Intrinsic value of ABB ADR - ABB

Previous Close

$22.30

  Intrinsic Value

$24.58

stock screener

  Rating & Target

hold

+10%

Previous close

$22.30

 
Intrinsic value

$24.58

 
Up/down potential

+10%

 
Rating

hold

We calculate the intrinsic value of ABB 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 47.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  34,998
  35,803
  36,723
  37,756
  38,901
  40,157
  41,525
  43,005
  44,600
  46,311
  48,143
  50,097
  52,177
  54,388
  56,734
  59,220
  61,852
  64,635
  67,576
  70,681
  73,957
  77,412
  81,054
  84,891
  88,933
  93,188
  97,667
  102,380
  107,338
  112,553
Variable operating expenses, $m
  20,796
  21,243
  21,753
  22,326
  22,961
  23,658
  24,417
  25,238
  26,123
  27,072
  26,706
  27,790
  28,944
  30,170
  31,471
  32,851
  34,311
  35,854
  37,486
  39,208
  41,025
  42,942
  44,962
  47,091
  49,333
  51,693
  54,178
  56,792
  59,542
  62,435
Fixed operating expenses, $m
  11,061
  11,304
  11,553
  11,807
  12,067
  12,333
  12,604
  12,881
  13,165
  13,454
  13,750
  14,053
  14,362
  14,678
  15,001
  15,331
  15,668
  16,013
  16,365
  16,725
  17,093
  17,469
  17,853
  18,246
  18,647
  19,058
  19,477
  19,905
  20,343
  20,791
Total operating expenses, $m
  31,857
  32,547
  33,306
  34,133
  35,028
  35,991
  37,021
  38,119
  39,288
  40,526
  40,456
  41,843
  43,306
  44,848
  46,472
  48,182
  49,979
  51,867
  53,851
  55,933
  58,118
  60,411
  62,815
  65,337
  67,980
  70,751
  73,655
  76,697
  79,885
  83,226
Operating income, $m
  3,141
  3,256
  3,417
  3,623
  3,873
  4,166
  4,504
  4,886
  5,313
  5,785
  7,687
  8,254
  8,872
  9,540
  10,262
  11,039
  11,874
  12,768
  13,725
  14,748
  15,839
  17,001
  18,239
  19,554
  20,953
  22,437
  24,012
  25,682
  27,452
  29,327
EBITDA, $m
  6,329
  6,485
  6,694
  6,953
  7,262
  7,621
  8,029
  8,487
  8,996
  9,557
  10,171
  10,839
  11,564
  12,346
  13,189
  14,095
  15,065
  16,103
  17,212
  18,395
  19,655
  20,996
  22,421
  23,935
  25,541
  27,245
  29,052
  30,965
  32,991
  35,134
Interest expense (income), $m
  213
  402
  432
  468
  509
  555
  607
  663
  724
  790
  862
  938
  1,020
  1,107
  1,201
  1,299
  1,404
  1,516
  1,633
  1,758
  1,889
  2,028
  2,175
  2,330
  2,492
  2,664
  2,845
  3,035
  3,236
  3,447
  3,668
Earnings before tax, $m
  2,739
  2,824
  2,949
  3,114
  3,317
  3,560
  3,841
  4,162
  4,523
  4,924
  6,749
  7,234
  7,764
  8,340
  8,962
  9,634
  10,358
  11,135
  11,967
  12,858
  13,810
  14,826
  15,909
  17,062
  18,288
  19,592
  20,977
  22,446
  24,005
  25,658
Tax expense, $m
  739
  762
  796
  841
  896
  961
  1,037
  1,124
  1,221
  1,329
  1,822
  1,953
  2,096
  2,252
  2,420
  2,601
  2,797
  3,006
  3,231
  3,472
  3,729
  4,003
  4,295
  4,607
  4,938
  5,290
  5,664
  6,061
  6,481
  6,928
Net income, $m
  1,999
  2,061
  2,153
  2,273
  2,422
  2,599
  2,804
  3,038
  3,301
  3,594
  4,927
  5,281
  5,668
  6,088
  6,543
  7,033
  7,561
  8,128
  8,736
  9,387
  10,082
  10,823
  11,614
  12,455
  13,350
  14,302
  15,313
  16,386
  17,524
  18,731

