Intrinsic value of Viacom Cl B - VIAB

Previous Close

$27.64

  Intrinsic Value

$141.47

stock screener

  Rating & Target

str. buy

+412%

  Value-price divergence*

+115%

Previous close

$27.64

 
Intrinsic value

$141.47

 
Up/down potential

+412%

 
Rating

str. buy

 
Value-price divergence*

+115%

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

We calculate the intrinsic value of VIAB 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 11.7

 

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, %
  -5.88
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
Revenue, $m
  12,488
  13,525
  14,602
  15,723
  16,887
  18,097
  19,355
  20,662
  22,021
  23,435
  24,906
  26,438
  28,034
  29,697
  31,431
  33,240
  35,128
  37,099
  39,158
  41,310
  43,559
  45,912
  48,373
  50,949
  53,646
  56,469
  59,427
  62,525
  65,771
  69,173
  72,739
Variable operating expenses, $m
 
  3,584
  3,779
  3,981
  4,192
  4,410
  4,638
  4,874
  5,119
  5,375
  5,641
  4,778
  5,066
  5,367
  5,680
  6,007
  6,348
  6,704
  7,076
  7,465
  7,872
  8,297
  8,742
  9,207
  9,694
  10,205
  10,739
  11,299
  11,886
  12,500
  13,145
Fixed operating expenses, $m
 
  6,900
  7,073
  7,250
  7,431
  7,617
  7,807
  8,002
  8,202
  8,407
  8,618
  8,833
  9,054
  9,280
  9,512
  9,750
  9,994
  10,244
  10,500
  10,762
  11,031
  11,307
  11,590
  11,879
  12,176
  12,481
  12,793
  13,113
  13,440
  13,776
  14,121
Total operating expenses, $m
  9,962
  10,484
  10,852
  11,231
  11,623
  12,027
  12,445
  12,876
  13,321
  13,782
  14,259
  13,611
  14,120
  14,647
  15,192
  15,757
  16,342
  16,948
  17,576
  18,227
  18,903
  19,604
  20,332
  21,086
  21,870
  22,686
  23,532
  24,412
  25,326
  26,276
  27,266
Operating income, $m
  2,526
  3,040
  3,751
  4,492
  5,265
  6,070
  6,910
  7,786
  8,699
  9,653
  10,648
  12,828
  13,914
  15,050
  16,239
  17,483
  18,786
  20,151
  21,582
  23,082
  24,656
  26,308
  28,042
  29,863
  31,775
  33,784
  35,895
  38,113
  40,445
  42,896
  45,473
EBITDA, $m
  2,747
  4,226
  4,940
  5,685
  6,461
  7,271
  8,115
  8,995
  9,913
  10,872
  11,872
  12,917
  14,008
  15,150
  16,345
  17,595
  18,904
  20,276
  21,714
  23,221
  24,803
  26,463
  28,205
  30,034
  31,956
  33,974
  36,095
  38,324
  40,666
  43,129
  45,718
Interest expense (income), $m
  611
  607
  684
  764
  848
  935
  1,025
  1,118
  1,215
  1,317
  1,422
  1,531
  1,645
  1,764
  1,888
  2,017
  2,151
  2,292
  2,439
  2,592
  2,752
  2,919
  3,095
  3,278
  3,469
  3,670
  3,880
  4,100
  4,331
  4,572
  4,826
Earnings before tax, $m
  1,990
  2,433
  3,066
  3,727
  4,417
  5,136
  5,885
  6,668
  7,484
  8,336
  9,226
  11,296
  12,269
  13,286
  14,351
  15,466
  16,634
  17,859
  19,143
  20,490
  21,904
  23,389
  24,948
  26,585
  28,306
  30,114
  32,014
  34,013
  36,114
  38,324
  40,648
Tax expense, $m
  519
  657
  828
  1,006
  1,193
  1,387
  1,589
  1,800
  2,021
  2,251
  2,491
  3,050
  3,313
  3,587
  3,875
  4,176
  4,491
  4,822
  5,169
  5,532
  5,914
  6,315
  6,736
  7,178
  7,642
  8,131
  8,644
  9,183
  9,751
  10,347
  10,975
Net income, $m
  1,438
  1,776
  2,239
  2,721
  3,224
  3,749
  4,296
  4,867
  5,463
  6,085
  6,735
  8,246
  8,956
  9,699
  10,476
  11,290
  12,143
  13,037
  13,975
  14,958
  15,990
  17,074
  18,212
  19,407
  20,663
  21,983
  23,371
  24,829
  26,363
  27,976
  29,673

