Intrinsic value of Coca-Cola Femsa ADR - KOF

Previous Close

$73.06

  Intrinsic Value

$159.17

stock screener

  Rating & Target

str. buy

+118%

Previous close

$73.06

 
Intrinsic value

$159.17

 
Up/down potential

+118%

 
Rating

str. buy

We calculate the intrinsic value of KOF 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  16.63
  16.50
  15.35
  14.32
  13.38
  12.55
  11.79
  11.11
  10.50
  9.95
  9.46
  9.01
  8.61
  8.25
  7.92
  7.63
  7.37
  7.13
  6.92
  6.73
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
Revenue, $m
  9,004
  10,490
  12,100
  13,832
  15,683
  17,651
  19,732
  21,924
  24,226
  26,637
  29,156
  31,782
  34,518
  37,366
  40,326
  43,403
  46,601
  49,924
  53,378
  56,968
  60,702
  64,585
  68,627
  72,836
  77,220
  81,789
  86,554
  91,525
  96,713
  102,131
  107,791
Variable operating expenses, $m
 
  8,941
  10,287
  11,735
  13,283
  14,928
  16,668
  18,501
  20,426
  22,441
  24,547
  26,574
  28,861
  31,242
  33,717
  36,290
  38,964
  41,742
  44,630
  47,632
  50,753
  54,000
  57,380
  60,899
  64,564
  68,385
  72,369
  76,525
  80,863
  85,393
  90,125
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
  7,964
  8,941
  10,287
  11,735
  13,283
  14,928
  16,668
  18,501
  20,426
  22,441
  24,547
  26,574
  28,861
  31,242
  33,717
  36,290
  38,964
  41,742
  44,630
  47,632
  50,753
  54,000
  57,380
  60,899
  64,564
  68,385
  72,369
  76,525
  80,863
  85,393
  90,125
Operating income, $m
  1,040
  1,549
  1,813
  2,097
  2,400
  2,723
  3,064
  3,423
  3,800
  4,195
  4,608
  5,209
  5,657
  6,124
  6,609
  7,113
  7,638
  8,182
  8,748
  9,337
  9,948
  10,585
  11,247
  11,937
  12,656
  13,405
  14,185
  15,000
  15,850
  16,738
  17,666
EBITDA, $m
  1,479
  2,145
  2,475
  2,829
  3,208
  3,610
  4,036
  4,484
  4,955
  5,448
  5,963
  6,500
  7,060
  7,642
  8,247
  8,877
  9,531
  10,211
  10,917
  11,651
  12,415
  13,209
  14,036
  14,896
  15,793
  16,728
  17,702
  18,719
  19,780
  20,888
  22,045
Interest expense (income), $m
  209
  231
  299
  373
  453
  538
  628
  724
  825
  931
  1,041
  1,157
  1,278
  1,403
  1,534
  1,670
  1,812
  1,959
  2,111
  2,270
  2,435
  2,606
  2,785
  2,971
  3,164
  3,365
  3,575
  3,794
  4,023
  4,261
  4,510
Earnings before tax, $m
  732
  1,318
  1,514
  1,723
  1,947
  2,185
  2,435
  2,699
  2,976
  3,265
  3,567
  4,052
  4,380
  4,720
  5,075
  5,443
  5,826
  6,224
  6,637
  7,067
  7,514
  7,979
  8,463
  8,967
  9,492
  10,039
  10,610
  11,206
  11,828
  12,477
  13,156
Tax expense, $m
  199
  356
  409
  465
  526
  590
  658
  729
  803
  882
  963
  1,094
  1,182
  1,275
  1,370
  1,470
  1,573
  1,680
  1,792
  1,908
  2,029
  2,154
  2,285
  2,421
  2,563
  2,711
  2,865
  3,026
  3,194
  3,369
  3,552
Net income, $m
  510
  962
  1,105
  1,258
  1,421
  1,595
  1,778
  1,970
  2,172
  2,383
  2,604
  2,958
  3,197
  3,446
  3,705
  3,974
  4,253
  4,543
  4,845
  5,159
  5,485
  5,824
  6,178
  6,546
  6,929
  7,329
  7,745
  8,180
  8,634
  9,109
  9,604