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
  44,134
  45,149
  46,309
  47,612
  49,056
  50,639
  52,364
  54,231
  56,242
  58,400
  60,709
  63,173
  65,797
  68,585
  71,543
  74,679
  77,998
  81,507
  85,216
  89,131
  93,262
  97,619
  102,212
  107,051
  112,147
  117,513
  123,161
  129,104
  135,357
  141,933
Adjusted assets (=assets-cash), $m
  44,134
  45,149
  46,309
  47,612
  49,056
  50,639
  52,364
  54,231
  56,242
  58,400
  60,709
  63,173
  65,797
  68,585
  71,543
  74,679
  77,998
  81,507
  85,216
  89,131
  93,262
  97,619
  102,212
  107,051
  112,147
  117,513
  123,161
  129,104
  135,357
  141,933
Revenue / Adjusted assets
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
Average production assets, $m
  18,059
  18,474
  18,949
  19,482
  20,073
  20,721
  21,427
  22,191
  23,014
  23,897
  24,842
  25,850
  26,923
  28,064
  29,275
  30,558
  31,916
  33,352
  34,869
  36,471
  38,162
  39,945
  41,824
  43,804
  45,889
  48,085
  50,396
  52,828
  55,386
  58,077
Working capital, $m
  -1,750
  -1,790
  -1,836
  -1,888
  -1,945
  -2,008
  -2,076
  -2,150
  -2,230
  -2,316
  -2,407
  -2,505
  -2,609
  -2,719
  -2,837
  -2,961
  -3,093
  -3,232
  -3,379
  -3,534
  -3,698
  -3,871
  -4,053
  -4,245
  -4,447
  -4,659
  -4,883
  -5,119
  -5,367
  -5,628
Total debt, $m
  8,000
  8,667
  9,429
  10,285
  11,233
  12,274
  13,407
  14,634
  15,955
  17,373
  18,890
  20,509
  22,233
  24,064
  26,008
  28,068
  30,248
  32,554
  34,991
  37,563
  40,277
  43,140
  46,157
  49,336
  52,685
  56,210
  59,921
  63,825
  67,933
  72,254
Total liabilities, $m
  28,996
  29,663
  30,425
  31,281
  32,229
  33,270
  34,403
  35,630
  36,951
  38,369
  39,886
  41,505
  43,229
  45,060
  47,004
  49,064
  51,244
  53,550
  55,987
  58,559
  61,273
  64,136
  67,153
  70,332
  73,681
  77,206
  80,917
  84,821
  88,929
  93,250
Total equity, $m
  15,138
  15,486
  15,884
  16,331
  16,826
  17,369
  17,961
  18,601
  19,291
  20,031
  20,823
  21,668
  22,568
  23,525
  24,539
  25,615
  26,753
  27,957
  29,229
  30,572
  31,989
  33,483
  35,059
  36,718
  38,466
  40,307
  42,244
  44,283
  46,427
  48,683
Total liabilities and equity, $m
  44,134
  45,149
  46,309
  47,612
  49,055
  50,639
  52,364
  54,231
  56,242
  58,400
  60,709
  63,173
  65,797
  68,585
  71,543
  74,679
  77,997
  81,507
  85,216
  89,131
  93,262
  97,619
  102,212
  107,050
  112,147
  117,513
  123,161
  129,104
  135,356
  141,933
Debt-to-equity ratio
  0.530
  0.560
  0.590
  0.630
  0.670
  0.710
  0.750
  0.790
  0.830
  0.870
  0.910
  0.950
  0.990
  1.020
  1.060
  1.100
  1.130
  1.160
  1.200
  1.230
  1.260
  1.290
  1.320
  1.340
  1.370
  1.390
  1.420
  1.440
  1.460
  1.480
Adjusted equity ratio
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,999
  2,061
  2,153
  2,273
  2,422
  2,599
  2,804
  3,038
  3,301
  3,594
  4,927
  5,281
  5,668
  6,088
  6,543
  7,033
  7,561
  8,128
  8,736
  9,387
  10,082
  10,823
  11,614
  12,455
  13,350
  14,302
  15,313
  16,386
  17,524
  18,731
Depreciation, amort., depletion, $m
  3,188
  3,230
  3,277
  3,330
  3,389
  3,454
  3,525
  3,601
  3,683
  3,772
  2,484
  2,585
  2,692
  2,806
  2,927
  3,056
  3,192
  3,335
  3,487
  3,647
  3,816
  3,994
  4,182
  4,380
  4,589
  4,808
  5,040
  5,283
  5,539
  5,808
Funds from operations, $m
  5,187
  5,291
  5,430
  5,603
  5,811
  6,053
  6,329
  6,639
  6,985
  7,366
  7,411
  7,866
  8,360
  8,894
  9,470
  10,089
  10,753
  11,464
  12,223
  13,034
  13,898
  14,818
  15,796
  16,836
  17,939
  19,111
  20,353
  21,669
  23,063