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  379
  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
  22,508
  23,980
  25,891
  27,877
  29,942
  32,087
  34,317
  36,635
  39,045
  41,551
  44,160
  46,876
  49,706
  52,654
  55,729
  58,936
  62,283
  65,778
  69,429
  73,244
  77,233
  81,404
  85,769
  90,336
  95,117
  100,123
  105,366
  110,859
  116,615
  122,647
  128,970
Adjusted assets (=assets-cash), $m
  22,129
  23,980
  25,891
  27,877
  29,942
  32,087
  34,317
  36,635
  39,045
  41,551
  44,160
  46,876
  49,706
  52,654
  55,729
  58,936
  62,283
  65,778
  69,429
  73,244
  77,233
  81,404
  85,769
  90,336
  95,117
  100,123
  105,366
  110,859
  116,615
  122,647
  128,970
Revenue / Adjusted assets
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
Average production assets, $m
  1,267
  1,366
  1,475
  1,588
  1,706
  1,828
  1,955
  2,087
  2,224
  2,367
  2,516
  2,670
  2,831
  2,999
  3,175
  3,357
  3,548
  3,747
  3,955
  4,172
  4,399
  4,637
  4,886
  5,146
  5,418
  5,703
  6,002
  6,315
  6,643
  6,986
  7,347
Working capital, $m
  850
  527
  569
  613
  659
  706
  755
  806
  859
  914
  971
  1,031
  1,093
  1,158
  1,226
  1,296
  1,370
  1,447
  1,527
  1,611
  1,699
  1,791
  1,887
  1,987
  2,092
  2,202
  2,318
  2,438
  2,565
  2,698
  2,837
Total debt, $m
  11,913
  13,417
  14,990
  16,625
  18,324
  20,090
  21,925
  23,832
  25,816
  27,879
  30,026
  32,261
  34,590
  37,016
  39,547
  42,186
  44,941
  47,817
  50,822
  53,962
  57,245
  60,678
  64,269
  68,028
  71,963
  76,083
  80,398
  84,919
  89,656
  94,620
  99,824
Total liabilities, $m
  18,231
  19,735
  21,308
  22,943
  24,642
  26,408
  28,243
  30,150
  32,134
  34,197
  36,344
  38,579
  40,908
  43,334
  45,865
  48,504
  51,259
  54,135
  57,140
  60,280
  63,563
  66,996
  70,587
  74,346
  78,281
  82,401
  86,716
  91,237
  95,974
  100,938
  106,142
Total equity, $m
  4,277
  4,244
  4,583
  4,934
  5,300
  5,679
  6,074
  6,484
  6,911
  7,355
  7,816
  8,297
  8,798
  9,320
  9,864
  10,432
  11,024
  11,643
  12,289
  12,964
  13,670
  14,409
  15,181
  15,989
  16,836
  17,722
  18,650
  19,622
  20,641
  21,709
  22,828
Total liabilities and equity, $m
  22,508
  23,979
  25,891
  27,877
  29,942
  32,087
  34,317
  36,634
  39,045
  41,552
  44,160
  46,876
  49,706
  52,654
  55,729
  58,936
  62,283
  65,778
  69,429
  73,244
  77,233
  81,405
  85,768
  90,335
  95,117
  100,123
  105,366
  110,859
  116,615
  122,647
  128,970
Debt-to-equity ratio
  2.785
  3.160
  3.270
  3.370
  3.460
  3.540
  3.610
  3.680
  3.740
  3.790
  3.840
  3.890
  3.930
  3.970
  4.010
  4.040
  4.080
  4.110
  4.140
  4.160
  4.190
  4.210
  4.230
  4.250
  4.270
  4.290
  4.310
  4.330
  4.340
  4.360
  4.370
Adjusted equity ratio
  0.176
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177
  0.177

