Intrinsic value of Snap-On - SNA

Previous Close

$151.52

  Intrinsic Value

$295.30

stock screener

  Rating & Target

str. buy

+95%

  Value-price divergence*

+31%

Previous close

$151.52

 
Intrinsic value

$295.30

 
Up/down potential

+95%

 
Rating

str. buy

 
Value-price divergence*

+31%

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

We calculate the intrinsic value of SNA 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 8.7

 

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, %
  3.31
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
  5.63
  5.56
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
Revenue, $m
  3,712
  3,972
  4,242
  4,523
  4,815
  5,119
  5,435
  5,765
  6,108
  6,466
  6,839
  7,229
  7,636
  8,061
  8,505
  8,969
  9,454
  9,962
  10,493
  11,050
  11,632
  12,242
  12,881
  13,550
  14,252
  14,987
  15,758
  16,566
  17,414
  18,303
  19,235
Variable operating expenses, $m
 
  995
  1,056
  1,120
  1,187
  1,256
  1,328
  1,403
  1,481
  1,563
  1,648
  1,647
  1,740
  1,837
  1,938
  2,044
  2,154
  2,270
  2,391
  2,518
  2,650
  2,789
  2,935
  3,088
  3,247
  3,415
  3,591
  3,775
  3,968
  4,170
  4,383
Fixed operating expenses, $m
 
  2,019
  2,070
  2,121
  2,175
  2,229
  2,285
  2,342
  2,400
  2,460
  2,522
  2,585
  2,649
  2,716
  2,784
  2,853
  2,924
  2,998
  3,073
  3,149
  3,228
  3,309
  3,391
  3,476
  3,563
  3,652
  3,744
  3,837
  3,933
  4,031
  4,132
Total operating expenses, $m
  2,858
  3,014
  3,126
  3,241
  3,362
  3,485
  3,613
  3,745
  3,881
  4,023
  4,170
  4,232
  4,389
  4,553
  4,722
  4,897
  5,078
  5,268
  5,464
  5,667
  5,878
  6,098
  6,326
  6,564
  6,810
  7,067
  7,335
  7,612
  7,901
  8,201
  8,515
Operating income, $m
  854
  958
  1,116
  1,281
  1,454
  1,634
  1,822
  2,020
  2,226
  2,443
  2,670
  2,997
  3,247
  3,508
  3,783
  4,072
  4,376
  4,695
  5,030
  5,383
  5,753
  6,144
  6,554
  6,986
  7,441
  7,920
  8,424
  8,954
  9,513
  10,101
  10,720
EBITDA, $m
  939
  1,086
  1,246
  1,414
  1,589
  1,773
  1,964
  2,165
  2,375
  2,594
  2,825
  3,066
  3,320
  3,586
  3,865
  4,158
  4,466
  4,790
  5,131
  5,489
  5,865
  6,261
  6,678
  7,116
  7,578
  8,064
  8,575
  9,113
  9,680
  10,276
  10,904
Interest expense (income), $m
  51
  49
  57
  65
  73
  81
  90
  99
  109
  119
  130
  140
  152
  164
  176
  189
  203
  217
  232
  247
  263
  280
  298
  317
  336
  357
  378
  401
  424
  449
  475
Earnings before tax, $m
  801
  909
  1,059
  1,216
  1,381
  1,553
  1,732
  1,920
  2,117
  2,324
  2,540
  2,857
  3,095
  3,345
  3,607
  3,883
  4,173
  4,478
  4,798
  5,135
  5,490
  5,863
  6,256
  6,670
  7,105
  7,563
  8,045
  8,553
  9,088
  9,652
  10,245
Tax expense, $m
  244
  245
  286
  328
  373
  419
  468
  518
  572
  627
  686
  771
  836
  903
  974
  1,048
  1,127
  1,209
  1,296
  1,387
  1,482
  1,583
  1,689
  1,801
  1,918
  2,042
  2,172
  2,309
  2,454
  2,606
  2,766
Net income, $m
  546
  663
  773
  888
  1,008
  1,133
  1,265
  1,402
  1,546
  1,696
  1,854
  2,085
  2,259
  2,442
  2,633
  2,835
  3,046
  3,269
  3,503
  3,749
  4,008
  4,280
  4,567
  4,869
  5,187
  5,521
  5,873
  6,244
  6,635
  7,046
  7,479

