Intrinsic value of Ecolab - ECL

Previous Close

$132.41

  Intrinsic Value

$45.06

stock screener

  Rating & Target

str. sell

-66%

  Value-price divergence*

-43%

Previous close

$132.41

 
Intrinsic value

$45.06

 
Up/down potential

-66%

 
Rating

str. sell

 
Value-price divergence*

-43%

*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 38.7

 

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
  2.10
  2.39
  2.65
  2.89
  3.10
  3.29
  3.46
  3.61
  3.75
  3.88
  3.99
  4.09
  4.18
  4.26
  4.34
  4.40
  4.46
  4.52
  4.56
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
Revenue, $m
  13,153
  13,429
  13,750
  14,115
  14,522
  14,972
  15,464
  15,999
  16,577
  17,199
  17,866
  18,578
  19,338
  20,147
  21,005
  21,916
  22,881
  23,902
  24,982
  26,122
  27,326
  28,596
  29,935
  31,346
  32,833
  34,399
  36,047
  37,782
  39,607
  41,527
  43,547
Variable operating expenses, $m
 
  11,871
  12,140
  12,445
  12,786
  13,162
  13,574
  14,021
  14,504
  15,025
  15,582
  15,540
  16,176
  16,852
  17,570
  18,332
  19,139
  19,994
  20,897
  21,850
  22,857
  23,920
  25,040
  26,220
  27,464
  28,773
  30,152
  31,603
  33,130
  34,736
  36,426
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
  11,871
  12,140
  12,445
  12,786
  13,162
  13,574
  14,021
  14,504
  15,025
  15,582
  15,540
  16,176
  16,852
  17,570
  18,332
  19,139
  19,994
  20,897
  21,850
  22,857
  23,920
  25,040
  26,220
  27,464
  28,773
  30,152
  31,603
  33,130
  34,736
  36,426
Operating income, $m
  1,915
  1,558
  1,610
  1,670
  1,736
  1,810
  1,891
  1,978
  2,073
  2,174
  2,283
  3,038
  3,162
  3,295
  3,435
  3,584
  3,742
  3,909
  4,085
  4,272
  4,469
  4,676
  4,895
  5,126
  5,369
  5,625
  5,895
  6,178
  6,477
  6,791
  7,121
EBITDA, $m
  2,766
  2,656
  2,720
  2,792
  2,873
  2,962
  3,059
  3,165
  3,279
  3,402
  3,534
  3,675
  3,825
  3,985
  4,155
  4,335
  4,526
  4,728
  4,942
  5,167
  5,405
  5,657
  5,922
  6,201
  6,495
  6,805
  7,131
  7,474
  7,835
  8,215
  8,614
Interest expense (income), $m
  267
  260
  270
  281
  293
  307
  323
  340
  358
  378
  400
  423
  447
  474
  502
  531
  563
  596
  631
  669
  708
  750
  794
  840
  889
  940
  994
  1,051
  1,111
  1,174
  1,240
Earnings before tax, $m
  1,650
  1,298
  1,341
  1,389
  1,443
  1,503
  1,568
  1,638
  1,714
  1,796
  1,883
  2,615
  2,715
  2,821
  2,933
  3,053
  3,179
  3,313
  3,454
  3,603
  3,760
  3,927
  4,102
  4,286
  4,481
  4,685
  4,901
  5,127
  5,366
  5,617
  5,881
Tax expense, $m
  403
  350
  362
  375
  390
  406
  423
  442
  463
  485
  509
  706
  733
  762
  792
  824
  858
  894
  933
  973
  1,015
  1,060
  1,107
  1,157
  1,210
  1,265
  1,323
  1,384
  1,449
  1,517
  1,588
Net income, $m
  1,230
  947
  979
  1,014
  1,054
  1,097
  1,144
  1,196
  1,251
  1,311
  1,375
  1,909
  1,982
  2,059
  2,141
  2,228
  2,321
  2,418
  2,521
  2,630
  2,745
  2,866
  2,994
  3,129
  3,271
  3,420
  3,577
  3,743
  3,917
  4,100
  4,293

