Intrinsic value of Ford Motor - F

Previous Close

$12.63

  Intrinsic Value

$10.78

stock screener

  Rating & Target

hold

-15%

Previous close

$12.63

 
Intrinsic value

$10.78

 
Up/down potential

-15%

 
Rating

hold

We calculate the intrinsic value of F 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 50.2

 

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, %
  1.50
  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
  151,800
  154,836
  158,397
  162,468
  167,038
  172,102
  177,659
  183,709
  190,259
  197,315
  204,887
  212,988
  221,632
  230,836
  240,618
  250,997
  261,997
  273,640
  285,953
  298,963
  312,700
  327,194
  342,480
  358,592
  375,568
  393,448
  412,273
  432,087
  452,938
  474,874
  497,947
Variable operating expenses, $m
 
  146,939
  150,319
  154,182
  158,519
  163,324
  168,597
  174,339
  180,554
  187,250
  194,436
  202,119
  210,322
  219,056
  228,338
  238,188
  248,626
  259,675
  271,360
  283,706
  296,742
  310,497
  325,002
  340,292
  356,402
  373,369
  391,233
  410,037
  429,823
  450,640
  472,535
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
  147,684
  146,939
  150,319
  154,182
  158,519
  163,324
  168,597
  174,339
  180,554
  187,250
  194,436
  202,119
  210,322
  219,056
  228,338
  238,188
  248,626
  259,675
  271,360
  283,706
  296,742
  310,497
  325,002
  340,292
  356,402
  373,369
  391,233
  410,037
  429,823
  450,640
  472,535
Operating income, $m
  4,116
  7,897
  8,078
  8,286
  8,519
  8,778
  9,061
  9,370
  9,704
  10,065
  10,451
  10,869
  11,311
  11,780
  12,279
  12,809
  13,370
  13,965
  14,593
  15,257
  15,958
  16,698
  17,478
  18,300
  19,166
  20,079
  21,040
  22,051
  23,115
  24,234
  25,412
EBITDA, $m
  13,139
  14,281
  14,609
  14,985
  15,406
  15,874
  16,386
  16,944
  17,548
  18,199
  18,897
  19,645
  20,442
  21,291
  22,193
  23,150
  24,165
  25,239
  26,374
  27,574
  28,841
  30,178
  31,588
  33,074
  34,640
  36,289
  38,025
  39,853
  41,776
  43,799
  45,927
Interest expense (income), $m
  0
  3,645
  3,770
  3,910
  4,070
  4,249
  4,447
  4,665
  4,903
  5,160
  5,436
  5,733
  6,051
  6,390
  6,751
  7,135
  7,542
  7,974
  8,430
  8,913
  9,424
  9,962
  10,531
  11,131
  11,763
  12,429
  13,130
  13,868
  14,646
  15,463
  16,324
Earnings before tax, $m
  6,796
  4,252
  4,308
  4,376
  4,450
  4,529
  4,614
  4,705
  4,802
  4,905
  5,015
  5,136
  5,259
  5,390
  5,528
  5,674
  5,828
  5,991
  6,163
  6,344
  6,534
  6,735
  6,947
  7,169
  7,404
  7,650
  7,910
  8,182
  8,469
  8,771
  9,088
Tax expense, $m
  2,189
  1,148
  1,163
  1,182
  1,201
  1,223
  1,246
  1,270
  1,296
  1,324
  1,354
  1,387
  1,420
  1,455
  1,493
  1,532
  1,574
  1,618
  1,664
  1,713
  1,764
  1,819
  1,876
  1,936
  1,999
  2,066
  2,136
  2,209
  2,287
  2,368
  2,454
Net income, $m
  4,596
  3,104
  3,145
  3,195
  3,248
  3,306
  3,368
  3,435
  3,505
  3,581
  3,661
  3,749
  3,839
  3,935
  4,036
  4,142
  4,255
  4,373
  4,499
  4,631
  4,770
  4,917
  5,071
  5,234
  5,405
  5,585
  5,774
  5,973
  6,183
  6,403
  6,634

