Intrinsic value of Grupo Aeroportuario del Pacifico ADR - PAC

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$109.75

  Intrinsic Value

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  Value-price divergence*

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$109.75

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

We calculate the intrinsic value of PAC 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 6.1

 

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, %
  36.98
  55.70
  50.63
  46.07
  41.96
  38.26
  34.94
  31.94
  29.25
  26.82
  24.64
  22.68
  20.91
  19.32
  17.89
  16.60
  15.44
  14.39
  13.46
  12.61
  11.85
  11.16
  10.55
  9.99
  9.49
  9.04
  8.64
  8.28
  7.95
  7.65
  7.39
Revenue, $m
  563
  17,295
  26,052
  38,053
  54,020
  74,690
  100,786
  132,981
  171,877
  217,983
  271,698
  333,314
  403,011
  480,869
  566,883
  660,978
  763,024
  872,860
  990,306
  1,115,181
  1,247,317
  1,386,567
  1,532,816
  1,685,987
  1,846,046
  2,013,005
  2,186,924
  2,367,908
  2,556,114
  2,751,743
  2,955,043
Variable operating expenses, $m
 
  8,578
  12,922
  18,874
  26,794
  37,046
  49,990
  65,958
  85,251
  108,119
  134,762
  165,324
  199,893
  238,511
  281,174
  327,845
  378,460
  432,938
  491,192
  553,130
  618,669
  687,737
  760,277
  836,249
  915,639
  998,451
  1,084,714
  1,174,483
  1,267,833
  1,364,865
  1,465,701
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
  298
  8,578
  12,922
  18,874
  26,794
  37,046
  49,990
  65,958
  85,251
  108,119
  134,762
  165,324
  199,893
  238,511
  281,174
  327,845
  378,460
  432,938
  491,192
  553,130
  618,669
  687,737
  760,277
  836,249
  915,639
  998,451
  1,084,714
  1,174,483
  1,267,833
  1,364,865
  1,465,701
Operating income, $m
  265
  8,717
  13,130
  19,179
  27,226
  37,644
  50,796
  67,022
  86,626
  109,863
  136,936
  167,990
  203,117
  242,358
  285,709
  333,133
  384,564
  439,921
  499,114
  562,051
  628,648
  698,830
  772,539
  849,737
  930,407
  1,014,555
  1,102,210
  1,193,426
  1,288,282
  1,386,879
  1,489,342
EBITDA, $m
  333
  10,815
  16,291
  23,796
  33,781
  46,706
  63,025
  83,157
  107,480
  136,312
  169,902
  208,432
  252,016
  300,703
  354,491
  413,331
  477,144
  545,828
  619,271
  697,360
  779,989
  867,066
  958,521
  1,054,304
  1,154,394
  1,258,799
  1,367,556
  1,480,732
  1,598,423
  1,720,757
  1,847,887
Interest expense (income), $m
  18
  409
  750
  1,235
  1,898
  2,781
  3,924
  5,367
  7,148
  9,299
  11,848
  14,819
  18,226
  22,081
  26,386
  31,143
  36,346
  41,989
  48,063
  54,558
  61,464
  68,771
  76,471
  84,559
  93,029
  101,880
  111,113
  120,731
  130,739
  141,147
  151,965
Earnings before tax, $m
  234
  8,308
  12,380
  17,944
  25,328
  34,863
  46,872
  61,655
  79,478
  100,564
  125,087
  153,171
  184,891
  220,277
  259,323
  301,990
  348,218
  397,932
  451,051
  507,493
  567,184
  630,059
  696,068
  765,179
  837,378
  912,674
  991,096
  1,072,695
  1,157,542
  1,245,731
  1,337,376
Tax expense, $m
  64
  2,243
  3,342
  4,845
  6,838
  9,413
  12,655
  16,647
  21,459
  27,152
  33,774
  41,356
  49,921
  59,475
  70,017
  81,537
  94,019
  107,442
  121,784
  137,023
  153,140
  170,116
  187,938
  206,598
  226,092
  246,422
  267,596
  289,628
  312,536
  336,347
  361,092
Net income, $m
  166
  6,065
  9,037
  13,099
  18,489
  25,450
  34,216
  45,008
  58,019
  73,412
  91,314
  111,815
  134,970
  160,803
  189,306
  220,453
  254,199
  290,490
  329,267
  370,470
  414,045
  459,943
  508,130
  558,580
  611,286
  666,252
  723,500
  783,067
  845,006
  909,384
  976,285

