Intrinsic value of Empresa Distribuidora y Comercializadora - EDN

Previous Close

$30.99

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$30.99

 
Intrinsic value premium content
 
Up/down potential premium content
 
Rating premium content
 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

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

We calculate the intrinsic value of EDN 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 0.7

 

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, %
  244.44
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  829
  6,083
  9,399
  14,056
  20,394
  28,773
  39,556
  53,096
  69,718
  89,710
  113,311
  140,707
  172,027
  207,351
  246,707
  290,083
  337,436
  388,698
  443,786
  502,611
  565,084
  631,124
  700,661
  773,644
  850,038
  929,833
  1,013,038
  1,099,689
  1,189,845
  1,283,585
  1,381,017
Variable operating expenses, $m
 
  6,509
  10,056
  15,039
  21,821
  30,787
  42,325
  56,812
  74,598
  95,990
  121,243
  150,556
  184,069
  221,865
  263,976
  310,389
  361,057
  415,907
  474,851
  537,794
  604,640
  675,303
  749,708
  827,799
  909,541
  994,921
  1,083,951
  1,176,668
  1,273,134
  1,373,436
  1,477,688
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
  879
  6,509
  10,056
  15,039
  21,821
  30,787
  42,325
  56,812
  74,598
  95,990
  121,243
  150,556
  184,069
  221,865
  263,976
  310,389
  361,057
  415,907
  474,851
  537,794
  604,640
  675,303
  749,708
  827,799
  909,541
  994,921
  1,083,951
  1,176,668
  1,273,134
  1,373,436
  1,477,688
Operating income, $m
  -42
  -426
  -658
  -984
  -1,428
  -2,014
  -2,769
  -3,717
  -4,880
  -6,280
  -7,932
  -9,849
  -12,042
  -14,515
  -17,269
  -20,306
  -23,621
  -27,209
  -31,065
  -35,183
  -39,556
  -44,179
  -49,046
  -54,155
  -59,503
  -65,088
  -70,913
  -76,978
  -83,289
  -89,851
  -96,671
EBITDA, $m
  -19
  25
  38
  57
  83
  117
  161
  216
  284
  365
  462
  573
  701
  845
  1,005
  1,182
  1,375
  1,584
  1,808
  2,048
  2,302
  2,571
  2,855
  3,152
  3,463
  3,788
  4,127
  4,480
  4,848
  5,229
  5,626
Interest expense (income), $m
  17
  207
  613
  1,357
  2,402
  3,824
  5,703
  8,122
  11,160
  14,889
  19,373
  24,668
  30,814
  37,840
  45,764
  54,593
  64,324
  74,946
  86,446
  98,804
  112,000
  126,015
  140,830
  156,430
  172,802
  189,940
  207,840
  226,506
  245,944
  266,169
  287,198
Earnings before tax, $m
  -124
  -633
  -1,271
  -2,341
  -3,829
  -5,838
  -8,472
  -11,839
  -16,040
  -21,168
  -27,305
  -34,517
  -42,856
  -52,354
  -63,033
  -74,899
  -87,944
  -102,155
  -117,511
  -133,987
  -151,556
  -170,194
  -189,876
  -210,585
  -232,305
  -255,028
  -278,753
  -303,484
  -329,234
  -356,020
  -383,869
Tax expense, $m
  -48
  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
  -76
  -633
  -1,271
  -2,341
  -3,829
  -5,838
  -8,472
  -11,839
  -16,040
  -21,168
  -27,305
  -34,517
  -42,856
  -52,354
  -63,033
  -74,899
  -87,944
  -102,155
  -117,511
  -133,987
  -151,556
  -170,194
  -189,876
  -210,585
  -232,305
  -255,028
  -278,753
  -303,484
  -329,234
  -356,020
  -383,869

