Intrinsic value of PPG Industries - PPG

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$110.68

  Intrinsic Value

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  Value-price divergence*

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$110.68

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

We calculate the intrinsic value of PPG 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 28.4

 

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, %
  -0.10
  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
  14,751
  15,046
  15,392
  15,788
  16,232
  16,724
  17,264
  17,852
  18,488
  19,174
  19,910
  20,697
  21,537
  22,431
  23,382
  24,390
  25,459
  26,591
  27,787
  29,051
  30,386
  31,795
  33,280
  34,846
  36,495
  38,233
  40,062
  41,988
  44,014
  46,145
  48,387
Variable operating expenses, $m
 
  13,173
  13,468
  13,805
  14,183
  14,602
  15,062
  15,563
  16,105
  16,689
  17,316
  17,629
  18,345
  19,107
  19,916
  20,775
  21,686
  22,650
  23,669
  24,746
  25,883
  27,082
  28,347
  29,681
  31,086
  32,566
  34,124
  35,764
  37,490
  39,306
  41,216
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
  13,905
  13,173
  13,468
  13,805
  14,183
  14,602
  15,062
  15,563
  16,105
  16,689
  17,316
  17,629
  18,345
  19,107
  19,916
  20,775
  21,686
  22,650
  23,669
  24,746
  25,883
  27,082
  28,347
  29,681
  31,086
  32,566
  34,124
  35,764
  37,490
  39,306
  41,216
Operating income, $m
  846
  1,873
  1,924
  1,983
  2,049
  2,122
  2,202
  2,289
  2,383
  2,485
  2,594
  3,068
  3,192
  3,325
  3,466
  3,615
  3,773
  3,941
  4,118
  4,306
  4,504
  4,712
  4,933
  5,165
  5,409
  5,667
  5,938
  6,223
  6,524
  6,839
  7,172
EBITDA, $m
  1,308
  2,500
  2,557
  2,623
  2,697
  2,779
  2,868
  2,966
  3,072
  3,186
  3,308
  3,439
  3,578
  3,727
  3,885
  4,052
  4,230
  4,418
  4,617
  4,827
  5,049
  5,283
  5,529
  5,790
  6,064
  6,352
  6,656
  6,976
  7,313
  7,667
  8,040
Interest expense (income), $m
  118
  133
  140
  148
  158
  169
  181
  194
  209
  224
  241
  259
  278
  299
  321
  344
  369
  395
  422
  452
  483
  515
  550
  586
  624
  665
  707
  752
  799
  849
  901
Earnings before tax, $m
  827
  1,740
  1,784
  1,834
  1,891
  1,953
  2,021
  2,095
  2,175
  2,261
  2,353
  2,809
  2,914
  3,026
  3,145
  3,271
  3,405
  3,546
  3,696
  3,854
  4,021
  4,197
  4,383
  4,579
  4,785
  5,002
  5,230
  5,471
  5,724
  5,991
  6,271
Tax expense, $m
  241
  470
  482
  495
  510
  527
  546
  566
  587
  610
  635
  758
  787
  817
  849
  883
  919
  958
  998
  1,041
  1,086
  1,133
  1,183
  1,236
  1,292
  1,350
  1,412
  1,477
  1,546
  1,617
  1,693
Net income, $m
  877
  1,270
  1,303
  1,339
  1,380
  1,425
  1,475
  1,529
  1,587
  1,650
  1,718
  2,050
  2,127
  2,209
  2,296
  2,388
  2,486
  2,589
  2,698
  2,814
  2,935
  3,064
  3,199
  3,342
  3,493
  3,651
  3,818
  3,994
  4,179
  4,373
  4,578

