Intrinsic value of Altaba Inc. - AABA

Previous Close

$72.01

  Intrinsic Value

$13.15

stock screener

  Rating & Target

str. sell

-82%

Previous close

$72.01

 
Intrinsic value

$13.15

 
Up/down potential

-82%

 
Rating

str. sell

We calculate the intrinsic value of AABA 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 0001), $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 40.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  22.10
  20.39
  18.85
  17.47
  16.22
  15.10
  14.09
  13.18
  12.36
  11.62
  10.96
  10.37
  9.83
  9.35
  8.91
  8.52
  8.17
  7.85
  7.57
  7.31
  7.08
  6.87
  6.68
  6.52
  6.36
  6.23
  6.10
  5.99
  5.89
  5.81
Revenue, $m
  6,311
  7,598
  9,031
  10,608
  12,328
  14,190
  16,189
  18,322
  20,587
  22,980
  25,499
  28,143
  30,909
  33,798
  36,810
  39,946
  43,209
  46,602
  50,128
  53,793
  57,601
  61,558
  65,673
  69,952
  74,404
  79,037
  83,862
  88,889
  94,129
  99,594
Variable operating expenses, $m
  12,318
  14,805
  17,573
  20,622
  23,947
  27,544
  31,407
  35,530
  39,907
  44,532
  49,280
  54,388
  59,734
  65,317
  71,138
  77,200
  83,506
  90,063
  96,877
  103,959
  111,318
  118,967
  126,919
  135,188
  143,792
  152,746
  162,071
  171,786
  181,913
  192,474
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
  12,318
  14,805
  17,573
  20,622
  23,947
  27,544
  31,407
  35,530
  39,907
  44,532
  49,280
  54,388
  59,734
  65,317
  71,138
  77,200
  83,506
  90,063
  96,877
  103,959
  111,318
  118,967
  126,919
  135,188
  143,792
  152,746
  162,071
  171,786
  181,913
  192,474
Operating income, $m
  -6,007
  -7,207
  -8,543
  -10,014
  -11,618
  -13,354
  -15,218
  -17,208
  -19,320
  -21,552
  -23,780
  -26,245
  -28,825
  -31,519
  -34,328
  -37,254
  -40,297
  -43,461
  -46,749
  -50,166
  -53,718
  -57,409
  -61,246
  -65,236
  -69,388
  -73,709
  -78,209
  -82,897
  -87,784
  -92,880
EBITDA, $m
  -5,443
  -6,553
  -7,788
  -9,148
  -10,632
  -12,237
  -13,961
  -15,801
  -17,754
  -19,818
  -21,990
  -24,270
  -26,656
  -29,147
  -31,744
  -34,449
  -37,263
  -40,189
  -43,230
  -46,390
  -49,674
  -53,087
  -56,636
  -60,326
  -64,165
  -68,161
  -72,322
  -76,657
  -81,176
  -85,889
Interest expense (income), $m
  0
  70
  277
  507
  762
  1,044
  1,351
  1,683
  2,040
  2,421
  2,825
  3,253
  3,702
  4,174
  4,668
  5,184
  5,721
  6,281
  6,864
  7,469
  8,099
  8,753
  9,433
  10,139
  10,874
  11,638
  12,432
  13,259
  14,121
  15,018
  15,954
Earnings before tax, $m
  -6,077
  -7,484
  -9,050
  -10,776
  -12,662
  -14,705
  -16,902
  -19,248
  -21,741
  -24,377
  -27,033
  -29,948
  -32,999
  -36,187
  -39,512
  -42,975
  -46,578
  -50,324
  -54,219
  -58,265
  -62,471
  -66,842
  -71,385
  -76,110
  -81,026
  -86,142
  -91,469
  -97,018
  -102,802
  -108,834
Tax expense, $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
Net income, $m
  -6,077
  -7,484
  -9,050
  -10,776
  -12,662
  -14,705
  -16,902
  -19,248
  -21,741
  -24,377
  -27,033
  -29,948
  -32,999
  -36,187
  -39,512
  -42,975
  -46,578
  -50,324
  -54,219
  -58,265
  -62,471
  -66,842
  -71,385
  -76,110
  -81,026
  -86,142
  -91,469
  -97,018
  -102,802
  -108,834

