933
  5,068
  5,214
  5,372
  5,542
  5,725
  5,919
  6,127
  6,348
  6,582
  6,831
  7,094
  7,373
  7,667
  7,978
  8,306
  8,653
  9,018
  9,403
  9,808
  10,235
  10,684
  11,157
  11,655
  12,178
  12,729
  13,308
Change in working capital, $m
  -888
  -17
  -20
  -22
  -24
  -27
  -29
  -32
  -34
  -36
  -39
  -42
  -44
  -47
  -50
  -53
  -56
  -59
  -63
  -66
  -70
  -74
  -78
  -82
  -86
  -91
  -95
  -100
  -106
  -111
  -117
Cash from operations, $m
  384
  7,260
  4,717
  4,831
  4,957
  5,094
  5,243
  5,404
  5,576
  5,761
  5,958
  6,168
  6,392
  6,629
  6,881
  7,147
  7,429
  7,726
  8,041
  8,372
  8,722
  9,091
  9,480
  9,890
  10,321
  10,775
  11,253
  11,755
  12,284
  12,840
  13,425
Maintenance CAPEX, $m
  0
  -832
  -851
  -873
  -897
  -925
  -954
  -987
  -1,022
  -1,060
  -1,101
  -1,144
  -1,191
  -1,240
  -1,293
  -1,348
  -1,407
  -1,470
  -1,536
  -1,606
  -1,680
  -1,758
  -1,840
  -1,926
  -2,018
  -2,114
  -2,215
  -2,321
  -2,433
  -2,551
  -2,675
New CAPEX, $m
  -361
  -258
  -304
  -341
  -378
  -415
  -452
  -489
  -527
  -565
  -605
  -645
  -687
  -730
  -775
  -821
  -869
  -919
  -971
  -1,026
  -1,082
  -1,141
  -1,203
  -1,268
  -1,335
  -1,406
  -1,480
  -1,557
  -1,638
  -1,723
  -1,812
Cash from investing activities, $m
  -194
  -1,090
  -1,155
  -1,214
  -1,275
  -1,340
  -1,406
  -1,476
  -1,549
  -1,625
  -1,706
  -1,789
  -1,878
  -1,970
  -2,068
  -2,169
  -2,276
  -2,389
  -2,507
  -2,632
  -2,762
  -2,899
  -3,043
  -3,194
  -3,353
  -3,520
  -3,695
  -3,878
  -4,071
  -4,274
  -4,487
Free cash flow, $m
  190
  6,169
  3,562
  3,617
  3,682
  3,755
  3,837
  3,928
  4,027
  4,136
  4,253
  4,379
  4,514
  4,659
  4,813
  4,977
  5,152
  5,337
  5,533
  5,741
  5,960
  6,192
  6,437
  6,696
  6,968
  7,256
  7,558
  7,877
  8,213
  8,566
  8,938
Issuance/(repayment) of debt, $m
  46
  559
  645
  724
  802
  880
  958
  1,037
  1,117
  1,199
  1,283
  1,369
  1,457
  1,549
  1,643
  1,742
  1,844
  1,950
  2,060
  2,175
  2,295
  2,420
  2,551
  2,688
  2,831
  2,981
  3,137
  3,301
  3,473
  3,653
  3,842
Issuance/(repurchase) of shares, $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
  0
Cash from financing (excl. dividends), $m  
  46
  559
  645
  724
  802
  880
  958
  1,037
  1,117
  1,199
  1,283
  1,369
  1,457
  1,549
  1,643
  1,742
  1,844
  1,950
  2,060
  2,175
  2,295
  2,420
  2,551
  2,688
  2,831
  2,981
  3,137
  3,301
  3,473
  3,653
  3,842
Total cash flow (excl. dividends), $m
  235
  6,727
  4,206
  4,341
  4,483
  4,635
  4,795
  4,965
  5,145
  5,335
  5,535
  5,747
  5,971
  6,207
  6,456
  6,719
  6,995
  7,286
  7,593
  7,916
  8,255
  8,613
  8,988
  9,384
  9,799
  10,236
  10,696
  11,179
  11,686
  12,219
  12,780
Retained Cash Flow (-), $m
  17
  -284
  -341
  -383
  -424
  -465
  -507
  -549
  -591
  -634
  -679
  -724
  -771
  -819
  -869
  -921
  -975
  -1,031
  -1,090
  -1,151
  -1,214
  -1,280
  -1,350
  -1,422
  -1,498
  -1,577
  -1,660
  -1,747
  -1,837
  -1,933
  -2,033
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
 
