Intrinsic value of Sasol ADR - SSL

Previous Close

$37.66

  Intrinsic Value

$59.08

stock screener

  Rating & Target

str. buy

+57%

Previous close

$37.66

 
Intrinsic value

$59.08

 
Up/down potential

+57%

 
Rating

str. buy

We calculate the intrinsic value of SSL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

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

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
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, %
  -0.31
  12.60
  11.84
  11.16
  10.54
  9.99
  9.49
  9.04
  8.64
  8.27
  7.94
  7.65
  7.38
  7.15
  6.93
  6.74
  6.56
  6.41
  6.27
  6.14
  6.03
  5.92
  5.83
  5.75
  5.67
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
Revenue, $m
  13,007
  14,843
  16,600
  18,452
  20,397
  22,434
  24,563
  26,783
  29,096
  31,502
  34,005
  36,606
  39,310
  42,119
  45,038
  48,073
  51,229
  54,512
  57,929
  61,486
  65,192
  69,054
  73,080
  77,281
  81,666
  86,244
  91,027
  96,026
  101,251
  106,716
  112,434
Variable operating expenses, $m
 
  11,694
  13,076
  14,533
  16,063
  17,665
  19,340
  21,086
  22,905
  24,799
  26,767
  28,795
  30,922
  33,132
  35,428
  37,816
  40,298
  42,881
  45,568
  48,367
  51,281
  54,319
  57,487
  60,792
  64,241
  67,842
  71,604
  75,536
  79,647
  83,946
  88,444
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
  10,696
  11,694
  13,076
  14,533
  16,063
  17,665
  19,340
  21,086
  22,905
  24,799
  26,767
  28,795
  30,922
  33,132
  35,428
  37,816
  40,298
  42,881
  45,568
  48,367
  51,281
  54,319
  57,487
  60,792
  64,241
  67,842
  71,604
  75,536
  79,647
  83,946
  88,444
Operating income, $m
  2,311
  3,149
  3,524
  3,919
  4,334
  4,769
  5,223
  5,697
  6,190
  6,704
  7,238
  7,811
  8,388
  8,987
  9,610
  10,258
  10,931
  11,631
  12,360
  13,119
  13,910
  14,734
  15,593
  16,490
  17,425
  18,402
  19,423
  20,489
  21,604
  22,770
  23,990
EBITDA, $m
  2,311
  5,420
  6,062
  6,738
  7,449
  8,192
  8,970
  9,780
  10,625
  11,504
  12,418
  13,368
  14,355
  15,381
  16,447
  17,555
  18,708
  19,906
  21,154
  22,453
  23,806
  25,216
  26,687
  28,221
  29,822
  31,494
  33,241
  35,066
  36,974
  38,970
  41,058
Interest expense (income), $m
  -272
  354
  440
  638
  846
  1,065
  1,294
  1,534
  1,784
  2,044
  2,315
  2,596
  2,889
  3,193
  3,509
  3,837
  4,179
  4,534
  4,903
  5,288
  5,688
  6,105
  6,539
  6,992
  7,465
  7,958
  8,473
  9,011
  9,573
  10,161
  10,776
Earnings before tax, $m
  2,264
  2,795
  3,084
  3,281
  3,488
  3,703
  3,929
  4,163
  4,406
  4,660
  4,923
  5,215
  5,499
  5,794
  6,101
  6,420
  6,752
  7,098
  7,457
  7,832
  8,222
  8,630
  9,054
  9,498
  9,961
  10,444
  10,950
  11,478
  12,031
  12,609
  13,214
Tax expense, $m
  641
  755
  833
  886
  942
  1,000
  1,061
  1,124
  1,190
  1,258
  1,329
  1,408
  1,485
  1,564
  1,647
  1,733
  1,823
  1,916
  2,013
  2,115
  2,220
  2,330
  2,445
  2,564
  2,689
  2,820
  2,956
  3,099
  3,248
  3,404
  3,568
Net income, $m
  1,537
  2,041
  2,251
  2,395
  2,546
  2,704
  2,868
  3,039
  3,217
  3,402
  3,594
  3,807
  4,014
  4,230
  4,454
  4,687
  4,929
  5,181
  5,444
  5,717
  6,002
  6,300
  6,610
  6,933
  7,271
  7,624
  7,993
  8,379
  8,783
  9,205
  9,646