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  100
  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
  4,723
  4,946
  5,283
  5,632
  5,996
  6,375
  6,769
  7,179
  7,607
  8,052
  8,517
  9,003
  9,509
  10,038
  10,591
  11,169
  11,774
  12,406
  13,068
  13,760
  14,486
  15,245
  16,041
  16,874
  17,748
  18,664
  19,624
  20,630
  21,686
  22,793
  23,954
Adjusted assets (=assets-cash), $m
  4,623
  4,946
  5,283
  5,632
  5,996
  6,375
  6,769
  7,179
  7,607
  8,052
  8,517
  9,003
  9,509
  10,038
  10,591
  11,169
  11,774
  12,406
  13,068
  13,760
  14,486
  15,245
  16,041
  16,874
  17,748
  18,664
  19,624
  20,630
  21,686
  22,793
  23,954
Revenue / Adjusted assets
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
  0.803
Average production assets, $m
  610
  651
  696
  742
  790
  839
  891
  945
  1,002
  1,060
  1,122
  1,186
  1,252
  1,322
  1,395
  1,471
  1,551
  1,634
  1,721
  1,812
  1,908
  2,008
  2,112
  2,222
  2,337
  2,458
  2,584
  2,717
  2,856
  3,002
  3,155
Working capital, $m
  894
  1,172
  1,251
  1,334
  1,420
  1,510
  1,603
  1,701
  1,802
  1,907
  2,018
  2,133
  2,253
  2,378
  2,509
  2,646
  2,789
  2,939
  3,096
  3,260
  3,431
  3,611
  3,800
  3,997
  4,204
  4,421
  4,649
  4,887
  5,137
  5,399
  5,674
Total debt, $m
  1,010
  1,051
  1,197
  1,348
  1,506
  1,671
  1,842
  2,020
  2,205
  2,399
  2,601
  2,811
  3,031
  3,261
  3,501
  3,752
  4,014
  4,288
  4,575
  4,876
  5,191
  5,520
  5,866
  6,228
  6,607
  7,004
  7,421
  7,858
  8,316
  8,796
  9,300
Total liabilities, $m
  2,106
  2,147
  2,293
  2,444
  2,602
  2,767
  2,938
  3,116
  3,301
  3,495
  3,697
  3,907
  4,127
  4,357
  4,597
  4,848
  5,110
  5,384
  5,671
  5,972
  6,287
  6,616
  6,962
  7,324
  7,703
  8,100
  8,517
  8,954
  9,412
  9,892
  10,396
Total equity, $m
  2,617
  2,800
  2,990
  3,188
  3,394
  3,608
  3,831
  4,063
  4,305
  4,558
  4,821
  5,095
  5,382
  5,682
  5,995
  6,322
  6,664
  7,022
  7,396
  7,788
  8,199
  8,629
  9,079
  9,551
  10,045
  10,564
  11,107
  11,677
  12,274
  12,901
  13,558
Total liabilities and equity, $m
  4,723
  4,947
  5,283
  5,632
  5,996
  6,375
  6,769
  7,179
  7,606
  8,053
  8,518
  9,002
  9,509
  10,039
  10,592
  11,170
  11,774
  12,406
  13,067
  13,760
  14,486
  15,245
  16,041
  16,875
  17,748
  18,664
  19,624
  20,631
  21,686
  22,793
  23,954
Debt-to-equity ratio
  0.386
  0.380
  0.400
  0.420
  0.440
  0.460
  0.480
  0.500
  0.510
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.590
  0.600
  0.610
  0.620
  0.630
  0.630
  0.640
  0.650
  0.650
  0.660
  0.660
  0.670
  0.670
  0.680
  0.680
  0.690
Adjusted equity ratio
  0.544
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566
  0.566