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  38,827
  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
  237,951
  203,197
  207,870
  213,213
  219,210
  225,856
  233,148
  241,088
  249,683
  258,943
  268,881
  279,512
  290,856
  302,935
  315,771
  329,393
  343,828
  359,108
  375,267
  392,340
  410,367
  429,389
  449,449
  470,593
  492,872
  516,336
  541,041
  567,044
  594,407
  623,194
  653,473
Adjusted assets (=assets-cash), $m
  199,124
  203,197
  207,870
  213,213
  219,210
  225,856
  233,148
  241,088
  249,683
  258,943
  268,881
  279,512
  290,856
  302,935
  315,771
  329,393
  343,828
  359,108
  375,267
  392,340
  410,367
  429,389
  449,449
  470,593
  492,872
  516,336
  541,041
  567,044
  594,407
  623,194
  653,473
Revenue / Adjusted assets
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
  0.762
Average production assets, $m
  31,279
  31,896
  32,630
  33,468
  34,410
  35,453
  36,598
  37,844
  39,193
  40,647
  42,207
  43,876
  45,656
  47,552
  49,567
  51,705
  53,971
  56,370
  58,906
  61,586
  64,416
  67,402
  70,551
  73,870
  77,367
  81,050
  84,928
  89,010
  93,305
  97,824
  102,577
Working capital, $m
  18,180
  29,574
  30,254
  31,031
  31,904
  32,872
  33,933
  35,088
  36,339
  37,687
  39,133
  40,681
  42,332
  44,090
  45,958
  47,940
  50,041
  52,265
  54,617
  57,102
  59,726
  62,494
  65,414
  68,491
  71,734
  75,149
  78,744
  82,529
  86,511
  90,701
  95,108
Total debt, $m
  142,970
  107,719
  111,710
  116,273
  121,395
  127,070
  133,297
  140,078
  147,419
  155,326
  163,813
  172,892
  182,580
  192,895
  203,858
  215,490
  227,818
  240,867
  254,667
  269,247
  284,643
  300,887
  318,018
  336,076
  355,101
  375,140
  396,238
  418,445
  441,813
  466,397
  492,255
Total liabilities, $m
  208,781
  173,530
  177,521
  182,084
  187,206
  192,881
  199,108
  205,889
  213,230
  221,137
  229,624
  238,703
  248,391
  258,706
  269,669
  281,301
  293,629
  306,678
  320,478
  335,058
  350,454
  366,698
  383,829
  401,887
  420,912
  440,951
  462,049
  484,256
  507,624
  532,208
  558,066
Total equity, $m
  29,170
  29,667
  30,349
  31,129
  32,005
  32,975
  34,040
  35,199
  36,454
  37,806
  39,257
  40,809
  42,465
  44,228
  46,103
  48,091
  50,199
  52,430
  54,789
  57,282
  59,914
  62,691
  65,620
  68,707
  71,959
  75,385
  78,992
  82,788
  86,783
  90,986
  95,407
Total liabilities and equity, $m
  237,951
  203,197
  207,870
  213,213
  219,211
  225,856
  233,148
  241,088
  249,684
  258,943
  268,881
  279,512
  290,856
  302,934
  315,772
  329,392
  343,828
  359,108
  375,267
  392,340
  410,368
  429,389
  449,449
  470,594
  492,871
  516,336
  541,041
  567,044
  594,407
  623,194
  653,473
Debt-to-equity ratio
  4.901
  3.630
  3.680
  3.740
  3.790
  3.850
  3.920
  3.980
  4.040
  4.110
  4.170
  4.240
  4.300
  4.360
  4.420
  4.480
  4.540
  4.590
  4.650
  4.700
  4.750
  4.800
  4.850
  4.890
  4.930
  4.980
  5.020
  5.050
  5.090
  5.130
  5.160
Adjusted equity ratio
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146
  0.146

