Intrinsic value of Astrazeneca PLC - AZN

Previous Close

$41.36

  Intrinsic Value

$21.02

stock screener

  Rating & Target

sell

-49%

Previous close

$41.36

 
Intrinsic value

$21.02

 
Up/down potential

-49%

 
Rating

sell

We calculate the intrinsic value of AZN 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 104.8

 

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, %
  2.00
  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
  22,532
  23,050
  23,642
  24,307
  25,044
  25,853
  26,733
  27,687
  28,713
  29,815
  30,994
  32,252
  33,591
  35,015
  36,525
  38,126
  39,820
  41,612
  43,505
  45,504
  47,613
  49,838
  52,182
  54,653
  57,255
  59,994
  62,878
  65,912
  69,104
  72,461
Variable operating expenses, $m
  5,047
  5,086
  5,130
  5,180
  5,235
  5,295
  5,361
  5,432
  5,509
  5,591
  2,312
  2,406
  2,506
  2,612
  2,725
  2,844
  2,970
  3,104
  3,245
  3,394
  3,552
  3,718
  3,893
  4,077
  4,271
  4,475
  4,690
  4,917
  5,155
  5,405
Fixed operating expenses, $m
  14,305
  14,620
  14,941
  15,270
  15,606
  15,949
  16,300
  16,659
  17,025
  17,400
  17,783
  18,174
  18,574
  18,982
  19,400
  19,827
  20,263
  20,709
  21,164
  21,630
  22,106
  22,592
  23,089
  23,597
  24,116
  24,647
  25,189
  25,743
  26,309
  26,888
Total operating expenses, $m
  19,352
  19,706
  20,071
  20,450
  20,841
  21,244
  21,661
  22,091
  22,534
  22,991
  20,095
  20,580
  21,080
  21,594
  22,125
  22,671
  23,233
  23,813
  24,409
  25,024
  25,658
  26,310
  26,982
  27,674
  28,387
  29,122
  29,879
  30,660
  31,464
  32,293
Operating income, $m
  3,179
  3,344
  3,571
  3,858
  4,204
  4,609
  5,072
  5,596
  6,180
  6,825
  10,900
  11,672
  12,512
  13,421
  14,401
  15,455
  16,587
  17,799
  19,096
  20,480
  21,956
  23,528
  25,201
  26,979
  28,868
  30,872
  32,998
  35,252
  37,640
  40,168
EBITDA, $m
  8,784
  9,000
  9,285
  9,638
  10,057
  10,543
  11,094
  11,712
  12,398
  13,152
  13,978
  14,875
  15,848
  16,898
  18,028
  19,241
  20,542
  21,932
  23,416
  24,999
  26,684
  28,478
  30,383
  32,407
  34,554
  36,830
  39,243
  41,798
  44,502
  47,364
Interest expense (income), $m
  677
  1,472
  1,546
  1,633
  1,733
  1,844
  1,968
  2,104
  2,252
  2,412
  2,584
  2,769
  2,967
  3,179
  3,404
  3,643
  3,896
  4,165
  4,450
  4,751
  5,069
  5,405
  5,759
  6,132
  6,526
  6,941
  7,378
  7,838
  8,323
  8,832
  9,368
Earnings before tax, $m
  1,708
  1,798
  1,938
  2,125
  2,359
  2,640
  2,969
  3,344
  3,768
  4,240
  8,130
  8,705
  9,333
  10,017
  10,758
  11,559
  12,422
  13,349
  14,345
  15,411
  16,551
  17,769
  19,068
  20,453
  21,926
  23,494
  25,160
  26,929
  28,807
  30,799
Tax expense, $m
  461
  486
  523
  574
  637
  713
  802
  903
  1,017
  1,145
  2,195
  2,350
  2,520
  2,705
  2,905
  3,121
  3,354
  3,604
  3,873
  4,161
  4,469
  4,798
  5,148
  5,522
  5,920
  6,343
  6,793
  7,271
  7,778
  8,316
Net income, $m
  1,247
  1,313
  1,415
  1,551
  1,722
  1,928
  2,167
  2,441
  2,750
  3,096
  5,935
  6,355
  6,813
  7,312
  7,853
  8,438
  9,068
  9,745
  10,472
  11,250
  12,083
  12,972
  13,920
  14,930
  16,006
  17,151
  18,367
  19,658
  21,029
  22,484

