Intrinsic value of Barrick Gold - ABX

Previous Close

$12.18

  Intrinsic Value

$1.41

stock screener

  Rating & Target

str. sell

-88%

Previous close

$12.18

 
Intrinsic value

$1.41

 
Up/down potential

-88%

 
Rating

str. sell

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

We calculate the intrinsic value of ABX 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Barrick Gold (ABX) stock.

STOCK VALUATION INPUT DATA

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

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
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, %
  -5.22
  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
  8,558
  8,729
  8,930
  9,159
  9,417
  9,703
  10,016
  10,357
  10,726
  11,124
  11,551
  12,008
  12,495
  13,014
  13,565
  14,150
  14,771
  15,427
  16,121
  16,855
  17,629
  18,446
  19,308
  20,216
  21,173
  22,181
  23,243
  24,360
  25,535
  26,772
  28,073
Variable operating expenses, $m
 
  10,996
  11,246
  11,531
  11,852
  12,207
  12,597
  13,021
  13,480
  13,975
  14,506
  14,937
  15,543
  16,189
  16,875
  17,603
  18,374
  19,191
  20,054
  20,967
  21,930
  22,947
  24,019
  25,149
  26,339
  27,593
  28,913
  30,303
  31,765
  33,304
  34,922
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
  6,134
  10,996
  11,246
  11,531
  11,852
  12,207
  12,597
  13,021
  13,480
  13,975
  14,506
  14,937
  15,543
  16,189
  16,875
  17,603
  18,374
  19,191
  20,054
  20,967
  21,930
  22,947
  24,019
  25,149
  26,339
  27,593
  28,913
  30,303
  31,765
  33,304
  34,922
Operating income, $m
  2,424
  -2,267
  -2,316
  -2,372
  -2,435
  -2,504
  -2,581
  -2,664
  -2,754
  -2,851
  -2,955
  -2,930
  -3,049
  -3,175
  -3,310
  -3,452
  -3,604
  -3,764
  -3,933
  -4,112
  -4,301
  -4,500
  -4,711
  -4,932
  -5,166
  -5,412
  -5,671
  -5,943
  -6,230
  -6,532
  -6,849
EBITDA, $m
  3,998
  -661
  -677
  -694
  -713
  -735
  -759
  -785
  -813
  -843
  -875
  -910
  -947
  -986
  -1,028
  -1,072
  -1,119
  -1,169
  -1,221
  -1,277
  -1,336
  -1,398
  -1,463
  -1,532
  -1,604
  -1,681
  -1,761
  -1,846
  -1,935
  -2,028
  -2,127
Interest expense (income), $m
  513
  444
  463
  486
  513
  542
  575
  611
  650
  692
  738
  786
  839
  894
  954
  1,017
  1,084
  1,155
  1,230
  1,309
  1,393
  1,482
  1,576
  1,674
  1,778
  1,888
  2,003
  2,125
  2,252
  2,387
  2,529
Earnings before tax, $m
  1,778
  -2,711
  -2,779
  -2,858
  -2,947
  -3,047
  -3,156
  -3,275
  -3,404
  -3,543
  -3,693
  -3,716
  -3,887
  -4,070
  -4,263
  -4,469
  -4,688
  -4,919
  -5,163
  -5,422
  -5,695
  -5,983
  -6,286
  -6,607
  -6,944
  -7,300
  -7,674
  -8,068
  -8,483
  -8,919
  -9,378
Tax expense, $m
  917
  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
  655
  -2,711
  -2,779
  -2,858
  -2,947
  -3,047
  -3,156
  -3,275
  -3,404
  -3,543
  -3,693
  -3,716
  -3,887
  -4,070
  -4,263
  -4,469
  -4,688
  -4,919
  -5,163
  -5,422
  -5,695
  -5,983
  -6,286
  -6,607
  -6,944
  -7,300
  -7,674
  -8,068
  -8,483
  -8,919
  -9,378

