Intrinsic value of California Resources - CRC

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$12.26

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$12.26

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence* premium content

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

We calculate the intrinsic value of CRC 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 0.5

 

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, %
  -35.62
  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
  1,547
  1,578
  1,614
  1,656
  1,702
  1,754
  1,811
  1,872
  1,939
  2,011
  2,088
  2,171
  2,259
  2,352
  2,452
  2,558
  2,670
  2,789
  2,914
  3,047
  3,187
  3,334
  3,490
  3,654
  3,827
  4,010
  4,201
  4,403
  4,616
  4,839
  5,075
Variable operating expenses, $m
 
  4,830
  4,941
  5,068
  5,211
  5,369
  5,542
  5,731
  5,935
  6,155
  6,391
  6,644
  6,914
  7,201
  7,506
  7,830
  8,173
  8,536
  8,920
  9,326
  9,755
  10,207
  10,684
  11,186
  11,716
  12,274
  12,861
  13,479
  14,129
  14,814
  15,533
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
  969
  4,830
  4,941
  5,068
  5,211
  5,369
  5,542
  5,731
  5,935
  6,155
  6,391
  6,644
  6,914
  7,201
  7,506
  7,830
  8,173
  8,536
  8,920
  9,326
  9,755
  10,207
  10,684
  11,186
  11,716
  12,274
  12,861
  13,479
  14,129
  14,814
  15,533
Operating income, $m
  578
  -3,252
  -3,327
  -3,412
  -3,508
  -3,615
  -3,731
  -3,859
  -3,996
  -4,144
  -4,303
  -4,474
  -4,655
  -4,848
  -5,054
  -5,272
  -5,503
  -5,747
  -6,006
  -6,279
  -6,568
  -6,872
  -7,193
  -7,532
  -7,888
  -8,264
  -8,659
  -9,075
  -9,513
  -9,974
  -10,459
EBITDA, $m
  1,137
  -2,681
  -2,743
  -2,814
  -2,893
  -2,980
  -3,077
  -3,182
  -3,295
  -3,417
  -3,548
  -3,689
  -3,838
  -3,998
  -4,167
  -4,347
  -4,537
  -4,739
  -4,952
  -5,177
  -5,415
  -5,666
  -5,931
  -6,210
  -6,504
  -6,814
  -7,140
  -7,483
  -7,844
  -8,224
  -8,624
Interest expense (income), $m
  0
  184
  146
  151
  156
  162
  169
  176
  184
  193
  202
  212
  223
  234
  246
  259
  273
  287
  303
  319
  336
  354
  373
  393
  414
  437
  460
  485
  511
  538
  567
Earnings before tax, $m
  201
  -3,436
  -3,473
  -3,563
  -3,665
  -3,777
  -3,900
  -4,035
  -4,180
  -4,337
  -4,505
  -4,686
  -4,878
  -5,083
  -5,300
  -5,531
  -5,776
  -6,035
  -6,309
  -6,598
  -6,904
  -7,226
  -7,566
  -7,925
  -8,303
  -8,700
  -9,119
  -9,560
  -10,024
  -10,513
  -11,026
Tax expense, $m
  -78
  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
Net income, $m
  279
  -3,436
  -3,473
  -3,563
  -3,665
  -3,777
  -3,900
  -4,035
  -4,180
  -4,337
  -4,505
  -4,686
  -4,878
  -5,083
  -5,300
  -5,531
  -5,776
  -6,035
  -6,309
  -6,598
  -6,904
  -7,226
  -7,566
  -7,925
  -8,303
  -8,700
  -9,119
  -9,560
  -10,024
  -10,513
  -11,026