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  546
  663
  773
  888
  1,008
  1,133
  1,265
  1,402
  1,546
  1,696
  1,854
  2,085
  2,259
  2,442
  2,633
  2,835
  3,046
  3,269
  3,503
  3,749
  4,008
  4,280
  4,567
  4,869
  5,187
  5,521
  5,873
  6,244
  6,635
  7,046
  7,479
Depreciation, amort., depletion, $m
  85
  128
  130
  133
  136
  139
  142
  145
  148
  152
  155
  69
  73
  77
  82
  86
  91
  96
  101
  106
  112
  117
  124
  130
  137
  144
  151
  159
  167
  176
  184
Funds from operations, $m
  423
  791
  904
  1,021
  1,144
  1,272
  1,406
  1,547
  1,694
  1,848
  2,009
  2,155
  2,332
  2,519
  2,715
  2,921
  3,137
  3,364
  3,603
  3,855
  4,119
  4,398
  4,691
  4,999
  5,323
  5,665
  6,024
  6,403
  6,802
  7,221
  7,663
Change in working capital, $m
  -153
  77
  80
  83
  86
  90
  93
  97
  101
  106
  110
  115
  120
  125
  131
  137
  143
  150
  157
  164
  172
  180
  188
  197
  207
  217
  227
  238
  250
  262
  275
Cash from operations, $m
  576
  714
  824
  938
  1,058
  1,182
  1,313
  1,450
  1,593
  1,742
  1,899
  2,040
  2,212
  2,394
  2,584
  2,784
  2,994
  3,215
  3,447
  3,691
  3,948
  4,218
  4,502
  4,801
  5,116
  5,448
  5,797
  6,164
  6,552
  6,959
  7,388
Maintenance CAPEX, $m
  0
  -36
  -38
  -41
  -43
  -46
  -49
  -52
  -55
  -59
  -62
  -66
  -69
  -73
  -77
  -82
  -86
  -91
  -96
  -101
  -106
  -112
  -117
  -124
  -130
  -137
  -144
  -151
  -159
  -167
  -176
New CAPEX, $m
  -74
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -83
  -87
  -91
  -96
  -100
  -105
  -110
  -115
  -121
  -126
  -133
  -139
  -146
  -153
Cash from investing activities, $m
  -473
  -78
  -82
  -87
  -91
  -96
  -101
  -106
  -111
  -118
  -123
  -130
  -136
  -143
  -150
  -158
  -166
  -174
  -183
  -192
  -202
  -212
  -222
  -234
  -245
  -258
  -270
  -284
  -298
  -313
  -329
Free cash flow, $m
  103
  637
  741
  851
  966
  1,086
  1,212
  1,343
  1,481
  1,625
  1,776
  1,910
  2,076
  2,251
  2,434
  2,626
  2,828
  3,041
  3,264
  3,499
  3,746
  4,006
  4,280
  4,568
  4,871
  5,191
  5,527
  5,881
  6,254
  6,646
  7,060
Issuance/(repayment) of debt, $m
  134
  141
  146
  152
  158
  164
  171
  178
  186
  193
  202
  211
  220
  230
  240
  251
  262
  274
  287
  301
  315
  330
  345
  362
  379
  397
  417
  437
  458
  480
  504
Issuance/(repurchase) of shares, $m
  -79
  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  
  32
  141
  146
  152
  158
  164
  171
  178
  186
  193
  202
  211
  220
  230
  240
  251
  262
  274
  287
  301
  315
  330
  345
  362
  379
  397
  417
  437
  458
  480
  504
Total cash flow (excl. dividends), $m
  133
  778
  887
  1,003
  1,124
  1,251
  1,383
  1,521
  1,667
  1,819
  1,978
  2,121
  2,296
  2,480
  2,674
  2,877
  3,091
  3,315
  3,551
  3,800
  4,061
  4,336
  4,625
  4,930
  5,250
  5,588
  5,943
  6,318
  6,712
  7,127
  7,564
Retained Cash Flow (-), $m
  -204
  -183
  -190
  -198
  -206
  -214
  -223
  -232
  -242
  -252
  -263
  -275
  -287
  -300
  -313
  -327
  -342
  -358
  -375
  -392
  -410
  -430
  -450
  -472
  -494
  -518
  -543
  -570
  -597
  -627
  -657
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  595
  697
  805
  918
  1,036
  1,160
  1,289
  1,424
  1,566
  1,715
  1,846
  2,009
  2,181
  2,361
  2,550
  2,748
  2,957
  3,177
  3,408
  3,650
  3,906
  4,175
  4,458
  4,756
  5,070
  5,400
  5,748
  6,114
  6,500
  6,906
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
 