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  144
  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
  1,212
  18,051
  27,889
  41,708
  60,516
  85,379
  117,377
  157,554
  206,878
  266,202
  336,235
  417,527
  510,467
  615,284
  732,067
  860,781
  1,001,295
  1,153,407
  1,316,873
  1,491,428
  1,676,807
  1,872,771
  2,079,114
  2,295,679
  2,522,369
  2,759,148
  3,006,048
  3,263,174
  3,530,696
  3,808,859
  4,097,973
Adjusted assets (=assets-cash), $m
  1,068
  18,051
  27,889
  41,708
  60,516
  85,379
  117,377
  157,554
  206,878
  266,202
  336,235
  417,527
  510,467
  615,284
  732,067
  860,781
  1,001,295
  1,153,407
  1,316,873
  1,491,428
  1,676,807
  1,872,771
  2,079,114
  2,295,679
  2,522,369
  2,759,148
  3,006,048
  3,263,174
  3,530,696
  3,808,859
  4,097,973
Revenue / Adjusted assets
  0.776
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
Average production assets, $m
  253
  4,867
  7,519
  11,244
  16,315
  23,018
  31,645
  42,477
  55,774
  71,768
  90,649
  112,565
  137,622
  165,881
  197,365
  232,066
  269,949
  310,959
  355,029
  402,089
  452,067
  504,899
  560,529
  618,915
  680,031
  743,866
  810,431
  879,752
  951,876
  1,026,868
  1,104,814
Working capital, $m
  -188
  -5,524
  -8,534
  -12,762
  -18,518
  -26,126
  -35,917
  -48,211
  -63,304
  -81,457
  -102,886
  -127,762
  -156,201
  -188,275
  -224,010
  -263,395
  -306,392
  -352,938
  -402,958
  -456,371
  -513,096
  -573,061
  -636,201
  -702,469
  -771,835
  -844,288
  -919,839
  -998,518
  -1,080,379
  -1,165,496
  -1,253,963
Total debt, $m
  181
  7,300
  16,154
  28,591
  45,518
  67,895
  96,693
  132,852
  177,244
  230,636
  293,665
  366,828
  450,474
  544,810
  649,914
  765,757
  892,219
  1,029,121
  1,176,240
  1,333,339
  1,500,181
  1,676,548
  1,862,257
  2,057,166
  2,261,186
  2,474,287
  2,696,498
  2,927,910
  3,168,681
  3,419,027
  3,679,230
Total liabilities, $m
  1,189
  16,246
  25,100
  37,537
  54,464
  76,841
  105,639
  141,798
  186,190
  239,582
  302,611
  375,774
  459,420
  553,756
  658,860
  774,703
  901,165
  1,038,067
  1,185,186
  1,342,285
  1,509,127
  1,685,494
  1,871,203
  2,066,112
  2,270,132
  2,483,233
  2,705,444
  2,936,856
  3,177,627
  3,427,973
  3,688,176
Total equity, $m
  23
  1,805
  2,789
  4,171
  6,052
  8,538
  11,738
  15,755
  20,688
  26,620
  33,623
  41,753
  51,047
  61,528
  73,207
  86,078
  100,129
  115,341
  131,687
  149,143
  167,681
  187,277
  207,911
  229,568
  252,237
  275,915
  300,605
  326,317
  353,070
  380,886
  409,797
Total liabilities and equity, $m
  1,212
  18,051
  27,889
  41,708
  60,516
  85,379
  117,377
  157,553
  206,878
  266,202
  336,234
  417,527
  510,467
  615,284
  732,067
  860,781
  1,001,294
  1,153,408
  1,316,873
  1,491,428
  1,676,808
  1,872,771
  2,079,114
  2,295,680
  2,522,369
  2,759,148
  3,006,049
  3,263,173
  3,530,697
  3,808,859
  4,097,973
Debt-to-equity ratio
  7.870
  4.040
  5.790
  6.860
  7.520
  7.950
  8.240
  8.430
  8.570
  8.660
  8.730
  8.790
  8.820
  8.850
  8.880
  8.900
  8.910
  8.920
  8.930
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.980
  8.980
Adjusted equity ratio
  -0.113
  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
  -76
  -633
  -1,271
  -2,341
  -3,829
  -5,838
  -8,472
  -11,839
  -16,040
  -21,168
  -27,305
  -34,517
  -42,856
  -52,354
  -63,033
  -74,899
  -87,944
  -102,155
  -117,511
  -133,987
  -151,556
  -170,194
  -189,876
  -210,585
  -232,305
  -255,028
  -278,753
  -303,484
  -329,234
  -356,020
  -383,869
Depreciation, amort., depletion, $m
  23
  451
  696
  1,041
  1,511
  2,131
  2,930
  3,933
  5,164
  6,645
  8,393
  10,423
  12,743
  15,359
  18,275
  21,488
  24,995
  28,792
  32,873
  37,230
  41,858
  46,750
  51,901
