Intrinsic value of Denbury Resources - DNR

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$2.24

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$2.24

 
Intrinsic value

$0.29

 
Up/down potential

-87%

 
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 DNR 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 0.9

 

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, %
  -22.42
  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
  976
  996
  1,018
  1,045
  1,074
  1,107
  1,142
  1,181
  1,223
  1,269
  1,317
  1,369
  1,425
  1,484
  1,547
  1,614
  1,685
  1,759
  1,839
  1,922
  2,011
  2,104
  2,202
  2,306
  2,415
  2,530
  2,651
  2,778
  2,912
  3,053
  3,202
Variable operating expenses, $m
 
  5,992
  6,130
  6,287
  6,464
  6,660
  6,875
  7,109
  7,363
  7,636
  7,929
  8,242
  8,577
  8,933
  9,312
  9,713
  10,139
  10,590
  11,066
  11,570
  12,101
  12,662
  13,254
  13,877
  14,534
  15,226
  15,955
  16,721
  17,528
  18,377
  19,270
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
  2,243
  5,992
  6,130
  6,287
  6,464
  6,660
  6,875
  7,109
  7,363
  7,636
  7,929
  8,242
  8,577
  8,933
  9,312
  9,713
  10,139
  10,590
  11,066
  11,570
  12,101
  12,662
  13,254
  13,877
  14,534
  15,226
  15,955
  16,721
  17,528
  18,377
  19,270
Operating income, $m
  -1,267
  -4,997
  -5,111
  -5,243
  -5,390
  -5,554
  -5,733
  -5,928
  -6,140
  -6,367
  -6,612
  -6,873
  -7,152
  -7,449
  -7,765
  -8,100
  -8,455
  -8,830
  -9,228
  -9,647
  -10,091
  -10,558
  -11,052
  -11,572
  -12,119
  -12,696
  -13,304
  -13,943
  -14,616
  -15,324
  -16,069
EBITDA, $m
  -421
  -4,128
  -4,223
  -4,332
  -4,453
  -4,588
  -4,737
  -4,898
  -5,072
  -5,261
  -5,462
  -5,678
  -5,909
  -6,154
  -6,415
  -6,692
  -6,985
  -7,295
  -7,624
  -7,971
  -8,337
  -8,723
  -9,131
  -9,560
  -10,013
  -10,490
  -10,992
  -11,520
  -12,076
  -12,661
  -13,276
Interest expense (income), $m
  131
  126
  129
  133
  137
  142
  147
  153
  159
  166
  174
  182
  190
  199
  209
  219
  230
  242
  254
  267
  281
  295
  311
  327
  344
  362
  381
  400
  421
  443
  466
Earnings before tax, $m
  -1,520
  -5,122
  -5,240
  -5,376
  -5,527
  -5,696
  -5,880
  -6,081
  -6,299
  -6,534
  -6,785
  -7,055
  -7,342
  -7,648
  -7,974
  -8,319
  -8,685
  -9,072
  -9,482
  -9,915
  -10,372
  -10,854
  -11,362
  -11,898
  -12,463
  -13,058
  -13,684
  -14,344
  -15,037
  -15,767
  -16,535
Tax expense, $m
  -544
  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
  -976
  -5,122
  -5,240
  -5,376
  -5,527
  -5,696
  -5,880
  -6,081
  -6,299
  -6,534
  -6,785
  -7,055
  -7,342
  -7,648
  -7,974
  -8,319
  -8,685
  -9,072
  -9,482
  -9,915
  -10,372
  -10,854
  -11,362
  -11,898
  -12,463
  -13,058
  -13,684
  -14,344
  -15,037
  -15,767
  -16,535