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  12
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,354
  6,467
  6,616
  6,786
  6,977
  7,188
  7,420
  7,673
  7,946
  8,241
  8,557
  8,896
  9,257
  9,641
  10,050
  10,483
  10,943
  11,429
  11,943
  12,487
  13,060
  13,666
  14,304
  14,977
  15,686
  16,433
  17,219
  18,047
  18,918
  19,834
  20,798
Adjusted assets (=assets-cash), $m
  6,342
  6,467
  6,616
  6,786
  6,977
  7,188
  7,420
  7,673
  7,946
  8,241
  8,557
  8,896
  9,257
  9,641
  10,050
  10,483
  10,943
  11,429
  11,943
  12,487
  13,060
  13,666
  14,304
  14,977
  15,686
  16,433
  17,219
  18,047
  18,918
  19,834
  20,798
Revenue / Adjusted assets
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
Average production assets, $m
  6,099
  6,220
  6,363
  6,527
  6,710
  6,914
  7,137
  7,380
  7,643
  7,927
  8,231
  8,556
  8,904
  9,273
  9,666
  10,083
  10,525
  10,993
  11,488
  12,010
  12,562
  13,144
  13,758
  14,406
  15,088
  15,806
  16,562
  17,358
  18,196
  19,077
  20,004
Working capital, $m
  -301
  -218
  -223
  -228
  -235
  -242
  -250
  -258
  -268
  -277
  -288
  -300
  -312
  -325
  -338
  -353
  -368
  -385
  -402
  -420
  -440
  -460
  -482
  -504
  -528
  -553
  -580
  -608
  -637
  -668
  -700
Total debt, $m
  5,268
  4,177
  4,311
  4,464
  4,636
  4,826
  5,035
  5,263
  5,509
  5,774
  6,059
  6,363
  6,688
  7,034
  7,402
  7,792
  8,205
  8,643
  9,106
  9,595
  10,111
  10,656
  11,231
  11,836
  12,475
  13,147
  13,854
  14,599
  15,383
  16,207
  17,075
Total liabilities, $m
  6,911
  5,820
  5,954
  6,107
  6,279
  6,469
  6,678
  6,906
  7,152
  7,417
  7,702
  8,006
  8,331
  8,677
  9,045
  9,435
  9,848
  10,286
  10,749
  11,238
  11,754
  12,299
  12,874
  13,479
  14,118
  14,790
  15,497
  16,242
  17,026
  17,850
  18,718
Total equity, $m
  -557
  647
  662
  679
  698
  719
  742
  767
  795
  824
  856
  890
  926
  964
  1,005
  1,048
  1,094
  1,143
  1,194
  1,249
  1,306
  1,367
  1,430
  1,498
  1,569
  1,643
  1,722
  1,805
  1,892
  1,983
  2,080
Total liabilities and equity, $m
  6,354
  6,467
  6,616
  6,786
  6,977
  7,188
  7,420
  7,673
  7,947
  8,241
  8,558
  8,896
  9,257
  9,641
  10,050
  10,483
  10,942
  11,429
  11,943
  12,487
  13,060
  13,666
  14,304
  14,977
  15,687
  16,433
  17,219
  18,047
  18,918
  19,833
  20,798
Debt-to-equity ratio
  -9.458
  6.460
  6.520
  6.580
  6.640
  6.710
  6.790
  6.860
  6.930
  7.010
  7.080
  7.150
  7.230
  7.300
  7.370
  7.430
  7.500
  7.560
  7.620
  7.680
  7.740
  7.800
  7.850
  7.900
  7.950
  8.000
  8.050
  8.090
  8.130
  8.170
  8.210
Adjusted equity ratio
  -0.090
  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
  279
  -3,436
  -3,473
  -3,563
  -3,665
  -3,777
  -3,900
  -4,035
  -4,180
  -4,337
  -4,505
  -4,686
  -4,878
  -5,083
  -5,300
  -5,531
  -5,776
  -6,035
  -6,309
  -6,598
  -6,904
  -7,226
  -7,566
  -7,925
  -8,303
  -8,700
  -9,119
  -9,560
  -10,024
  -10,513
  -11,026
Depreciation, amort., depletion, $m
  559
  571
  584
  599
  616
  634
  655
  677
  701
  727
  755
  785
  817
  851
  887
  925
  966
  1,009
  1,054
  1,102
  1,152
  1,206
  1,262
  1,322
  1,384