  57,307
  62,966
  68,877
  75,040
  81,458
  88,137
  95,080
  102,298
Funds from operations, $m
  465
  -182
  -575
  -1,300
  -2,319
  -3,706
  -5,542
  -7,906
  -10,876
  -14,523
  -18,912
  -24,095
  -30,113
  -36,995
  -44,759
  -53,411
  -62,949
  -73,363
  -84,638
  -96,756
  -109,698
  -123,444
  -137,975
  -153,278
  -169,339
  -186,151
  -203,713
  -222,026
  -241,097
  -260,940
  -281,572
Change in working capital, $m
  277
  -2,071
  -3,010
  -4,229
  -5,755
  -7,608
  -9,791
  -12,294
  -15,093
  -18,153
  -21,430
  -24,875
  -28,439
  -32,074
  -35,735
  -39,386
  -42,997
  -46,546
  -50,020
  -53,413
  -56,725
  -59,964
  -63,140
  -66,268
  -69,366
  -72,453
  -75,551
  -78,679
  -81,861
  -85,117
  -88,468
Cash from operations, $m
  188
  2,489
  2,435
  2,929
  3,437
  3,902
  4,249
  4,388
  4,217
  3,630
  2,518
  781
  -1,674
  -4,921
  -9,024
  -14,025
  -19,952
  -26,817
  -34,618
  -43,344
  -52,973
  -63,480
  -74,835
  -87,009
  -99,973
  -113,698
  -128,162
  -143,346
  -159,236
  -175,823
  -193,104
Maintenance CAPEX, $m
  0
  -282
  -451
  -696
  -1,041
  -1,511
  -2,131
  -2,930
  -3,933
  -5,164
  -6,645
  -8,393
  -10,423
  -12,743
  -15,359
  -18,275
  -21,488
  -24,995
  -28,792
  -32,873
  -37,230
  -41,858
  -46,750
  -51,901
  -57,307
  -62,966
  -68,877
  -75,040
  -81,458
  -88,137
  -95,080
New CAPEX, $m
  -158
  -1,826
  -2,652
  -3,726
  -5,071
  -6,703
  -8,627
  -10,832
  -13,298
  -15,994
  -18,881
  -21,916
  -25,057
  -28,259
  -31,485
  -34,701
  -37,883
  -41,010
  -44,070
  -47,060
  -49,978
  -52,832
  -55,630
  -58,386
  -61,115
  -63,836
  -66,564
  -69,321
  -72,124
  -74,993
  -77,945
Cash from investing activities, $m
  -152
  -2,108
  -3,103
  -4,422
  -6,112
  -8,214
  -10,758
  -13,762
  -17,231
  -21,158
  -25,526
  -30,309
  -35,480
  -41,002
  -46,844
  -52,976
  -59,371
  -66,005
  -72,862
  -79,933
  -87,208
  -94,690
  -102,380
  -110,287
  -118,422
  -126,802
  -135,441
  -144,361
  -153,582
  -163,130
  -173,025
Free cash flow, $m
  36
  381
  -667
  -1,493
  -2,675
  -4,312
  -6,509
  -9,374
  -13,013
  -17,528
  -23,008
  -29,529
  -37,153
  -45,923
  -55,868
  -67,001
  -79,322
  -92,822
  -107,481
  -123,276
  -140,182
  -158,170
  -177,215
  -197,296
  -218,395
  -240,499
  -263,603
  -287,707
  -312,819
  -338,952
  -366,130
Issuance/(repayment) of debt, $m
  -14
  4,839
  8,854
  12,437
  16,927
  22,377
  28,798
  36,159
  44,392
  53,391
  63,029
  73,163
  83,646
  94,336
  105,104
  115,842
  126,463
  136,902
  147,119
  157,099
  166,842
  176,367
  185,708
  194,909
  204,021
  213,101
  222,211
  231,413
  240,770
  250,347
  260,203
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1,399
  12,141
  24,044
  37,044
  51,076
  66,083
  82,007
  98,801
  116,422
  134,838
Cash from financing (excl. dividends), $m  
  -32
  4,839
  8,854
  12,437
  16,927
  22,377
  28,798
  36,159
  44,392
  53,391
  63,029
  73,163
  83,646
  94,336
  105,104
  115,842
  126,463
  136,902
  147,119
  157,099
  166,842
  177,766
  197,849
  218,953
  241,065
  264,177
  288,294
  313,420
  339,571
  366,769
  395,041
Total cash flow (excl. dividends), $m
  8
  5,220
  8,187
  10,944
  14,252
  18,065
  22,289
  26,786
  31,379
  35,863
  40,021
  43,634
  46,493
  48,413
  49,236
  48,841
  47,140
  44,080
  39,638
  33,822
  26,660
  18,198
  8,493
  -2,387
  -14,375
  -27,399
  -41,393
  -56,294
  -72,048
  -88,606
  -105,927
Retained Cash Flow (-), $m
  75
  -1,920
  -984
  -1,382
  -1,881
  -2,486
  -3,200
  -4,018
  -4,932
  -5,932
  -7,003
  -8,129
  -9,294
  -10,482
  -11,678
  -12,871
  -14,051
  -15,211
  -16,347
  -17,455
  -18,538
  -19,596
  -20,634
  -21,657
  -22,669
  -23,678
  -24,690
  -25,713
  -26,752
  -27,816
  -28,911
Prev. year cash balance distribution, $m
 