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
  18,371
  18,810
  19,309
  19,866
  20,481
  21,155
  21,886
  22,677
  23,528
  24,440
  25,415
  26,454
  27,560
  28,735
  29,981
  31,301
  32,698
  34,175
  35,735
  37,382
  39,119
  40,951
  42,881
  44,915
  47,057
  49,312
  51,685
  54,182
  56,809
  59,572
Adjusted assets (=assets-cash), $m
  17,983
  18,371
  18,810
  19,309
  19,866
  20,481
  21,155
  21,886
  22,677
  23,528
  24,440
  25,415
  26,454
  27,560
  28,735
  29,981
  31,301
  32,698
  34,175
  35,735
  37,382
  39,119
  40,951
  42,881
  44,915
  47,057
  49,312
  51,685
  54,182
  56,809
  59,572
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
  7,413
  7,590
  7,791
  8,016
  8,264
  8,536
  8,831
  9,150
  9,494
  9,862
  10,255
  10,675
  11,121
  11,595
  12,098
  12,630
  13,194
  13,790
  14,419
  15,084
  15,785
  16,524
  17,303
  18,124
  18,988
  19,898
  20,856
  21,863
  22,923
  24,038
Working capital, $m
  1,260
  1,491
  1,526
  1,567
  1,612
  1,662
  1,717
  1,776
  1,840
  1,909
  1,983
  2,062
  2,147
  2,236
  2,332
  2,433
  2,540
  2,653
  2,773
  2,900
  3,033
  3,174
  3,323
  3,479
  3,644
  3,818
  4,001
  4,194
  4,396
  4,610
  4,834
Total debt, $m
  6,687
  6,575
  6,845
  7,152
  7,495
  7,874
  8,289
  8,740
  9,227
  9,751
  10,313
  10,913
  11,554
  12,235
  12,959
  13,726
  14,540
  15,400
  16,310
  17,271
  18,285
  19,355
  20,484
  21,673
  22,926
  24,245
  25,634
  27,096
  28,634
  30,252
  31,954
Total liabilities, $m
  11,429
  11,317
  11,587
  11,894
  12,237
  12,616
  13,031
  13,482
  13,969
  14,493
  15,055
  15,655
  16,296
  16,977
  17,701
  18,468
  19,282
  20,142
  21,052
  22,013
  23,027
  24,097
  25,226
  26,415
  27,668
  28,987
  30,376
  31,838
  33,376
  34,994
  36,696
Total equity, $m
  6,901
  7,054
  7,223
  7,415
  7,629
  7,865
  8,123
  8,404
  8,708
  9,035
  9,385
  9,759
  10,158
  10,583
  11,034
  11,513
  12,020
  12,556
  13,123
  13,722
  14,355
  15,022
  15,725
  16,466
  17,247
  18,070
  18,936
  19,847
  20,806
  21,815
  22,876
Total liabilities and equity, $m
  18,330
  18,371
  18,810
  19,309
  19,866
  20,481
  21,154
  21,886
  22,677
  23,528
  24,440
  25,414
  26,454
  27,560
  28,735
  29,981
  31,302
  32,698
  34,175
  35,735
  37,382
  39,119
  40,951
  42,881
  44,915
  47,057
  49,312
  51,685
  54,182
  56,809
  59,572
Debt-to-equity ratio
  0.969
  0.930
  0.950
  0.960
  0.980
  1.000
  1.020
  1.040
  1.060
  1.080
  1.100
  1.120
  1.140
  1.160
  1.170
  1.190
  1.210
  1.230
  1.240
  1.260
  1.270
  1.290
  1.300
  1.320
  1.330
  1.340
  1.350
  1.370
  1.380
  1.390
  1.400
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
  947
  979
  1,014
  1,054
  1,097
  1,144
  1,196
  1,251
  1,311
  1,375
  1,909
  1,982
  2,059
  2,141
  2,228
  2,321
  2,418
  2,521
  2,630
  2,745
  2,866
  2,994
  3,129
  3,271
  3,420
  3,577
  3,743
  3,917
  4,100
  4,293
Depreciation, amort., depletion, $m
  851
  1,099
  1,110
  1,122
  1,136
  1,152
  1,168