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,085
  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
  30,097
  34,359
  38,427
  42,714
  47,216
  51,931
  56,858
  61,997
  67,351
  72,922
  78,715
  84,737
  90,994
  97,497
  104,256
  111,281
  118,586
  126,186
  134,094
  142,329
  150,906
  159,846
  169,168
  178,892
  189,042
  199,640
  210,711
  222,281
  234,378
  247,029
  260,265
Adjusted assets (=assets-cash), $m
  28,012
  34,359
  38,427
  42,714
  47,216
  51,931
  56,858
  61,997
  67,351
  72,922
  78,715
  84,737
  90,994
  97,497
  104,256
  111,281
  118,586
  126,186
  134,094
  142,329
  150,906
  159,846
  169,168
  178,892
  189,042
  199,640
  210,711
  222,281
  234,378
  247,029
  260,265
Revenue / Adjusted assets
  0.464
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
Average production assets, $m
  20,866
  22,532
  25,199
  28,011
  30,963
  34,055
  37,286
  40,656
  44,167
  47,820
  51,619
  55,568
  59,672
  63,936
  68,368
  72,975
  77,766
  82,750
  87,936
  93,336
  98,961
  104,823
  110,936
  117,313
  123,969
  130,919
  138,179
  145,767
  153,699
  161,996
  170,675
Working capital, $m
  2,699
  -950
  -1,062
  -1,181
  -1,305
  -1,436
  -1,572
  -1,714
  -1,862
  -2,016
  -2,176
  -2,343
  -2,516
  -2,696
  -2,882
  -3,077
  -3,279
  -3,489
  -3,707
  -3,935
  -4,172
  -4,419
  -4,677
  -4,946
  -5,227
  -5,520
  -5,826
  -6,146
  -6,480
  -6,830
  -7,196
Total debt, $m
  6,460
  8,155
  11,817
  15,675
  19,727
  23,970
  28,405
  33,030
  37,848
  42,862
  48,076
  53,496
  59,128
  64,980
  71,063
  77,386
  83,960
  90,800
  97,918
  105,328
  113,048
  121,094
  129,483
  138,235
  147,370
  156,908
  166,873
  177,286
  188,173
  199,559
  211,471
Total liabilities, $m
  14,125
  30,923
  34,584
  38,442
  42,494
  46,738
  51,172
  55,798
  60,616
  65,630
  70,843
  76,263
  81,895
  87,748
  93,830
  100,153
  106,728
  113,567
  120,685
  128,096
  135,816
  143,861
  152,251
  161,003
  170,138
  179,676
  189,640
  200,053
  210,940
  222,326
  234,238
Total equity, $m
  15,972
  3,436
  3,843
  4,271
  4,722
  5,193
  5,686
  6,200
  6,735
  7,292
  7,871
  8,474
  9,099
  9,750
  10,426
  11,128
  11,859
  12,619
  13,409
  14,233
  15,091
  15,985
  16,917
  17,889
  18,904
  19,964
  21,071
  22,228
  23,438
  24,703
  26,026
Total liabilities and equity, $m
  30,097
  34,359
  38,427
  42,713
  47,216
  51,931
  56,858
  61,998
  67,351
  72,922
  78,714
  84,737
  90,994
  97,498
  104,256
  111,281
  118,587
  126,186
  134,094
  142,329
  150,907
  159,846
  169,168
  178,892
  189,042
  199,640
  210,711
  222,281
  234,378
  247,029
  260,264
Debt-to-equity ratio
  0.404
  2.370
  3.080
  3.670
  4.180
  4.620
  5.000
  5.330
  5.620
  5.880
  6.110
  6.310
  6.500
  6.660
  6.820
  6.950
  7.080
  7.200
  7.300
  7.400
  7.490
  7.580
  7.650
  7.730
  7.800
  7.860
  7.920
  7.980
  8.030
  8.080
  8.130
Adjusted equity ratio
  0.503
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,537
  2,041
  2,251
  2,395
  2,546
  2,704
  2,868
  3,039
  3,217
  3,402
  3,594
  3,807
  4,014
  4,230
  4,454
  4,687
  4,929
  5,181
  5,444
  5,717
  6,002
  6,300
  6,610
  6,933
  7,271
  7,624
  7,993
  8,379
  8,783
  9,205
  9,646
Depreciation, amort., depletion, $m
  0
  2,271
  2,538
  2,819
  3,114
  3,424
  3,747
  4,084
  4,435
  4,800
  5,180
  5,557