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
  61,901
  63,324
  64,952
  66,779
  68,803
  71,025
  73,444
  76,062
  78,883
  81,910
  85,149
  88,605
  92,284
  96,194
  100,344
  104,741
  109,396
  114,319
  119,520
  125,012
  130,806
  136,917
  143,358
  150,145
  157,293
  164,819
  172,741
  181,076
  189,846
  199,070
Adjusted assets (=assets-cash), $m
  61,901
  63,324
  64,952
  66,779
  68,803
  71,025
  73,444
  76,062
  78,883
  81,910
  85,149
  88,605
  92,284
  96,194
  100,344
  104,741
  109,396
  114,319
  119,520
  125,012
  130,806
  136,917
  143,358
  150,145
  157,293
  164,819
  172,741
  181,076
  189,846
  199,070
Revenue / Adjusted assets
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
Average production assets, $m
  25,957
  26,554
  27,236
  28,002
  28,851
  29,783
  30,797
  31,895
  33,078
  34,347
  35,705
  37,154
  38,697
  40,337
  42,077
  43,921
  45,873
  47,937
  50,118
  52,421
  54,851
  57,413
  60,114
  62,960
  65,957
  69,113
  72,435
  75,930
  79,608
  83,476
Working capital, $m
  -4,709
  -4,817
  -4,941
  -5,080
  -5,234
  -5,403
  -5,587
  -5,786
  -6,001
  -6,231
  -6,478
  -6,741
  -7,021
  -7,318
  -7,634
  -7,968
  -8,322
  -8,697
  -9,093
  -9,510
  -9,951
  -10,416
  -10,906
  -11,422
  -11,966
  -12,539
  -13,141
  -13,776
  -14,443
  -15,144
Total debt, $m
  20,079
  21,209
  22,502
  23,952
  25,560
  27,324
  29,244
  31,323
  33,563
  35,967
  38,538
  41,282
  44,204
  47,308
  50,603
  54,095
  57,791
  61,699
  65,829
  70,189
  74,790
  79,642
  84,757
  90,145
  95,821
  101,796
  108,086
  114,705
  121,668
  128,991
Total liabilities, $m
  49,149
  50,279
  51,572
  53,022
  54,630
  56,394
  58,314
  60,393
  62,633
  65,037
  67,608
  70,352
  73,274
  76,378
  79,673
  83,165
  86,861
  90,769
  94,899
  99,259
  103,860
  108,712
  113,827
  119,215
  124,891
  130,866
  137,156
  143,775
  150,738
  158,061
Total equity, $m
  12,752
  13,045
  13,380
  13,756
  14,173
  14,631
  15,129
  15,669
  16,250
  16,873
  17,541
  18,253
  19,011
  19,816
  20,671
  21,577
  22,536
  23,550
  24,621
  25,752
  26,946
  28,205
  29,532
  30,930
  32,402
  33,953
  35,585
  37,302
  39,108
  41,008
Total liabilities and equity, $m
  61,901
  63,324
  64,952
  66,778
  68,803
  71,025
  73,443
  76,062
  78,883
  81,910
  85,149
  88,605
  92,285
  96,194
  100,344
  104,742
  109,397
  114,319
  119,520
  125,011
  130,806
  136,917
  143,359
  150,145
  157,293
  164,819
  172,741
  181,077
  189,846
  199,069
Debt-to-equity ratio
  1.570
  1.630
  1.680
  1.740
  1.800
  1.870
  1.930
  2.000
  2.070
  2.130
  2.200
  2.260
  2.330
  2.390
  2.450
  2.510
  2.560
  2.620
  2.670
  2.730
  2.780
  2.820
  2.870
  2.910
  2.960
  3.000
  3.040
  3.080
  3.110
  3.150
Adjusted equity ratio
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206
  0.206