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,863
  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
  15,769
  14,181
  14,507
  14,880
  15,299
  15,762
  16,271
  16,825
  17,425
  18,071
  18,765
  19,507
  20,299
  21,142
  22,037
  22,988
  23,996
  25,062
  26,190
  27,381
  28,639
  29,967
  31,367
  32,842
  34,397
  36,035
  37,759
  39,574
  41,483
  43,492
  45,605
Adjusted assets (=assets-cash), $m
  13,906
  14,181
  14,507
  14,880
  15,299
  15,762
  16,271
  16,825
  17,425
  18,071
  18,765
  19,507
  20,299
  21,142
  22,037
  22,988
  23,996
  25,062
  26,190
  27,381
  28,639
  29,967
  31,367
  32,842
  34,397
  36,035
  37,759
  39,574
  41,483
  43,492
  45,605
Revenue / Adjusted assets
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
  1.061
Average production assets, $m
  4,871
  4,965
  5,079
  5,210
  5,356
  5,519
  5,697
  5,891
  6,101
  6,327
  6,570
  6,830
  7,107
  7,402
  7,716
  8,049
  8,402
  8,775
  9,170
  9,587
  10,027
  10,492
  10,982
  11,499
  12,043
  12,617
  13,221
  13,856
  14,525
  15,228
  15,968
Working capital, $m
  2,212
  993
  1,016
  1,042
  1,071
  1,104
  1,139
  1,178
  1,220
  1,265
  1,314
  1,366
  1,421
  1,480
  1,543
  1,610
  1,680
  1,755
  1,834
  1,917
  2,005
  2,098
  2,196
  2,300
  2,409
  2,523
  2,644
  2,771
  2,905
  3,046
  3,194
Total debt, $m
  4,416
  3,995
  4,237
  4,514
  4,825
  5,169
  5,546
  5,957
  6,403
  6,882
  7,397
  7,947
  8,535
  9,160
  9,825
  10,530
  11,278
  12,069
  12,906
  13,790
  14,723
  15,708
  16,747
  17,842
  18,996
  20,211
  21,490
  22,837
  24,254
  25,744
  27,312
Total liabilities, $m
  10,943
  10,522
  10,764
  11,041
  11,352
  11,696
  12,073
  12,484
  12,930
  13,409
  13,924
  14,474
  15,062
  15,687
  16,352
  17,057
  17,805
  18,596
  19,433
  20,317
  21,250
  22,235
  23,274
  24,369
  25,523
  26,738
  28,017
  29,364
  30,781
  32,271
  33,839
Total equity, $m
  4,826
  3,659
  3,743
  3,839
  3,947
  4,067
  4,198
  4,341
  4,496
  4,662
  4,841
  5,033
  5,237
  5,455
  5,686
  5,931
  6,191
  6,466
  6,757
  7,064
  7,389
  7,731
  8,093
  8,473
  8,874
  9,297
  9,742
  10,210
  10,703
  11,221
  11,766
Total liabilities and equity, $m
  15,769
  14,181
  14,507
  14,880
  15,299
  15,763
  16,271
  16,825
  17,426
  18,071
  18,765
  19,507
  20,299
  21,142
  22,038
  22,988
  23,996
  25,062
  26,190
  27,381
  28,639
  29,966
  31,367
  32,842
  34,397
  36,035
  37,759
  39,574
  41,484
  43,492
  45,605
Debt-to-equity ratio
  0.915
  1.090
  1.130
  1.180
  1.220
  1.270
  1.320
  1.370
  1.420
  1.480
  1.530
  1.580
  1.630
  1.680
  1.730
  1.780
  1.820
  1.870
  1.910
  1.950
  1.990
  2.030
  2.070
  2.110
  2.140
  2.170
  2.210
  2.240
  2.270
  2.290
  2.320
Adjusted equity ratio
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  877
  1,270
  1,303
  1,339
  1,380
  1,425
  1,475
  1,529
  1,587
  1,650
  1,718
  2,050
  2,127
  2,209
  2,296
  2,388
  2,486
  2,589
  2,698
  2,814
  2,935
  3,064
  3,199
  3,342
  3,493
  3,651
  3,818
  3,994
  4,179
  4,373
  4,578
Depreciation, amort., depletion, $m
  462
  627
  633
  640
  648
  657
  667
  677
  689
  701
  714
  371
  386
  402
  419
  437
  457
  477
  498
  521
  545
  570
  597
  625
  655
  686
  719
  753
  789
  828
  868
Funds from operations, $m
  293
  1,897
  1,936
  1,980
  2,028
  2,083
  2,142
  2,206
  2,276
  2,351
  2,432
  2,422
  2,513
  2,611
  2,715
  2,825
  2,942
  3,066
  3,196
  3,335
  3,480
  3,634
  3,796
  3,967
  4,147
  4,337
  4,537
  4,747
  4,968
  5,201
  5,445
Change in working capital, $m
  -1,032
  19
  23
  26
  29
  32
  36
  39
  42
  45
  49
  52
  55
  59
  63
  67
  71
  75
  79
  83
  88
  93
  98
  103
  109
  115
  121
  127
  134
  141
  148
Cash from operations, $m
  1,325
  1,749
  1,913
  1,953
  1,999
  2,050
  2,106
  2,168
  2,234
  2,306
  2,383
  2,370
  2,458
  2,552
  2,652
  2,759
  2,872
  2,991
  3,118
  3,251
  3,392
  3,541
  3,698
  3,864
  4,038
  4,222
  4,416
  4,620
  4,834
  5,060
  5,297
Maintenance CAPEX, $m
  0
  -265
  -270
  -276
  -283
  -291
  -300
  -310
  -320
  -332
  -344
  -357
  -371
  -386
  -402
  -419
  -437
  -457
  -477
  -498
  -521
  -545
  -570
  -597
  -625
  -655
  -686
  -719
  -753
  -789
  -828
New CAPEX, $m
  -402
  -94
  -114
  -131
  -147
  -162
  -178
  -194
  -210
  -226
  -243
  -260
  -277
  -295
  -314
  -333
  -353
  -373
  -395
  -417
  -440
  -465
  -490
  -517
  -544
  -573
  -604
  -635
  -669
  -703
  -740
Cash from investing activities, $m
  436
  -359
  -384
  -407
  -430
  -453
  -478
  -504
  -530
  -558
  -587
  -617
  -648
  -681
  -716
  -752
  -790
  -830
  -872
  -915
  -961
  -1,010
  -1,060
  -1,114
  -1,169
  -1,228
  -1,290
  -1,354
  -1,422
  -1,492
  -1,568
Free cash flow, $m
  1,761
  1,390
  1,529
  1,547
  1,569
  1,597
  1,628
  1,664
  1,704
  1,748
  1,797
  1,753
  1,810
  1,871
  1,936
  2,007
  2,081
  2,161
  2,246
  2,336
  2,431
  2,531
  2,638
  2,750
  2,869
  2,994
  3,127
  3,266
  3,413
  3,567
  3,730
Issuance/(repayment) of debt, $m
  233
  208
  242
  277
  311
  344
  378
  411
  445
  480
  515
  551
  587
  625
  665
  705
  748
  791
  837
  884
  934
  985
  1,039
  1,095
  1,154
  1,215
  1,279
  1,347
  1,417
  1,491
  1,568
Issuance/(repurchase) of shares, $m
  -1,019
  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  
  -770
  208
  242
  277
  311
  344
  378
  411
  445
  480
  515
  551
  587
  625
  665
  705
  748
  791
  837
  884
  934
  985
  1,039
  1,095
  1,154
  1,215
  1,279
  1,347
  1,417
  1,491
  1,568
Total cash flow (excl. dividends), $m
  923
  1,598
  1,771
  1,823
  1,880
  1,941
  2,006
  2,075
  2,149
  2,228
  2,311
  2,303
  2,397
  2,496
  2,601
  2,712
  2,829
  2,952
  3,083
  3,220
  3,364
  3,516
  3,677
  3,845
  4,023
  4,210
  4,406
  4,612
  4,830
  5,058
  5,298
Retained Cash Flow (-), $m
  157
  -67
  -84
  -96
  -108
  -120
  -131
  -143
  -155
  -167
  -179
  -191
  -204
  -217
  -231
  -245
  -260
  -275
  -291
  -307
  -325
  -342
  -361
  -381
  -401
  -422
  -445
  -468
  -493
  -518
  -545
Prev. year cash balance distribution, $m
 
