Intrinsic value of Calumet Specialty Products Partners - CLMT

Previous Close

$5.15

  Intrinsic Value

$41.33

stock screener

  Rating & Target

str. buy

+702%

  Value-price divergence*

-90%

Previous close

$5.15

 
Intrinsic value

$41.33

 
Up/down potential

+702%

 
Rating

str. buy

 
Value-price divergence*

-90%

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

We calculate the intrinsic value of CLMT 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 0.4

 

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, %
  -14.57
  31.40
  28.76
  26.38
  24.25
  22.32
  20.59
  19.03
  17.63
  16.36
  15.23
  14.21
  13.28
  12.46
  11.71
  11.04
  10.44
  9.89
  9.40
  8.96
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.24
Revenue, $m
  3,599
  4,729
  6,089
  7,696
  9,562
  11,696
  14,104
  16,788
  19,747
  22,979
  26,478
  30,239
  34,256
  38,523
  43,034
  47,785
  52,772
  57,992
  63,445
  69,131
  75,053
  81,214
  87,621
  94,280
  101,200
  108,391
  115,865
  123,635
  131,714
  140,120
  148,868
Variable operating expenses, $m
 
  3,655
  4,701
  5,936
  7,371
  9,013
  10,865
  12,929
  15,205
  17,690
  20,381
  23,256
  26,346
  29,627
  33,097
  36,751
  40,586
  44,600
  48,794
  53,167
  57,722
  62,461
  67,388
  72,509
  77,831
  83,362
  89,110
  95,085
  101,299
  107,764
  114,492
Fixed operating expenses, $m
 
  1,037
  1,063
  1,090
  1,117
  1,145
  1,174
  1,203
  1,233
  1,264
  1,295
  1,328
  1,361
  1,395
  1,430
  1,466
  1,502
  1,540
  1,578
  1,618
  1,658
  1,700
  1,742
  1,786
  1,830
  1,876
  1,923
  1,971
  2,020
  2,071
  2,123
Total operating expenses, $m
  3,771
  4,692
  5,764
  7,026
  8,488
  10,158
  12,039
  14,132
  16,438
  18,954
  21,676
  24,584
  27,707
  31,022
  34,527
  38,217
  42,088
  46,140
  50,372
  54,785
  59,380
  64,161
  69,130
  74,295
  79,661
  85,238
  91,033
  97,056
  103,319
  109,835
  116,615
Operating income, $m
  -172
  37
  325
  670
  1,073
  1,538
  2,066
  2,656
  3,309
  4,025
  4,801
  5,655
  6,549
  7,501
  8,507
  9,569
  10,684
  11,851
  13,072
  14,346
  15,673
  17,054
  18,491
  19,985
  21,539
  23,153
  24,832
  26,578
  28,395
  30,285
  32,254
EBITDA, $m
  -1
  259
  606
  1,019
  1,504
  2,061
  2,692
  3,398
  4,179
  5,034
  5,962
  6,960
  8,028
  9,164
  10,365
  11,631
  12,962
  14,355
  15,811
  17,330
  18,913
  20,560
  22,273
  24,055
  25,907
  27,832
  29,834
  31,915
  34,080
  36,334
  38,680
Interest expense (income), $m
  130
  138
  187
  251
  327
  414
  515
  628
  754
  893
  1,045
  1,210
  1,386
  1,575
  1,776
  1,988
  2,211
  2,446
  2,691
  2,947
  3,215
  3,493
  3,783
  4,084
  4,397
  4,722
  5,060
  5,412
  5,777
  6,157
  6,552
Earnings before tax, $m
  -336
  -101
  138
  418
  747
  1,124
  1,551
  2,028
  2,555
  3,131
  3,756
  4,445
  5,163
  5,925
  6,732
  7,581
  8,472
  9,406
  10,381
  11,398
  12,458
  13,561
  14,708
  15,901
  17,142
  18,431
  19,772
  21,167
  22,618
  24,129
  25,702
Tax expense, $m
  -7
  0
  37
  113
  202
  303
  419
  548
  690
  845
  1,014
  1,200
  1,394
  1,600
  1,818
  2,047
  2,288
  2,540
  2,803
  3,078
  3,364
  3,661
  3,971
  4,293
  4,628
  4,976
  5,338
  5,715
  6,107
  6,515
  6,939
Net income, $m
  -329
  -101
  101
  305
  545
  820
  1,132
  1,480
  1,865
  2,286
  2,742
  3,245
  3,769
  4,326
  4,914
  5,534
  6,185
  6,866
  7,578
  8,321
  9,094
  9,900
  10,737
  11,608
  12,513
  13,455
  14,434
  15,452
  16,511
  17,614
  18,762

