Intrinsic value of Madison Square Garden - MSG

Previous Close

$219.38

  Intrinsic Value

$117.64

stock screener

  Rating & Target

sell

-46%

Previous close

$219.38

 
Intrinsic value

$117.64

 
Up/down potential

-46%

 
Rating

sell

We calculate the intrinsic value of MSG 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 2017), $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 5.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  18.21
  40.40
  36.86
  33.67
  30.81
  28.23
  25.90
  23.81
  21.93
  20.24
  18.71
  17.34
  16.11
  15.00
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
Revenue, $m
  1,318
  1,850
  2,533
  3,385
  4,428
  5,678
  7,149
  8,851
  10,793
  12,977
  15,406
  18,077
  20,990
  24,138
  27,516
  31,121
  34,945
  38,984
  43,235
  47,694
  52,360
  57,231
  62,309
  67,597
  73,098
  78,817
  84,761
  90,937
  97,356
  104,027
  110,963
Variable operating expenses, $m
 
  1,854
  2,523
  3,360
  4,383
  5,609
  7,052
  8,723
  10,627
  12,771
  15,154
  17,737
  20,594
  23,683
  26,998
  30,535
  34,287
  38,250
  42,421
  46,796
  51,374
  56,153
  61,136
  66,324
  71,721
  77,332
  83,164
  89,225
  95,523
  102,068
  108,874
Fixed operating expenses, $m
 
  50
  51
  53
  54
  55
  57
  58
  60
  61
  63
  64
  66
  68
  69
  71
  73
  75
  76
  78
  80
  82
  84
  86
  89
  91
  93
  95
  98
  100
  103
Total operating expenses, $m
  1,379
  1,904
  2,574
  3,413
  4,437
  5,664
  7,109
  8,781
  10,687
  12,832
  15,217
  17,801
  20,660
  23,751
  27,067
  30,606
  34,360
  38,325
  42,497
  46,874
  51,454
  56,235
  61,220
  66,410
  71,810
  77,423
  83,257
  89,320
  95,621
  102,168
  108,977
Operating income, $m
  -60
  -53
  -42
  -27
  -9
  13
  40
  70
  106
  145
  189
  276
  329
  387
  449
  515
  585
  660
  738
  820
  906
  995
  1,089
  1,186
  1,288
  1,393
  1,503
  1,617
  1,736
  1,859
  1,987
EBITDA, $m
  47
  108
  165
  236
  324
  429
  553
  697
  861
  1,046
  1,251
  1,478
  1,724
  1,991
  2,278
  2,584
  2,908
  3,251
  3,611
  3,990
  4,386
  4,799
  5,231
  5,679
  6,147
  6,632
  7,137
  7,661
  8,207
  8,773
  9,362
Interest expense (income), $m
  0
  4
  22
  46
  75
  111
  155
  205
  264
  331
  407
  491
  584
  684
  793
  910
  1,035
  1,167
  1,307
  1,454
  1,609
  1,770
  1,939
  2,114
  2,297
  2,488
  2,686
  2,891
  3,105
  3,327
  3,558
Earnings before tax, $m
  -81
  -57
  -64
  -73
  -84
  -98
  -115
  -135
  -159
  -186
  -218
  -215
  -254
  -297
  -344
  -395
  -450
  -508
  -569
  -634
  -703
  -775
  -850
  -928
  -1,009
  -1,094
  -1,182
  -1,274
  -1,369
  -1,468
  -1,571
Tax expense, $m
  -4
  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
  -73
  -57
  -64
  -73
  -84
  -98
  -115
  -135
  -159
  -186
  -218
  -215
  -254
  -297
  -344
  -395
  -450
  -508
  -569
  -634
  -703
  -775
  -850
  -928
  -1,009
  -1,094
  -1,182
  -1,274
  -1,369
  -1,468
  -1,571

