Intrinsic value of AmerisourceBergen Corporation (Holding C - ABC

Previous Close

$85.05

  Intrinsic Value

$491.43

stock screener

  Rating & Target

str. buy

+478%

Previous close

$85.05

 
Intrinsic value

$491.43

 
Up/down potential

+478%

 
Rating

str. buy

We calculate the intrinsic value of ABC 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 18.0

 

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, %
  12.20
  11.48
  10.83
  10.25
  9.72
  9.25
  8.83
  8.44
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.57
  5.52
  5.47
  5.42
  5.38
  5.34
Revenue, $m
  188,429
  210,060
  232,814
  256,675
  281,634
  307,689
  334,847
  363,120
  392,531
  423,107
  454,884
  487,906
  522,223
  557,891
  594,975
  633,544
  673,674
  715,447
  758,951
  804,280
  851,534
  900,819
  952,247
  1,005,936
  1,062,010
  1,120,600
  1,181,843
  1,245,884
  1,312,872
  1,382,968
Variable operating expenses, $m
  183,412
  204,358
  226,390
  249,493
  273,660
  298,889
  325,185
  352,562
  381,039
  410,645
  440,453
  472,428
  505,656
  540,193
  576,100
  613,446
  652,302
  692,750
  734,874
  778,765
  824,520
  872,242
  922,039
  974,024
  1,028,320
  1,085,051
  1,144,351
  1,206,360
  1,271,223
  1,339,096
Fixed operating expenses, $m
  3,040
  3,107
  3,176
  3,246
  3,317
  3,390
  3,465
  3,541
  3,619
  3,698
  3,780
  3,863
  3,948
  4,035
  4,123
  4,214
  4,307
  4,402
  4,498
  4,597
  4,698
  4,802
  4,907
  5,015
  5,126
  5,239
  5,354
  5,472
  5,592
  5,715
Total operating expenses, $m
  186,452
  207,465
  229,566
  252,739
  276,977
  302,279
  328,650
  356,103
  384,658
  414,343
  444,233
  476,291
  509,604
  544,228
  580,223
  617,660
  656,609
  697,152
  739,372
  783,362
  829,218
  877,044
  926,946
  979,039
  1,033,446
  1,090,290
  1,149,705
  1,211,832
  1,276,815
  1,344,811
Operating income, $m
  1,976
  2,595
  3,249
  3,936
  4,656
  5,410
  6,197
  7,017
  7,873
  8,763
  10,651
  11,615
  12,619
  13,664
  14,751
  15,884
  17,064
  18,295
  19,578
  20,917
  22,315
  23,775
  25,301
  26,896
  28,565
  30,311
  32,138
  34,052
  36,057
  38,158
EBITDA, $m
  3,182
  3,830
  4,513
  5,231
  5,984
  6,771
  7,593
  8,451
  9,344
  10,274
  11,242
  12,250
  13,298
  14,389
  15,525
  16,708
  17,940
  19,225
  20,565
  21,963
  23,422
  24,946
  26,539
  28,204
  29,945
  31,768
  33,675
  35,672
  37,764
  39,955
Interest expense (income), $m
  125
  252
  430
  666
  914
  1,174
  1,446
  1,730
  2,026
  2,335
  2,655
  2,989
  3,335
  3,695
  4,069
  4,458
  4,862
  5,283
  5,720
  6,176
  6,650
  7,144
  7,659
  8,196
  8,757
  9,342
  9,954
  10,592
  11,260
  11,958
  12,689
Earnings before tax, $m
  1,724
  2,165
  2,583
  3,022
  3,482
  3,964
  4,466
  4,991
  5,538
  6,108
  7,662
  8,280
  8,924
  9,595
  10,293
  11,022
  11,782
  12,575
  13,403
  14,267
  15,171
  16,116
  17,105
  18,139
  19,222
  20,357
  21,546
  22,792
  24,099
  25,469
Tax expense, $m
  466
  585
  697
  816
  940
  1,070
  1,206
  1,348
  1,495
  1,649
  2,069
  2,236
  2,409
  2,591
  2,779
  2,976
  3,181
  3,395
  3,619
  3,852
  4,096
  4,351
  4,618
  4,898
  5,190
  5,496
  5,817
  6,154
  6,507
  6,877
Net income, $m
  1,259
  1,581
  1,885
  2,206
  2,542
  2,893
  3,261
  3,644
  4,043
  4,459
  5,593
  6,045
  6,515
  7,004
  7,514
  8,046
  8,601
  9,180
  9,784
  10,415
  11,075
  11,765
  12,486
  13,242
  14,032
  14,861
  15,729
  16,638
  17,592
  18,592