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,389
  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
  25,264
  23,340
  23,877
  24,490
  25,179
  25,943
  26,780
  27,692
  28,680
  29,743
  30,885
  32,106
  33,409
  34,796
  36,271
  37,835
  39,493
  41,249
  43,105
  45,066
  47,136
  49,321
  51,625
  54,054
  56,613
  59,308
  62,146
  65,133
  68,276
  71,583
  75,061
Adjusted assets (=assets-cash), $m
  22,875
  23,340
  23,877
  24,490
  25,179
  25,943
  26,780
  27,692
  28,680
  29,743
  30,885
  32,106
  33,409
  34,796
  36,271
  37,835
  39,493
  41,249
  43,105
  45,066
  47,136
  49,321
  51,625
  54,054
  56,613
  59,308
  62,146
  65,133
  68,276
  71,583
  75,061
Revenue / Adjusted assets
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
Average production assets, $m
  14,540
  14,831
  15,172
  15,562
  16,000
  16,485
  17,017
  17,596
  18,224
  18,900
  19,625
  20,401
  21,229
  22,110
  23,047
  24,042
  25,095
  26,210
  27,390
  28,636
  29,952
  31,340
  32,804
  34,347
  35,974
  37,686
  39,489
  41,387
  43,384
  45,485
  47,695
Working capital, $m
  3,055
  829
  848
  870
  895
  922
  952
  984
  1,019
  1,057
  1,097
  1,141
  1,187
  1,236
  1,289
  1,344
  1,403
  1,466
  1,532
  1,601
  1,675
  1,752
  1,834
  1,921
  2,011
  2,107
  2,208
  2,314
  2,426
  2,543
  2,667
Total debt, $m
  7,931
  8,130
  8,533
  8,994
  9,512
  10,085
  10,714
  11,399
  12,140
  12,939
  13,796
  14,714
  15,692
  16,734
  17,841
  19,016
  20,262
  21,580
  22,974
  24,446
  26,001
  27,642
  29,373
  31,197
  33,119
  35,143
  37,274
  39,517
  41,877
  44,360
  46,972
Total liabilities, $m
  17,329
  17,528
  17,931
  18,392
  18,910
  19,483
  20,112
  20,797
  21,538
  22,337
  23,194
  24,112
  25,090
  26,132
  27,239
  28,414
  29,660
  30,978
  32,372
  33,844
  35,399
  37,040
  38,771
  40,595
  42,517
  44,541
  46,672
  48,915
  51,275
  53,758
  56,370
Total equity, $m
  7,935
  5,812
  5,945
  6,098
  6,270
  6,460
  6,668
  6,895
  7,141
  7,406
  7,690
  7,994
  8,319
  8,664
  9,031
  9,421
  9,834
  10,271
  10,733
  11,221
  11,737
  12,281
  12,855
  13,460
  14,097
  14,768
  15,474
  16,218
  17,001
  17,824
  18,690
Total liabilities and equity, $m
  25,264
  23,340
  23,876
  24,490
  25,180
  25,943
  26,780
  27,692
  28,679
  29,743
  30,884
  32,106
  33,409
  34,796
  36,270
  37,835
  39,494
  41,249
  43,105
  45,065
  47,136
  49,321
  51,626
  54,055
  56,614
  59,309
  62,146
  65,133
  68,276
  71,582
  75,060
Debt-to-equity ratio
  0.999
  1.400
  1.440
  1.470
  1.520
  1.560
  1.610
  1.650
  1.700
  1.750
  1.790
  1.840
  1.890
  1.930
  1.980
  2.020
  2.060
  2.100
  2.140
  2.180
  2.220
  2.250
  2.280
  2.320
  2.350
  2.380
  2.410
  2.440
  2.460
  2.490
  2.510
Adjusted equity ratio
  0.242
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  655
  -2,711
  -2,779
  -2,858
  -2,947
  -3,047
  -3,156
  -3,275
  -3,404
  -3,543
  -3,693
  -3,716
  -3,887
  -4,070
  -4,263
  -4,469
  -4,688
  -4,919
  -5,163
  -5,422
  -5,695
  -5,983
  -6,286
  -6,607
  -6,944
  -7,300
  -7,674
  -8,068
  -8,483
  -8,919
  -9,378
Depreciation, amort., depletion, $m
  1,574
  1,606
  1,639
  1,678
  1,721
  1,769
  1,822
  1,879
  1,941
  2,008
  2,080
  2,020
  2,102
  2,189
  2,282
  2,380
  2,485
  2,595
  2,712
  2,835
  2,966
  3,103
  3,248
  3,401
  3,562
  3,731
  3,910
  4,098