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,238
  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
  3,713
  3,472
  4,752
  6,352
  8,308
  10,653
  13,413
  16,607
  20,249
  24,347
  28,904
  33,916
  39,380
  45,286
  51,626
  58,388
  65,563
  73,141
  81,117
  89,482
  98,236
  107,375
  116,903
  126,824
  137,144
  147,874
  159,025
  170,614
  182,657
  195,174
  208,187
Adjusted assets (=assets-cash), $m
  2,475
  3,472
  4,752
  6,352
  8,308
  10,653
  13,413
  16,607
  20,249
  24,347
  28,904
  33,916
  39,380
  45,286
  51,626
  58,388
  65,563
  73,141
  81,117
  89,482
  98,236
  107,375
  116,903
  126,824
  137,144
  147,874
  159,025
  170,614
  182,657
  195,174
  208,187
Revenue / Adjusted assets
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
  0.533
Average production assets, $m
  1,463
  2,054
  2,811
  3,758
  4,915
  6,303
  7,935
  9,825
  11,980
  14,405
  17,100
  20,066
  23,298
  26,793
  30,543
  34,544
  38,789
  43,273
  47,991
  52,941
  58,119
  63,526
  69,163
  75,033
  81,138
  87,487
  94,084
  100,940
  108,065
  115,471
  123,169
Working capital, $m
  688
  -772
  -1,056
  -1,412
  -1,847
  -2,368
  -2,981
  -3,691
  -4,501
  -5,411
  -6,424
  -7,538
  -8,753
  -10,065
  -11,474
  -12,977
  -14,572
  -16,256
  -18,029
  -19,888
  -21,834
  -23,865
  -25,983
  -28,188
  -30,482
  -32,867
  -35,345
  -37,921
  -40,597
  -43,379
  -46,272
Total debt, $m
  105
  630
  1,304
  2,147
  3,178
  4,414
  5,869
  7,552
  9,471
  11,631
  14,032
  16,674
  19,553
  22,666
  26,007
  29,570
  33,352
  37,346
  41,548
  45,957
  50,570
  55,387
  60,408
  65,636
  71,075
  76,729
  82,606
  88,714
  95,060
  101,656
  108,514
Total liabilities, $m
  1,305
  1,830
  2,504
  3,347
  4,378
  5,614
  7,069
  8,752
  10,671
  12,831
  15,232
  17,874
  20,753
  23,866
  27,207
  30,770
  34,552
  38,546
  42,748
  47,157
  51,770
  56,587
  61,608
  66,836
  72,275
  77,929
  83,806
  89,914
  96,260
  102,856
  109,714
Total equity, $m
  2,408
  1,642
  2,247
  3,004
  3,930
  5,039
  6,344
  7,855
  9,578
  11,516
  13,671
  16,042
  18,627
  21,420
  24,419
  27,617
  31,011
  34,596
  38,368
  42,325
  46,465
  50,789
  55,295
  59,988
  64,869
  69,944
  75,219
  80,700
  86,397
  92,317
  98,472
Total liabilities and equity, $m
  3,713
  3,472
  4,751
  6,351
  8,308
  10,653
  13,413
  16,607
  20,249
  24,347
  28,903
  33,916
  39,380
  45,286
  51,626
  58,387
  65,563
  73,142
  81,116
  89,482
  98,235
  107,376
  116,903
  126,824
  137,144
  147,873
  159,025
  170,614
  182,657
  195,173
  208,186
Debt-to-equity ratio
  0.044
  0.380
  0.580
  0.710
  0.810
  0.880
  0.930
  0.960
  0.990
  1.010
  1.030
  1.040
  1.050
  1.060
  1.070
  1.070
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
Adjusted equity ratio
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -73
  -57
  -64
  -73
  -84
  -98
  -115
  -135
  -159
  -186
  -218
  -215
  -254
  -297
  -344
  -395
  -450
  -508
  -569
  -634
  -703
  -775
  -850
  -928
  -1,009
  -1,094
  -1,182
  -1,274
  -1,369
  -1,468
  -1,571
Depreciation, amort., depletion, $m
  107
  161
  206
  263
  332
  415
  513
  626
  755
  901
  1,062
  1,202
  1,395
  1,604
  1,829
  2,068
  2,323
  2,591
  2,874
  3,170
  3,480
  3,804
  4,142
  4,493
  4,859
  5,239
  5,634
  6,044
  6,471
  6,914
  7,375
Funds from operations, $m