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
  42,268
  47,120
  52,224
  57,576
  63,175
  69,019
  75,111
  81,454
  88,051
  94,910
  102,038
  109,445
  117,143
  125,144
  133,462
  142,114
  151,116
  160,486
  170,245
  180,413
  191,013
  202,068
  213,604
  225,647
  238,226
  251,368
  265,106
  279,471
  294,498
  310,222
Adjusted assets (=assets-cash), $m
  42,268
  47,120
  52,224
  57,576
  63,175
  69,019
  75,111
  81,454
  88,051
  94,910
  102,038
  109,445
  117,143
  125,144
  133,462
  142,114
  151,116
  160,486
  170,245
  180,413
  191,013
  202,068
  213,604
  225,647
  238,226
  251,368
  265,106
  279,471
  294,498
  310,222
Revenue / Adjusted assets
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
  4.458
Average production assets, $m
  7,349
  8,192
  9,080
  10,010
  10,984
  12,000
  13,059
  14,162
  15,309
  16,501
  17,740
  19,028
  20,367
  21,758
  23,204
  24,708
  26,273
  27,902
  29,599
  31,367
  33,210
  35,132
  37,138
  39,232
  41,418
  43,703
  46,092
  48,589
  51,202
  53,936
Working capital, $m
  -4,899
  -5,462
  -6,053
  -6,674
  -7,322
  -8,000
  -8,706
  -9,441
  -10,206
  -11,001
  -11,827
  -12,686
  -13,578
  -14,505
  -15,469
  -16,472
  -17,516
  -18,602
  -19,733
  -20,911
  -22,140
  -23,421
  -24,758
  -26,154
  -27,612
  -29,136
  -30,728
  -32,393
  -34,135
  -35,957
Total debt, $m
  7,966
  12,333
  16,927
  21,744
  26,783
  32,043
  37,526
  43,234
  49,171
  55,344
  61,759
  68,426
  75,354
  82,555
  90,042
  97,828
  105,930
  114,363
  123,146
  132,297
  141,837
  151,787
  162,169
  173,008
  184,329
  196,157
  208,521
  221,450
  234,974
  249,125
Total liabilities, $m
  38,041
  42,408
  47,001
  51,819
  56,857
  62,118
  67,600
  73,308
  79,246
  85,419
  91,834
  98,501
  105,429
  112,629
  120,116
  127,903
  136,004
  144,437
  153,220
  162,371
  171,911
  181,861
  192,244
  203,083
  214,403
  226,232
  238,596
  251,524
  265,048
  279,200
Total equity, $m
  4,227
  4,712
  5,222
  5,758
  6,317
  6,902
  7,511
  8,145
  8,805
  9,491
  10,204
  10,945
  11,714
  12,514
  13,346
  14,211
  15,112
  16,049
  17,024
  18,041
  19,101
  20,207
  21,360
  22,565
  23,823
  25,137
  26,511
  27,947
  29,450
  31,022
Total liabilities and equity, $m
  42,268
  47,120
  52,223
  57,577
  63,174
  69,020
  75,111
  81,453
  88,051
  94,910
  102,038
  109,446
  117,143
  125,143
  133,462
  142,114
  151,116
  160,486
  170,244
  180,412
  191,012
  202,068
  213,604
  225,648
  238,226
  251,369
  265,107
  279,471
  294,498
  310,222
Debt-to-equity ratio
  1.880
  2.620
  3.240
  3.780
  4.240
  4.640
  5.000
  5.310
  5.580
  5.830
  6.050
  6.250
  6.430
  6.600
  6.750
  6.880
  7.010
  7.130
  7.230
  7.330
  7.430
  7.510
  7.590
  7.670
  7.740
  7.800
  7.870
  7.920
  7.980
  8.030
Adjusted equity ratio
  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
  1,259
  1,581
  1,885
  2,206
  2,542
  2,893
  3,261
  3,644
  4,043
  4,459
  5,593
  6,045
  6,515
  7,004
  7,514
  8,046
  8,601
  9,180
  9,784
  10,415
  11,075
  11,765
  12,486
  13,242
  14,032
  14,861
  15,729
  16,638
  17,592
  18,592
Depreciation, amort., depletion, $m
  1,206
  1,234
  1,264
  1,295
  1,327
  1,361
  1,397
  1,433
  1,471
  1,511
  591
  634
  679
  725
  773
  824
  876
  930
  987
  1,046
  1,107
  1,171
  1,238
  1,308
  1,381
  1,457
  1,536
  1,620
  1,707
  1,798
Funds from operations, $m
  2,465
  2,815
  3,149
  3,501
  3,869
  4,255
  4,657
  5,077
  5,514
  5,970
  6,185
  6,679
  7,193
  7,729
  8,288
  8,870
  9,476
  10,110
  10,771
  11,461