  24,538
Change in working capital, $m
  -34
  -40
  -46
  -52
  -57
  -63
  -68
  -74
  -80
  -86
  -92
  -98
  -104
  -111
  -117
  -124
  -132
  -139
  -147
  -155
  -164
  -173
  -182
  -192
  -202
  -213
  -224
  -236
  -248
  -261
Cash from operations, $m
  5,222
  5,331
  5,476
  5,655
  5,868
  6,116
  6,397
  6,713
  7,065
  7,452
  7,502
  7,964
  8,464
  9,005
  9,587
  10,213
  10,884
  11,603
  12,370
  13,189
  14,062
  14,990
  15,978
  17,027
  18,141
  19,323
  20,577
  21,904
  23,310
  24,799
Maintenance CAPEX, $m
  -1,771
  -1,806
  -1,847
  -1,895
  -1,948
  -2,007
  -2,072
  -2,143
  -2,219
  -2,301
  -2,390
  -2,484
  -2,585
  -2,692
  -2,806
  -2,927
  -3,056
  -3,192
  -3,335
  -3,487
  -3,647
  -3,816
  -3,994
  -4,182
  -4,380
  -4,589
  -4,808
  -5,040
  -5,283
  -5,539
New CAPEX, $m
  -347
  -415
  -475
  -533
  -591
  -648
  -706
  -764
  -823
  -883
  -945
  -1,008
  -1,073
  -1,141
  -1,211
  -1,283
  -1,358
  -1,436
  -1,517
  -1,602
  -1,691
  -1,783
  -1,879
  -1,980
  -2,085
  -2,196
  -2,311
  -2,432
  -2,558
  -2,691
Cash from investing activities, $m
  -2,118
  -2,221
  -2,322
  -2,428
  -2,539
  -2,655
  -2,778
  -2,907
  -3,042
  -3,184
  -3,335
  -3,492
  -3,658
  -3,833
  -4,017
  -4,210
  -4,414
  -4,628
  -4,852
  -5,089
  -5,338
  -5,599
  -5,873
  -6,162
  -6,465
  -6,785
  -7,119
  -7,472
  -7,841
  -8,230
Free cash flow, $m
  3,103
  3,110
  3,154
  3,227
  3,329
  3,460
  3,620
  3,807
  4,023
  4,267
  4,168
  4,471
  4,806
  5,172
  5,570
  6,003
  6,471
  6,975
  7,518
  8,100
  8,724
  9,391
  10,104
  10,865
  11,676
  12,539
  13,457
  14,433
  15,469
  16,569
Issuance/(repayment) of debt, $m
  553
  667
  762
  856
  948
  1,041
  1,133
  1,227
  1,321
  1,418
  1,517
  1,619
  1,724
  1,832
  1,944
  2,060
  2,180
  2,306
  2,436
  2,572
  2,714
  2,863
  3,017
  3,179
  3,348
  3,525
  3,711
  3,905
  4,108
  4,321
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  553
  667
  762
  856
  948
  1,041
  1,133
  1,227
  1,321
  1,418
  1,517
  1,619
  1,724
  1,832
  1,944
  2,060
  2,180
  2,306
  2,436
  2,572
  2,714
  2,863
  3,017
  3,179
  3,348
  3,525
  3,711
  3,905
  4,108
  4,321
Total cash flow (excl. dividends), $m
  3,656
  3,777
  3,916
  4,083
  4,278
  4,501
  4,753
  5,033
  5,344
  5,685
  5,685
  6,090
  6,529
  7,003
  7,514
  8,063
  8,651
  9,281
  9,954
  10,672
  11,438
  12,254
  13,122
  14,044
  15,024
  16,064
  17,168
  18,337
  19,577
  20,890
Retained Cash Flow (-), $m
  -319
  -348
  -398
  -447
  -495
  -543
  -592
  -640
  -690
  -740
  -792
  -845
  -900
  -956
  -1,015
  -1,075
  -1,138
  -1,204
  -1,272
  -1,343
  -1,417
  -1,494
  -1,575
  -1,660
  -1,748
  -1,840
  -1,937
  -2,039
  -2,145
  -2,256
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
  69
  70
  72
  73
  76
  78
  80
  83
  86
  89
  93
  96
  100
  104
  109
  113
  118
  124
  129
  135
  141
  148
  155
  162
  170
  178
  186
  195
  205
  215
Cash available for distribution, $m
  3,337
  3,429
  3,518
  3,636
  3,783
  3,958
  4,161
  4,393
  4,654
  4,945
  4,893
  5,245
  5,629
  6,047
  6,499
  6,987
  7,513
  8,077
  8,682
  9,329
  10,021
  10,759
  11,546
  12,384
  13,276
  14,224
  15,230
  16,299
  17,433
  18,634
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
  3,200
  3,139
  3,061
  2,994
  2,932
  2,872
  2,811
  2,746
  2,674
  2,592
  2,324
  2,238
  2,140
  2,030
  1,908
  1,776
  1,635
  1,487
  1,337
  1,185
  1,037
  893
  757
  631
  516
  415
  327
  252
  190
  140
Current shareholders' claim on cash, %
  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

