Intrinsic value of Ecolab - ECL

Previous Close

$134.45

  Intrinsic Value

$47.77

stock screener

  Rating & Target

str. sell

-64%

  Value-price divergence*

-23%

Previous close

$134.45

 
Intrinsic value

$47.77

 
Up/down potential

-64%

 
Rating

str. sell

 
Value-price divergence*

-23%

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

We calculate the intrinsic value of ECL 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 39.1

 

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, %
  -2.89
  4.40
  4.46
  4.51
  4.56
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
Revenue, $m
  13,153
  13,732
  14,344
  14,992
  15,676
  16,398
  17,160
  17,963
  18,809
  19,701
  20,641
  21,629
  22,670
  23,765
  24,917
  26,129
  27,403
  28,743
  30,151
  31,632
  33,187
  34,823
  36,541
  38,346
  40,243
  42,236
  44,330
  46,529
  48,839
  51,266
  53,815
Variable operating expenses, $m
 
  12,124
  12,637
  13,178
  13,751
  14,355
  14,992
  15,664
  16,372
  17,118
  17,904
  18,092
  18,963
  19,879
  20,843
  21,856
  22,922
  24,042
  25,221
  26,459
  27,760
  29,128
  30,565
  32,076
  33,662
  35,329
  37,081
  38,920
  40,853
  42,883
  45,015
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
  11,238
  12,124
  12,637
  13,178
  13,751
  14,355
  14,992
  15,664
  16,372
  17,118
  17,904
  18,092
  18,963
  19,879
  20,843
  21,856
  22,922
  24,042
  25,221
  26,459
  27,760
  29,128
  30,565
  32,076
  33,662
  35,329
  37,081
  38,920
  40,853
  42,883
  45,015
Operating income, $m
  1,915
  1,607
  1,707
  1,813
  1,925
  2,043
  2,168
  2,299
  2,438
  2,583
  2,737
  3,537
  3,707
  3,886
  4,075
  4,273
  4,481
  4,700
  4,931
  5,173
  5,427
  5,695
  5,975
  6,271
  6,581
  6,907
  7,249
  7,609
  7,987
  8,383
  8,800
EBITDA, $m
  2,766
  2,716
  2,837
  2,966
  3,101
  3,244
  3,394
  3,553
  3,721
  3,897
  4,083
  4,279
  4,484
  4,701
  4,929
  5,169
  5,421
  5,686
  5,964
  6,257
  6,565
  6,888
  7,228
  7,585
  7,961
  8,355
  8,769
  9,204
  9,661
  10,141
  10,645
Interest expense (income), $m
  267
  260
  280
  301
  324
  347
  372
  398
  426
  455
  486
  519
  553
  589
  627
  666
  708
  752
  799
  847
  898
  952
  1,009
  1,068
  1,130
  1,196
  1,265
  1,337
  1,413
  1,493
  1,577
Earnings before tax, $m
  1,650
  1,347
  1,427
  1,512
  1,602
  1,696
  1,796
  1,901
  2,011
  2,128
  2,251
  3,018
  3,154
  3,297
  3,448
  3,606
  3,773
  3,948
  4,132
  4,325
  4,529
  4,742
  4,967
  5,203
  5,450
  5,711
  5,984
  6,272
  6,573
  6,890
  7,223
Tax expense, $m
  403
  364
  385
  408
  432
  458
  485
  513
  543
  575
  608
  815
  852
  890
  931
  974
  1,019
  1,066
  1,116
  1,168
  1,223
  1,280
  1,341
  1,405
  1,472
  1,542
  1,616
  1,693
  1,775
  1,860
  1,950
Net income, $m
  1,230
  984
  1,042
  1,104
  1,169
  1,238
  1,311
  1,388
  1,468
  1,553
  1,643
  2,203
  2,303
  2,407
  2,517
  2,633
  2,754
  2,882
  3,016
  3,158
  3,306
  3,462
  3,626
  3,798
  3,979
  4,169
  4,369
  4,578
  4,799
  5,030
  5,273