  5,967
  6,394
  6,837
  7,298
  7,777
  8,275
  8,794
  9,334
  9,896
  10,482
  11,094
  11,731
  12,397
  13,092
  13,818
  14,577
  15,370
  16,200
  17,068
Funds from operations, $m
  1,725
  4,312
  4,789
  5,214
  5,660
  6,127
  6,615
  7,123
  7,652
  8,202
  8,774
  9,364
  9,981
  10,623
  11,291
  11,984
  12,706
  13,456
  14,237
  15,051
  15,898
  16,782
  17,703
  18,665
  19,668
  20,716
  21,811
  22,956
  24,152
  25,404
  26,714
Change in working capital, $m
  -424
  -106
  -112
  -119
  -124
  -130
  -136
  -142
  -148
  -154
  -160
  -166
  -173
  -180
  -187
  -194
  -202
  -210
  -219
  -228
  -237
  -247
  -258
  -269
  -281
  -293
  -306
  -320
  -334
  -350
  -366
Cash from operations, $m
  2,149
  4,418
  4,902
  5,333
  5,785
  6,258
  6,751
  7,265
  7,800
  8,356
  8,934
  9,530
  10,154
  10,803
  11,477
  12,179
  12,908
  13,666
  14,456
  15,279
  16,136
  17,029
  17,961
  18,933
  19,949
  21,009
  22,117
  23,276
  24,487
  25,754
  27,080
Maintenance CAPEX, $m
  0
  -2,001
  -2,253
  -2,520
  -2,801
  -3,096
  -3,406
  -3,729
  -4,066
  -4,417
  -4,782
  -5,162
  -5,557
  -5,967
  -6,394
  -6,837
  -7,298
  -7,777
  -8,275
  -8,794
  -9,334
  -9,896
  -10,482
  -11,094
  -11,731
  -12,397
  -13,092
  -13,818
  -14,577
  -15,370
  -16,200
New CAPEX, $m
  -4,552
  -2,518
  -2,668
  -2,811
  -2,952
  -3,092
  -3,231
  -3,370
  -3,511
  -3,653
  -3,799
  -3,949
  -4,104
  -4,264
  -4,432
  -4,607
  -4,791
  -4,983
  -5,186
  -5,400
  -5,625
  -5,862
  -6,113
  -6,377
  -6,656
  -6,950
  -7,260
  -7,587
  -7,933
  -8,296
  -8,680
Cash from investing activities, $m
  -4,276
  -4,519
  -4,921
  -5,331
  -5,753
  -6,188
  -6,637
  -7,099
  -7,577
  -8,070
  -8,581
  -9,111
  -9,661
  -10,231
  -10,826
  -11,444
  -12,089
  -12,760
  -13,461
  -14,194
  -14,959
  -15,758
  -16,595
  -17,471
  -18,387
  -19,347
  -20,352
  -21,405
  -22,510
  -23,666
  -24,880
Free cash flow, $m
  -2,127
  -101
  -19
  2
  31
  69
  114
  166
  223
  286
  353
  419
  494
  572
  652
  735
  819
  906
  995
  1,085
  1,177
  1,271
  1,366
  1,463
  1,562
  1,662
  1,765
  1,870
  1,978
  2,088
  2,201
Issuance/(repayment) of debt, $m
  719
  1,609
  3,661
  3,858
  4,052
  4,244
  4,434
  4,625
  4,818
  5,014
  5,214
  5,419
  5,632
  5,853
  6,083
  6,323
  6,575
  6,839
  7,118
  7,411
  7,720
  8,046
  8,389
  8,752
  9,135
  9,538
  9,964
  10,413
  10,887
  11,386
  11,912
Issuance/(repurchase) of shares, $m
  0
  207
  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  
  645
  1,816
  3,661
  3,858
  4,052
  4,244
  4,434
  4,625
  4,818
  5,014
  5,214
  5,419
  5,632
  5,853
  6,083
  6,323
  6,575
  6,839
  7,118
  7,411
  7,720
  8,046
  8,389
  8,752
  9,135
  9,538
  9,964
  10,413
  10,887
  11,386
  11,912
Total cash flow (excl. dividends), $m
  -1,724
  1,715
  3,642
  3,860
  4,083
  4,313
  4,549
  4,791
  5,041
  5,300
  5,567
  5,839
  6,126
  6,424
  6,734
  7,057
  7,394
  7,746
  8,113
  8,496
  8,897
  9,316
  9,755
  10,215
  10,696
  11,201
  11,729
  12,283
  12,864
  13,474
  14,113
Retained Cash Flow (-), $m
  -356
  -2,248
  -407
  -429
  -450
  -472
  -493
  -514
  -535
  -557
  -579
  -602
  -626
  -650
  -676
  -703
  -731
  -760
  -791
  -823
  -858
  -894
  -932
  -972
  -1,015
  -1,060
  -1,107
  -1,157
  -1,210
  -1,265
  -1,324
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
 