  1,187
  1,207
  1,228
  1,251
  637
  663
  691
  720
  751
  784
  820
  857
  896
  937
  980
  1,026
  1,075
  1,126
  1,179
  1,236
  1,295
  1,358
  1,424
  1,493
Funds from operations, $m
  1,969
  2,046
  2,088
  2,136
  2,190
  2,249
  2,313
  2,383
  2,458
  2,539
  2,626
  2,546
  2,645
  2,750
  2,862
  2,980
  3,105
  3,238
  3,378
  3,526
  3,682
  3,847
  4,021
  4,204
  4,397
  4,600
  4,813
  5,038
  5,275
  5,524
  5,786
Change in working capital, $m
  29
  31
  36
  40
  45
  50
  55
  59
  64
  69
  74
  79
  84
  90
  95
  101
  107
  113
  120
  127
  134
  141
  149
  157
  165
  174
  183
  193
  203
  213
  224
Cash from operations, $m
  1,940
  2,015
  2,053
  2,096
  2,145
  2,199
  2,258
  2,323
  2,394
  2,470
  2,552
  2,467
  2,561
  2,660
  2,766
  2,879
  2,998
  3,124
  3,258
  3,399
  3,548
  3,706
  3,872
  4,047
  4,231
  4,426
  4,630
  4,846
  5,073
  5,311
  5,562
Maintenance CAPEX, $m
  0
  -451
  -460
  -471
  -484
  -498
  -513
  -530
  -549
  -568
  -590
  -613
  -637
  -663
  -691
  -720
  -751
  -784
  -820
  -857
  -896
  -937
  -980
  -1,026
  -1,075
  -1,126
  -1,179
  -1,236
  -1,295
  -1,358
  -1,424
New CAPEX, $m
  -757
  -152
  -177
  -201
  -225
  -248
  -272
  -295
  -319
  -343
  -368
  -393
  -419
  -446
  -474
  -503
  -533
  -564
  -596
  -629
  -664
  -701
  -739
  -779
  -821
  -864
  -910
  -958
  -1,008
  -1,060
  -1,115
Cash from investing activities, $m
  -830
  -603
  -637
  -672
  -709
  -746
  -785
  -825
  -868
  -911
  -958
  -1,006
  -1,056
  -1,109
  -1,165
  -1,223
  -1,284
  -1,348
  -1,416
  -1,486
  -1,560
  -1,638
  -1,719
  -1,805
  -1,896
  -1,990
  -2,089
  -2,194
  -2,303
  -2,418
  -2,539
Free cash flow, $m
  1,110
  1,412
  1,415
  1,423
  1,436
  1,452
  1,473
  1,498
  1,526
  1,558
  1,594
  1,461
  1,504
  1,551
  1,601
  1,656
  1,714
  1,776
  1,843
  1,913
  1,988
  2,068
  2,152
  2,242
  2,336
  2,436
  2,541
  2,652
  2,770
  2,893
  3,023
Issuance/(repayment) of debt, $m
  214
  235
  270
  307
  343
  379
  415
  451
  487
  524
  562
  601
  640
  681
  724
  768
  813
  860
  910
  961
  1,014
  1,070
  1,128
  1,189
  1,253
  1,319
  1,389
  1,462
  1,538
  1,618
  1,702
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
  235
  270
  307
  343
  379
  415
  451
  487
  524
  562
  601
  640
  681
  724
  768
  813
  860
  910
  961
  1,014
  1,070
  1,128
  1,189
  1,253
  1,319
  1,389
  1,462
  1,538
  1,618
  1,702
Total cash flow (excl. dividends), $m
  663
  1,647
  1,686
  1,730
  1,779
  1,832
  1,888
  1,949
  2,013
  2,082
  2,156
  2,062
  2,144
  2,232
  2,325
  2,423
  2,527
  2,637
  2,752
  2,874
  3,003
  3,138
  3,281
  3,431
  3,589
  3,755
  3,930
  4,114
  4,308
  4,511
  4,725
Retained Cash Flow (-), $m
  9
  -153
  -169
  -191
  -214
  -236
  -259
  -281
  -304
  -327
  -350
  -374
  -399
  -425
  -451
  -479
  -507
  -536
  -567
  -599
  -632
  -667
  -703
  -741
  -781
  -822
  -866
  -911
  -959
  -1,009
  -1,061
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
 