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4
  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
  2,725
  3,580
  4,610
  5,826
  7,238
  8,854
  10,677
  12,708
  14,949
  17,395
  20,044
  22,891
  25,932
  29,162
  32,577
  36,173
  39,948
  43,900
  48,028
  52,332
  56,815
  61,480
  66,329
  71,370
  76,609
  82,052
  87,710
  93,592
  99,708
  106,071
  112,694
Adjusted assets (=assets-cash), $m
  2,721
  3,580
  4,610
  5,826
  7,238
  8,854
  10,677
  12,708
  14,949
  17,395
  20,044
  22,891
  25,932
  29,162
  32,577
  36,173
  39,948
  43,900
  48,028
  52,332
  56,815
  61,480
  66,329
  71,370
  76,609
  82,052
  87,710
  93,592
  99,708
  106,071
  112,694
Revenue / Adjusted assets
  1.323
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
  1.321
Average production assets, $m
  1,865
  2,450
  3,154
  3,986
  4,953
  6,058
  7,306
  8,696
  10,229
  11,903
  13,715
  15,664
  17,745
  19,955
  22,292
  24,753
  27,336
  30,040
  32,864
  35,810
  38,877
  42,069
  45,388
  48,837
  52,422
  56,147
  60,018
  64,043
  68,228
  72,582
  77,114
Working capital, $m
  143
  189
  244
  308
  382
  468
  564
  672
  790
  919
  1,059
  1,210
  1,370
  1,541
  1,721
  1,911
  2,111
  2,320
  2,538
  2,765
  3,002
  3,249
  3,505
  3,771
  4,048
  4,336
  4,635
  4,945
  5,269
  5,605
  5,955
Total debt, $m
  1,997
  2,713
  3,640
  4,734
  6,005
  7,459
  9,100
  10,929
  12,945
  15,146
  17,530
  20,093
  22,830
  25,737
  28,810
  32,047
  35,444
  39,001
  42,716
  46,590
  50,625
  54,823
  59,187
  63,724
  68,439
  73,338
  78,430
  83,724
  89,228
  94,955
  100,915
Total liabilities, $m
  2,507
  3,222
  4,149
  5,243
  6,514
  7,968
  9,609
  11,438
  13,454
  15,655
  18,039
  20,602
  23,339
  26,246
  29,319
  32,556
  35,953
  39,510
  43,225
  47,099
  51,134
  55,332
  59,696
  64,233
  68,948
  73,847
  78,939
  84,233
  89,737
  95,464
  101,424
Total equity, $m
  219
  358
  461
  583
  724
  885
  1,068
  1,271
  1,495
  1,739
  2,004
  2,289
  2,593
  2,916
  3,258
  3,617
  3,995
  4,390
  4,803
  5,233
  5,682
  6,148
  6,633
  7,137
  7,661
  8,205
  8,771
  9,359
  9,971
  10,607
  11,269
Total liabilities and equity, $m
  2,726
  3,580
  4,610
  5,826
  7,238
  8,853
  10,677
  12,709
  14,949
  17,394
  20,043
  22,891
  25,932
  29,162
  32,577
  36,173
  39,948
  43,900
  48,028
  52,332
  56,816
  61,480
  66,329
  71,370
  76,609
  82,052
  87,710
  93,592
  99,708
  106,071
  112,693
Debt-to-equity ratio
  9.119
  7.580
  7.900
  8.130
  8.300
  8.430
  8.520
  8.600
  8.660
  8.710
  8.750
  8.780
  8.800
  8.830
  8.840
  8.860
  8.870
  8.880
  8.890
  8.900
  8.910
  8.920
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
  8.950
  8.950
Adjusted equity ratio
  0.079
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -329
  -101
  101
  305
  545
  820
  1,132
  1,480
  1,865
  2,286
  2,742
  3,245
  3,769
  4,326
  4,914
  5,534
  6,185
  6,866
  7,578
  8,321
  9,094
  9,900
  10,737
  11,608
  12,513
  13,455
  14,434
  15,452
  16,511
  17,614
  18,762
Depreciation, amort., depletion, $m
  171
  222
  281
  350
  430
  523
  627
  742
  870
  1,010
  1,161
  1,305
  1,479
  1,663
  1,858
  2,063
  2,278