  1,640
  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
 
  4,940
  7,203
  9,562
  12,371
  15,579
  19,089
  22,768
  26,446
  29,931
  33,018
  35,505
  37,199
  37,931
  37,558
  35,970
  33,089
  28,868
  23,292
  16,367
  8,122
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  4,736
  6,594
  8,322
  10,187
  12,075
  13,854
  15,382
  16,529
  17,194
  17,310
  16,861
  15,874
  14,422
  12,609
  10,560
  8,409
  6,281
  4,289
  2,520
  1,032
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
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
  98.8
  90.4
  77.6
  63.1
  48.9
  36.5
  26.2
  18.3
  12.4
  8.3

Empresa Distribuidora y Comercializadora Norte S.A., a public service company, engages in the distribution and sale of electricity in Argentina. The company, through a concession, distributes electricity to the northwestern zone of the greater Buenos Aires metropolitan area and the northern part of the city of Buenos Aires. As of December 31, 2015, it served approximately 2,835,229 residential, small and medium commercial, industrial, wheeling system, and public lighting customers. The company was formerly known as Empresa Distribuidora Norte Sociedad AnĂ³nima and changed its name to Empresa Distribuidora y Comercializadora Norte S.A. in June 1996. The company was founded in 1992 and is headquartered in Buenos Aires, Argentina. Empresa Distribuidora y Comercializadora Norte S.A. is a subsidiary of Electricidad Argentina S.A.