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  263
  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
  1,827
  48,042
  72,366
  105,703
  150,056
  207,473
  279,960
  369,391
  477,436
  605,507
  754,717
  925,872
  1,119,474
  1,335,747
  1,574,676
  1,836,049
  2,119,511
  2,424,610
  2,750,849
  3,097,726
  3,464,770
  3,851,575
  4,257,821
  4,683,296
  5,127,905
  5,591,681
  6,074,788
  6,577,523
  7,100,318
  7,643,731
  8,208,453
Adjusted assets (=assets-cash), $m
  1,564
  48,042
  72,366
  105,703
  150,056
  207,473
  279,960
  369,391
  477,436
  605,507
  754,717
  925,872
  1,119,474
  1,335,747
  1,574,676
  1,836,049
  2,119,511
  2,424,610
  2,750,849
  3,097,726
  3,464,770
  3,851,575
  4,257,821
  4,683,296
  5,127,905
  5,591,681
  6,074,788
  6,577,523
  7,100,318
  7,643,731
  8,208,453
Revenue / Adjusted assets
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
Average production assets, $m
  973
  22,034
  33,190
  48,479
  68,822
  95,156
  128,401
  169,417
  218,971
  277,710
  346,144
  424,642
  513,436
  612,627
  722,209
  842,085
  972,092
  1,112,023
  1,261,650
  1,420,741
  1,589,082
  1,766,486
  1,952,807
  2,147,947
  2,351,862
  2,564,569
  2,786,141
  3,016,715
  3,256,490
  3,505,721
  3,764,725
Working capital, $m
  206
  -1,626
  -2,449
  -3,577
  -5,078
  -7,021
  -9,474
  -12,500
  -16,156
  -20,490
  -25,540
  -31,332
  -37,883
  -45,202
  -53,287
  -62,132
  -71,724
  -82,049
  -93,089
  -104,827
  -117,248
  -130,337
  -144,085
  -158,483
  -173,528
  -189,222
  -205,571
  -222,583
  -240,275
  -258,664
  -277,774
Total debt, $m
  497
  17,868
  29,397
  45,199
  66,222
  93,438
  127,797
  170,187
  221,401
  282,106
  352,832
  433,959
  525,727
  628,240
  741,492
  865,383
  999,744
  1,144,361
  1,298,999
  1,463,418
  1,637,397
  1,820,742
  2,013,303
  2,214,978
  2,425,723
  2,645,553
  2,874,546
  3,112,842
  3,360,647
  3,618,225
  3,885,903
Total liabilities, $m
  746
  22,772
  34,301
  50,103
  71,126
  98,342
  132,701
  175,091
  226,305
  287,010
  357,736
  438,863
  530,631
  633,144
  746,396
  870,287
  1,004,648
  1,149,265
  1,303,903
  1,468,322
  1,642,301
  1,825,646
  2,018,207
  2,219,882
  2,430,627
  2,650,457
  2,879,450
  3,117,746
  3,365,551
  3,623,129
  3,890,807
Total equity, $m
  1,081
  25,270
  38,064
  55,600
  78,929
  109,131
  147,259
  194,300
  251,131
  318,497
  396,981
  487,009
  588,843
  702,603
  828,279
  965,762
  1,114,863
  1,275,345
  1,446,947
  1,629,404
  1,822,469
  2,025,928
  2,239,614
  2,463,414
  2,697,278
  2,941,224
  3,195,338
  3,459,777
  3,734,767
  4,020,603
  4,317,646
Total liabilities and equity, $m
  1,827
  48,042
  72,365
  105,703
  150,055
  207,473
  279,960
  369,391
  477,436
  605,507
  754,717
  925,872
  1,119,474
  1,335,747
  1,574,675
  1,836,049
  2,119,511
  2,424,610
  2,750,850
  3,097,726
  3,464,770
  3,851,574
  4,257,821
  4,683,296
  5,127,905
  5,591,681
  6,074,788
  6,577,523
  7,100,318
  7,643,732
  8,208,453
Debt-to-equity ratio
  0.460
  0.710
  0.770
  0.810
  0.840
  0.860
  0.870
  0.880
  0.880
  0.890
  0.890
  0.890
  0.890
  0.890
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
Adjusted equity ratio
  0.523
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  166
  6,065
  9,037
  13,099
  18,489
  25,450
  34,216
  45,008
  58,019
  73,412
  91,314
  111,815
  134,970
  160,803
  189,306
  220,453
  254,199
  290,490
  329,267
  370,470
  414,045
  459,943
  508,130
  558,580
  611,286
  666,252
  723,500
  783,067
  845,006
  909,384
  976,285
Depreciation, amort., depletion, $m
  68
  2,098
  3,161
  4,617
  6,554
  9,062
  12,229
  16,135
  20,854
  26,449
  32,966
  40,442
  48,899
  58,345
  68,782
  80,199
  92,580
  105,907
  120,157
  135,309
  151,341
  168,237
  185,982
  204,566