  1,234
  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
 
  2,766
  1,687
  1,727
  1,772
  1,821
  1,874
  1,932
  1,994
  2,061
  2,132
  2,112
  2,193
  2,279
  2,370
  2,467
  2,569
  2,677
  2,792
  2,912
  3,040
  3,174
  3,315
  3,465
  3,622
  3,787
  3,961
  4,144
  4,337
  4,540
  4,753
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
 
  2,652
  1,544
  1,503
  1,459
  1,412
  1,360
  1,305
  1,246
  1,184
  1,118
  1,003
  936
  866
  796
  724
  653
  583
  514
  448
  386
  328
  275
  227
  184
  147
  116
  89
  67
  50
  36
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

PPG Industries, Inc. manufactures and distributes coatings, specialty materials, and glass products. It operates in three segments: Performance Coatings, Industrial Coatings, and Glass. The Performance Coatings segment provides coatings products for automotive and commercial transport/fleet repair and refurbishing; light industrial and specialty coatings for signs; coatings, sealants, and transparencies for commercial, military, regional jet and general aviation aircraft, and transparent armor for specialty applications; protective and marine coatings and finishes; architectural coatings; and purchased sundries to painting contractors and consumers, as well as chemical management services. As of December 31, 2016, this segment operated company-owned stores approximately 920 stores in North America, 40 in Australia, and 75 in Central America. In addition, it sells coatings and related products through approximately 4,200 stores that are independently owned and operated by 700 concessionaires primarily in Mexico. The Industrial Coatings segment provides adhesives and sealants for the automotive industry; metal pretreatments and related chemicals for industrial and automotive applications; packaging coatings for the protection, performance, and decoration of metal cans, closures, plastic tubes, industrial packaging, and promotional and specialty packaging; precipitated silicas for tire, battery separator, and other markets; substrates used in radio frequency identification tags and labels, e-passports, drivers' licenses, and identification cards; organic light emitting diode materials for use in displays and lighting; optical lens materials and photochromic dyes for optical lenses and color-change products. The Glass segment produces fiber glass for use in commercial and residential construction, wind energy, energy infrastructure, transportation, and electronics industries. The company was founded in 1883 and is headquartered in Pittsburgh, Pennsylvania.