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,438
  1,776
  2,239
  2,721
  3,224
  3,749
  4,296
  4,867
  5,463
  6,085
  6,735
  8,246
  8,956
  9,699
  10,476
  11,290
  12,143
  13,037
  13,975
  14,958
  15,990
  17,074
  18,212
  19,407
  20,663
  21,983
  23,371
  24,829
  26,363
  27,976
  29,673
Depreciation, amort., depletion, $m
  221
  1,186
  1,189
  1,193
  1,197
  1,201
  1,205
  1,210
  1,214
  1,219
  1,224
  89
  94
  100
  106
  112
  118
  125
  132
  139
  147
  155
  163
  172
  181
  190
  200
  210
  221
  233
  245
Funds from operations, $m
  -3,852
  2,962
  3,428
  3,914
  4,421
  4,950
  5,502
  6,077
  6,677
  7,304
  7,959
  8,335
  9,051
  9,799
  10,582
  11,402
  12,261
  13,162
  14,106
  15,097
  16,137
  17,228
  18,375
  19,579
  20,844
  22,173
  23,571
  25,040
  26,585
  28,209
  29,918
Change in working capital, $m
  -5,223
  40
  42
  44
  45
  47
  49
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  80
  84
  88
  92
  96
  100
  105
  110
  115
  121
  127
  133
  139
Cash from operations, $m
  1,371
  2,922
  3,386
  3,870
  4,376
  4,903
  5,453
  6,026
  6,624
  7,249
  7,902
  8,276
  8,988
  9,734
  10,514
  11,332
  12,188
  13,085
  14,026
  15,013
  16,049
  17,137
  18,279
  19,478
  20,738
  22,063
  23,455
  24,919
  26,458
  28,076
  29,779
Maintenance CAPEX, $m
  0
  -42
  -46
  -49
  -53
  -57
  -61
  -65
  -70
  -74
  -79
  -84
  -89
  -94
  -100
  -106
  -112
  -118
  -125
  -132
  -139
  -147
  -155
  -163
  -172
  -181
  -190
  -200
  -210
  -221
  -233
New CAPEX, $m
  -172
  -99
  -109
  -113
  -118
  -122
  -127
  -132
  -137
  -143
  -149
  -155
  -161
  -168
  -175
  -183
  -191
  -199
  -208
  -217
  -227
  -238
  -249
  -260
  -272
  -285
  -299
  -313
  -328
  -344
  -360
Cash from investing activities, $m
  -299
  -141
  -155
  -162
  -171
  -179
  -188
  -197
  -207
  -217
  -228
  -239
  -250
  -262
  -275
  -289
  -303
  -317
  -333
  -349
  -366
  -385
  -404
  -423
  -444
  -466
  -489
  -513
  -538
  -565
  -593
Free cash flow, $m
  1,072
  2,780
  3,231
  3,708
  4,205
  4,724
  5,265
  5,829
  6,418
  7,032
  7,674
  8,037
  8,738
  9,472
  10,239
  11,043
  11,885
  12,768
  13,693
  14,664
  15,683
  16,752
  17,875
  19,055
  20,295
  21,597
  22,966
  24,406
  25,920
  27,511
  29,186
Issuance/(repayment) of debt, $m
  -368
  1,521
  1,573
  1,635
  1,699
  1,766
  1,835
  1,907
  1,983
  2,063
  2,147
  2,235
  2,328
  2,427
  2,530
  2,639
  2,755
  2,876
  3,005
  3,140
  3,283
  3,433
  3,592
  3,759
  3,935
  4,120
  4,315
  4,521
  4,737
  4,964
  5,204
Issuance/(repurchase) of shares, $m
  -89
  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  
  -538
  1,521
  1,573
  1,635
  1,699
  1,766
  1,835
  1,907
  1,983
  2,063
  2,147
  2,235
  2,328
  2,427
  2,530
  2,639
  2,755
  2,876
  3,005
  3,140
  3,283
  3,433
  3,592
  3,759
  3,935
  4,120
  4,315
  4,521
  4,737
  4,964
  5,204
Total cash flow (excl. dividends), $m
  508
  4,302
  4,804
  5,343
  5,904
  6,489
  7,100
  7,736
  8,401
  9,095
  9,821
  10,272
  11,067
  11,898
  12,770
  13,683
  14,640
  15,644
  16,698
  17,804
  18,966
  20,185
  21,467
  22,814
  24,229
  25,717
  27,282
  28,927
  30,657
  32,476
  34,389
Retained Cash Flow (-), $m
  -739
  -329
  -338
  -352
  -365
  -380
  -395
  -410
  -427
  -444
  -462
  -481
  -501
  -522
  -544
  -568
  -592
  -619
  -646
  -675
  -706
  -738
  -772
  -808
  -846
  -886
  -928
  -972
  -1,019
  -1,068
  -1,119
Prev. year cash balance distribution, $m
 