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  347
  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
  18,330
  18,785
  19,623
  20,508
  21,444
  22,432
  23,474
  24,573
  25,731
  26,951
  28,236
  29,589
  31,012
  32,511
  34,087
  35,744
  37,487
  39,320
  41,246
  43,272
  45,400
  47,637
  49,988
  52,457
  55,052
  57,779
  60,643
  63,651
  66,812
  70,131
  73,618
Adjusted assets (=assets-cash), $m
  17,983
  18,785
  19,623
  20,508
  21,444
  22,432
  23,474
  24,573
  25,731
  26,951
  28,236
  29,589
  31,012
  32,511
  34,087
  35,744
  37,487
  39,320
  41,246
  43,272
  45,400
  47,637
  49,988
  52,457
  55,052
  57,779
  60,643
  63,651
  66,812
  70,131
  73,618
Revenue / Adjusted assets
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
Average production assets, $m
  7,261
  7,580
  7,918
  8,275
  8,653
  9,052
  9,472
  9,915
  10,383
  10,875
  11,394
  11,939
  12,514
  13,118
  13,754
  14,423
  15,126
  15,866
  16,643
  17,461
  18,319
  19,222
  20,171
  21,167
  22,214
  23,314
  24,470
  25,684
  26,959
  28,299
  29,706
Working capital, $m
  1,260
  1,524
  1,592
  1,664
  1,740
  1,820
  1,905
  1,994
  2,088
  2,187
  2,291
  2,401
  2,516
  2,638
  2,766
  2,900
  3,042
  3,190
  3,347
  3,511
  3,684
  3,865
  4,056
  4,256
  4,467
  4,688
  4,921
  5,165
  5,421
  5,691
  5,973
Total debt, $m
  6,687
  6,829
  7,346
  7,891
  8,468
  9,076
  9,718
  10,395
  11,108
  11,860
  12,651
  13,485
  14,362
  15,285
  16,255
  17,276
  18,350
  19,479
  20,666
  21,913
  23,224
  24,602
  26,050
  27,572
  29,170
  30,850
  32,614
  34,467
  36,414
  38,459
  40,607
Total liabilities, $m
  11,429
  11,571
  12,088
  12,633
  13,210
  13,818
  14,460
  15,137
  15,850
  16,602
  17,393
  18,227
  19,104
  20,027
  20,997
  22,018
  23,092
  24,221
  25,408
  26,655
  27,966
  29,344
  30,792
  32,314
  33,912
  35,592
  37,356
  39,209
  41,156
  43,201
  45,349
Total equity, $m
  6,901
  7,213
  7,535
  7,875
  8,235
  8,614
  9,014
  9,436
  9,881
  10,349
  10,843
  11,362
  11,909
  12,484
  13,089
  13,726
  14,395
  15,099
  15,839
  16,616
  17,434
  18,293
  19,195
  20,144
  21,140
  22,187
  23,287
  24,442
  25,656
  26,930
  28,269
Total liabilities and equity, $m
  18,330
  18,784
  19,623
  20,508
  21,445
  22,432
  23,474
  24,573
  25,731
  26,951
  28,236
  29,589
  31,013
  32,511
  34,086
  35,744
  37,487
  39,320
  41,247
  43,271
  45,400
  47,637
  49,987
  52,458
  55,052
  57,779
  60,643
  63,651
  66,812
  70,131
  73,618
Debt-to-equity ratio
  0.969
  0.950
  0.970
  1.000
  1.030
  1.050
  1.080
  1.100
  1.120
  1.150
  1.170
  1.190
  1.210
  1.220
  1.240
  1.260
  1.270
  1.290
  1.300
  1.320
  1.330
  1.340
  1.360
  1.370
  1.380
  1.390
  1.400
  1.410
  1.420
  1.430
  1.440
Adjusted equity ratio
  0.366
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,230
  984
  1,042
  1,104
  1,169
  1,238
  1,311
  1,388
  1,468
  1,553
  1,643
  2,203
  2,303
  2,407
  2,517
  2,633
  2,754
  2,882
  3,016
  3,158
  3,306
  3,462
  3,626
  3,798
  3,979
  4,169
  4,369
  4,578
  4,799
  5,030
  5,273
Depreciation, amort., depletion, $m
  851
  1,109
  1,130