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,596
  3,104
  3,145
  3,195
  3,248
  3,306
  3,368
  3,435
  3,505
  3,581
  3,661
  3,749
  3,839
  3,935
  4,036
  4,142
  4,255
  4,373
  4,499
  4,631
  4,770
  4,917
  5,071
  5,234
  5,405
  5,585
  5,774
  5,973
  6,183
  6,403
  6,634
Depreciation, amort., depletion, $m
  9,023
  6,384
  6,531
  6,699
  6,887
  7,096
  7,325
  7,574
  7,844
  8,134
  8,446
  8,775
  9,131
  9,510
  9,913
  10,341
  10,794
  11,274
  11,781
  12,317
  12,883
  13,480
  14,110
  14,774
  15,473
  16,210
  16,986
  17,802
  18,661
  19,565
  20,515
Funds from operations, $m
  22,716
  9,488
  9,676
  9,893
  10,135
  10,402
  10,693
  11,008
  11,349
  11,715
  12,107
  12,524
  12,971
  13,445
  13,949
  14,483
  15,049
  15,647
  16,280
  16,948
  17,653
  18,397
  19,181
  20,008
  20,878
  21,795
  22,760
  23,775
  24,844
  25,967
  27,149
Change in working capital, $m
  2,924
  580
  680
  778
  873
  967
  1,061
  1,156
  1,251
  1,348
  1,446
  1,547
  1,651
  1,758
  1,868
  1,982
  2,101
  2,224
  2,352
  2,485
  2,624
  2,768
  2,920
  3,077
  3,242
  3,415
  3,596
  3,785
  3,982
  4,190
  4,407
Cash from operations, $m
  19,792
  8,908
  8,996
  9,116
  9,262
  9,435
  9,631
  9,853
  10,098
  10,367
  10,661
  10,977
  11,320
  11,687
  12,081
  12,501
  12,948
  13,424
  13,928
  14,463
  15,030
  15,629
  16,262
  16,930
  17,636
  18,380
  19,164
  19,991
  20,861
  21,778
  22,743
Maintenance CAPEX, $m
  0
  -6,256
  -6,379
  -6,526
  -6,694
  -6,882
  -7,091
  -7,320
  -7,569
  -7,839
  -8,129
  -8,441
  -8,775
  -9,131
  -9,510
  -9,913
  -10,341
  -10,794
  -11,274
  -11,781
  -12,317
  -12,883
  -13,480
  -14,110
  -14,774
  -15,473
  -16,210
  -16,986
  -17,802
  -18,661
  -19,565
New CAPEX, $m
  -6,992
  -618
  -734
  -839
  -941
  -1,043
  -1,145
  -1,246
  -1,349
  -1,454
  -1,560
  -1,669
  -1,781
  -1,896
  -2,015
  -2,138
  -2,266
  -2,399
  -2,536
  -2,680
  -2,830
  -2,986
  -3,149
  -3,319
  -3,497
  -3,683
  -3,878
  -4,082
  -4,295
  -4,519
  -4,753
Cash from investing activities, $m
  -25,352
  -6,874
  -7,113
  -7,365
  -7,635
  -7,925
  -8,236
  -8,566
  -8,918
  -9,293
  -9,689
  -10,110
  -10,556
  -11,027
  -11,525
  -12,051
  -12,607
  -13,193
  -13,810
  -14,461
  -15,147
  -15,869
  -16,629
  -17,429
  -18,271
  -19,156
  -20,088
  -21,068
  -22,097
  -23,180
  -24,318
Free cash flow, $m
  -5,560
  2,035
  1,883
  1,751
  1,627
  1,509
  1,396
  1,287
  1,180
  1,075
  971
  867
  764
  660
  555
  449
  341
  231
  118
  2
  -117
  -240
  -368
  -499
  -635
  -777
  -924
  -1,077
  -1,236
  -1,402
  -1,575
Issuance/(repayment) of debt, $m
  11,028
  3,576
  3,991
  4,562
  5,122
  5,676
  6,227
  6,781
  7,340
  7,908
  8,487
  9,079
  9,688
  10,315
  10,963
  11,633
  12,328
  13,049
  13,800
  14,581
  15,395
  16,244
  17,131
  18,058
  19,026
  20,038
  21,098
  22,207
  23,368
  24,584
  25,858
Issuance/(repurchase) of shares, $m
  -145
  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  
  10,834
  3,576
  3,991
  4,562
  5,122
  5,676
  6,227
  6,781
  7,340
  7,908
  8,487
  9,079
  9,688
  10,315
  10,963
  11,633
  12,328
  13,049
  13,800
  14,581
  15,395
  16,244
  17,131
  18,058
  19,026
  20,038
  21,098
  22,207
  23,368
  24,584
  25,858
Total cash flow (excl. dividends), $m
  5,009
  5,611
  5,874
  6,314
  6,749
  7,185
  7,623
  8,068
  8,520
  8,983
  9,458
  9,946
  10,452
  10,975
  11,518
  12,082
  12,669
  13,280
  13,917
  14,583
  15,278
  16,004
  16,764
  17,558
  18,390
  19,261
  20,174
  21,130
  22,132
  23,182
  24,283
Retained Cash Flow (-), $m
  -528
  -497
  -682
  -780
  -876
  -970
  -1,065
  -1,159
  -1,255
  -1,352
  -1,451
  -1,552
  -1,656
  -1,763
  -1,874
  -1,989
  -2,108
  -2,231
  -2,359
  -2,493
  -2,632
  -2,777
  -2,929
  -3,087
  -3,253
  -3,426
  -3,607
  -3,796
  -3,995
  -4,203
  -4,421
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
 
  5,114
  5,192
  5,534
  5,874
  6,215
  6,559
  6,908
  7,265
  7,631
  8,007
  8,394
  8,795
  9,211
  9,644
  10,093
  10,561
  11,049
  11,558
  12,090
  12,646
  13,227
  13,835
  14,471
  15,138
  15,836
  16,567
  17,333
  18,137
  18,979
  19,862
Discount rate, %
 