  362
  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
 
  4,334
  4,466
  4,991
  5,539
  6,110
  6,705
  7,326
  7,974
  8,652
  9,359
  9,792
  10,566
  11,376
  12,225
  13,115
  14,047
  15,026
  16,052
  17,129
  18,260
  19,447
  20,695
  22,006
  23,383
  24,831
  26,354
  27,954
  29,638
  31,408
  33,270
Discount rate, %
 
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
 
  4,058
  3,890
  4,018
  4,091
  4,107
  4,069
  3,979
  3,839
  3,655
  3,433
  3,083
  2,822
  2,544
  2,258
  1,972
  1,694
  1,429
  1,184
  962
  766
  597
  455
  339
  247
  175
  120
  81
  53
  33
  20
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

Viacom Inc. offers global media brands that create television programs, motion pictures, short-form content, applications, games, consumer products, social media experiences and other entertainment content. As of September 30, 2016, the Company offered its services for audiences in more than 180 countries. The Company operates through two segments: Media Networks and Filmed Entertainment. The Media Networks segment creates, acquires and distributes programming and other content for audiences The Media Networks segment provides entertainment content and related branded products for advertisers, content distributors and retailers. The Filmed Entertainment segment produces, finances, acquires and distributes motion pictures, television programming and other entertainment content under the Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, Nickelodeon Movies, MTV Films and Paramount Television brands.

FINANCIAL RATIOS  of  Viacom Cl B (VIAB)

Valuation Ratios
P/E Ratio 7.6
Price to Sales 0.9
Price to Book 2.6
Price to Tangible Book
Price to Cash Flow 8
Price to Free Cash Flow 9.2
Growth Rates
Sales Growth Rate -5.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 21.1%
Cap. Spend. - 3 Yr. Gr. Rate 1.5%
Financial Strength
Quick Ratio 22
Current Ratio 0
LT Debt to Equity 278.1%
Total Debt to Equity 278.5%
Interest Coverage 4
Management Effectiveness
Return On Assets 8.5%
Ret/ On Assets - 3 Yr. Avg. 10.4%
Return On Total Capital 9%
Ret/ On T. Cap. - 3 Yr. Avg. 11.7%
Return On Equity 36.8%
Return On Equity - 3 Yr. Avg. 47.8%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 46.5%
Gross Margin - 3 Yr. Avg. 49.1%
EBITDA Margin 22.6%
EBITDA Margin - 3 Yr. Avg. 26.4%
Operating Margin 20.2%
Oper. Margin - 3 Yr. Avg. 24.4%
Pre-Tax Margin 15.9%
Pre-Tax Margin - 3 Yr. Avg. 20.1%
Net Profit Margin 11.5%
Net Profit Margin - 3 Yr. Avg. 14.4%
Effective Tax Rate 26.1%
Eff/ Tax Rate - 3 Yr. Avg. 25.3%
Payout Ratio 44.2%