  12,182
  12,936
  13,724
  14,549
  15,413
  16,317
  17,265
  18,258
  19,299
  20,390
Change in working capital, $m
  -533
  -562
  -592
  -620
  -649
  -677
  -706
  -735
  -765
  -795
  -826
  -859
  -892
  -927
  -964
  -1,003
  -1,043
  -1,086
  -1,131
  -1,179
  -1,229
  -1,281
  -1,337
  -1,396
  -1,458
  -1,523
  -1,592
  -1,665
  -1,742
  -1,822
Cash from operations, $m
  2,998
  3,377
  3,741
  4,121
  4,518
  4,932
  5,363
  5,812
  6,279
  6,765
  7,011
  7,537
  8,086
  8,657
  9,252
  9,872
  10,520
  11,196
  11,902
  12,639
  13,411
  14,217
  15,061
  15,945
  16,871
  17,841
  18,857
  19,923
  21,040
  22,213
Maintenance CAPEX, $m
  -216
  -245
  -273
  -303
  -334
  -366
  -400
  -435
  -472
  -510
  -550
  -591
  -634
  -679
  -725
  -773
  -824
  -876
  -930
  -987
  -1,046
  -1,107
  -1,171
  -1,238
  -1,308
  -1,381
  -1,457
  -1,536
  -1,620
  -1,707
New CAPEX, $m
  -881
  -844
  -887
  -931
  -973
  -1,016
  -1,059
  -1,103
  -1,147
  -1,192
  -1,239
  -1,288
  -1,338
  -1,391
  -1,446
  -1,504
  -1,565
  -1,629
  -1,697
  -1,768
  -1,843
  -1,922
  -2,006
  -2,094
  -2,187
  -2,285
  -2,388
  -2,498
  -2,613
  -2,734
Cash from investing activities, $m
  -1,097
  -1,089
  -1,160
  -1,234
  -1,307
  -1,382
  -1,459
  -1,538
  -1,619
  -1,702
  -1,789
  -1,879
  -1,972
  -2,070
  -2,171
  -2,277
  -2,389
  -2,505
  -2,627
  -2,755
  -2,889
  -3,029
  -3,177
  -3,332
  -3,495
  -3,666
  -3,845
  -4,034
  -4,233
  -4,441
Free cash flow, $m
  1,901
  2,289
  2,580
  2,888
  3,211
  3,550
  3,904
  4,274
  4,660
  5,062
  5,222
  5,658
  6,113
  6,587
  7,080
  7,595
  8,131
  8,691
  9,275
  9,885
  10,522
  11,188
  11,885
  12,613
  13,376
  14,175
  15,012
  15,889
  16,808
  17,772
Issuance/(repayment) of debt, $m
  3,304
  4,367
  4,594
  4,817
  5,039
  5,260
  5,483
  5,708
  5,938
  6,173
  6,415
  6,667
  6,928
  7,201
  7,487
  7,786
  8,102
  8,433
  8,783
  9,151
  9,540
  9,950
  10,383
  10,839
  11,320
  11,828
  12,364
  12,929
  13,524
  14,151
Issuance/(repurchase) of shares, $m
  35
  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  
  3,339
  4,367
  4,594
  4,817
  5,039
  5,260
  5,483
  5,708
  5,938
  6,173
  6,415
  6,667
  6,928
  7,201
  7,487
  7,786
  8,102
  8,433
  8,783
  9,151
  9,540
  9,950
  10,383
  10,839
  11,320
  11,828
  12,364
  12,929
  13,524
  14,151
Total cash flow (excl. dividends), $m
  5,240
  6,656
  7,174
  7,705
  8,250
  8,810
  9,387
  9,982
  10,597
  11,235
  11,637
  12,325
  13,041
  13,788
  14,567
  15,381
  16,233
  17,124
  18,058
  19,036
  20,062
  21,138
  22,267
  23,452
  24,697
  26,004
  27,376
  28,818
  30,332
  31,924
Retained Cash Flow (-), $m
  -1,294
  -485
  -510
  -535
  -560
  -584
  -609
  -634
  -660
  -686
  -713
  -741
  -770
  -800
  -832
  -865
  -900
  -937
  -976
  -1,017
  -1,060
  -1,106
  -1,154
  -1,204
  -1,258
  -1,314
  -1,374
  -1,437
  -1,503
  -1,572
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
  3,946
  6,171
  6,664
  7,170
  7,690
  8,225
  8,778
  9,348
  9,938
  10,549
  10,924
  11,584
  12,271
  12,988
  13,735
  14,516
  15,333
  16,187
  17,082
  18,019
  19,002
  20,032
  21,114
  22,248
  23,439
  24,689
  26,002
  27,381
  28,830
  30,351
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
  3,783
  5,649
  5,799
  5,904
  5,961
  5,970
  5,930
  5,843
  5,709
  5,530
  5,188
  4,943
  4,666
  4,360
  4,032
  3,689
  3,336
  2,981
  2,630
  2,290
  1,965
  1,662
  1,384
  1,133
  912
  720
  558
  424
  315
  229
Current shareholders' claim on cash, %
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8