FINANCIAL RATIOS  of  PPG Industries (PPG)

Valuation Ratios
P/E Ratio 32.5
Price to Sales 1.9
Price to Book 5.9
Price to Tangible Book
Price to Cash Flow 21.5
Price to Free Cash Flow 30.9
Growth Rates
Sales Growth Rate -0.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -15.5%
Cap. Spend. - 3 Yr. Gr. Rate -4%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 78.5%
Total Debt to Equity 91.5%
Interest Coverage 8
Management Effectiveness
Return On Assets 5.8%
Ret/ On Assets - 3 Yr. Avg. 9.4%
Return On Total Capital 9.5%
Ret/ On T. Cap. - 3 Yr. Avg. 16.2%
Return On Equity 17.9%
Return On Equity - 3 Yr. Avg. 29%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 45.3%
Gross Margin - 3 Yr. Avg. 44.4%
EBITDA Margin 9.5%
EBITDA Margin - 3 Yr. Avg. 13.2%
Operating Margin 5.7%
Oper. Margin - 3 Yr. Avg. 9.1%
Pre-Tax Margin 5.6%
Pre-Tax Margin - 3 Yr. Avg. 8.9%
Net Profit Margin 5.9%
Net Profit Margin - 3 Yr. Avg. 9.9%
Effective Tax Rate 29.1%
Eff/ Tax Rate - 3 Yr. Avg. 23.5%
Payout Ratio 47.2%

PPG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PPG stock intrinsic value calculation we used $14751 million for the last fiscal year's total revenue generated by PPG Industries. The default revenue input number comes from 2016 income statement of PPG Industries. 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 PPG 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 4.3%, whose default value for PPG is calculated based on our internal credit rating of PPG Industries, 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 PPG Industries.
    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 PPG stock the variable cost ratio is equal to 87.6%.

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 PPG 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 PPG Industries.

Corporate tax rate of 27% is the nominal tax rate for PPG Industries. 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 PPG 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 PPG are equal to 33%.

Life of production assets of 18.4 years is the average useful life of capital assets used in PPG Industries 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 PPG is equal to 6.6%. 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 - $4826 million for PPG Industries - 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 257.043 million for PPG Industries 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 PPG Industries at the current share price and the inputted number of shares is $28.4 billion.


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COMPANY NEWS

▶ PPG Industries Wont Attempt to Acquire Akzo Nobel   [Jun-05-17 12:05PM  Market Realist]
▶ [$$] Akzo faces tough battle after fending off PPG   [Jun-04-17 09:09AM  Financial Times]
▶ [$$] Week in Review, June 3   [Jun-02-17 05:01PM  Financial Times]
▶ [$$] Theres a Paint Company to Own, But Akzo Nobel Isnt It   [12:07AM  The Wall Street Journal]
▶ [$$] Elliotts Brash Activism Cant Sway Dutch Paint Giant   [12:06AM  The Wall Street Journal]
▶ [$$] EuroTrip: Another US buyer falls short   [12:02AM  Financial Times]
▶ How PPG lost its $29.5 bln bet on Dulux paint   [Jun-01-17 05:51PM  Reuters]
▶ [$$] Elliott's Brash Activism Can't Sway Dutch Paint Giant   [01:39PM  The Wall Street Journal]
▶ PPG Should Have Tried for a Knock-Out   [08:15AM  Bloomberg]
▶ [$$] The chemicals industry has lost its future   [11:44AM  Financial Times]
▶ PRESS DIGEST- Financial Times - May 31   [May-30-17 08:27PM  Reuters]
▶ Akzo Nobel's win over dissident shareholders   [10:27AM  Reuters Videos]
▶ PPG nears deadline for making new play for Akzo Nobel   [09:16AM  American City Business Journals]
▶ Bossing the Bosses   [08:00AM  Bloomberg]
▶ PPG to Sell Its Fiberglass Business for $545 Million   [May-26-17 08:09AM  TheStreet.com]
▶ Hearing held over shareholders' unhappiness with Akzo Nobel   [May-22-17 05:55PM  American City Business Journals]
Stock chart of PPG Financial statements of PPG Annual reports of PPG
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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