  6,443
  3,865
  3,958
  4,059
  4,169
  4,288
  4,416
  4,554
  4,700
  4,857
  5,023
  5,200
  5,388
  5,587
  5,797
  6,020
  6,255
  6,503
  6,765
  7,041
  7,332
  7,639
  7,962
  8,302
  8,659
  9,036
  9,432
  9,849
  10,287
  10,747
Discount rate, %
 
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
 
  6,095
  3,441
  3,297
  3,144
  2,983
  2,814
  2,638
  2,456
  2,270
  2,081
  1,892
  1,703
  1,518
  1,338
  1,166
  1,003
  852
  713
  588
  477
  381
  298
  229
  173
  127
  92
  65
  44
  30
  19
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 Energética de Minas Gerais S.A., through its subsidiaries, engages in the generation, transmission, distribution, and trading of electric energy in Brazil. It also distributes natural gas. The company was founded in 1952 and is headquartered in Belo Horizonte, Brazil.

FINANCIAL RATIOS  of  Companhia Energetica de Minas Gerais-Cem (CIG)

Valuation Ratios
P/E Ratio 27.9
Price to Sales 0.5
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 7.7
Price to Free Cash Flow 128.6
Growth Rates
Sales Growth Rate -14.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5.6%
Cap. Spend. - 3 Yr. Gr. Rate 3.2%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 80%
Total Debt to Equity 117.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 6%
Ret/ On Assets - 3 Yr. Avg. 8.8%
Return On Total Capital 1.2%
Ret/ On T. Cap. - 3 Yr. Avg. 8%
Return On Equity 2.6%
Return On Equity - 3 Yr. Avg. 16.4%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 23.1%
Gross Margin - 3 Yr. Avg. 28.5%
EBITDA Margin 19%
EBITDA Margin - 3 Yr. Avg. 25.1%
Operating Margin 9.6%
Oper. Margin - 3 Yr. Avg. 19.9%
Pre-Tax Margin 2%
Pre-Tax Margin - 3 Yr. Avg. 13.4%
Net Profit Margin 1.8%
Net Profit Margin - 3 Yr. Avg. 9.7%
Effective Tax Rate 8.6%
Eff/ Tax Rate - 3 Yr. Avg. 21.7%
Payout Ratio 200.9%

CIG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CIG stock intrinsic value calculation we used $21292 million for the last fiscal year's total revenue generated by Companhia Energetica de Minas Gerais-Cem. The default revenue input number comes from 2016 income statement of Companhia Energetica de Minas Gerais-Cem. 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 CIG stock valuation model: a) initial revenue growth rate of 2.3% 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 5.7%, whose default value for CIG is calculated based on our internal credit rating of Companhia Energetica de Minas Gerais-Cem, 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 Energetica de Minas Gerais-Cem.
    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 CIG stock the variable cost ratio is equal to 71.4%.

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 CIG 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 9.3% for Companhia Energetica de Minas Gerais-Cem.

Corporate tax rate of 27% is the nominal tax rate for Companhia Energetica de Minas Gerais-Cem. 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 CIG 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 CIG are equal to 54.3%.

Life of production assets of 13.9 years is the average useful life of capital assets used in Companhia Energetica de Minas Gerais-Cem 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 CIG is equal to -3.5%. 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 - $12984 million for Companhia Energetica de Minas Gerais-Cem - 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 1423.53 million for Companhia Energetica de Minas Gerais-Cem 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 Energetica de Minas Gerais-Cem at the current share price and the inputted number of shares is $3.3 billion.


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COMPANY NEWS

▶ Cemig Files 2016 20-F Form with the SEC   [May-17-17 02:02PM  PR Newswire]
▶ Shares of CEMIG Slump Following Court Injunction   [Mar-22-17 02:03PM  Motley Fool]
▶ Filing of 2015 20-F Form with the SEC   [Feb-22-17 07:08PM  PR Newswire]
▶ Hedge Funds Are Dumping Deluxe Corporation (DLX)   [Dec-06-16 10:29AM  at Insider Monkey]
▶ Brazil's Cemig reiterates plans for asset sales   [Aug-09-16 04:45PM  Reuters]
▶ Brazil: Olympics Boosting Consumer Confidence?   [Jul-25-16 01:29PM  at Barrons.com]
▶ The most dangerous thing that could push the S&P below 700   [Jun-20-16 09:07AM  at MarketWatch]
Stock chart of CIG Financial statements of CIG Annual reports of CIG
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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