Intrinsic value of Anthem - ANTM

Previous Close

$275.58

  Intrinsic Value

$335.75

stock screener

  Rating & Target

buy

+22%

Previous close

$275.58

 
Intrinsic value

$335.75

 
Up/down potential

+22%

 
Rating

buy

Our model is not good at valuating stocks of financial companies, such as ANTM.

We calculate the intrinsic value of ANTM 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 71.6

 

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, %
  2.40
  2.66
  2.89
  3.10
  3.29
  3.46
  3.62
  3.76
  3.88
  3.99
  4.09
  4.18
  4.27
  4.34
  4.41
  4.46
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
Revenue, $m
  92,200
  94,653
  97,392
  100,416
  103,724
  107,317
  111,200
  115,378
  119,855
  124,641
  129,743
  135,171
  140,937
  147,053
  153,531
  160,385
  167,632
  175,286
  183,367
  191,891
  200,879
  210,351
  220,330
  230,839
  241,902
  253,546
  265,797
  278,685
  292,241
  306,495
Variable operating expenses, $m
  86,418
  88,643
  91,128
  93,872
  96,873
  100,134
  103,657
  107,447
  111,510
  115,852
  117,722
  122,647
  127,879
  133,428
  139,305
  145,525
  152,100
  159,046
  166,377
  174,112
  182,267
  190,862
  199,916
  209,451
  219,490
  230,054
  241,171
  252,865
  265,164
  278,097
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
  86,418
  88,643
  91,128
  93,872
  96,873
  100,134
  103,657
  107,447
  111,510
  115,852
  117,722
  122,647
  127,879
  133,428
  139,305
  145,525
  152,100
  159,046
  166,377
  174,112
  182,267
  190,862
  199,916
  209,451
  219,490
  230,054
  241,171
  252,865
  265,164
  278,097
Operating income, $m
  5,783
  6,010
  6,264
  6,544
  6,850
  7,183
  7,543
  7,930
  8,345
  8,788
  12,021
  12,524
  13,058
  13,625
  14,225
  14,860
  15,532
  16,241
  16,989
  17,779
  18,612
  19,490
  20,414
  21,388
  22,413
  23,492
  24,627
  25,821
  27,077
  28,398
EBITDA, $m
  9,068
  9,309
  9,579
  9,876
  10,202
  10,555
  10,937
  11,348
  11,788
  12,259
  12,761
  13,294
  13,862
  14,463
  15,100
  15,774
  16,487
  17,240
  18,035
  18,873
  19,757
  20,689
  21,670
  22,704
  23,792
  24,937
  26,142
  27,409
  28,743
  30,145
Interest expense (income), $m
  595
  1,076
  1,132
  1,193
  1,261
  1,336
  1,419
  1,508
  1,605
  1,709
  1,820
  1,939
  2,066
  2,202
  2,345
  2,497
  2,659
  2,829
  3,010
  3,200
  3,402
  3,614
  3,838
  4,073
  4,322
  4,584
  4,859
  5,149
  5,454
  5,775
  6,112
Earnings before tax, $m
  4,706
  4,878
  5,071
  5,283
  5,514
  5,765
  6,035
  6,325
  6,636
  6,968
  10,082
  10,458
  10,857
  11,280
  11,728
  12,201
  12,702
  13,231
  13,789
  14,378
  14,998
  15,652
  16,341
  17,066
  17,829
  18,633
  19,478
  20,367
  21,302
  22,285
Tax expense, $m
  1,271
  1,317
  1,369
  1,426
  1,489
  1,556
  1,629
  1,708
  1,792
  1,881
  2,722
  2,824
  2,931
  3,046
  3,166
  3,294
  3,430
  3,572
  3,723
  3,882
  4,050
  4,226
  4,412
  4,608
  4,814
  5,031
  5,259
  5,499
  5,752
  6,017
Net income, $m
  3,436
  3,561
  3,702
  3,857
  4,025
  4,208
  4,406
  4,618
  4,844
  5,087
  7,360
  7,634
  7,925
  8,234
  8,561
  8,907
  9,273
  9,659
  10,066
  10,496
  10,949
  11,426
  11,929
  12,458
  13,015
  13,602
  14,219
  14,868
  15,551
  16,268