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  531
  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
  14,149
  15,869
  18,305
  20,926
  23,726
  26,703
  29,851
  33,168
  36,651
  40,298
  44,108
  48,082
  52,222
  56,529
  61,008
  65,663
  70,501
  75,528
  80,753
  86,185
  91,833
  97,709
  103,823
  110,190
  116,823
  123,736
  130,944
  138,464
  146,314
  154,510
  163,072
Adjusted assets (=assets-cash), $m
  13,618
  15,869
  18,305
  20,926
  23,726
  26,703
  29,851
  33,168
  36,651
  40,298
  44,108
  48,082
  52,222
  56,529
  61,008
  65,663
  70,501
  75,528
  80,753
  86,185
  91,833
  97,709
  103,823
  110,190
  116,823
  123,736
  130,944
  138,464
  146,314
  154,510
  163,072
Revenue / Adjusted assets
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
Average production assets, $m
  6,990
  8,140
  9,389
  10,734
  12,170
  13,697
  15,312
  17,013
  18,800
  20,670
  22,625
  24,663
  26,786
  28,996
  31,293
  33,681
  36,162
  38,741
  41,421
  44,207
  47,104
  50,118
  53,255
  56,521
  59,923
  63,469
  67,166
  71,023
  75,049
  79,254
  83,646
Working capital, $m
  283
  -105
  -121
  -138
  -157
  -177
  -197
  -219
  -242
  -266
  -292
  -318
  -345
  -374
  -403
  -434
  -466
  -499
  -534
  -570
  -607
  -646
  -686
  -728
  -772
  -818
  -866
  -915
  -967
  -1,021
  -1,078
Total debt, $m
  4,518
  5,650
  7,046
  8,547
  10,152
  11,858
  13,662
  15,562
  17,558
  19,648
  21,831
  24,108
  26,480
  28,948
  31,514
  34,182
  36,954
  39,835
  42,829
  45,941
  49,177
  52,544
  56,048
  59,696
  63,497
  67,458
  71,588
  75,897
  80,395
  85,091
  89,997
Total liabilities, $m
  7,961
  9,093
  10,489
  11,990
  13,595
  15,301
  17,105
  19,005
  21,001
  23,091
  25,274
  27,551
  29,923
  32,391
  34,957
  37,625
  40,397
  43,278
  46,272
  49,384
  52,620
  55,987
  59,491
  63,139
  66,940
  70,901
  75,031
  79,340
  83,838
  88,534
  93,440
Total equity, $m
  6,188
  6,776
  7,816
  8,935
  10,131
  11,402
  12,746
  14,163
  15,650
  17,207
  18,834
  20,531
  22,299
  24,138
  26,050
  28,038
  30,104
  32,251
  34,482
  36,801
  39,213
  41,722
  44,333
  47,051
  49,883
  52,835
  55,913
  59,124
  62,476
  65,976
  69,632
Total liabilities and equity, $m
  14,149
  15,869
  18,305
  20,925
  23,726
  26,703
  29,851
  33,168
  36,651
  40,298
  44,108
  48,082
  52,222
  56,529
  61,007
  65,663
  70,501
  75,529
  80,754
  86,185
  91,833
  97,709
  103,824
  110,190
  116,823
  123,736
  130,944
  138,464
  146,314
  154,510
  163,072
Debt-to-equity ratio
  0.730
  0.830
  0.900
  0.960
  1.000
  1.040
  1.070
  1.100
  1.120
  1.140
  1.160
  1.170
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.240
  1.250
  1.250
  1.260
  1.260
  1.270
  1.270
  1.280
  1.280
  1.280
  1.290
  1.290
  1.290
Adjusted equity ratio
  0.421
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  510
  962
  1,105
  1,258
  1,421
  1,595
  1,778
  1,970
  2,172
  2,383
  2,604
  2,958
  3,197
  3,446
  3,705
  3,974
  4,253
  4,543
  4,845
  5,159
  5,485
  5,824
  6,178
  6,546
  6,929
  7,329
  7,745
  8,180
  8,634
  9,109
  9,604
Depreciation, amort., depletion, $m
  439
  596
  662
  732
  807
  887
  972
  1,061
  1,154
  1,252
  1,355
  1,291