  1,493
  1,517
  1,539
  1,565
  1,595
  1,629
  1,668
  1,710
  1,756
  1,806
  1,687
  1,745
  1,807
  1,874
  1,945
  2,020
  2,100
  2,185
  2,275
  2,370
  2,471
  2,577
  2,690
  2,808
  2,933
  3,064
  3,203
  3,349
  3,503
  3,664
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
 
  1,395
  1,316
  1,231
  1,146
  1,060
  975
  890
  806
  724
  644
  514
  449
  388
  330
  278
  230
  187
  150
  118
  91
  69
  51
  37
  26
  18
  12
  8
  5
  3
  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 for customers worldwide. The company operates in three segments: Global Industrial, Global Institutional, and Global Energy. The Global Industrial segment provides water treatment and process applications, and cleaning and sanitizing solutions primarily to large industrial customers within the manufacturing, food and beverage processing, chemical, mining and primary metals, power generation, pulp and paper, and commercial laundry industries. The Global Institutional segment offers specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, healthcare, government and education, and retail industries. The Global Energy segment provides the process chemicals and water treatment needs of the petroleum and petrochemical industries in upstream and downstream applications. The company also offers pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects, in restaurants, food and beverage processors, educational and healthcare facilities, hotels, quick service restaurant and grocery operations, and other institutional and commercial customers; and equipment repair, maintenance, and preventive maintenance services for the commercial food service industry. Ecolab Inc. sells its products through field sales personnel, corporate account personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in St. Paul, Minnesota.

FINANCIAL RATIOS  of  Ecolab (ECL)

Valuation Ratios
P/E Ratio 31.4
Price to Sales 2.9
Price to Book 5.6
Price to Tangible Book
Price to Cash Flow 19.9
Price to Free Cash Flow 32.7
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 2.1% 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 292.047 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 $38.7 billion.

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COMPANY NEWS

▶ 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]
▶ Ecolab misses 1Q profit forecasts   [08:21AM  Associated Press]
▶ Ecolab to Webcast Annual Meeting on May 4, 2017   [Apr-26-17 04:30PM  Business Wire]
▶ Multiple Stocks Reach 52-Week Highs   [Apr-18-17 04:42PM  GuruFocus.com]
▶ Ecolab sells former downtown St. Paul headquarters   [08:00AM  American City Business Journals]
▶ Ecolab Schedules Webcast and Conference Call on May 2   [Mar-29-17 05:35PM  Business Wire]
▶ Ecolab partners with Microsoft to enhance water-monitoring product   [Mar-22-17 04:34PM  at bizjournals.com]
▶ Ecolab partners with Microsoft to enhance water-monitoring product   [04:34PM  American City Business Journals]
▶ Ecolab Stock Trades Ex-Dividend Friday   [Mar-16-17 09:15AM  Investopedia]
▶ Ecolab Stock Trades Ex-Dividend Friday   [09:15AM  at Investopedia]
▶ 70 or Older? 3 Stocks You Should Consider Buying   [Mar-03-17 07:53AM  at Motley Fool]
▶ Ecolab Declares Regular Dividend   [Feb-23-17 06:27PM  Business Wire]
▶ Ecolab Closes on Purchase of Anios   [Feb-01-17 08:30AM  Business Wire]
Stock chart of ECL 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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