VIAB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VIAB stock intrinsic value calculation we used $12488 million for the last fiscal year's total revenue generated by Viacom Cl B. The default revenue input number comes from 2016 income statement of Viacom Cl B. 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 VIAB stock valuation model: a) initial revenue growth rate of 8.3% 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 6.8%, whose default value for VIAB is calculated based on our internal credit rating of Viacom Cl B, 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 Viacom Cl B.
    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 VIAB stock the variable cost ratio is equal to 27.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6732 million in the base year in the intrinsic value calculation for VIAB 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 5.1% for Viacom Cl B.

Corporate tax rate of 27% is the nominal tax rate for Viacom Cl B. 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 VIAB 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 VIAB are equal to 10.1%.

Life of production assets of 57.4 years is the average useful life of capital assets used in Viacom Cl B 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 VIAB is equal to 3.9%. 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 - $4277 million for Viacom Cl B - 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 424.118 million for Viacom Cl B 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 Viacom Cl B at the current share price and the inputted number of shares is $11.7 billion.

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DISCA Discovery Comm 21.41 55.37  str.buy
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DIS Walt Disney 98.60 103.16  hold
SNI Scripps Networ 86.04 67.01  sell
AMZN Amazon.com 955.10 538.53  sell

COMPANY NEWS

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▶ Cord-cutting is on the rise, and TV companies are taking note   [Sep-13-17 04:30PM  American City Business Journals]
▶ MTV ratings grow   [03:43PM  Reuters Videos]
▶ Viacom's MTV ratings growth   [03:24PM  Reuters Videos]
▶ Will Viacom's TV Bundle Be Too Skinny?   [Sep-12-17 02:12PM  Barrons.com]
▶ Paramount replaces motion picture group president over the weekend   [Sep-11-17 02:15PM  American City Business Journals]
▶ 'It' floats away with record-breaking $117.2 million weekend   [Sep-10-17 03:09PM  Associated Press]
▶ [$$] An MTV Reboot Won't Make Viacom Cool Again   [Sep-08-17 11:18PM  Barrons.com]
▶ Why An MTV Reboot Won't Make Viacom Cool Again   [Sep-05-17 04:46PM  Barrons.com]
▶ Walt Disney: A Solid Streaming Strategy?   [09:53AM  Barrons.com]
▶ A slow Labor Day caps a down summer at the box office   [Sep-03-17 04:34PM  Associated Press]
▶ Yahoo Finance Live: Midday Movers - Sep 1st, 2017   [09:40AM  Yahoo Finance Video]
▶ ESPN pulls announcer Robert Lee from UVA game   [12:52PM  Yahoo Finance Video]
▶ 'The Hitman's Bodyguard' outdoes 'Logan Lucky' at box office   [Aug-20-17 05:05PM  Associated Press]
▶ ETFs with exposure to Viacom, Inc. : August 18, 2017   [Aug-18-17 06:33PM  Capital Cube]
▶ TV Networks Take a Hit from Cutting Ad Time   [12:01AM  The Wall Street Journal]
▶ Finance Face Off: Is cord cutting the future?   [Aug-10-17 01:22PM  Yahoo Finance Video]
▶ The Heart and Soul of the Beach!   [05:55AM  Business Wire]
▶ TODAY'S CHARTS: Why Netflix doesn't need Disney   [12:26PM  Yahoo Finance Video]
▶ Charter Communications: Another Bidder?   [11:16AM  Barrons.com]
▶ CBS: Full Stream Ahead?   [12:41PM  Barrons.com]
▶ Skydance extends film production deal with Paramount   [03:00PM  American City Business Journals]
▶ Viacom Was the S&P 500s Top Loser on August 4   [10:40AM  Market Realist]
Financial statements of VIAB
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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