  4,295
  4,504
  4,722
Funds from operations, $m
  901
  -1,105
  -1,140
  -1,180
  -1,226
  -1,277
  -1,334
  -1,395
  -1,462
  -1,535
  -1,613
  -1,696
  -1,785
  -1,880
  -1,982
  -2,089
  -2,203
  -2,324
  -2,451
  -2,586
  -2,729
  -2,880
  -3,038
  -3,206
  -3,382
  -3,568
  -3,764
  -3,970
  -4,187
  -4,415
  -4,655
Change in working capital, $m
  -1,739
  16
  19
  22
  24
  27
  30
  32
  35
  38
  41
  43
  46
  49
  52
  56
  59
  62
  66
  70
  74
  78
  82
  86
  91
  96
  101
  106
  112
  117
  124
Cash from operations, $m
  2,640
  -1,122
  -1,159
  -1,202
  -1,251
  -1,304
  -1,363
  -1,428
  -1,497
  -1,573
  -1,653
  -1,740
  -1,832
  -1,930
  -2,034
  -2,145
  -2,262
  -2,386
  -2,517
  -2,656
  -2,803
  -2,957
  -3,120
  -3,292
  -3,473
  -3,664
  -3,865
  -4,076
  -4,299
  -4,533
  -4,779
Maintenance CAPEX, $m
  0
  -1,440
  -1,468
  -1,502
  -1,541
  -1,584
  -1,632
  -1,685
  -1,742
  -1,804
  -1,871
  -1,943
  -2,020
  -2,102
  -2,189
  -2,282
  -2,380
  -2,485
  -2,595
  -2,712
  -2,835
  -2,966
  -3,103
  -3,248
  -3,401
  -3,562
  -3,731
  -3,910
  -4,098
  -4,295
  -4,504
New CAPEX, $m
  -1,126
  -291
  -341
  -390
  -438
  -485
  -532
  -580
  -627
  -676
  -725
  -776
  -828
  -882
  -937
  -994
  -1,054
  -1,115
  -1,179
  -1,246
  -1,316
  -1,388
  -1,464
  -1,543
  -1,626
  -1,713
  -1,803
  -1,898
  -1,997
  -2,101
  -2,210
Cash from investing activities, $m
  -412
  -1,731
  -1,809
  -1,892
  -1,979
  -2,069
  -2,164
  -2,265
  -2,369
  -2,480
  -2,596
  -2,719
  -2,848
  -2,984
  -3,126
  -3,276
  -3,434
  -3,600
  -3,774
  -3,958
  -4,151
  -4,354
  -4,567
  -4,791
  -5,027
  -5,275
  -5,534
  -5,808
  -6,095
  -6,396
  -6,714
Free cash flow, $m
  2,228
  -2,852
  -2,969
  -3,094
  -3,229
  -3,374
  -3,528
  -3,692
  -3,867
  -4,053
  -4,250
  -4,459
  -4,679
  -4,913
  -5,160
  -5,421
  -5,696
  -5,986
  -6,292
  -6,614
  -6,954
  -7,311
  -7,687
  -8,083
  -8,500
  -8,938
  -9,399
  -9,884
  -10,394
  -10,929
  -11,492
Issuance/(repayment) of debt, $m
  -2,057
  342
  403
  461
  517
  573
  629
  685
  741
  799
  857
  917
  979
  1,042
  1,107
  1,175
  1,245
  1,318
  1,394
  1,473
  1,555
  1,641
  1,730
  1,824
  1,922
  2,024
  2,131
  2,243
  2,360
  2,483
  2,612
Issuance/(repurchase) of shares, $m
  0
  2,833
  2,913
  3,011
  3,119
  3,237
  3,364
  3,502
  3,650
  3,808
  3,977
  4,020
  4,212
  4,415
  4,631
  4,859
  5,101
  5,356
  5,625
  5,910
  6,210
  6,527
  6,860
  7,211
  7,581
  7,971
  8,380
  8,812
  9,265
  9,742
  10,244
Cash from financing (excl. dividends), $m  
  -2,211
  3,175
  3,316
  3,472
  3,636
  3,810
  3,993
  4,187
  4,391
  4,607
  4,834
  4,937
  5,191
  5,457
  5,738
  6,034
  6,346
  6,674
  7,019
  7,383
  7,765
  8,168
  8,590
  9,035
  9,503
  9,995
  10,511
  11,055
  11,625
  12,225
  12,856
Total cash flow (excl. dividends), $m
  20
  324
  348
  378
  407
  436
  465
  495
  524
  554
  585
  479
  511
  544
  578
  613
  650
  688
  727
  769
  812
  856
  903
  952
  1,003
  1,056
  1,112
  1,171
  1,232
  1,296
  1,363
Retained Cash Flow (-), $m
  -757
  -2,833
  -2,913
  -3,011
  -3,119
  -3,237
  -3,364
  -3,502
  -3,650
  -3,808
  -3,977
  -4,020
  -4,212
  -4,415
  -4,631
  -4,859
  -5,101
  -5,356
  -5,625
  -5,910
  -6,210
  -6,527
  -6,860
  -7,211
  -7,581
  -7,971
  -8,380
  -8,812
  -9,265
  -9,742
  -10,244
Prev. year cash balance distribution, $m
 