  1,450
  1,519
  1,593
  1,669
  1,750
  1,835
Funds from operations, $m
  -786
  -2,865
  -2,889
  -2,965
  -3,049
  -3,143
  -3,246
  -3,358
  -3,479
  -3,610
  -3,750
  -3,901
  -4,061
  -4,232
  -4,413
  -4,606
  -4,810
  -5,026
  -5,255
  -5,496
  -5,751
  -6,020
  -6,304
  -6,603
  -6,918
  -7,250
  -7,600
  -7,968
  -8,355
  -8,762
  -9,191
Change in working capital, $m
  -916
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
Cash from operations, $m
  130
  -3,075
  -2,884
  -2,959
  -3,043
  -3,136
  -3,238
  -3,349
  -3,470
  -3,600
  -3,740
  -3,889
  -4,049
  -4,219
  -4,399
  -4,591
  -4,795
  -5,010
  -5,237
  -5,478
  -5,732
  -6,000
  -6,283
  -6,581
  -6,895
  -7,225
  -7,573
  -7,940
  -8,326
  -8,731
  -9,158
Maintenance CAPEX, $m
  0
  -559
  -571
  -584
  -599
  -616
  -634
  -655
  -677
  -701
  -727
  -755
  -785
  -817
  -851
  -887
  -925
  -966
  -1,009
  -1,054
  -1,102
  -1,152
  -1,206
  -1,262
  -1,322
  -1,384
  -1,450
  -1,519
  -1,593
  -1,669
  -1,750
New CAPEX, $m
  -75
  -122
  -143
  -164
  -184
  -203
  -223
  -243
  -263
  -283
  -304
  -325
  -347
  -370
  -393
  -417
  -442
  -468
  -495
  -523
  -552
  -582
  -614
  -647
  -682
  -718
  -756
  -796
  -838
  -881
  -927
Cash from investing activities, $m
  -61
  -681
  -714
  -748
  -783
  -819
  -857
  -898
  -940
  -984
  -1,031
  -1,080
  -1,132
  -1,187
  -1,244
  -1,304
  -1,367
  -1,434
  -1,504
  -1,577
  -1,654
  -1,734
  -1,820
  -1,909
  -2,004
  -2,102
  -2,206
  -2,315
  -2,431
  -2,550
  -2,677
Free cash flow, $m
  69
  -3,756
  -3,598
  -3,706
  -3,825
  -3,955
  -4,095
  -4,247
  -4,410
  -4,585
  -4,771
  -4,970
  -5,181
  -5,405
  -5,643
  -5,895
  -6,162
  -6,443
  -6,741
  -7,054
  -7,386
  -7,735
  -8,103
  -8,490
  -8,898
  -9,328
  -9,780
  -10,255
  -10,756
  -11,282
  -11,835
Issuance/(repayment) of debt, $m
  -181
  -1,079
  134
  153
  172
  190
  209
  227
  246
  265
  285
  305
  325
  346
  368
  390
  413
  438
  463
  489
  516
  545
  575
  606
  638
  672
  708
  745
  784
  825
  867
Issuance/(repurchase) of shares, $m
  4
  6,038
  3,479
  3,570
  3,672
  3,785
  3,910
  4,045
  4,191
  4,349
  4,518
  4,699
  4,892
  5,098
  5,316
  5,548
  5,794
  6,054
  6,329
  6,620
  6,927
  7,250
  7,592
  7,952
  8,331
  8,730
  9,151
  9,593
  10,059
  10,549
  11,064
Cash from financing (excl. dividends), $m  
  -69
  4,959
  3,613
  3,723
  3,844
  3,975
  4,119
  4,272
  4,437
  4,614
  4,803
  5,004
  5,217
  5,444
  5,684
  5,938
  6,207
  6,492
  6,792
  7,109
  7,443
  7,795
  8,167
  8,558
  8,969
  9,402
  9,859
  10,338
  10,843
  11,374
  11,931
Total cash flow (excl. dividends), $m
  0
  -4,835
  -3,464
  -3,553
  -3,653
  -3,764
  -3,886
  -4,020
  -4,164
  -4,319
  -4,486
  -4,665
  -4,856
  -5,059
  -5,276
  -5,505
  -5,748
  -6,005
  -6,278
  -6,565
  -6,869
  -7,190
  -7,528
  -7,884
  -8,260
  -8,656
  -9,072
  -9,511
  -9,972
  -10,457
  -10,968
Retained Cash Flow (-), $m
  -359
  -1,204
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -32
  -34
  -36
  -38
  -41
  -43
  -46
  -49
  -51
  -54
  -57
  -61
  -64
  -67
  -71
  -75
  -79
  -83
  -87
  -92
  -96
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
 