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  52,160
  62,795
  74,633
  87,668
  101,887
  117,270
  133,790
  151,422
  170,140
  189,918
  210,738
  232,583
  255,445
  279,320
  304,213
  330,134
  357,102
  385,141
  414,283
  444,567
  476,037
  508,746
  542,751
  578,114
  614,905
  653,199
  693,076
  734,621
  777,927
  823,089
Adjusted assets (=assets-cash), $m
  52,160
  62,795
  74,633
  87,668
  101,887
  117,270
  133,790
  151,422
  170,140
  189,918
  210,738
  232,583
  255,445
  279,320
  304,213
  330,134
  357,102
  385,141
  414,283
  444,567
  476,037
  508,746
  542,751
  578,114
  614,905
  653,199
  693,076
  734,621
  777,927
  823,089
Revenue / Adjusted assets
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
  0.121
Average production assets, $m
  2,215
  2,667
  3,170
  3,723
  4,327
  4,981
  5,682
  6,431
  7,226
  8,066
  8,950
  9,878
  10,849
  11,863
  12,920
  14,021
  15,166
  16,357
  17,595
  18,881
  20,218
  21,607
  23,051
  24,553
  26,116
  27,742
  29,436
  31,200
  33,039
  34,957
Working capital, $m
  25
  30
  36
  42
  49
  57
  65
  73
  82
  92
  102
  113
  124
  135
  147
  160
  173
  186
  201
  215
  230
  246
  263
  280
  298
  316
  335
  356
  377
  398
Total debt, $m
  5,130
  9,384
  14,119
  19,333
  25,021
  31,174
  37,782
  44,835
  52,322
  60,233
  68,561
  77,299
  86,444
  95,994
  105,951
  116,320
  127,107
  138,322
  149,979
  162,093
  174,681
  187,765
  201,366
  215,512
  230,228
  245,546
  261,496
  278,115
  295,437
  313,502
Total liabilities, $m
  20,864
  25,118
  29,853
  35,067
  40,755
  46,908
  53,516
  60,569
  68,056
  75,967
  84,295
  93,033
  102,178
  111,728
  121,685
  132,054
  142,841
  154,056
  165,713
  177,827
  190,415
  203,499
  217,100
  231,246
  245,962
  261,280
  277,230
  293,849
  311,171
  329,235
Total equity, $m
  31,296
  37,677
  44,780
  52,601
  61,132
  70,362
  80,274
  90,853
  102,084
  113,951
  126,443
  139,550
  153,267
  167,592
  182,528
  198,081
  214,261
  231,084
  248,570
  266,740
  285,622
  305,248
  325,650
  346,868
  368,943
  391,919
  415,846
  440,773
  466,756
  493,853
Total liabilities and equity, $m
  52,160
  62,795
  74,633
  87,668
  101,887
  117,270
  133,790
  151,422
  170,140
  189,918
  210,738
  232,583
  255,445
  279,320
  304,213
  330,135
  357,102
  385,140
  414,283
  444,567
  476,037
  508,747
  542,750
  578,114
  614,905
  653,199
  693,076
  734,622
  777,927
  823,088
Debt-to-equity ratio
  0.160
  0.250
  0.320
  0.370
  0.410
  0.440
  0.470
  0.490
  0.510
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.590
  0.590
  0.600
  0.600
  0.610
  0.610
  0.620
  0.620
  0.620
  0.620
  0.630
  0.630
  0.630
  0.630
  0.630
Adjusted equity ratio
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -6,077
  -7,484
  -9,050
  -10,776
  -12,662
  -14,705
  -16,902
  -19,248
  -21,741
  -24,377
  -27,033
  -29,948
  -32,999
  -36,187
  -39,512
  -42,975
  -46,578
  -50,324
  -54,219
  -58,265
  -62,471
  -66,842
  -71,385
  -76,110
  -81,026
  -86,142
  -91,469
  -97,018
  -102,802
  -108,834
Depreciation, amort., depletion, $m
  564
  654
  755
  866
  986
  1,117
  1,257
  1,407
  1,566
  1,734
  1,790
  1,976
  2,170
  2,373
  2,584
  2,804
  3,033
  3,271
  3,519
  3,776
  4,044
  4,321
  4,610
  4,911
  5,223
  5,548
  5,887
  6,240
  6,608
  6,991
Funds from operations, $m
  -5,513
  -6,830
  -8,295
  -9,911
  -11,676
  -13,588
  -15,644
  -17,841
  -20,175
  -22,643
  -25,243
  -27,972
  -30,830
  -33,815
  -36,928
  -40,171
  -43,545
  -47,053
  -50,700
  -54,489
  -58,427
  -62,520
  -66,775
  -71,200
  -75,803
  -80,593
  -85,581
  -90,778
  -96,194
  -101,842
Change in working capital, $m
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
Cash from operations, $m
  -5,518
  -6,835
  -8,300
  -9,917
  -11,683
  -13,596
  -15,652