  2,246
  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
 
  -264
  -2,565
  -2,633
  -2,712
  -2,800
  -2,899
  -3,007
  -3,126
  -3,254
  -3,393
  -3,541
  -3,701
  -3,871
  -4,053
  -4,246
  -4,451
  -4,668
  -4,898
  -5,141
  -5,399
  -5,670
  -5,957
  -6,259
  -6,578
  -6,914
  -7,268
  -7,641
  -8,033
  -8,446
  -8,881
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
 
  -253
  -2,349
  -2,292
  -2,233
  -2,171
  -2,104
  -2,032
  -1,954
  -1,869
  -1,779
  -1,682
  -1,579
  -1,472
  -1,361
  -1,246
  -1,131
  -1,016
  -902
  -792
  -686
  -586
  -494
  -410
  -335
  -269
  -212
  -164
  -124
  -92
  -67
Current shareholders' claim on cash, %
  100
  78.2
  61.1
  47.6
  37.0
  28.7
  22.2
  17.2
  13.2
  10.2
  7.8
  6.1
  4.7
  3.6
  2.8
  2.1
  1.6
  1.3
  1.0
  0.7
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0

Barrick Gold Corporation (Barrick) is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company's segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. The Pascua-Lama project is located on the border between Chile and Argentina. The Company has nine producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic.

FINANCIAL RATIOS  of  Barrick Gold (ABX)

Valuation Ratios
P/E Ratio 21.7
Price to Sales 1.7
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 5.4
Price to Free Cash Flow 9.4
Growth Rates
Sales Growth Rate -5.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -34.3%
Cap. Spend. - 3 Yr. Gr. Rate -27.2%
Financial Strength
Quick Ratio 17
Current Ratio 0
LT Debt to Equity 98.1%
Total Debt to Equity 99.9%
Interest Coverage 4
Management Effectiveness
Return On Assets 3.5%
Ret/ On Assets - 3 Yr. Avg. -3.2%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. -7.2%
Return On Equity 8.7%
Return On Equity - 3 Yr. Avg. -16.1%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 40.7%
Gross Margin - 3 Yr. Avg. 34.8%
EBITDA Margin 45.2%
EBITDA Margin - 3 Yr. Avg. 11.5%
Operating Margin 28.3%
Oper. Margin - 3 Yr. Avg. -5.3%
Pre-Tax Margin 20.8%
Pre-Tax Margin - 3 Yr. Avg. -13.3%
Net Profit Margin 7.7%
Net Profit Margin - 3 Yr. Avg. -17.4%
Effective Tax Rate 51.6%
Eff/ Tax Rate - 3 Yr. Avg. 13.7%
Payout Ratio 13.1%

ABX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ABX stock intrinsic value calculation we used $8558 million for the last fiscal year's total revenue generated by Barrick Gold. The default revenue input number comes from 2016 income statement of Barrick Gold. 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 ABX 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 ABX is calculated based on our internal credit rating of Barrick Gold, 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 Barrick Gold.
    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 ABX stock the variable cost ratio is equal to 126%.

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 ABX 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 5.7% for Barrick Gold.