FINANCIAL RATIOS  of  Empresa Distribuidora y Comercializadora (EDN)

Valuation Ratios
P/E Ratio -365.8
Price to Sales 33.2
Price to Book 1208.7
Price to Tangible Book
Price to Cash Flow 147.9
Price to Free Cash Flow 926.6
Growth Rates
Sales Growth Rate 244.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 17.9%
Cap. Spend. - 3 Yr. Gr. Rate 22.6%
Financial Strength
Quick Ratio 48
Current Ratio 0
LT Debt to Equity 773.9%
Total Debt to Equity 787%
Interest Coverage -6
Management Effectiveness
Return On Assets -6.4%
Ret/ On Assets - 3 Yr. Avg. -0.9%
Return On Total Capital -32.8%
Ret/ On T. Cap. - 3 Yr. Avg. -9.9%
Return On Equity -125.6%
Return On Equity - 3 Yr. Avg. -35.6%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -10%
EBITDA Margin - 3 Yr. Avg. 7.2%
Operating Margin -5%
Oper. Margin - 3 Yr. Avg. 15.6%
Pre-Tax Margin -14.8%
Pre-Tax Margin - 3 Yr. Avg. -2%
Net Profit Margin -9.1%
Net Profit Margin - 3 Yr. Avg. -0.3%
Effective Tax Rate 38.7%
Eff/ Tax Rate - 3 Yr. Avg. 23.2%
Payout Ratio 0%

EDN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EDN stock intrinsic value calculation we used $3802 million for the last fiscal year's total revenue generated by Empresa Distribuidora y Comercializadora. The default revenue input number comes from 2016 income statement of Empresa Distribuidora y Comercializadora. 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 EDN stock valuation model: a) initial revenue growth rate of 60% 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 4.3%, whose default value for EDN is calculated based on our internal credit rating of Empresa Distribuidora y Comercializadora, 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 Empresa Distribuidora y Comercializadora.
    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 EDN stock the variable cost ratio is equal to 107%.

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 EDN 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 8.4% for Empresa Distribuidora y Comercializadora.

Corporate tax rate of 27% is the nominal tax rate for Empresa Distribuidora y Comercializadora. 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 EDN 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 EDN are equal to 80%.

Life of production assets of 10.8 years is the average useful life of capital assets used in Empresa Distribuidora y Comercializadora 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 EDN is equal to -90.8%. 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 - $1525 million for Empresa Distribuidora y Comercializadora - 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 21.818 million for Empresa Distribuidora y Comercializadora 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 Empresa Distribuidora y Comercializadora at the current share price and the inputted number of shares is $0.7 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
PAM Pampa Energia 59.99 prem.  prem.
CIG Companhia Ener 2.33 prem.  prem.
ENIA Enel Americas 9.24 prem.  prem.
CPL CPFL Energia A 15.75 prem.  prem.