  292
  104
  143
  190
  248
  318
  398
  491
  597
  714
  844
  987
  1,141
  1,307
  1,485
  1,673
  1,873
  2,083
  2,304
  2,536
  2,777
  3,029
  3,292
  3,565
  3,849
  4,144
  4,451
  4,770
  5,102
  5,446
  5,804
Change in working capital, $m
  75
  -222
  -284
  -356
  -435
  -521
  -613
  -710
  -810
  -911
  -1,013
  -1,114
  -1,214
  -1,313
  -1,409
  -1,503
  -1,595
  -1,684
  -1,773
  -1,859
  -1,945
  -2,031
  -2,118
  -2,205
  -2,294
  -2,385
  -2,479
  -2,576
  -2,677
  -2,782
  -2,892
Cash from operations, $m
  217
  326
  427
  546
  683
  839
  1,012
  1,201
  1,406
  1,625
  1,857
  2,101
  2,355
  2,620
  2,894
  3,176
  3,468
  3,768
  4,077
  4,395
  4,723
  5,061
  5,410
  5,770
  6,143
  6,529
  6,930
  7,346
  7,778
  8,228
  8,697
Maintenance CAPEX, $m
  0
  -88
  -123
  -168
  -225
  -294
  -377
  -475
  -588
  -717
  -863
  -1,024
  -1,202
  -1,395
  -1,604
  -1,829
  -2,068
  -2,323
  -2,591
  -2,874
  -3,170
  -3,480
  -3,804
  -4,142
  -4,493
  -4,859
  -5,239
  -5,634
  -6,044
  -6,471
  -6,914
New CAPEX, $m
  -44
  -591
  -757
  -947
  -1,158
  -1,387
  -1,633
  -1,890
  -2,155
  -2,425
  -2,696
  -2,966
  -3,232
  -3,494
  -3,750
  -4,001
  -4,245
  -4,484
  -4,718
  -4,949
  -5,179
  -5,407
  -5,637
  -5,869
  -6,106
  -6,348
  -6,598
  -6,856
  -7,125
  -7,405
  -7,699
Cash from investing activities, $m
  -264
  -679
  -880
  -1,115
  -1,383
  -1,681
  -2,010
  -2,365
  -2,743
  -3,142
  -3,559
  -3,990
  -4,434
  -4,889
  -5,354
  -5,830
  -6,313
  -6,807
  -7,309
  -7,823
  -8,349
  -8,887
  -9,441
  -10,011
  -10,599
  -11,207
  -11,837
  -12,490
  -13,169
  -13,876
  -14,613
Free cash flow, $m
  -47
  -353
  -453
  -569
  -699
  -843
  -998
  -1,164
  -1,337
  -1,517
  -1,701
  -1,889
  -2,079
  -2,270
  -2,461
  -2,653
  -2,846
  -3,039
  -3,233
  -3,428
  -3,626
  -3,827
  -4,031
  -4,241
  -4,456
  -4,677
  -4,906
  -5,144
  -5,391
  -5,648
  -5,917
Issuance/(repayment) of debt, $m
  0
  525
  674
  843
  1,031
  1,236
  1,454
  1,683
  1,919
  2,160
  2,401
  2,642
  2,879
  3,113
  3,341
  3,564
  3,781
  3,994
  4,203
  4,409
  4,613
  4,817
  5,021
  5,228
  5,439
  5,655
  5,877
  6,107
  6,347
  6,596
  6,858
Issuance/(repurchase) of shares, $m
  -148
  529
  669
  829
  1,009
  1,207
  1,420
  1,646
  1,882
  2,125
  2,373
  2,586
  2,838
  3,091
  3,343
  3,594
  3,843
  4,093
  4,342
  4,591
  4,843
  5,098
  5,356
  5,620
  5,891
  6,169
  6,457
  6,756
  7,066
  7,389
  7,726
Cash from financing (excl. dividends), $m  
  -159
  1,054
  1,343
  1,672
  2,040
  2,443
  2,874
  3,329
  3,801
  4,285
  4,774
  5,228
  5,717
  6,204
  6,684
  7,158
  7,624
  8,087
  8,545
  9,000
  9,456
  9,915
  10,377
  10,848
  11,330
  11,824
  12,334
  12,863
  13,413
  13,985
  14,584
Total cash flow (excl. dividends), $m
  -206
  701
  890
  1,104
  1,341
  1,600
  1,876
  2,165
  2,464
  2,768
  3,073
  3,339
  3,639
  3,934
  4,222
  4,504
  4,779
  5,048
  5,312
  5,572
  5,830
  6,088
  6,346
  6,608
  6,874
  7,147
  7,428
  7,719
  8,021
  8,337
  8,667
Retained Cash Flow (-), $m
  178
  -529
  -669
  -829
  -1,009
  -1,207
  -1,420
  -1,646
  -1,882
  -2,125
  -2,373
  -2,586
  -2,838
  -3,091
  -3,343
  -3,594
  -3,843
  -4,093
  -4,342
  -4,591
  -4,843
  -5,098
  -5,356
  -5,620
  -5,891
  -6,169
  -6,457
  -6,756
  -7,066
  -7,389
  -7,726
Prev. year cash balance distribution, $m
 