  1,152
  1,176
  1,201
  1,227
  1,254
  1,283
  1,314
  1,346
  742
  777
  815
  854
  896
  940
  985
  1,034
  1,085
  1,138
  1,194
  1,253
  1,315
  1,380
  1,448
  1,520
  1,595
  1,674
  1,758
  1,845
Funds from operations, $m
  1,969
  2,093
  2,172
  2,256
  2,345
  2,439
  2,537
  2,642
  2,752
  2,867
  2,989
  2,945
  3,080
  3,222
  3,371
  3,528
  3,694
  3,867
  4,050
  4,242
  4,444
  4,656
  4,879
  5,113
  5,359
  5,617
  5,888
  6,174
  6,473
  6,788
  7,118
Change in working capital, $m
  29
  64
  68
  72
  76
  80
  85
  89
  94
  99
  104
  110
  116
  122
  128
  134
  141
  149
  156
  164
  173
  182
  191
  200
  211
  221
  232
  244
  256
  269
  283
Cash from operations, $m
  1,940
  2,028
  2,104
  2,184
  2,269
  2,358
  2,453
  2,553
  2,658
  2,768
  2,885
  2,835
  2,964
  3,100
  3,243
  3,394
  3,552
  3,719
  3,894
  4,078
  4,271
  4,474
  4,688
  4,912
  5,148
  5,396
  5,656
  5,929
  6,217
  6,518
  6,835
Maintenance CAPEX, $m
  0
  -451
  -471
  -492
  -514
  -537
  -562
  -588
  -616
  -645
  -675
  -708
  -742
  -777
  -815
  -854
  -896
  -940
  -985
  -1,034
  -1,085
  -1,138
  -1,194
  -1,253
  -1,315
  -1,380
  -1,448
  -1,520
  -1,595
  -1,674
  -1,758
New CAPEX, $m
  -757
  -319
  -338
  -357
  -378
  -399
  -421
  -443
  -467
  -492
  -518
  -546
  -574
  -604
  -636
  -669
  -703
  -740
  -777
  -817
  -859
  -903
  -948
  -997
  -1,047
  -1,100
  -1,156
  -1,214
  -1,275
  -1,340
  -1,407
Cash from investing activities, $m
  -830
  -770
  -809
  -849
  -892
  -936
  -983
  -1,031
  -1,083
  -1,137
  -1,193
  -1,254
  -1,316
  -1,381
  -1,451
  -1,523
  -1,599
  -1,680
  -1,762
  -1,851
  -1,944
  -2,041
  -2,142
  -2,250
  -2,362
  -2,480
  -2,604
  -2,734
  -2,870
  -3,014
  -3,165
Free cash flow, $m
  1,110
  1,258
  1,295
  1,335
  1,377
  1,422
  1,470
  1,521
  1,574
  1,631
  1,691
  1,582
  1,648
  1,719
  1,793
  1,871
  1,953
  2,040
  2,131
  2,227
  2,328
  2,434
  2,545
  2,663
  2,786
  2,916
  3,052
  3,196
  3,346
  3,504
  3,671
Issuance/(repayment) of debt, $m
  214
  489
  516
  546
  576
  608
  642
  677
  713
  752
  792
  833
  877
  923
  971
  1,021
  1,074
  1,129
  1,187
  1,248
  1,311
  1,378
  1,448
  1,521
  1,599
  1,679
  1,764
  1,853
  1,947
  2,045
  2,148
Issuance/(repurchase) of shares, $m
  -663
  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  
  -440
  489
  516
  546
  576
  608
  642
  677
  713
  752
  792
  833
  877
  923
  971
  1,021
  1,074
  1,129
  1,187
  1,248
  1,311
  1,378
  1,448
  1,521
  1,599
  1,679
  1,764
  1,853
  1,947
  2,045
  2,148
Total cash flow (excl. dividends), $m
  663
  1,747
  1,811
  1,881
  1,954
  2,031
  2,112
  2,198
  2,288
  2,383
  2,482
  2,415
  2,525
  2,641
  2,764
  2,892
  3,027
  3,169
  3,318
  3,474
  3,639
  3,812
  3,993
  4,184
  4,385
  4,595
  4,817
  5,049
  5,293
  5,549
  5,818
Retained Cash Flow (-), $m
  9
  -312
  -322
  -340
  -359
  -379
  -400
  -422
  -445
  -469
  -493
  -519
  -547
  -575
  -605
  -636
  -669
  -704
  -740
  -778
  -817
  -859
  -903
  -948
  -996
  -1,047
  -1,100
  -1,155
  -1,214
  -1,275
  -1,339
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
 