COMPANY NEWS

▶ Argentina: Tax Amnesty For $400B In Hidden Assets?   [Aug-18-16 05:21PM  at Barrons.com]
▶ EDENOR Financials   [May-04-16 01:04PM  EDGAR Online Financials]
▶ Argentina To Sell State Stake In Stocks?   [03:56PM  at Barrons.com]
▶ Fourth Q.14 - Earnings Release   [Mar-18  08:18AM  at noodls]
▶ Emerging Market Week in Review   [Sep-05  06:01PM  at Barrons.com]
▶ Argentina Stocks Drop On Bond Default Vote   [Sep-04  05:42PM  at Barrons.com]
▶ [video] Argentina disputing debt default   [Jul-31  10:09AM  at CNBC]
▶ Today's Top Performers In Utilities   [Jul-09  01:03PM  at TheStreet]
▶ 4 Emerging Markets Stocks On Winning Streaks   [Jul-01  05:46PM  at Seeking Alpha]
▶ What Will Happen to These ADRs if Argentina Defaults?   [Jun-26  02:10PM  at Motley Fool]
▶ Stock Downgrades: Travelers Going Nowhere Fast   [Jun-17  09:26AM  at Minyanville]
▶ Argentina refuses to submit to 'extortion' on debt   [05:49AM  at Financial Times]
▶ 4 Stocks Under $10 Making Big Moves   [Mar-17  07:46AM  at TheStreet]
▶ Edenor: Trading At A Bargain Price   [Feb-08  10:18AM  at Seeking Alpha]
▶ Avoid Argentina Stocks This Year   [Jan-26  08:23AM  at Seeking Alpha]
▶ 4 Stocks Under $10 to Trade for Breakouts   [Dec-13  09:34AM  Optionetics]
▶ 4 Stocks Under $10 to Trade for Breakouts   [Nov-15  08:13AM  Optionetics]
▶ Argentina's Errant Energy Policy   [Feb-26  10:34AM  at Motley Fool]
▶ Should You Invest In Argentina Stocks Now?   [Nov-26-12 04:13AM  at Seeking Alpha]
▶ Utilities Sector Wrap   [Aug-24-12 04:41PM  at Fox Business]
▶ Utilities Sector Wrap   [Jul-25-12 05:40PM  at Fox Business]
▶ Utilities Sector Wrap   [Jul-05-12 05:39PM  at Fox Business]
▶ Utilities Sector Wrap   [Jun-04-12 05:12PM  at Fox Business]
▶ Utilities Sector Wrap   [May-31-12 04:56PM  at Fox Business]
▶ Utilities Sector Wrap   [May-21-12 04:56PM  at Fox Business]
▶ Utilities Sector Wrap   [May-09-12 04:56PM  at Fox Business]
▶ Utilities Sector Wrap   [May-08-12 04:56PM  at Fox Business]
▶ Are Argentinean Companies at Risk of Being Expropriated?   [Apr-27-12 11:20AM  at Motley Fool]
▶ Utilities Sector Wrap   [Apr-26-12 04:56PM  at Fox Business]
▶ Argentina's Wasted Chances   [Apr-23-12 09:06AM  at Seeking Alpha]
▶ Polaris, Calpine hit new highs; Seagate active   [Apr-18-12 10:26AM  at MarketWatch]
▶ YPF slumps to three-year low on takeover move   [Apr-17-12 07:34PM  at MarketWatch]
▶ 2 Utilities To Add Utility To Your Portfolio   [Dec-20-11 03:30AM  at Seeking Alpha]
▶ 10 Foreign Utility Stocks To Consider   [Nov-03-11 03:39AM  at Seeking Alpha]
▶ The AES Corp Third Quarter Earnings Sneak Peek   [Nov-01-11 10:58AM  Wall St. Cheat Sheet]
▶ The Fastest-Growing Electric Utility Stocks   [Oct-11-11 02:44PM  at Motley Fool]
▶ The AES Earnings Cheat Sheet: Revenue, Net Income Climbs   [Aug-05-11 08:30AM  Wall St. Cheat Sheet]
▶ The AES Corp Second Quarter Earnings Sneak Peek   [Jul-28-11 07:07PM  Wall St. Cheat Sheet]
▶ Italian Stocks - Factors to watch on July 22   [Jul-22-11 12:00AM  at Reuters]
▶ Vectren Corp Passes Through 5% Yield Mark   [Jul-15-11 03:25PM  at Forbes]
▶ UPDATE 1-Lactalis wins Parmalat control battle   [Jun-28-11 02:10PM  at Reuters]
▶ Utes And Auto Parts Thrive On Friday   [Jun-24-11 03:36PM  at Forbes]
▶ Italian Stocks - Factors to watch on June 22   [Jun-22-11 12:00AM  at Reuters]
▶ UPDATE 1-Italy seeking to keep Edison in Italian hands   [Jun-21-11 07:11AM  at Reuters]
Stock chart of EDN Financial statements of EDN Annual reports of EDN
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.