  1,402
  1,518
  1,638
  1,763
  1,893
  2,028
  2,169
  2,315
  2,466
  2,624
  2,788
  2,959
  3,137
  3,323
  3,517
  3,719
  3,929
  4,149
  4,379
Funds from operations, $m
  1,678
  1,558
  1,767
  1,990
  2,229
  2,482
  2,750
  3,031
  3,327
  3,636
  3,958
  4,249
  4,600
  4,964
  5,343
  5,737
  6,146
  6,572
  7,014
  7,473
  7,951
  8,448
  8,966
  9,505
  10,066
  10,652
  11,262
  11,899
  12,564
  13,258
  13,983
Change in working capital, $m
  34
  -15
  -16
  -17
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -32
  -33
  -35
  -36
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
Cash from operations, $m
  1,644
  1,573
  1,783
  2,007
  2,247
  2,502
  2,770
  3,053
  3,350
  3,660
  3,984
  4,275
  4,627
  4,993
  5,373
  5,768
  6,178
  6,605
  7,048
  7,509
  7,988
  8,487
  9,006
  9,547
  10,110
  10,697
  11,310
  11,949
  12,616
  13,312
  14,040
Maintenance CAPEX, $m
  0
  -366
  -426
  -492
  -562
  -637
  -717
  -802
  -891
  -984
  -1,082
  -1,185
  -1,291
  -1,402
  -1,518
  -1,638
  -1,763
  -1,893
  -2,028
  -2,169
  -2,315
  -2,466
  -2,624
  -2,788
  -2,959
  -3,137
  -3,323
  -3,517
  -3,719
  -3,929
  -4,149
New CAPEX, $m
  -643
  -1,150
  -1,249
  -1,344
  -1,437
  -1,527
  -1,615
  -1,701
  -1,786
  -1,871
  -1,954
  -2,038
  -2,123
  -2,209
  -2,297
  -2,388
  -2,482
  -2,579
  -2,680
  -2,786
  -2,897
  -3,014
  -3,137
  -3,266
  -3,402
  -3,546
  -3,697
  -3,857
  -4,026
  -4,204
  -4,392
Cash from investing activities, $m
  -1,364
  -1,516
  -1,675
  -1,836
  -1,999
  -2,164
  -2,332
  -2,503
  -2,677
  -2,855
  -3,036
  -3,223
  -3,414
  -3,611
  -3,815
  -4,026
  -4,245
  -4,472
  -4,708
  -4,955
  -5,212
  -5,480
  -5,761
  -6,054
  -6,361
  -6,683
  -7,020
  -7,374
  -7,745
  -8,133
  -8,541
Free cash flow, $m
  280
  57
  107
  172
  249
  338
  438
  550
  672
  805
  947
  1,052
  1,212
  1,381
  1,557
  1,741
  1,933
  2,133
  2,340
  2,554
  2,777
  3,007
  3,246
  3,493
  3,749
  4,014
  4,289
  4,575
  4,871
  5,179
  5,499
Issuance/(repayment) of debt, $m
  157
  1,287
  1,396
  1,501
  1,605
  1,706
  1,804
  1,901
  1,996
  2,090
  2,183
  2,277
  2,372
  2,468
  2,566
  2,668
  2,772
  2,881
  2,994
  3,112
  3,236
  3,367
  3,504
  3,648
  3,800
  3,961
  4,130
  4,309
  4,498
  4,696
  4,906
Issuance/(repurchase) of shares, $m
  42
  2
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -138
  1,289
  1,396
  1,501
  1,605
  1,706
  1,804
  1,901
  1,996
  2,090
  2,183
  2,277
  2,372
  2,468
  2,566
  2,668
  2,772
  2,881
  2,994
  3,112
  3,236
  3,367
  3,504
  3,648
  3,800
  3,961
  4,130
  4,309
  4,498
  4,696
  4,906
Total cash flow (excl. dividends), $m
  76
  1,346
  1,503
  1,673
  1,854
  2,043
  2,242
  2,451
  2,668
  2,895
  3,130
  3,330
  3,584
  3,849
  4,124
  4,409
  4,705
  5,013
  5,334
  5,667
  6,013
  6,374
  6,750
  7,141
  7,549
  7,975
  8,420
  8,884
  9,369
  9,875
  10,405
Retained Cash Flow (-), $m
  -881
  -964
  -1,040
  -1,119
  -1,196
  -1,271
  -1,344
  -1,416
  -1,487
  -1,557
  -1,627
  -1,697
  -1,767
  -1,839
  -1,912
  -1,988
  -2,066
  -2,147
  -2,231
  -2,319
  -2,412
  -2,509
  -2,611
  -2,719
  -2,832
  -2,952
  -3,078
  -3,211
  -3,352
  -3,500
  -3,656
Prev. year cash balance distribution, $m
 