  571
  638
  701
  756
  803
  842
  871
  890
  900
  899
  877
  858
  829
  793
  749
  698
  643
  585
  525
  464
  404
  346
  292
  242
  197
  158
  123
  95
  71
  52
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

Snap-on Incorporated manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide. The company operates in Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments. It offers hand tools, such as wrenches, sockets, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments, and other products; power tools, such as cordless, pneumatic, hydraulic, and corded tools; and tool storage products, including tool chests, roll cabinets, and other products. The company also provides handheld and PC-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics. In addition, it offers solutions for diagnosis and service of vehicles and industrial equipment, such as wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane systems, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists. Further, the company provides financing programs to facilitate the sales of its products and support its franchise business. It serves aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation, and technical education industries, as well as vehicle dealerships and repair centers. The company was founded in 1920 and is headquartered in Kenosha, Wisconsin.

FINANCIAL RATIOS  of  Snap-On (SNA)

Valuation Ratios
P/E Ratio 16.1
Price to Sales 2.4
Price to Book 3.4
Price to Tangible Book
Price to Cash Flow 15.2
Price to Free Cash Flow 17.5
Growth Rates
Sales Growth Rate 3.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -7.5%
Cap. Spend. - 3 Yr. Gr. Rate 0.8%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 27.1%
Total Debt to Equity 38.6%
Interest Coverage 17
Management Effectiveness
Return On Assets 12.8%
Ret/ On Assets - 3 Yr. Avg. 11.9%
Return On Total Capital 15.8%
Ret/ On T. Cap. - 3 Yr. Avg. 14.8%
Return On Equity 21.7%
Return On Equity - 3 Yr. Avg. 20.7%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 53.6%
Gross Margin - 3 Yr. Avg. 52.6%
EBITDA Margin 25.2%
EBITDA Margin - 3 Yr. Avg. 23.5%
Operating Margin 23%
Oper. Margin - 3 Yr. Avg. 21.3%
Pre-Tax Margin 21.6%
Pre-Tax Margin - 3 Yr. Avg. 19.8%
Net Profit Margin 14.7%
Net Profit Margin - 3 Yr. Avg. 13.4%
Effective Tax Rate 30.5%
Eff/ Tax Rate - 3 Yr. Avg. 31.1%
Payout Ratio 27.1%

SNA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SNA stock intrinsic value calculation we used $3712 million for the last fiscal year's total revenue generated by Snap-On. The default revenue input number comes from 2017 income statement of Snap-On. 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 SNA stock valuation model: a) initial revenue growth rate of 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 SNA is calculated based on our internal credit rating of Snap-On, 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 Snap-On.
    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 SNA stock the variable cost ratio is equal to 25.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1970 million in the base year in the intrinsic value calculation for SNA 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 5.4% for Snap-On.

Corporate tax rate of 27% is the nominal tax rate for Snap-On. 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 SNA 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 SNA are equal to 16.4%.

Life of production assets of 17.1 years is the average useful life of capital assets used in Snap-On 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 SNA is equal to 29.5%. 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 - $2617 million for Snap-On - 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 57.507 million for Snap-On 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 Snap-On at the current share price and the inputted number of shares is $8.7 billion.