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
  68,347
  70,165
  72,196
  74,437
  76,889
  79,553
  82,432
  85,528
  88,847
  92,395
  96,177
  100,201
  104,475
  109,009
  113,811
  118,892
  124,264
  129,938
  135,928
  142,247
  148,910
  155,931
  163,329
  171,119
  179,320
  187,951
  197,033
  206,587
  216,635
  227,201
Adjusted assets (=assets-cash), $m
  68,347
  70,165
  72,196
  74,437
  76,889
  79,553
  82,432
  85,528
  88,847
  92,395
  96,177
  100,201
  104,475
  109,009
  113,811
  118,892
  124,264
  129,938
  135,928
  142,247
  148,910
  155,931
  163,329
  171,119
  179,320
  187,951
  197,033
  206,587
  216,635
  227,201
Revenue / Adjusted assets
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
  1.349
Average production assets, $m
  15,766
  16,186
  16,654
  17,171
  17,737
  18,351
  19,015
  19,730
  20,495
  21,314
  22,186
  23,114
  24,100
  25,146
  26,254
  27,426
  28,665
  29,974
  31,356
  32,813
  34,350
  35,970
  37,677
  39,474
  41,365
  43,356
  45,451
  47,655
  49,973
  52,411
Working capital, $m
  -9,404
  -9,655
  -9,934
  -10,242
  -10,580
  -10,946
  -11,342
  -11,769
  -12,225
  -12,713
  -13,234
  -13,787
  -14,376
  -14,999
  -15,660
  -16,359
  -17,098
  -17,879
  -18,703
  -19,573
  -20,490
  -21,456
  -22,474
  -23,546
  -24,674
  -25,862
  -27,111
  -28,426
  -29,809
  -31,262
Total debt, $m
  20,956
  22,087
  23,350
  24,744
  26,269
  27,926
  29,717
  31,643
  33,707
  35,914
  38,266
  40,769
  43,428
  46,248
  49,235
  52,395
  55,736
  59,266
  62,991
  66,922
  71,066
  75,434
  80,035
  84,880
  89,981
  95,350
  100,999
  106,941
  113,191
  119,764
Total liabilities, $m
  42,512
  43,643
  44,906
  46,300
  47,825
  49,482
  51,273
  53,199
  55,263
  57,470
  59,822
  62,325
  64,984
  67,803
  70,790
  73,951
  77,292
  80,821
  84,547
  88,478
  92,622
  96,989
  101,590
  106,436
  111,537
  116,906
  122,555
  128,497
  134,747
  141,319
Total equity, $m
  25,835
  26,522
  27,290
  28,137
  29,064
  30,071
  31,159
  32,330
  33,584
  34,925
  36,355
  37,876
  39,492
  41,205
  43,020
  44,941
  46,972
  49,117
  51,381
  53,769
  56,288
  58,942
  61,738
  64,683
  67,783
  71,046
  74,478
  78,090
  81,888
  85,882
Total liabilities and equity, $m
  68,347
  70,165
  72,196
  74,437
  76,889
  79,553
  82,432
  85,529
  88,847
  92,395
  96,177
  100,201
  104,476
  109,008
  113,810
  118,892
  124,264
  129,938
  135,928
  142,247
  148,910
  155,931
  163,328
  171,119
  179,320
  187,952
  197,033
  206,587
  216,635
  227,201
Debt-to-equity ratio
  0.810
  0.830
  0.860
  0.880
  0.900
  0.930
  0.950
  0.980
  1.000
  1.030
  1.050
  1.080
  1.100
  1.120
  1.140
  1.170
  1.190
  1.210
  1.230
  1.240
  1.260
  1.280
  1.300
  1.310
  1.330
  1.340
  1.360
  1.370
  1.380
  1.390
Adjusted equity ratio
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378
  0.378