ABB Ltd (ABB) is a holding company. The Company's segments include Electrification Products, Robotics and Motion, Industrial Automation, Power Grids, and Corporate and Other. It operates through four divisions: Electrification Products, Robotics and Motion, Industrial Automation and Power Grids. It is engaged in serving customers in utilities, industry and transport and infrastructure. The Electrification Products segment manufactures and sells products and services including low and medium-voltage switchgear, breakers, switches and control products. The Robotics and Motion segment manufactures and sells motors, generators, variable speed drives and robots and robotics. The Industrial Automation segment develops and sells control and plant optimization systems, and automation products and solutions. The Power Grids segment supplies power and automation products, systems, and service and software solutions.

FINANCIAL RATIOS  of  ABB ADR (ABB)

Valuation Ratios
P/E Ratio 25.1
Price to Sales 1.4
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 12.4
Price to Free Cash Flow 15.8
Growth Rates
Sales Growth Rate -4.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -5.1%
Cap. Spend. - 3 Yr. Gr. Rate -5.6%
Financial Strength
Quick Ratio 6
Current Ratio 0.1
LT Debt to Equity 43.3%
Total Debt to Equity 50.8%
Interest Coverage 14
Management Effectiveness
Return On Assets 5.1%
Ret/ On Assets - 3 Yr. Avg. 5.3%
Return On Total Capital 9%
Ret/ On T. Cap. - 3 Yr. Avg. 9.2%
Return On Equity 13.6%
Return On Equity - 3 Yr. Avg. 13.7%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 28.8%
Gross Margin - 3 Yr. Avg. 28.5%
EBITDA Margin 12.3%
EBITDA Margin - 3 Yr. Avg. 12.6%
Operating Margin 8.8%
Oper. Margin - 3 Yr. Avg. 9.3%
Pre-Tax Margin 8.3%
Pre-Tax Margin - 3 Yr. Avg. 8.7%
Net Profit Margin 5.6%
Net Profit Margin - 3 Yr. Avg. 5.9%
Effective Tax Rate 27.9%
Eff/ Tax Rate - 3 Yr. Avg. 28.8%
Payout Ratio 0%