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COMPANY NEWS

▶ Snap-on Incorporated Declares Quarterly Dividend   [Aug-03-17 04:05PM  Business Wire]
▶ Snap-on to Present at Jefferies 2017 Industrials Conference   [Jul-31-17 04:07PM  Business Wire]
▶ [$$] State Street: corporate governance has grown up   [Jul-21-17 12:38AM  Financial Times]
▶ Snap-On beats 2Q profit forecasts   [12:23AM  Associated Press]
▶ Star Navigation Announces Full Certification of SSU-G3   [Jul-14-17 05:00PM  GlobeNewswire]
▶ [$$] State Street asks SEC to block non-voting shares   [Jun-18-17 12:03AM  Financial Times]
▶ Star Navigation Announces Exercise of Warrants   [Jun-15-17 05:00PM  GlobeNewswire]
▶ Can Snap-on Hammer Out a Rally?   [Jun-13-17 03:30PM  TheStreet.com]
▶ Biotech Movers: Acceleron, Clovis, Coherus   [09:28AM  TheStreet.com]
▶ How McDonald's is using Snapchat to hire summer workers in New York   [Jun-12-17 02:40PM  American City Business Journals]
▶ Star Navigation Announces Share Lock-up Agreement   [Jun-08-17 05:00PM  GlobeNewswire]
▶ Carson Block Explains Why He's Watching Snap Closely   [Jun-05-17 11:24PM  Bloomberg Video]
▶ Lululemon Athletica: Cramer's Top Takeaways   [Jun-03-17 06:41AM  TheStreet.com]
▶ Star Navigation Updates R&D   [May-29-17 05:00PM  GlobeNewswire]
▶ Star Extends Term and Reprices Certain Warrants   [May-25-17 05:00PM  GlobeNewswire]
▶ Star Navigation Updates STAR-M.M.I.   [May-24-17 05:00PM  GlobeNewswire]
▶ Snap-on CEO on the skills gap in the U.S.   [May-18-17 07:52PM  Fox Business Videos]
▶ Snap-on CEO on Trump, Manufacturing, Skilled Workers   [May-16-17 08:34AM  Bloomberg Video]
▶ ETFs with exposure to Snap-On, Inc. : May 5, 2017   [May-05-17 04:34PM  Capital Cube]
▶ [$$] Snap targets smaller advertisers with self-serve platform   [May-04-17 09:00AM  Financial Times]
▶ Snap-on Acquires Norbar Torque Tools   [06:30AM  Business Wire]
▶ Snap-on Incorporated Declares Quarterly Dividend   [Apr-27-17 04:17PM  Business Wire]
▶ ETFs with exposure to Snap-On, Inc. : April 24, 2017   [Apr-24-17 02:43PM  Capital Cube]
▶ Consumer Staples Beats Estimates This Week   [11:26AM  Investopedia]
▶ Sales jump boosts Snap-on   [12:00PM  American City Business Journals]
▶ Snap-On beats Street 1Q forecasts   [06:36AM  Associated Press]
▶ Snap-on Announces First Quarter 2017 Results   [06:30AM  Business Wire]
▶ At Snap-on, Trump orders more federal contracts for American firms, workers (Video)   [Apr-18-17 08:04PM  American City Business Journals]
▶ Snap-on CEO discusses Trumps visit   [05:22PM  Fox Business Videos]
▶ Raw: Pres. Trump Tours Wisconsin Snap-On Factory   [04:38PM  Associated Press Videos]
▶ Snap-on CEO: Trump visit is about the American worker   [03:15PM  American City Business Journals]
▶ Trump order would target high-skilled worker visa program   [Apr-17-17 11:30PM  Associated Press]
▶ President Donald Trump slated to visit Snap-on HQ in Kenosha   [02:30PM  American City Business Journals]
▶ [$$] Sluggish US IPO activity needs more than a new Jobs Act   [Apr-04-17 12:00PM  Financial Times]
▶ Snap-on: Patience Is the Best Strategy Right Now   [Mar-29-17 10:44AM  TheStreet.com]
▶ Final Trade: MO, UAL & more   [Mar-14-17 05:58PM  CNBC Videos]
Stock chart of SNA Financial statements of SNA
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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