  9.30
  9.77
  10.25
  10.77
  11.30
  11.87
  12.46
  13.09
  13.74
  14.43
  15.15
  15.91
  16.70
  17.54
  18.41
  19.33
  20.30
  21.32
  22.38
  23.50
  24.68
  25.91
  27.20
  28.57
  29.99
  31.49
  33.07
  34.72
  36.46
  38.28
PV of cash for distribution, $m
 
  4,679
  4,309
  4,129
  3,902
  3,638
  3,346
  3,036
  2,716
  2,395
  2,081
  1,779
  1,496
  1,237
  1,004
  800
  624
  477
  357
  261
  186
  129
  87
  57
  36
  22
  13
  8
  4
  2
  1
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

Ford Motor Company is a global automotive and mobility company. The Company's business includes designing, manufacturing, marketing, and servicing a full line of Ford cars, trucks, and sport utility vehicles (SUVs), as well as Lincoln luxury vehicles. The Company operates in four segments: Automotive, Financial Services, Ford Smart Mobility LLC, and Central Treasury Operations. The Automotive segment primarily includes the sale of Ford and Lincoln brand vehicles, service parts, and accessories across the world. The Financial Services segment primarily includes its vehicle-related financing and leasing activities at Ford Motor Credit Company LLC. Ford Smart Mobility LLC is a subsidiary formed to design, build, grow, and invest in emerging mobility services. The Central Treasury Operations segment is primarily engaged in decision making for investments, risk management activities, and providing financing for the Automotive segment.

FINANCIAL RATIOS  of  Ford Motor (F)

Valuation Ratios
P/E Ratio 11.1
Price to Sales 0.3
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 2.6
Price to Free Cash Flow 4
Growth Rates
Sales Growth Rate 1.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.8%
Cap. Spend. - 3 Yr. Gr. Rate 1.2%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 319.9%
Total Debt to Equity 490.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 2%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 2.8%
Ret/ On T. Cap. - 3 Yr. Avg. 2.8%
Return On Equity 15.9%
Return On Equity - 3 Yr. Avg. 16.2%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 19.6%
Gross Margin - 3 Yr. Avg. 15.4%
EBITDA Margin 10.4%
EBITDA Margin - 3 Yr. Avg. 9.5%
Operating Margin 2.7%
Oper. Margin - 3 Yr. Avg. 2.7%
Pre-Tax Margin 4.5%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 3%
Net Profit Margin - 3 Yr. Avg. 2.9%
Effective Tax Rate 32.2%
Eff/ Tax Rate - 3 Yr. Avg. 20.2%
Payout Ratio 73.5%

F stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the F stock intrinsic value calculation we used $151800 million for the last fiscal year's total revenue generated by Ford Motor. The default revenue input number comes from 2016 income statement of Ford Motor. 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 F 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 9.3%, whose default value for F is calculated based on our internal credit rating of Ford Motor, 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 Ford Motor.
    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 F stock the variable cost ratio is equal to 94.9%.

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 F stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Ford Motor.

Corporate tax rate of 27% is the nominal tax rate for Ford Motor. 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 F 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 F are equal to 20.6%.

Life of production assets of 3.5 years is the average useful life of capital assets used in Ford Motor 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 F is equal to 19.1%. 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 - $29170 million for Ford Motor - 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 3971.9 million for Ford Motor 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 Ford Motor at the current share price and the inputted number of shares is $50.2 billion.

RELATED COMPANIES Price Int.Val. Rating
TM Toyota Motor A 124.92 173.50  buy
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TSLA Tesla 339.03 1,339.81  str.buy
HMC Honda Motor AD 33.73 8.72  str.sell

COMPANY NEWS

▶ Here's Why Ford Needs a Turnaround in China   [Dec-12-17 10:06PM  Motley Fool]
▶ Who are Ford's (F) main suppliers?   [11:24AM  Investopedia]
▶ Fords US Retail Sales Rose 1.3% in November   [07:32AM  Market Realist]
▶ Fords F-Series Still Ruled the US Market in November   [Dec-08-17 05:00PM  Market Realist]
▶ Why Oil Prices Bounced Back   [03:00PM  Oilprice.com]
▶ GMs Latest Weapon in Pickup Truck Wars: Carbon Fiber   [11:57PM  The Wall Street Journal]
▶ GM's Latest Weapon in Pickup Truck Wars: Carbon Fiber   [08:51AM  The Wall Street Journal]
▶ Today's Top Supply Chain and Logistics News From WSJ   [06:56AM  The Wall Street Journal]
▶ [$$] Ford Attempts a U-Turn in China   [12:39AM  The Wall Street Journal]
▶ This Is Ford's Plan For The Market That's Driving EV, SUV Growth   [Dec-05-17 04:05PM  Investor's Business Daily]
▶ US Automakers Report Flat November Sales   [Dec-04-17 02:38PM  GuruFocus.com]
Financial statements of F
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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