  -533
  3,235
  3,431
  3,633
  3,841
  4,056
  4,277
  4,506
  4,743
  4,988
  5,237
  5,500
  5,774
  6,059
  6,355
  6,664
  6,986
  7,322
  7,673
  8,039
  8,422
  8,823
  9,242
  9,681
  10,141
  10,622
  11,126
  11,655
  12,209
  12,789
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  -506
  2,903
  2,894
  2,863
  2,811
  2,739
  2,646
  2,535
  2,406
  2,263
  2,106
  1,942
  1,771
  1,597
  1,422
  1,251
  1,086
  930
  784
  651
  531
  426
  336
  259
  196
  145
  105
  74
  51
  34
Current shareholders' claim on cash, %
  100
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3

Sasol Limited is an international integrated chemicals and energy company. The Company develops and commercializes technologies, and builds and operates facilities to produce a range of product streams, including liquid fuels, chemicals and low-carbon electricity. The Company's operating business units include Mining and, Exploration and Production International. Its Strategic Business Units are energy, base chemicals, performance chemicals and group functions. The Company's regional operating hubs include Southern Africa Operations and International Operations. The Company operates approximately six coal mines that supply feedstock for its Secunda (Sasol Synfuels) and Sasolburg (Sasolburg Operations) complexes in South Africa. It offers market ready fuels and oils, such as bitumen; industrial heating fuels; naphtha and illuminating paraffin transport fuels; automotive lubricants; industrial lubricants; greases; cleansers and degreasers; automotive fuels, and burner fuels.

FINANCIAL RATIOS  of  Sasol ADR (SSL)

Valuation Ratios
P/E Ratio 0.1
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow -0
Growth Rates
Sales Growth Rate -0.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -14.3%
Cap. Spend. - 3 Yr. Gr. Rate 9.2%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 35.4%
Total Debt to Equity 40.4%
Interest Coverage -7
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. 5.7%
Return On Total Capital 6.9%
Ret/ On T. Cap. - 3 Yr. Avg. 8.6%
Return On Equity 9.7%
Return On Equity - 3 Yr. Avg. 10.9%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 58.6%
Gross Margin - 3 Yr. Avg. 58%
EBITDA Margin 15.3%
EBITDA Margin - 3 Yr. Avg. 16.9%
Operating Margin 17.8%
Oper. Margin - 3 Yr. Avg. 18.5%
Pre-Tax Margin 17.4%
Pre-Tax Margin - 3 Yr. Avg. 18.6%
Net Profit Margin 11.8%
Net Profit Margin - 3 Yr. Avg. 11.8%
Effective Tax Rate 28.3%
Eff/ Tax Rate - 3 Yr. Avg. 32.2%
Payout Ratio 0%