ABB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ABB stock intrinsic value calculation we used $34312 million for the last fiscal year's total revenue generated by ABB ADR. The default revenue input number comes from 2017 income statement of ABB 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 ABB stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ABB is calculated based on our internal credit rating of ABB 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 ABB 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 ABB stock the variable cost ratio is equal to 59.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $10823 million in the base year in the intrinsic value calculation for ABB 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 ABB ADR.

Corporate tax rate of 27% is the nominal tax rate for ABB 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 ABB stock is equal to 0.2%.

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 ABB are equal to 51.6%.

Life of production assets of 10 years is the average useful life of capital assets used in ABB 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 ABB is equal to -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 - $14819 million for ABB 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 2138 million for ABB 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 ABB ADR at the current share price and the inputted number of shares is $47.7 billion.

RELATED COMPANIES Price Int.Val. Rating
EMR Emerson Electr 73.96 52.56  sell
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COMPANY NEWS

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▶ ABB: 2Q Earnings Snapshot   [Jul-19-18 05:01AM  Associated Press]
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▶ When Should You Buy ABB Ltd (VTX:ABBN)?   [May-18-18 08:06AM  Simply Wall St.]
▶ ABB: 1Q Earnings Snapshot   [05:02AM  Associated Press]
▶ [$$] ABB Reports Profit Fall   [01:25AM  The Wall Street Journal]
▶ General Electric Starts Restructuring   [06:03AM  Motley Fool]
▶ Moving Average Crossover Alert: ABB (ABB)   [Apr-11-18 08:37AM  Zacks]
▶ ABB posts 4Q profit   [05:01AM  Associated Press]
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▶ ETFs with exposure to ABB Ltd. : January 1, 2018   [Jan-01-18 11:25AM  Capital Cube]
▶ Why General Electric Company Stock Isnt a Value Play Yet   [Dec-21-17 11:53AM  InvestorPlace]
▶ ETFs with exposure to ABB Ltd. : December 19, 2017   [Dec-19-17 12:09PM  Capital Cube]
▶ ETFs with exposure to ABB Ltd. : December 8, 2017   [Dec-08-17 12:14PM  Capital Cube]
▶ ABB helps Toronto railway cut emissions to zero   [Dec-07-17 06:00AM  CNW Group]
▶ ETFs with exposure to ABB Ltd. : November 27, 2017   [Nov-27-17 11:44AM  Capital Cube]
▶ 9 Stocks Steven Cohen Keeps Buying   [Nov-22-17 03:57PM  GuruFocus.com]
▶ ABB Campus Montreal LEEDs with Silver   [Nov-21-17 07:00AM  CNW Group]
▶ ETFs with exposure to ABB Ltd. : November 17, 2017   [Nov-17-17 11:15AM  Capital Cube]
▶ ETFs with exposure to ABB Ltd. : November 7, 2017   [Nov-07-17 09:32AM  Capital Cube]
▶ ETFs with exposure to ABB Ltd. : October 25, 2017   [Oct-25-17 09:44AM  Capital Cube]
▶ 3 Stocks to Buy for the Next Generation   [08:00AM  Motley Fool]
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▶ GE Sells Industrial Solutions Segment to ABB   [Oct-01-17 04:30PM  Motley Fool]
▶ A Wall Street Wedding (and a Divorce)   [03:18PM  Motley Fool]
▶ [$$] GE Agrees to Sell Industrial Unit to ABB for $2.6 Billion   [Sep-25-17 11:02AM  The Wall Street Journal]
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