  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
Discount rate, %
 
  13.30
  13.97
  14.66
  15.40
  16.17
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.75
  23.88
  25.08
  26.33
  27.65
  29.03
  30.48
  32.01
  33.61
  35.29
  37.05
  38.91
  40.85
  42.89
  45.04
  47.29
  49.65
  52.14
  54.74
PV of cash for 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
Current shareholders' claim on cash, %
  100
  50.0
  7.8
  1.2
  0.2
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

California Resources Corporation operates as an oil and natural gas exploration and production company in the State of California. It produces oil, natural gas, and natural gas liquids. The company holds interests in approximately 2.4 million net acres. As of December 31, 2015, it had net proved reserves of 644 million barrels of oil equivalent. It also gathers, processes, and markets oil and gas products to marketers, California refineries, and other purchasers that have access to transportation and storage facilities. In addition, the company generates and sells electricity to the grid and to others through contractual agreements. California Resources Corporation is headquartered in Los Angeles, California.

FINANCIAL RATIOS  of  California Resources (CRC)

Valuation Ratios
P/E Ratio 1.9
Price to Sales 0.3
Price to Book -0.9
Price to Tangible Book
Price to Cash Flow 4
Price to Free Cash Flow 9.5
Growth Rates
Sales Growth Rate -35.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -81.3%
Cap. Spend. - 3 Yr. Gr. Rate -46.2%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity -927.8%
Total Debt to Equity -945.8%
Interest Coverage 0
Management Effectiveness
Return On Assets 4.2%
Ret/ On Assets - 3 Yr. Avg. -14.4%
Return On Total Capital 5.6%
Ret/ On T. Cap. - 3 Yr. Avg. -19.9%
Return On Equity -37.9%
Return On Equity - 3 Yr. Avg. -160%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 48.3%
Gross Margin - 3 Yr. Avg. 61.1%
EBITDA Margin 49.1%
EBITDA Margin - 3 Yr. Avg. -55.4%
Operating Margin 37.4%
Oper. Margin - 3 Yr. Avg. -73.4%
Pre-Tax Margin 13%
Pre-Tax Margin - 3 Yr. Avg. -91%
Net Profit Margin 18%
Net Profit Margin - 3 Yr. Avg. -54.7%
Effective Tax Rate -38.8%
Eff/ Tax Rate - 3 Yr. Avg. 12.4%
Payout Ratio 0%

CRC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CRC stock intrinsic value calculation we used $1547 million for the last fiscal year's total revenue generated by California Resources. The default revenue input number comes from 2016 income statement of California Resources. 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 CRC 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 13.3%, whose default value for CRC is calculated based on our internal credit rating of California Resources, 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 California Resources.
    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 CRC stock the variable cost ratio is equal to 306.1%.

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 CRC 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 California Resources.

Corporate tax rate of 27% is the nominal tax rate for California Resources. 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 CRC 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 CRC are equal to 394.2%.

Life of production assets of 10.9 years is the average useful life of capital assets used in California Resources 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 CRC is equal to -13.8%. 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 - $-557 million for California Resources - 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 44.628 million for California Resources 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 California Resources at the current share price and the inputted number of shares is $0.5 billion.


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Stock chart of CRC Financial statements of CRC Annual reports of CRC
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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