Corporate tax rate of 27% is the nominal tax rate for Barrick Gold. 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 ABX 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 ABX are equal to 169.9%.

Life of production assets of 10.1 years is the average useful life of capital assets used in Barrick Gold 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 ABX is equal to 9.5%. 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 - $7935 million for Barrick Gold - 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 1163.79 million for Barrick Gold 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 Barrick Gold at the current share price and the inputted number of shares is $14.2 billion.

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COMPANY NEWS

▶ Barrick Vows Not to Grow for Growth's Sake   [Feb-22-18 05:17PM  Bloomberg]
▶ Investors Return to Big Gold Miners ETF   [10:33AM  ETF Trends]
▶ Barrick Gold: An Attractive Investment Option   [Feb-21-18 04:41PM  GuruFocus.com]
▶ [$$] Acacia Mining considers selling stake in Tanzania assets   [Feb-16-18 12:26AM  Financial Times]
▶ Gold edges higher as dollar hits two-week low   [Feb-15-18 02:16PM  Reuters]
▶ Barrick Gold Corp Climbs 0.73%   [10:03AM  GuruFocus.com]
▶ Barrick Announces Dividend   [05:10PM  GlobeNewswire]
▶ Barrick Gold Q4 Earnings Preview   [09:07AM  Benzinga]
▶ Acacia Mining Tumbles   [10:16AM  GuruFocus.com]
▶ 4 Ways You Can Invest In Gold Without Holding It   [Feb-09-18 03:39PM  Investopedia]
▶ Barrick Provides Update on Pascua-Lama Project   [Feb-06-18 05:28PM  GlobeNewswire]
▶ Read This Before You Buy Gold Stocks   [06:07AM  Motley Fool]
▶ Top 4 Gold Stocks as of February 2018   [Feb-02-18 05:40PM  Investopedia]
▶ GoodHaven Fund Annual Shareholder 2017   [Jan-30-18 05:57PM  GuruFocus.com]
▶ Ideas For Late-Cycle Investing   [05:28PM  Forbes]
▶ Gold ETF Holdings Climb to a 5-Year High, Supporting Prices   [Jan-26-18 04:40PM  Market Realist]
▶ The Gemstone Sector Could Be Set To Boom   [Jan-23-18 07:30PM  Oilprice.com]
▶ Gold: Safe Investment for the Long Haul   [08:50AM  InvestorPlace]
▶ Gold: Safe Investment for the Long Haul   [Jan-17-18 02:59PM  Zacks]
▶ Gold Mining Stock Outlook - January 2018   [Jan-16-18 05:02PM  Zacks]
▶ Is Franco-Nevada Corporation a Buy?   [Jan-15-18 09:03AM  Motley Fool]
▶ Is Analyst Sentiment on Goldcorp Improving?   [09:02AM  Market Realist]
▶ How Miners Were Moving in the 1st Week of January   [Jan-10-18 10:00AM  Market Realist]
▶ Upswing in Precious Metals at the End of 2017   [Jan-05-18 10:38AM  Market Realist]
▶ Gold Stocks: What to Watch in 2018   [08:02AM  Motley Fool]
▶ 3 Myths About Investing in Gold   [Jan-04-18 10:15AM  Motley Fool]
▶ Which Gold Company Is the Best Dividend Stock?   [Dec-31-17 08:07AM  Motley Fool]
▶ How Financially Strong Is Barrick Gold Corporation (TSE:ABX)?   [Dec-29-17 07:19AM  Simply Wall St.]
▶ 2017 Leaders and Laggards in the Gold Stock Industry   [Dec-28-17 10:37AM  GuruFocus.com]
▶ The Outlook for Gold as We Enter 2018   [07:34AM  Market Realist]
▶ Do Analysts Believe in a 2018 Rally for Gold?   [Dec-27-17 05:35PM  Market Realist]
▶ Will Bitcoin Steal Golds Luster in 2018?   [02:32PM  Market Realist]
▶ Analyst Sentiment for Newmont Mining ahead of 2018   [Dec-25-17 09:01AM  Market Realist]
▶ How Newmont Mining Plans to Generate Free Cash Flow in 2018   [Dec-22-17 10:31AM  Market Realist]
Financial statements of ABX
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