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,436
  3,561
  3,702
  3,857
  4,025
  4,208
  4,406
  4,618
  4,844
  5,087
  7,360
  7,634
  7,925
  8,234
  8,561
  8,907
  9,273
  9,659
  10,066
  10,496
  10,949
  11,426
  11,929
  12,458
  13,015
  13,602
  14,219
  14,868
  15,551
  16,268
Depreciation, amort., depletion, $m
  3,286
  3,299
  3,315
  3,332
  3,351
  3,372
  3,394
  3,418
  3,443
  3,470
  740
  770
  803
  838
  875
  914
  956
  999
  1,045
  1,094
  1,145
  1,199
  1,256
  1,316
  1,379
  1,445
  1,515
  1,589
  1,666
  1,747
Funds from operations, $m
  6,721
  6,861
  7,017
  7,189
  7,377
  7,580
  7,799
  8,035
  8,288
  8,557
  8,099
  8,405
  8,729
  9,072
  9,436
  9,821
  10,228
  10,658
  11,111
  11,590
  12,094
  12,625
  13,185
  13,774
  14,394
  15,047
  15,734
  16,456
  17,216
  18,015
Change in working capital, $m
  -220
  -250
  -279
  -308
  -337
  -367
  -396
  -426
  -457
  -488
  -520
  -554
  -588
  -624
  -661
  -699
  -739
  -781
  -824
  -869
  -917
  -966
  -1,018
  -1,072
  -1,128
  -1,188
  -1,250
  -1,315
  -1,383
  -1,454
Cash from operations, $m
  6,942
  7,111
  7,296
  7,497
  7,714
  7,946
  8,195
  8,461
  8,744
  9,045
  8,620
  8,958
  9,317
  9,696
  10,097
  10,520
  10,967
  11,439
  11,935
  12,459
  13,010
  13,591
  14,203
  14,846
  15,523
  16,235
  16,984
  17,771
  18,599
  19,469
Maintenance CAPEX, $m
  -512
  -526
  -540
  -555
  -572
  -591
  -612
  -634
  -658
  -683
  -710
  -740
  -770
  -803
  -838
  -875
  -914
  -956
  -999
  -1,045
  -1,094
  -1,145
  -1,199
  -1,256
  -1,316
  -1,379
  -1,445
  -1,515
  -1,589
  -1,666
New CAPEX, $m
  -408
  -419
  -468
  -517
  -566
  -615
  -664
  -714
  -766
  -818
  -872
  -928
  -986
  -1,046
  -1,108
  -1,172
  -1,239
  -1,309
  -1,382
  -1,458
  -1,537
  -1,620
  -1,706
  -1,797
  -1,892
  -1,991
  -2,095
  -2,204
  -2,318
  -2,437
Cash from investing activities, $m
  -920
  -945
  -1,008
  -1,072
  -1,138
  -1,206
  -1,276
  -1,348
  -1,424
  -1,501
  -1,582
  -1,668
  -1,756
  -1,849
  -1,946
  -2,047
  -2,153
  -2,265
  -2,381
  -2,503
  -2,631
  -2,765
  -2,905
  -3,053
  -3,208
  -3,370
  -3,540
  -3,719
  -3,907
  -4,103
Free cash flow, $m
  6,021
  6,166
  6,288
  6,425
  6,576
  6,741
  6,920
  7,113
  7,321
  7,544
  7,037
  7,290
  7,560
  7,847
  8,151
  8,473
  8,814
  9,174
  9,555
  9,956
  10,380
  10,826
  11,297
  11,793
  12,315
  12,865
  13,443
  14,052
  14,692
  15,366
Issuance/(repayment) of debt, $m
  1,024
  1,131
  1,263
  1,394
  1,525
  1,657
  1,790
  1,926
  2,065
  2,206
  2,352
  2,503
  2,659
  2,820
  2,987
  3,161
  3,341
  3,529
  3,726
  3,930
  4,144
  4,368
  4,601
  4,845
  5,101
  5,369
  5,649
  5,942
  6,250
  6,572
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  
  1,024
  1,131
  1,263
  1,394
  1,525
  1,657
  1,790
  1,926
  2,065
  2,206
  2,352
  2,503
  2,659
  2,820
  2,987
  3,161
  3,341
  3,529
  3,726
  3,930
  4,144
  4,368
  4,601
  4,845
  5,101
  5,369
  5,649
  5,942
  6,250
  6,572
Total cash flow (excl. dividends), $m
  7,045
  7,297
  7,551
  7,819
  8,101
  8,398
  8,710
  9,039
  9,386
  9,750
  9,389
  9,793
  10,219
  10,667
  11,138
  11,634
  12,155
  12,704
  13,280
  13,887
  14,524
  15,194
  15,898
  16,638
  17,416
  18,234
  19,092
  19,995
  20,942
  21,938
Retained Cash Flow (-), $m
  -579
  -687
  -768
  -847
  -927
  -1,007
  -1,088
  -1,170
  -1,255
  -1,341
  -1,430
  -1,521
  -1,616
  -1,714
  -1,815
  -1,921
  -2,031
  -2,145
  -2,264
  -2,389
  -2,519
  -2,654
  -2,796
  -2,945
  -3,100
  -3,263
  -3,433
  -3,611
  -3,798
  -3,994
Prev. year cash balance distribution, $m
  1,247
  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
  7,713
  6,609
  6,784
  6,972
  7,174
  7,391
  7,622
  7,869
  8,131
  8,409
  7,959
  8,272
  8,603
  8,953
  9,323
  9,713
  10,125
  10,559
  11,016
  11,498
  12,005
  12,540
  13,102
  13,694
  14,316
  14,971
  15,659
  16,383
  17,144
  17,944
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
  7,395
  6,051
  5,904
  5,741
  5,561
  5,364
  5,149
  4,918
  4,671
  4,409
  3,780
  3,530
  3,271
  3,006
  2,737
  2,468
  2,203
  1,944
  1,696
  1,461
  1,242
  1,040
  859
  697
  557
  437
  336
  253
  187
  135
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