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  4,275
  4,366
  4,467
  4,582
  4,710
  4,853
  5,010
  5,181
  5,365
  5,564
  5,778
  6,006
  6,250
  6,509
  6,785
  7,078
  7,388
  7,717
  8,064
  8,431
  8,818
  9,227
  9,658
  10,112
  10,591
  11,095
  11,626
  12,185
  12,773
  13,391
  14,042
Adjusted assets (=assets-cash), $m
  4,273
  4,366
  4,467
  4,582
  4,710
  4,853
  5,010
  5,181
  5,365
  5,564
  5,778
  6,006
  6,250
  6,509
  6,785
  7,078
  7,388
  7,717
  8,064
  8,431
  8,818
  9,227
  9,658
  10,112
  10,591
  11,095
  11,626
  12,185
  12,773
  13,391
  14,042
Revenue / Adjusted assets
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
Average production assets, $m
  4,683
  4,777
  4,886
  5,012
  5,153
  5,309
  5,481
  5,667
  5,869
  6,087
  6,321
  6,570
  6,837
  7,121
  7,423
  7,743
  8,082
  8,441
  8,821
  9,223
  9,646
  10,094
  10,565
  11,062
  11,586
  12,137
  12,718
  13,329
  13,973
  14,649
  15,361
Working capital, $m
  -253
  -175
  -179
  -184
  -189
  -195
  -201
  -208
  -215
  -223
  -232
  -241
  -251
  -261
  -272
  -284
  -296
  -310
  -324
  -338
  -354
  -370
  -388
  -406
  -425
  -445
  -467
  -489
  -513
  -537
  -563
Total debt, $m
  2,993
  3,072
  3,161
  3,264
  3,378
  3,505
  3,645
  3,797
  3,961
  4,138
  4,328
  4,532
  4,748
  4,979
  5,225
  5,485
  5,762
  6,054
  6,363
  6,689
  7,034
  7,398
  7,781
  8,186
  8,612
  9,061
  9,533
  10,030
  10,554
  11,104
  11,683
Total liabilities, $m
  3,806
  3,886
  3,975
  4,078
  4,192
  4,319
  4,459
  4,611
  4,775
  4,952
  5,142
  5,346
  5,562
  5,793
  6,039
  6,299
  6,576
  6,868
  7,177
  7,503
  7,848
  8,212
  8,595
  9,000
  9,426
  9,875
  10,347
  10,844
  11,368
  11,918
  12,497
Total equity, $m
  468
  480
  491
  504
  518
  534
  551
  570
  590
  612
  636
  661
  687
  716
  746
  779
  813
  849
  887
  927
  970
  1,015
  1,062
  1,112
  1,165
  1,220
  1,279
  1,340
  1,405
  1,473
  1,545
Total liabilities and equity, $m
  4,274
  4,366
  4,466
  4,582
  4,710
  4,853
  5,010
  5,181
  5,365
  5,564
  5,778
  6,007
  6,249
  6,509
  6,785
  7,078
  7,389
  7,717
  8,064
  8,430
  8,818
  9,227
  9,657
  10,112
  10,591
  11,095
  11,626
  12,184
  12,773
  13,391
  14,042
Debt-to-equity ratio
  6.395
  6.400
  6.430
  6.480
  6.520
  6.570
  6.610
  6.660
  6.710
  6.760
  6.810
  6.860
  6.910
  6.950
  7.000
  7.050
  7.090
  7.130
  7.170
  7.210
  7.250
  7.290
  7.320
  7.360
  7.390
  7.420
  7.450
  7.480
  7.510
  7.540
  7.560
Adjusted equity ratio
  0.109
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -976
  -5,122
  -5,240
  -5,376
  -5,527
  -5,696
  -5,880
  -6,081
  -6,299
  -6,534
  -6,785
  -7,055
  -7,342
  -7,648
  -7,974
  -8,319
  -8,685
  -9,072
  -9,482
  -9,915
  -10,372
  -10,854
  -11,362
  -11,898
  -12,463
  -13,058
  -13,684
  -14,344
  -15,037
  -15,767
  -16,535
Depreciation, amort., depletion, $m
  846
  868
  888
  911
  937
  965
  996
  1,030
  1,067
  1,107
  1,149
  1,195
  1,243
  1,295
  1,350
  1,408
  1,470
  1,535
  1,604
  1,677
  1,754
  1,835
  1,921
  2,011
  2,107
  2,207
  2,312
  2,424
  2,540
  2,664
  2,793
Funds from operations, $m
  174
  -4,254