  -17,850
  -20,184
  -22,653
  -25,253
  -27,983
  -30,841
  -33,826
  -36,940
  -40,183
  -43,558
  -47,067
  -50,714
  -54,504
  -58,442
  -62,536
  -66,791
  -71,217
  -75,820
  -80,612
  -85,601
  -90,798
  -96,215
  -101,864
Maintenance CAPEX, $m
  -362
  -443
  -533
  -634
  -745
  -865
  -996
  -1,136
  -1,286
  -1,445
  -1,613
  -1,790
  -1,976
  -2,170
  -2,373
  -2,584
  -2,804
  -3,033
  -3,271
  -3,519
  -3,776
  -4,044
  -4,321
  -4,610
  -4,911
  -5,223
  -5,548
  -5,887
  -6,240
  -6,608
New CAPEX, $m
  -403
  -452
  -503
  -554
  -604
  -653
  -702
  -749
  -795
  -840
  -884
  -928
  -971
  -1,014
  -1,057
  -1,101
  -1,145
  -1,191
  -1,238
  -1,286
  -1,337
  -1,389
  -1,444
  -1,502
  -1,563
  -1,626
  -1,694
  -1,764
  -1,839
  -1,918
Cash from investing activities, $m
  -765
  -895
  -1,036
  -1,188
  -1,349
  -1,518
  -1,698
  -1,885
  -2,081
  -2,285
  -2,497
  -2,718
  -2,947
  -3,184
  -3,430
  -3,685
  -3,949
  -4,224
  -4,509
  -4,805
  -5,113
  -5,433
  -5,765
  -6,112
  -6,474
  -6,849
  -7,242
  -7,651
  -8,079
  -8,526
Free cash flow, $m
  -6,283
  -7,730
  -9,337
  -11,104
  -13,031
  -15,114
  -17,350
  -19,735
  -22,265
  -24,938
  -27,750
  -30,701
  -33,787
  -37,010
  -40,370
  -43,868
  -47,507
  -51,291
  -55,223
  -59,309
  -63,555
  -67,969
  -72,557
  -77,329
  -82,294
  -87,461
  -92,843
  -98,450
  -104,295
  -110,390
Issuance/(repayment) of debt, $m
  3,830
  4,254
  4,735
  5,214
  5,688
  6,153
  6,608
  7,053
  7,487
  7,911
  8,328
  8,738
  9,145
  9,550
  9,957
  10,368
  10,787
  11,216
  11,657
  12,114
  12,588
  13,084
  13,602
  14,145
  14,716
  15,318
  15,951
  16,618
  17,322
  18,065
Issuance/(repurchase) of shares, $m
  11,857
  13,865
  16,152
  18,597
  21,194
  23,935
  26,814
  29,827
  32,972
  36,245
  39,525
  43,055
  46,717
  50,513
  54,448
  58,528
  62,758
  67,148
  71,704
  76,436
  81,353
  86,467
  91,788
  97,328
  103,100
  109,118
  115,395
  121,945
  128,785
  135,931
Cash from financing (excl. dividends), $m  
  15,687
  18,119
  20,887
  23,811
  26,882
  30,088
  33,422
  36,880
  40,459
  44,156
  47,853
  51,793
  55,862
  60,063
  64,405
  68,896
  73,545
  78,364
  83,361
  88,550
  93,941
  99,551
  105,390
  111,473
  117,816
  124,436
  131,346
  138,563
  146,107
  153,996
Total cash flow (excl. dividends), $m
  9,403
  10,390
  11,551
  12,707
  13,850
  14,973
  16,072
  17,145
  18,193
  19,218
  20,102
  21,093
  22,074
  23,053
  24,035
  25,028
  26,038
  27,073
  28,138
  29,240
  30,386
  31,582
  32,833
  34,145
  35,523
  36,974
  38,503
  40,114
  41,813
  43,606
Retained Cash Flow (-), $m
  -11,857
  -13,865
  -16,152
  -18,597
  -21,194
  -23,935
  -26,814
  -29,827
  -32,972
  -36,245
  -39,525
  -43,055
  -46,717
  -50,513
  -54,448
  -58,528
  -62,758
  -67,148
  -71,704
  -76,436
  -81,353
  -86,467
  -91,788
  -97,328
  -103,100
  -109,118
  -115,395
  -121,945
  -128,785
  -135,931
Prev. year cash balance distribution, $m
  5,533
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  3,080
  -3,475
  -4,602
  -5,890
  -7,344
  -8,961
  -10,742
  -12,682
  -14,778
  -17,027
  -19,423
  -21,962
  -24,643
  -27,460
  -30,413
  -33,500
  -36,720
  -40,075
  -43,566
  -47,195
  -50,967
  -54,885
  -58,955
  -63,184
  -67,577
  -72,144
  -76,892
  -81,832
  -86,972
  -92,325
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
  2,953
  -3,182
  -4,005
  -4,850
  -5,692
  -6,504
  -7,257
  -7,927
  -8,489
  -8,926
  -9,224
  -9,372
  -9,370
  -9,219
  -8,929
  -8,513
  -7,990
  -7,380
  -6,708
  -5,997
  -5,272
  -4,554
  -3,864
  -3,218
  -2,629
  -2,105
  -1,650
  -1,266
  -949
  -695
Current shareholders' claim on cash, %
  73.9
  55.3
  41.7
  31.7
  24.3
  18.7
  14.5
  11.3
  8.9
  7.0
  5.5
  4.4
  3.5
  2.8
  2.2
  1.8
  1.5
  1.2
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2
  0.1
  0.1