  223,987
  244,245
  265,347
  287,306
  310,142
  333,878
  358,545
Funds from operations, $m
  219
  8,163
  12,198
  17,716
  25,044
  34,512
  46,445
  61,143
  78,873
  99,861
  124,280
  152,257
  183,869
  219,148
  258,088
  300,651
  346,779
  396,397
  449,424
  505,779
  565,386
  628,180
  694,111
  763,147
  835,273
  910,497
  988,847
  1,070,374
  1,155,148
  1,243,262
  1,334,830
Change in working capital, $m
  -67
  -582
  -823
  -1,128
  -1,501
  -1,943
  -2,453
  -3,026
  -3,656
  -4,334
  -5,049
  -5,792
  -6,551
  -7,319
  -8,085
  -8,845
  -9,592
  -10,325
  -11,040
  -11,738
  -12,421
  -13,089
  -13,747
  -14,398
  -15,046
  -15,694
  -16,348
  -17,013
  -17,691
  -18,389
  -19,110
Cash from operations, $m
  286
  8,558
  13,021
  18,844
  26,545
  36,455
  48,898
  64,169
  82,530
  104,194
  129,329
  158,049
  190,421
  226,467
  266,173
  309,496
  356,372
  406,722
  460,464
  517,517
  577,806
  641,269
  707,859
  777,545
  850,318
  926,191
  1,005,195
  1,087,386
  1,172,839
  1,261,651
  1,353,940
Maintenance CAPEX, $m
  0
  -1,347
  -2,098
  -3,161
  -4,617
  -6,554
  -9,062
  -12,229
  -16,135
  -20,854
  -26,449
  -32,966
  -40,442
  -48,899
  -58,345
  -68,782
  -80,199
  -92,580
  -105,907
  -120,157
  -135,309
  -151,341
  -168,237
  -185,982
  -204,566
  -223,987
  -244,245
  -265,347
  -287,306
  -310,142
  -333,878
New CAPEX, $m
  -94
  -7,887
  -11,156
  -15,290
  -20,342
  -26,334
  -33,245
  -41,016
  -49,554
  -58,738
  -68,434
  -78,498
  -88,793
  -99,192
  -109,582
  -119,876
  -130,007
  -139,931
  -149,626
  -159,091
  -168,341
  -177,404
  -186,321
  -195,140
  -203,916
  -212,706
  -221,572
  -230,575
  -239,774
  -249,231
  -259,004
Cash from investing activities, $m
  -92
  -9,234
  -13,254
  -18,451
  -24,959
  -32,888
  -42,307
  -53,245
  -65,689
  -79,592
  -94,883
  -111,464
  -129,235
  -148,091
  -167,927
  -188,658
  -210,206
  -232,511
  -255,533
  -279,248
  -303,650
  -328,745
  -354,558
  -381,122
  -408,482
  -436,693
  -465,817
  -495,922
  -527,080
  -559,373
  -592,882
Free cash flow, $m
  194
  -676
  -233
  394
  1,585
  3,567
  6,590
  10,924
  16,841
  24,602
  34,447
  46,585
  61,185
  78,377
  98,245
  120,838
  146,166
  174,211
  204,931
  238,269
  274,157
  312,524
  353,301
  396,423
  441,837
  489,498
  539,379
  591,465
  645,759
  702,278
  761,058
Issuance/(repayment) of debt, $m
  125
  8,139
  11,529
  15,802
  21,023
  27,216
  34,359
  42,390
  51,214
  60,706
  70,726
  81,127
  91,767
  102,513
  113,252
  123,891
  134,361
  144,617
  154,637
  164,419
  173,979
  183,345
  192,561
  201,675
  210,745
  219,830
  228,993
  238,297
  247,804
  257,578
  267,678
Issuance/(repurchase) of shares, $m
  -89
  0
  1,498
  1,340
  721
  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  
  18
  8,139
  13,027
  17,142
  21,744
  27,216
  34,359
  42,390
  51,214
  60,706
  70,726
  81,127
  91,767
  102,513
  113,252
  123,891
  134,361
  144,617
  154,637
  164,419
  173,979
  183,345
  192,561
  201,675
  210,745
  219,830
  228,993
  238,297
  247,804
  257,578
  267,678
Total cash flow (excl. dividends), $m
  219
  7,463
  11,296
  16,195
  22,609
  30,783
  40,949
  53,314
  68,054
  85,307
  105,173
  127,712
  152,952
  180,890
  211,498
  244,729
  280,527
  318,828
  359,568
  402,688
  448,136
  495,870
  545,862
  598,098
  652,581
  709,328
  768,371
  829,761
  893,563
  959,856
  1,028,736
Retained Cash Flow (-), $m
  -3
  -9,040
  -12,794
  -17,535
  -23,330
  -30,202
  -38,128
  -47,041
  -56,832
  -67,365
  -78,485
  -90,027
  -101,835
  -113,760
  -125,676
  -137,482
  -149,101
  -160,482
  -171,602
  -182,457
  -193,065
  -203,459
  -213,686
  -223,800
  -233,864
  -243,946
  -254,114
  -264,439
  -274,990
  -285,836
  -297,044
Prev. year cash balance distribution, $m
 