  -4,352
  -4,464
  -4,590
  -4,730
  -4,884
  -5,051
  -5,232
  -5,427
  -5,636
  -5,860
  -6,099
  -6,354
  -6,624
  -6,911
  -7,215
  -7,537
  -7,878
  -8,238
  -8,618
  -9,019
  -9,442
  -9,887
  -10,357
  -10,851
  -11,372
  -11,920
  -12,497
  -13,104
  -13,742
Change in working capital, $m
  -45
  -3
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
Cash from operations, $m
  219
  -4,944
  -4,348
  -4,460
  -4,585
  -4,725
  -4,877
  -5,044
  -5,225
  -5,419
  -5,628
  -5,851
  -6,089
  -6,343
  -6,613
  -6,900
  -7,203
  -7,524
  -7,864
  -8,223
  -8,602
  -9,002
  -9,424
  -9,869
  -10,338
  -10,831
  -11,351
  -11,898
  -12,473
  -13,079
  -13,716
Maintenance CAPEX, $m
  0
  -851
  -868
  -888
  -911
  -937
  -965
  -996
  -1,030
  -1,067
  -1,107
  -1,149
  -1,195
  -1,243
  -1,295
  -1,350
  -1,408
  -1,470
  -1,535
  -1,604
  -1,677
  -1,754
  -1,835
  -1,921
  -2,011
  -2,107
  -2,207
  -2,312
  -2,424
  -2,540
  -2,664
New CAPEX, $m
  -253
  -94
  -110
  -126
  -141
  -156
  -171
  -187
  -202
  -218
  -234
  -250
  -267
  -284
  -302
  -320
  -339
  -359
  -380
  -401
  -424
  -447
  -472
  -497
  -524
  -552
  -581
  -611
  -643
  -677
  -712
Cash from investing activities, $m
  -205
  -945
  -978
  -1,014
  -1,052
  -1,093
  -1,136
  -1,183
  -1,232
  -1,285
  -1,341
  -1,399
  -1,462
  -1,527
  -1,597
  -1,670
  -1,747
  -1,829
  -1,915
  -2,005
  -2,101
  -2,201
  -2,307
  -2,418
  -2,535
  -2,659
  -2,788
  -2,923
  -3,067
  -3,217
  -3,376
Free cash flow, $m
  14
  -5,889
  -5,326
  -5,474
  -5,638
  -5,818
  -6,014
  -6,227
  -6,457
  -6,704
  -6,968
  -7,250
  -7,551
  -7,870
  -8,210
  -8,569
  -8,950
  -9,353
  -9,779
  -10,228
  -10,703
  -11,203
  -11,731
  -12,287
  -12,873
  -13,489
  -14,138
  -14,821
  -15,540
  -16,296
  -17,091
Issuance/(repayment) of debt, $m
  20
  81
  89
  102
  115
  127
  139
  152
  164
  177
  190
  203
  217
  231
  245
  261
  276
  292
  309
  327
  345
  364
  384
  404
  426
  449
  472
  497
  523
  551
  579
Issuance/(repurchase) of shares, $m
  0
  5,820
  5,248
  5,384
  5,537
  5,706
  5,892
  6,094
  6,313
  6,549
  6,801
  7,072
  7,361
  7,668
  7,994
  8,341
  8,708
  9,097
  9,508
  9,942
  10,401
  10,885
  11,395
  11,933
  12,499
  13,096
  13,724
  14,386
  15,082
  15,814
  16,584
Cash from financing (excl. dividends), $m  
  -15
  5,901
  5,337
  5,486
  5,652
  5,833
  6,031
  6,246
  6,477
  6,726
  6,991
  7,275
  7,578
  7,899
  8,239
  8,602
  8,984
  9,389
  9,817
  10,269
  10,746
  11,249
  11,779
  12,337
  12,925
  13,545
  14,196
  14,883
  15,605
  16,365
  17,163
Total cash flow (excl. dividends), $m
  -1
  -5,808
  -5,237
  -5,372
  -5,523
  -5,691
  -5,875
  -6,075
  -6,293
  -6,527
  -6,778
  -7,047
  -7,334
  -7,639
  -7,964
  -8,309
  -8,674
  -9,061
  -9,470
  -9,902
  -10,358
  -10,840
  -11,347
  -11,883
  -12,446
  -13,040
  -13,666
  -14,324
  -15,017
  -15,746
  -16,512
Retained Cash Flow (-), $m
  781
  -12
  -11
  -13
  -14
  -16
  -17
  -19
  -20
  -22
  -23
  -25
  -27
  -29
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -47
  -50
  -53
  -55
  -58
  -61
  -65
  -68
  -72
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, %
 