  1,435
  1,490
  1,541
  1,594
  1,652
  1,712
  1,776
  1,843
  1,914
  1,989
  1,896
  1,979
  2,066
  2,158
  2,255
  2,357
  2,465
  2,578
  2,697
  2,821
  2,953
  3,091
  3,236
  3,388
  3,548
  3,717
  3,894
  4,079
  4,275
  4,480
Discount rate, %
 
  7.00
  7.35
  7.72
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.86
  11.40
  11.97
  12.57
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.70
  24.89
  26.13
  27.44
  28.81
PV of cash for distribution, $m
 
  1,341
  1,293
  1,233
  1,168
  1,098
  1,025
  948
  869
  789
  709
  578
  509
  443
  380
  322
  268
  220
  177
  140
  109
  83
  61
  45
  32
  22
  15
  10
  6
  4
  2
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

Ecolab Inc. provides water, hygiene and energy technologies and services. The Company's cleaning and sanitizing programs and products, pest elimination services and equipment maintenance and repair services support customers in the foodservice, food and beverage processing, hospitality, healthcare, government and education, retail, textile care and commercial facilities management sectors in over 170 countries. Its segments include Global Industrial, Global Institutional, Global Energy, Other and Corporate. Its Global Industrial segment consists of the Water, Food and Beverage, Paper and Textile Care operating units. Its Global Institutional segment consists of the Institutional, Specialty and Healthcare operating units. The Global Energy segment provides on-site and technology-driven solutions to the global drilling, oil and gas production, refining, and petrochemical industries. The Company's Other segment consists of the Pest Elimination and Equipment Care operating units.

FINANCIAL RATIOS  of  Ecolab (ECL)

Valuation Ratios
P/E Ratio 31.9
Price to Sales 3
Price to Book 5.7
Price to Tangible Book
Price to Cash Flow 20.2
Price to Free Cash Flow 33.2
Growth Rates
Sales Growth Rate -2.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -7.1%
Cap. Spend. - 3 Yr. Gr. Rate 2.7%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 89.1%
Total Debt to Equity 96.9%
Interest Coverage 7
Management Effectiveness
Return On Assets 7.7%
Ret/ On Assets - 3 Yr. Avg. 7%
Return On Total Capital 9.1%
Ret/ On T. Cap. - 3 Yr. Avg. 8.3%
Return On Equity 17.8%
Return On Equity - 3 Yr. Avg. 16.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 48%
Gross Margin - 3 Yr. Avg. 47.2%
EBITDA Margin 21%
EBITDA Margin - 3 Yr. Avg. 19.6%
Operating Margin 14.6%
Oper. Margin - 3 Yr. Avg. 13.3%
Pre-Tax Margin 12.5%
Pre-Tax Margin - 3 Yr. Avg. 11.4%
Net Profit Margin 9.4%
Net Profit Margin - 3 Yr. Avg. 8.4%
Effective Tax Rate 24.4%
Eff/ Tax Rate - 3 Yr. Avg. 25.1%
Payout Ratio 34.8%