  5,103
  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
 
  3,525
  0
  0
  0
  581
  2,821
  6,274
  11,222
  17,942
  26,688
  37,684
  51,118
  67,130
  85,821
  107,247
  131,426
  158,346
  187,966
  220,231
  255,070
  292,410
  332,176
  374,299
  418,717
  465,382
  514,257
  565,323
  618,573
  674,021
  731,692
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
 
  3,380
  0
  0
  0
  450
  2,047
  4,238
  7,014
  10,307
  13,991
  17,896
  21,814
  25,524
  28,812
  31,486
  33,398
  34,453
  34,616
  33,909
  32,412
  30,245
  27,562
  24,532
  21,326
  18,104
  15,003
  12,133
  9,570
  7,358
  5,509
Current shareholders' claim on cash, %
  100
  100.0
  92.2
  87.8
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2
  86.2

Grupo Aeroportuario del Pacífico, S.A.B. de C.V. operates airports in Mexico’s Pacific region. It has 12 airports in Guadalajara, Tijuana, Puerto Vallarta, Los Cabos, La Paz, Manzanillo, Hermosillo, Guanajuato, Morelia, Aguascalientes, Mexicali, and Los Mochis. The company was incorporated in 1998 and is headquartered in Guadalajara, Mexico.

FINANCIAL RATIOS  of  Grupo Aeroportuario del Pacifico ADR (PAC)

Valuation Ratios
P/E Ratio 347.5
Price to Sales 102.5
Price to Book 53.4
Price to Tangible Book
Price to Cash Flow 201.7
Price to Free Cash Flow 300.4
Growth Rates
Sales Growth Rate 37%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 64.9%
Cap. Spend. - 3 Yr. Gr. Rate 21.8%
Financial Strength
Quick Ratio 66
Current Ratio 0
LT Debt to Equity 45.6%
Total Debt to Equity 46%
Interest Coverage 14
Management Effectiveness
Return On Assets 10.5%
Ret/ On Assets - 3 Yr. Avg. 10%
Return On Total Capital 11.1%
Ret/ On T. Cap. - 3 Yr. Avg. 10.5%
Return On Equity 15.4%
Return On Equity - 3 Yr. Avg. 12.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 56.7%
Gross Margin - 3 Yr. Avg. 56.7%
EBITDA Margin 56.8%
EBITDA Margin - 3 Yr. Avg. 62.1%
Operating Margin 47.1%
Oper. Margin - 3 Yr. Avg. 49.1%
Pre-Tax Margin 41.6%
Pre-Tax Margin - 3 Yr. Avg. 45.3%
Net Profit Margin 29.5%
Net Profit Margin - 3 Yr. Avg. 34.5%
Effective Tax Rate 27.4%
Eff/ Tax Rate - 3 Yr. Avg. 23.1%
Payout Ratio 65.1%

PAC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PAC stock intrinsic value calculation we used $11108 million for the last fiscal year's total revenue generated by Grupo Aeroportuario del Pacifico ADR. The default revenue input number comes from 2016 income statement of Grupo Aeroportuario del Pacifico 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 PAC stock valuation model: a) initial revenue growth rate of 55.7% 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 PAC is calculated based on our internal credit rating of Grupo Aeroportuario del Pacifico 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 Grupo Aeroportuario del Pacifico 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 PAC stock the variable cost ratio is equal to 49.6%.

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

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.2% for Grupo Aeroportuario del Pacifico ADR.

Corporate tax rate of 27% is the nominal tax rate for Grupo Aeroportuario del Pacifico 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 PAC 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 PAC are equal to 127.4%.

Life of production assets of 10.5 years is the average useful life of capital assets used in Grupo Aeroportuario del Pacifico 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 PAC is equal to -9.4%. 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 - $21333 million for Grupo Aeroportuario del Pacifico 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 55.45 million for Grupo Aeroportuario del Pacifico 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 Grupo Aeroportuario del Pacifico ADR at the current share price and the inputted number of shares is $6.1 billion.


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Stock chart of PAC Financial statements of PAC Annual reports of PAC
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