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.23
  23.35
  24.51
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.49
  36.22
  38.03
  39.93
  41.93
  44.02
  46.22
  48.53
  50.96
  53.51
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
  13.7
  2.1
  0.3
  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
  0.0

Denbury Resources Inc. operates as an independent oil and natural gas company in the United States. The company primarily focuses on enhanced oil recovery utilizing carbon dioxide. It holds properties located in Mississippi, Texas, Louisiana, and Alabama in the Gulf Coast region; and in Montana, North Dakota, and Wyoming in the Rocky Mountain region. As of December 31, 2015, the company had 288.6 million barrels of oil equivalent of estimated proved oil and natural gas reserves. Denbury Resources Inc. was founded in 1951 and is headquartered in Plano, Texas.

FINANCIAL RATIOS  of  Denbury Resources (DNR)

Valuation Ratios
P/E Ratio -0.9
Price to Sales 0.9
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 4.1
Price to Free Cash Flow -26.2
Growth Rates
Sales Growth Rate -22.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -55%
Cap. Spend. - 3 Yr. Gr. Rate -27.4%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 621.8%
Total Debt to Equity 639.5%
Interest Coverage -11
Management Effectiveness
Return On Assets -17.6%
Ret/ On Assets - 3 Yr. Avg. -19.2%
Return On Total Capital -24.4%
Ret/ On T. Cap. - 3 Yr. Avg. -26.8%
Return On Equity -113.7%
Return On Equity - 3 Yr. Avg. -76.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 99.6%
Gross Margin - 3 Yr. Avg. 99.4%
EBITDA Margin -55.6%
EBITDA Margin - 3 Yr. Avg. -143.5%
Operating Margin -129.8%
Oper. Margin - 3 Yr. Avg. -201.7%
Pre-Tax Margin -155.7%
Pre-Tax Margin - 3 Yr. Avg. -205.5%
Net Profit Margin -100%
Net Profit Margin - 3 Yr. Avg. -140.8%
Effective Tax Rate 35.8%
Eff/ Tax Rate - 3 Yr. Avg. 34.8%
Payout Ratio 0%

DNR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DNR stock intrinsic value calculation we used $976 million for the last fiscal year's total revenue generated by Denbury Resources. The default revenue input number comes from 2016 income statement of Denbury 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 DNR 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%, whose default value for DNR is calculated based on our internal credit rating of Denbury 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 Denbury 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 DNR stock the variable cost ratio is equal to 601.9%.

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 DNR 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 4.2% for Denbury Resources.

Corporate tax rate of 27% is the nominal tax rate for Denbury 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 DNR 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 DNR are equal to 479.8%.

Life of production assets of 5.5 years is the average useful life of capital assets used in Denbury 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 DNR is equal to -17.6%. 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 - $468 million for Denbury 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 410.853 million for Denbury 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 Denbury Resources at the current share price and the inputted number of shares is $0.9 billion.


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Stock chart of DNR Financial statements of DNR
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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