SSL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SSL stock intrinsic value calculation we used $13182 million for the last fiscal year's total revenue generated by Sasol ADR. The default revenue input number comes from 2017 income statement of Sasol 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 SSL stock valuation model: a) initial revenue growth rate of 12.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.3%, whose default value for SSL is calculated based on our internal credit rating of Sasol 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 Sasol 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 SSL stock the variable cost ratio is equal to 78.8%.

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 SSL 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 Sasol ADR.

Corporate tax rate of 27% is the nominal tax rate for Sasol 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 SSL 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 SSL are equal to 151.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Sasol 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 SSL is equal to -6.4%. 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 - $1188 million for Sasol 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 654 million for Sasol 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 Sasol ADR at the current share price and the inputted number of shares is $24.6 billion.

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COMPANY NEWS

▶ 5 Value Picks to Exploit the Dip in Emerging Markets   [Jun-28-18 11:45AM  InvestorPlace]
▶ New Strong Buy Stocks for May 14th   [May-14-18 09:48AM  Zacks]
▶ Sasol Co-CEO Sees a 'Volatile Environment' for Crude   [May-08-18 06:42AM  Bloomberg Video]
▶ [$$] Sasol Profit Hit By One-Off Charges   [01:28AM  The Wall Street Journal]
▶ Sasol Shifts Strategy, Evaluates Chemical Business Split   [Nov-28-17 07:00PM  Rigzone.com]
▶ ETFs with exposure to Sasol Ltd. : November 6, 2017   [Nov-06-17 12:31PM  Capital Cube]
▶ [$$] Sasol goes cold on converting gas and coal to liquids   [Sep-26-17 05:15AM  Financial Times]
▶ Today's Bell Ringer, September 9, 2017   [Sep-08-17 09:14AM  CNBC Videos]
▶ ETFs with exposure to Sasol Ltd. : September 1, 2017   [Aug-31-17 09:13PM  Capital Cube]
▶ Which Stocks Are Showing Rising Relative Strength?   [May-22-17 12:12PM  Investor's Business Daily]
▶ South African Chemical Maker Looks To Fuel New Rebound   [12:03PM  Investor's Business Daily]
▶ Is This Country Africas Qatar Of Natural Gas?   [May-11-17 10:55AM  Oilprice.com]
▶ Sasol Sees Mixed Sales to Start 2017   [May-06-17 06:58PM  Motley Fool]
▶ Sasol: The Benefits Of A Weak Rand   [Apr-17-17 12:44PM  Barrons.com]
▶ Sasol Looks to North America for Growth   [Mar-13-17 09:52AM  Motley Fool]
▶ Sasol Looks to North America for Growth   [09:52AM  at Motley Fool]
▶ Why energy execs are suddenly pumped up on Trump   [Mar-06-17 08:58AM  at CNBC]
▶ These 4 Stocks Could Be Turning 'Toxic' in March   [Mar-03-17 07:00AM  TheStreet.com]
▶ South Africa's Sasol Energy Rises On Earnings   [Feb-27-17 10:30AM  Barrons.com]
▶ South Africa's Sasol Energy Rises On Earnings   [10:30AM  at Barrons.com]
▶ Hedge Fund Sentiment Is Stagnant On Ecopetrol S.A. (ADR) (EC)   [Dec-12-16 03:53PM  at Insider Monkey]
▶ Do Hedge Funds Love Dr Pepper Snapple Group Inc. (DPS)?   [Dec-11-16 09:24AM  at Insider Monkey]
Financial statements of SSL
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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