ECL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ECL stock intrinsic value calculation we used $13153 million for the last fiscal year's total revenue generated by Ecolab. The default revenue input number comes from 2016 income statement of Ecolab. 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 ECL stock valuation model: a) initial revenue growth rate of 4.4% 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 7%, whose default value for ECL is calculated based on our internal credit rating of Ecolab, 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 Ecolab.
    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 ECL stock the variable cost ratio is equal to 88.5%.

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 ECL 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 4.1% for Ecolab.

Corporate tax rate of 27% is the nominal tax rate for Ecolab. 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 ECL 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 ECL are equal to 55.2%.

Life of production assets of 16.1 years is the average useful life of capital assets used in Ecolab 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 ECL is equal to 11.1%. 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 - $6901 million for Ecolab - 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 290.98 million for Ecolab 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 Ecolab at the current share price and the inputted number of shares is $39.1 billion.

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COMPANY NEWS

▶ [$$] Ecolab Selling Equipment-Care Business to Audax   [Oct-11-17 01:00PM  The Wall Street Journal]
▶ 3 Stable Stocks for Conservative Investors   [Oct-07-17 10:30AM  Motley Fool]
▶ ETFs with exposure to Ecolab, Inc. : October 6, 2017   [Oct-06-17 10:47AM  Capital Cube]
▶ Ecolab Schedules Webcast and Conference Call on October 31   [Sep-26-17 04:30PM  Business Wire]
▶ Investing in a market near all-time highs   [Sep-25-17 05:06PM  Yahoo Finance Video]
▶ Nalco Champion Announces Price Increase   [08:30AM  Business Wire]
▶ How Safe Is Ecolab's Dividend?   [Sep-10-17 11:08AM  Motley Fool]
▶ Ecolab Comments on the Effects of Hurricane Harvey   [Sep-05-17 04:30PM  Business Wire]
▶ Ecolab, Inc. Value Analysis (NYSE:ECL) : August 7, 2017   [Aug-07-17 05:35PM  Capital Cube]
▶ Ecolab beats Street 2Q forecasts   [Aug-01-17 10:57PM  Associated Press]
▶ ETFs with exposure to Ecolab, Inc. : July 13, 2017   [Jul-13-17 03:53PM  Capital Cube]
▶ ETFs with exposure to Ecolab, Inc. : July 3, 2017   [Jul-03-17 03:08PM  Capital Cube]
▶ Ecolab Schedules Webcast and Conference Call on August 1   [Jun-23-17 04:30PM  Business Wire]
▶ ETFs with exposure to Ecolab, Inc. : June 22, 2017   [Jun-22-17 03:39PM  Capital Cube]
▶ This money manager aims to hold on to stocks for decades   [Jun-14-17 01:57PM  MarketWatch]
▶ Optimization Frenzy And The Power Of Mission   [Jun-08-17 11:38AM  Forbes]
▶ Ecolab Schedules Webcast of Industry Conference for June 13   [Jun-02-17 04:30PM  Business Wire]
▶ Ecolab Schedules Webcast of Industry Conference for June 8   [May-31-17 04:30PM  Business Wire]
▶ Stock Market News for May 25, 2017   [May-25-17 10:25AM  Zacks]
▶ 3 Top Stocks That Are Cash Cows   [May-23-17 09:49AM  Motley Fool]
▶ Ecolab Schedules Webcast of Industry Conference for May 17   [May-09-17 04:30PM  Business Wire]
▶ 3 Top Dividend Aristocrats for May   [11:11AM  Motley Fool]
▶ Ecolab on Track With First-Quarter 2017 Earnings   [May-04-17 07:05PM  Motley Fool]
▶ Ecolab Declares Regular Dividend   [10:51AM  Business Wire]
Financial statements of ECL
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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