Anthem, Inc. is a health benefits company. The Company operates through three segments: Commercial and Specialty Business, Government Business and Other. It offers a spectrum of network-based managed care plans to large and small employer, individual, Medicaid and Medicare markets. Its managed care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; indemnity plans and other hybrid plans, including consumer-driven health plans; and hospital only and limited benefit products. It also provides an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. It provides an array of specialty and other insurance products and services, such as dental, vision, life and disability insurance benefits and radiology benefit management.

FINANCIAL RATIOS  of  Anthem (ANTM)

Valuation Ratios
P/E Ratio 29.4
Price to Sales 0.9
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 22.7
Price to Free Cash Flow 27.7
Growth Rates
Sales Growth Rate 7.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -8.5%
Cap. Spend. - 3 Yr. Gr. Rate -2%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 57.2%
Total Debt to Equity 62.7%
Interest Coverage 9
Management Effectiveness
Return On Assets 4.4%
Ret/ On Assets - 3 Yr. Avg. 4.6%
Return On Total Capital 6.2%
Ret/ On T. Cap. - 3 Yr. Avg. 6.4%
Return On Equity 10.3%
Return On Equity - 3 Yr. Avg. 10.5%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 7.1%
EBITDA Margin - 3 Yr. Avg. 7.6%
Operating Margin 6.2%
Oper. Margin - 3 Yr. Avg. 6.5%
Pre-Tax Margin 5.4%
Pre-Tax Margin - 3 Yr. Avg. 5.7%
Net Profit Margin 2.9%
Net Profit Margin - 3 Yr. Avg. 3.2%
Effective Tax Rate 45.8%
Eff/ Tax Rate - 3 Yr. Avg. 44%
Payout Ratio 27.7%

ANTM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ANTM stock intrinsic value calculation we used $90039.4 million for the last fiscal year's total revenue generated by Anthem. The default revenue input number comes from 0001 income statement of Anthem. 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 ANTM stock valuation model: a) initial revenue growth rate of 2.4% 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 ANTM is calculated based on our internal credit rating of Anthem, 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 Anthem.
    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 ANTM stock the variable cost ratio is equal to 93.8%.

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 ANTM 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 Anthem.

Corporate tax rate of 27% is the nominal tax rate for Anthem. 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 ANTM 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 ANTM are equal to 17.1%.

Life of production assets of 32.2 years is the average useful life of capital assets used in Anthem 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 ANTM is equal to -10.2%. 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 - $26502.9 million for Anthem - 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 259.954 million for Anthem 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 Anthem at the current share price and the inputted number of shares is $71.6 billion.

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