  2,503
  2,739
  2,984
  3,240
  3,506
  3,782
  4,070
  4,368
  4,679
  5,002
  5,337
  5,686
  6,049
  6,426
Funds from operations, $m
  3
  121
  381
  655
  975
  1,343
  1,759
  2,223
  2,735
  3,296
  3,902
  4,550
  5,248
  5,988
  6,772
  7,597
  8,463
  9,370
  10,317
  11,305
  12,334
  13,405
  14,519
  15,678
  16,882
  18,134
  19,435
  20,789
  22,197
  23,662
  25,188
Change in working capital, $m
  -1
  45
  54
  64
  75
  85
  96
  107
  118
  129
  140
  150
  161
  171
  180
  190
  199
  209
  218
  227
  237
  246
  256
  266
  277
  288
  299
  311
  323
  336
  350
Cash from operations, $m
  4
  76
  327
  591
  901
  1,258
  1,662
  2,116
  2,617
  3,166
  3,763
  4,400
  5,087
  5,818
  6,591
  7,407
  8,263
  9,161
  10,099
  11,077
  12,097
  13,159
  14,263
  15,411
  16,605
  17,846
  19,136
  20,478
  21,874
  23,326
  24,838
Maintenance CAPEX, $m
  0
  -155
  -204
  -263
  -332
  -413
  -505
  -609
  -725
  -852
  -992
  -1,143
  -1,305
  -1,479
  -1,663
  -1,858
  -2,063
  -2,278
  -2,503
  -2,739
  -2,984
  -3,240
  -3,506
  -3,782
  -4,070
  -4,368
  -4,679
  -5,002
  -5,337
  -5,686
  -6,049
New CAPEX, $m
  -139
  -585
  -705
  -832
  -967
  -1,106
  -1,247
  -1,390
  -1,533
  -1,674
  -1,813
  -1,948
  -2,081
  -2,210
  -2,337
  -2,461
  -2,583
  -2,704
  -2,825
  -2,945
  -3,068
  -3,192
  -3,319
  -3,449
  -3,585
  -3,725
  -3,871
  -4,025
  -4,185
  -4,354
  -4,532
Cash from investing activities, $m
  -154
  -740
  -909
  -1,095
  -1,299
  -1,519
  -1,752
  -1,999
  -2,258
  -2,526
  -2,805
  -3,091
  -3,386
  -3,689
  -4,000
  -4,319
  -4,646
  -4,982
  -5,328
  -5,684
  -6,052
  -6,432
  -6,825
  -7,231
  -7,655
  -8,093
  -8,550
  -9,027
  -9,522
  -10,040
  -10,581
Free cash flow, $m
  -150
  -665
  -582
  -504
  -398
  -261
  -90
  116
  359
  640
  958
  1,309
  1,701
  2,129
  2,592
  3,088
  3,618
  4,179
  4,771
  5,393
  6,046
  6,727
  7,439
  8,180
  8,951
  9,752
  10,586
  11,452
  12,351
  13,286
  14,258
Issuance/(repayment) of debt, $m
  209
  716
  927
  1,095
  1,271
  1,454
  1,641
  1,829
  2,016
  2,202
  2,384
  2,563
  2,737
  2,907
  3,074
  3,237
  3,397
  3,557
  3,715
  3,874
  4,035
  4,198
  4,365
  4,537
  4,715
  4,899
  5,092
  5,293
  5,505
  5,727
  5,960
Issuance/(repurchase) of shares, $m
  -2
  240
  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
Cash from financing (excl. dividends), $m  
  206
  956
  929
  1,095
  1,271
  1,454
  1,641
  1,829
  2,016
  2,202
  2,384
  2,563
  2,737
  2,907
  3,074
  3,237
  3,397
  3,557
  3,715
  3,874
  4,035
  4,198
  4,365
  4,537
  4,715
  4,899
  5,092
  5,293
  5,505
  5,727
  5,960
Total cash flow (excl. dividends), $m
  56
  291
  347
  591
  873
  1,193
  1,551
  1,945
  2,376
  2,842
  3,342
  3,871
  4,438
  5,036
  5,665
  6,325
  7,015
  7,735
  8,486
  9,267
  10,080
  10,925
  11,804
  12,716
  13,665
  14,652
  15,678
  16,745
  17,856
  19,013
  20,219
Retained Cash Flow (-), $m
  385
  -240
  -103
  -122
  -141
  -162
  -182
  -203
  -224
  -245
  -265
  -285
  -304
  -323
  -342
  -360
  -377
  -395
  -413
  -430
  -448
  -466
  -485
  -504
  -524
  -544
  -566
  -588
  -612
  -636
  -662
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
 