AmerisourceBergen Corporation is a pharmaceutical sourcing and distribution services company. The Company's segments include Pharmaceutical Distribution and Other. The Company provides services to healthcare providers, and pharmaceutical and biotech manufacturers. As of June 30, 2016, the Pharmaceutical Distribution segment consists of two operating segments, including the operations of AmerisourceBergen Drug Corporation (ABDC) and AmerisourceBergen Specialty Group (ABSG), which distributes specialty drugs to their customers. Servicing healthcare providers in the pharmaceutical supply channel, the Pharmaceutical Distribution segment's operations provide drug distribution and related services. The Other segment consists of the operations of various segments, including the AmerisourceBergen Consulting Services (ABCS), the World Courier Group, Inc. and the MWI Veterinary Supply, Inc. ABSG operates distribution facilities that focus primarily on complex disease treatment regimens.

FINANCIAL RATIOS  of  AmerisourceBergen Corporation (Holding C (ABC)

Valuation Ratios
P/E Ratio 50.9
Price to Sales 0.1
Price to Book 9
Price to Tangible Book
Price to Cash Flow 12.3
Price to Free Cash Flow 17.9
Growth Rates
Sales Growth Rate 4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0.2%
Cap. Spend. - 3 Yr. Gr. Rate 12%
Financial Strength
Quick Ratio 203
Current Ratio 0
LT Debt to Equity 183.2%
Total Debt to Equity 183.8%
Interest Coverage 8
Management Effectiveness
Return On Assets 1.2%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital 5.8%
Ret/ On T. Cap. - 3 Yr. Avg. 9.5%
Return On Equity 17.4%
Return On Equity - 3 Yr. Avg. 36.9%
Asset Turnover 4.4
Profitability Ratios
Gross Margin 3%
Gross Margin - 3 Yr. Avg. 2.8%
EBITDA Margin 1%
EBITDA Margin - 3 Yr. Avg. 0.9%
Operating Margin 0.7%
Oper. Margin - 3 Yr. Avg. 0.7%
Pre-Tax Margin 0.6%
Pre-Tax Margin - 3 Yr. Avg. 0.6%
Net Profit Margin 0.2%
Net Profit Margin - 3 Yr. Avg. 0.4%
Effective Tax Rate 60.3%
Eff/ Tax Rate - 3 Yr. Avg. 69.7%
Payout Ratio 87.9%

ABC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ABC stock intrinsic value calculation we used $167940 million for the last fiscal year's total revenue generated by AmerisourceBergen Corporation (Holding C. The default revenue input number comes from 0001 income statement of AmerisourceBergen Corporation (Holding C. 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 ABC stock valuation model: a) initial revenue growth rate of 12.2% 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 ABC is calculated based on our internal credit rating of AmerisourceBergen Corporation (Holding C, 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 AmerisourceBergen Corporation (Holding C.
    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 ABC stock the variable cost ratio is equal to 97.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2975 million in the base year in the intrinsic value calculation for ABC 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 AmerisourceBergen Corporation (Holding C.

Corporate tax rate of 27% is the nominal tax rate for AmerisourceBergen Corporation (Holding C. 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 ABC 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 ABC are equal to 3.9%.

Life of production assets of 34.8 years is the average useful life of capital assets used in AmerisourceBergen Corporation (Holding C 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 ABC is equal to -2.6%. 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 - $2932.824 million for AmerisourceBergen Corporation (Holding C - 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 211.150 million for AmerisourceBergen Corporation (Holding C 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 AmerisourceBergen Corporation (Holding C at the current share price and the inputted number of shares is $18.0 billion.

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