  376
  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
 
  758
  463
  554
  658
  772
  898
  1,034
  1,181
  1,337
  1,503
  1,633
  1,817
  2,010
  2,211
  2,421
  2,640
  2,867
  3,103
  3,347
  3,601
  3,865
  4,139
  4,422
  4,717
  5,023
  5,342
  5,673
  6,017
  6,375
  6,749
Discount rate, %
 
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
 
  717
  412
  462
  509
  552
  589
  618
  637
  646
  644
  615
  595
  566
  530
  487
  440
  390
  340
  291
  244
  201
  162
  127
  98
  74
  54
  39
  27
  18
  12
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

Coca-Cola FEMSA, S.A.B. de C.V. is a franchise bottler of Coca-Cola trademark beverages across the world. The Company and its subsidiaries are engaged in the production, distribution and marketing of certain Coca-Cola beverages. It is also engaged in acquiring, holding and transferring all types of bonds, shares and marketable securities. The Company's segments include Mexico and Central America division, which comprises Mexico (including corporate operations), Guatemala, Nicaragua, Costa Rica and Panama; the South America division, which consists of Brazil, Argentina and Colombia; Venezuela, which operates in an economy with exchange control and hyper-inflation, and the Asian division, which consists of the Company's equity method investment in Coca-Cola FEMSA Philippines, Inc. The Coca-Cola trademark beverages include sparkling beverages (colas and flavored sparkling beverages), waters and still beverages (including juice drinks, coffee, teas, milk, dairy and isotonic drinks).

FINANCIAL RATIOS  of  Coca-Cola Femsa ADR (KOF)

Valuation Ratios
P/E Ratio 297
Price to Sales 16.8
Price to Book 24.5
Price to Tangible Book
Price to Cash Flow 92.1
Price to Free Cash Flow 151.3
Growth Rates
Sales Growth Rate 16.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 10.3%
Cap. Spend. - 3 Yr. Gr. Rate 1.4%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 70.5%
Total Debt to Equity 73%
Interest Coverage 5
Management Effectiveness
Return On Assets 5.3%
Ret/ On Assets - 3 Yr. Avg. 5.8%
Return On Total Capital 5.3%
Ret/ On T. Cap. - 3 Yr. Avg. 5.8%
Return On Equity 8.9%
Return On Equity - 3 Yr. Avg. 9.4%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 44.8%
Gross Margin - 3 Yr. Avg. 46.2%
EBITDA Margin 15.3%
EBITDA Margin - 3 Yr. Avg. 16.4%
Operating Margin 11.6%
Oper. Margin - 3 Yr. Avg. 13.5%
Pre-Tax Margin 8.1%
Pre-Tax Margin - 3 Yr. Avg. 9.3%
Net Profit Margin 5.7%
Net Profit Margin - 3 Yr. Avg. 6.5%
Effective Tax Rate 27.2%
Eff/ Tax Rate - 3 Yr. Avg. 27.9%
Payout Ratio 69.6%

KOF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KOF stock intrinsic value calculation we used $9004 million for the last fiscal year's total revenue generated by Coca-Cola Femsa ADR. The default revenue input number comes from 2016 income statement of Coca-Cola Femsa ADR. 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 KOF stock valuation model: a) initial revenue growth rate of 16.5% 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 5.7%, whose default value for KOF is calculated based on our internal credit rating of Coca-Cola Femsa ADR, 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 Coca-Cola Femsa ADR.
    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 KOF stock the variable cost ratio is equal to 85.5%.

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 KOF 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 5.3% for Coca-Cola Femsa ADR.

Corporate tax rate of 27% is the nominal tax rate for Coca-Cola Femsa ADR. 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 KOF 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 KOF are equal to 77.6%.

Life of production assets of 19.1 years is the average useful life of capital assets used in Coca-Cola Femsa ADR 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 KOF is equal to -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 - $6188 million for Coca-Cola Femsa ADR - 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 69.808 million for Coca-Cola Femsa ADR 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 Coca-Cola Femsa ADR at the current share price and the inputted number of shares is $5.1 billion.

RELATED COMPANIES Price Int.Val. Rating
PEP PepsiCo 111.06 59.61  str.sell
KO Coca-Cola 44.98 17.12  str.sell
COKE Coca-Cola Bott 190.69 619.12  str.buy

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Financial statements of KOF
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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