  51
  244
  469
  732
  1,032
  1,368
  1,742
  2,152
  2,597
  3,077
  3,586
  4,134
  4,713
  5,324
  5,965
  6,637
  7,340
  8,073
  8,837
  9,632
  10,459
  11,319
  12,212
  13,141
  14,107
  15,112
  16,157
  17,244
  18,377
  19,556
Discount rate, %
 
  14.60
  15.33
  16.10
  16.90
  17.75
  18.63
  19.57
  20.54
  21.57
  22.65
  23.78
  24.97
  26.22
  27.53
  28.91
  30.35
  31.87
  33.46
  35.14
  36.89
  38.74
  40.68
  42.71
  44.84
  47.09
  49.44
  51.91
  54.51
  57.23
  60.10
PV of cash for distribution, $m
 
  45
  184
  300
  392
  456
  491
  499
  483
  448
  399
  343
  285
  228
  177
  132
  96
  67
  45
  29
  18
  11
  6
  3
  2
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  62.4
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2

Calumet Specialty Products Partners, L.P. produces and sells specialty hydrocarbon products in North America. It operates in three segments: Specialty Products, Fuel Products, and Oilfield Services. The Specialty Products segment offers various lubricating oils, white mineral oils, petrolatums, solvents, waxes, synthetic lubricants, and other products which are used primarily as raw material components for basic automotive, industrial, and consumer goods. The Fuel Products segment provides fuel and fuel-related products, including gasoline, diesel, jet fuel, asphalt, and heavy fuel oils, as well as resells purchased crude oil to third party customers. The Oilfield Services segment manufactures and markets drilling fluids, completion fluids, production chemicals, and solids control services to the oil and gas exploration industry. Calumet GP, LLC serves as the general partner for Calumet Specialty Products Partners, L.P. The company was founded in 1916 and is headquartered in Indianapolis, Indiana.

FINANCIAL RATIOS  of  Calumet Specialty Products Partners (CLMT)

Valuation Ratios
P/E Ratio -1.2
Price to Sales 0.1
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 98.4
Price to Free Cash Flow -2.9
Growth Rates
Sales Growth Rate -14.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -59%
Cap. Spend. - 3 Yr. Gr. Rate -2.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 910%
Total Debt to Equity 911.9%
Interest Coverage -2
Management Effectiveness
Return On Assets -7.1%
Ret/ On Assets - 3 Yr. Avg. -2.9%
Return On Total Capital -14.3%
Ret/ On T. Cap. - 3 Yr. Avg. -8.3%
Return On Equity -80%
Return On Equity - 3 Yr. Avg. -37.2%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 11.3%
Gross Margin - 3 Yr. Avg. 11.5%
EBITDA Margin -1%
EBITDA Margin - 3 Yr. Avg. 1.2%
Operating Margin -4.8%
Oper. Margin - 3 Yr. Avg. -2.1%
Pre-Tax Margin -9.3%
Pre-Tax Margin - 3 Yr. Avg. -5.1%
Net Profit Margin -9.1%
Net Profit Margin - 3 Yr. Avg. -4.8%
Effective Tax Rate 2.1%
Eff/ Tax Rate - 3 Yr. Avg. 6.7%
Payout Ratio -17.3%

CLMT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CLMT stock intrinsic value calculation we used $3599 million for the last fiscal year's total revenue generated by Calumet Specialty Products Partners. The default revenue input number comes from 2016 income statement of Calumet Specialty Products Partners. 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 CLMT stock valuation model: a) initial revenue growth rate of 31.4% 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 14.6%, whose default value for CLMT is calculated based on our internal credit rating of Calumet Specialty Products Partners, 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 Calumet Specialty Products Partners.
    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 CLMT stock the variable cost ratio is equal to 77.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1012 million in the base year in the intrinsic value calculation for CLMT 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 6.9% for Calumet Specialty Products Partners.

Corporate tax rate of 27% is the nominal tax rate for Calumet Specialty Products Partners. 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 CLMT 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 CLMT are equal to 51.8%.

Life of production assets of 12 years is the average useful life of capital assets used in Calumet Specialty Products Partners 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 CLMT is equal to 4%. 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 - $219 million for Calumet Specialty Products Partners - 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 77.362 million for Calumet Specialty Products Partners 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 Calumet Specialty Products Partners at the current share price and the inputted number of shares is $0.4 billion.

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COMPANY NEWS

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Stock chart of CLMT Financial statements of CLMT Annual reports of CLMT
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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