Altaba Inc. (the Fund), formerly Yahoo! Inc., is a non-diversified, closed-end management investment company. The Fund seeks to track the combined investment return of the Alibaba Shares and the Yahoo Japan Shares it owns. Alibaba Shares represent an approximate 15% equity interest in Alibaba Group Holding Limited (Alibaba), and its Yahoo Japan Corporation ((Yahoo Japa) Shares represent an approximate 36% equity interest in Yahoo Japan. In addition to the Alibaba Shares and the Yahoo Japan Shares, the Fund also owns the minority investments, all of the equity interests in Excalibur IP, LLC (which owns the Excalibur IP Assets) and the marketable debt securities portfolio. The Fund’s external investment advisors are BlackRock Advisors, LLC and Morgan Stanley Smith Barney LLC.

FINANCIAL RATIOS  of  Altaba Inc. (AABA)

Valuation Ratios
P/E Ratio -321.5
Price to Sales 13.3
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 55.1
Price to Free Cash Flow 68.2
Growth Rates
Sales Growth Rate 4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -56.9%
Cap. Spend. - 3 Yr. Gr. Rate -6.7%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 4.2%
Total Debt to Equity 4.2%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.5%
Ret/ On Assets - 3 Yr. Avg. 3.5%
Return On Total Capital -0.7%
Ret/ On T. Cap. - 3 Yr. Avg. 4.9%
Return On Equity -0.7%
Return On Equity - 3 Yr. Avg. 5.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 47.4%
Gross Margin - 3 Yr. Avg. 59.2%
EBITDA Margin -3.7%
EBITDA Margin - 3 Yr. Avg. 50.7%
Operating Margin -12.5%
Oper. Margin - 3 Yr. Avg. 39.5%
Pre-Tax Margin -13.5%
Pre-Tax Margin - 3 Yr. Avg. 39%
Net Profit Margin -4.1%
Net Profit Margin - 3 Yr. Avg. 23.7%
Effective Tax Rate 18%
Eff/ Tax Rate - 3 Yr. Avg. 19.4%
Payout Ratio 0%

AABA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AABA stock intrinsic value calculation we used $5169 million for the last fiscal year's total revenue generated by Altaba Inc.. The default revenue input number comes from 0001 income statement of Altaba Inc.. 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 AABA stock valuation model: a) initial revenue growth rate of 22.1% 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 AABA is calculated based on our internal credit rating of Altaba Inc., 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 Altaba Inc..
    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 AABA stock the variable cost ratio is equal to 195.6%.

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 AABA 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 Altaba Inc..

Corporate tax rate of 27% is the nominal tax rate for Altaba Inc.. 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 AABA 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 AABA are equal to 35.1%.

Life of production assets of 4.4 years is the average useful life of capital assets used in Altaba Inc. 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 AABA is equal to 0.4%. 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 - $31049.283 million for Altaba Inc. - 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 567.490 million for Altaba Inc. 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 Altaba Inc. at the current share price and the inputted number of shares is $40.9 billion.

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