  1,238
  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
 
  1,410
  221
  274
  332
  393
  456
  520
  582
  643
  700
  753
  801
  843
  879
  910
  936
  955
  970
  981
  987
  990
  990
  987
  983
  977
  970
  963
  956
  948
  941
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
 
  1,352
  203
  239
  273
  305
  331
  351
  364
  369
  367
  357
  342
  320
  295
  267
  238
  208
  179
  151
  125
  102
  82
  65
  50
  38
  28
  21
  15
  10
  7
Current shareholders' claim on cash, %
  100
  82.6
  69.4
  59.2
  51.2
  44.8
  39.6
  35.3
  31.8
  28.8
  26.3
  24.2
  22.3
  20.7
  19.3
  18.1
  17.0
  16.0
  15.1
  14.3
  13.6
  12.9
  12.3
  11.8
  11.3
  10.8
  10.3
  9.9
  9.5
  9.2
  8.8

The Madison Square Garden Company is a holding company, which is engaged in live experiences consisting of celebrated venues, sports teams, and entertainment productions. The Company operates in two segments, which include MSG Entertainment and MSG Sports. The MSG Sports segment includes the Company's professional sports franchises, which include the New York Knicks (the Knicks) of the National Basketball Association (the NBA), the New York Rangers (the Rangers) of the National Hockey League (the NHL), the New York Liberty (the Liberty) of the Women's National Basketball Association (the WNBA), the Hartford Wolf Pack of the American Hockey League (the AHL), which is the primary player development team for the Rangers, and the Westchester Knicks, an NBA Development League team. The MSG Entertainment segment includes the Company's live entertainment events. The Company presents or hosts live entertainment events, including concerts, family shows, performing arts and special events.

FINANCIAL RATIOS  of  Madison Square Garden (MSG)

Valuation Ratios
P/E Ratio -70.7
Price to Sales 3.9
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 23.8
Price to Free Cash Flow 29.9
Growth Rates
Sales Growth Rate 18.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -38.9%
Cap. Spend. - 3 Yr. Gr. Rate -32.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 4.4%
Total Debt to Equity 4.4%
Interest Coverage 0
Management Effectiveness
Return On Assets -2%
Ret/ On Assets - 3 Yr. Avg. -2.2%
Return On Total Capital -2.9%
Ret/ On T. Cap. - 3 Yr. Avg. -3.4%
Return On Equity -2.9%
Return On Equity - 3 Yr. Avg. -3.5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 34.7%
Gross Margin - 3 Yr. Avg. 33.6%
EBITDA Margin 2%
EBITDA Margin - 3 Yr. Avg. 3.6%
Operating Margin -4.6%
Oper. Margin - 3 Yr. Avg. -3.3%
Pre-Tax Margin -6.1%
Pre-Tax Margin - 3 Yr. Avg. -5.6%
Net Profit Margin -5.5%
Net Profit Margin - 3 Yr. Avg. -5.4%
Effective Tax Rate 4.9%
Eff/ Tax Rate - 3 Yr. Avg. 0.8%
Payout Ratio 0%

MSG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MSG stock intrinsic value calculation we used $1318 million for the last fiscal year's total revenue generated by Madison Square Garden. The default revenue input number comes from 2017 income statement of Madison Square Garden. 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 MSG stock valuation model: a) initial revenue growth rate of 40.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for MSG is calculated based on our internal credit rating of Madison Square Garden, 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 Madison Square Garden.
    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 MSG stock the variable cost ratio is equal to 101%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $49 million in the base year in the intrinsic value calculation for MSG 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 Madison Square Garden.

Corporate tax rate of 27% is the nominal tax rate for Madison Square Garden. 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 MSG 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 MSG are equal to 111%.

Life of production assets of 16.7 years is the average useful life of capital assets used in Madison Square Garden 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 MSG is equal to -41.7%. 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 - $2408 million for Madison Square Garden - 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 23.566 million for Madison Square Garden 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 Madison Square Garden at the current share price and the inputted number of shares is $5.2 billion.

RELATED COMPANIES Price Int.Val. Rating
MANU Manchester Uni 18.25 89.25  str.buy
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COMPANY NEWS

▶ MSG Networks Deleveraging Is Working   [Oct-11-17 10:10AM  Benzinga]
▶ How the Knicks Are Making a Winner Out of Dolan   [Sep-07-17 03:40PM  Bloomberg Video]
▶ The Madison Square Garden Co. posts 4Q loss   [Aug-17-17 11:02PM  Associated Press]
▶ Why Mario Gabelli Is Optimistic about Multimedia Stocks   [Jul-26-17 09:11AM  Market Realist]
▶ 6 Things You Didn't Know About Shake Shack Inc.   [Jul-02-17 05:31PM  Motley Fool]
▶ Financials, food, housing & more in the trader blitz   [Jun-28-17 01:54PM  CNBC Videos]
▶ The Madison Square Garden Co. posts 3Q loss   [May-04-17 07:47AM  Associated Press]
▶ Trader tracker: Q1's most memorable calls   [Mar-27-17 04:09PM  CNBC]
▶ The Madison Square Garden Company Statement on the Grammys   [Mar-01-17 12:34PM  GlobeNewswire]
▶ Trader goes one-on-one with NBA legend Allan Houston   [Feb-17-17 05:23PM  CNBC Videos]
Financial statements of MSG
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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