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,247
  1,313
  1,415
  1,551
  1,722
  1,928
  2,167
  2,441
  2,750
  3,096
  5,935
  6,355
  6,813
  7,312
  7,853
  8,438
  9,068
  9,745
  10,472
  11,250
  12,083
  12,972
  13,920
  14,930
  16,006
  17,151
  18,367
  19,658
  21,029
  22,484
Depreciation, amort., depletion, $m
  5,604
  5,656
  5,715
  5,781
  5,854
  5,934
  6,022
  6,116
  6,218
  6,328
  3,078
  3,203
  3,336
  3,477
  3,627
  3,786
  3,955
  4,133
  4,321
  4,519
  4,729
  4,949
  5,182
  5,428
  5,686
  5,958
  6,244
  6,546
  6,863
  7,196
Funds from operations, $m
  6,851
  6,968
  7,129
  7,332
  7,576
  7,862
  8,189
  8,557
  8,969
  9,423
  9,013
  9,558
  10,149
  10,790
  11,481
  12,224
  13,022
  13,878
  14,792
  15,769
  16,811
  17,921
  19,102
  20,358
  21,692
  23,109
  24,611
  26,204
  27,892
  29,680
Change in working capital, $m
  -92
  -108
  -124
  -139
  -154
  -169
  -184
  -199
  -215
  -230
  -246
  -263
  -280
  -297
  -316
  -335
  -354
  -374
  -396
  -418
  -441
  -465
  -490
  -516
  -544
  -573
  -603
  -634
  -667
  -702
Cash from operations, $m
  6,943
  7,077
  7,253
  7,471
  7,730
  8,031
  8,373
  8,757
  9,183
  9,653
  9,259
  9,820
  10,429
  11,087
  11,796
  12,559
  13,376
  14,252
  15,188
  16,187
  17,252
  18,386
  19,592
  20,874
  22,236
  23,681
  25,214
  26,838
  28,559
  30,381
Maintenance CAPEX, $m
  -2,193
  -2,238
  -2,289
  -2,348
  -2,414
  -2,487
  -2,567
  -2,655
  -2,750
  -2,852
  -2,961
  -3,078
  -3,203
  -3,336
  -3,477
  -3,627
  -3,786
  -3,955
  -4,133
  -4,321
  -4,519
  -4,729
  -4,949
  -5,182
  -5,428
  -5,686
  -5,958
  -6,244
  -6,546
  -6,863
New CAPEX, $m
  -519
  -597
  -682
  -766
  -849
  -931
  -1,014
  -1,098
  -1,183
  -1,269
  -1,358
  -1,449
  -1,543
  -1,640
  -1,740
  -1,844
  -1,952
  -2,064
  -2,181
  -2,303
  -2,430
  -2,562
  -2,701
  -2,846
  -2,997
  -3,156
  -3,322
  -3,495
  -3,677
  -3,868
Cash from investing activities, $m
  -2,712
  -2,835
  -2,971
  -3,114
  -3,263
  -3,418
  -3,581
  -3,753
  -3,933
  -4,121
  -4,319
  -4,527
  -4,746
  -4,976
  -5,217
  -5,471
  -5,738
  -6,019
  -6,314
  -6,624
  -6,949
  -7,291
  -7,650
  -8,028
  -8,425
  -8,842
  -9,280
  -9,739
  -10,223
  -10,731
Free cash flow, $m
  4,231
  4,242
  4,281
  4,357
  4,467
  4,612
  4,791
  5,004
  5,251
  5,532
  4,940
  5,293
  5,683
  6,111
  6,579
  7,087
  7,638
  8,233
  8,874
  9,564
  10,303
  11,095
  11,942
  12,846
  13,811
  14,839
  15,934
  17,098
  18,336
  19,651
Issuance/(repayment) of debt, $m
  966
  1,130
  1,292
  1,451
  1,607
  1,764
  1,921
  2,079
  2,240
  2,404
  2,572
  2,744
  2,922
  3,105
  3,295
  3,492
  3,696
  3,908
  4,130
  4,360
  4,601
  4,852
  5,114
  5,389
  5,675
  5,976
  6,290
  6,619
  6,963
  7,324
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  
  966
  1,130
  1,292
  1,451
  1,607
  1,764
  1,921
  2,079
  2,240
  2,404
  2,572
  2,744
  2,922
  3,105
  3,295
  3,492
  3,696
  3,908
  4,130
  4,360
  4,601
  4,852
  5,114
  5,389
  5,675
  5,976
  6,290
  6,619
  6,963
  7,324
Total cash flow (excl. dividends), $m
  5,197
  5,373
  5,574
  5,807
  6,075
  6,376
  6,711
  7,083
  7,490
  7,936
  7,512
  8,037
  8,605
  9,216
  9,874
  10,579
  11,334
  12,142
  13,004
  13,924
  14,904
  15,947
  17,056
  18,235
  19,487
  20,815
  22,224
  23,717
  25,299
  26,975
Retained Cash Flow (-), $m
  -284
  -293
  -335
  -376
  -417
  -458
  -498
  -539
  -581
  -624
  -667
  -712
  -758
  -806
  -855
  -906
  -959
  -1,014
  -1,071
  -1,131
  -1,194
  -1,259
  -1,327
  -1,398
  -1,472
  -1,550
  -1,632
  -1,717
  -1,807
  -1,900
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
  4,914
  5,079
  5,238
  5,431
  5,658
  5,918
  6,213
  6,543
  6,909
  7,312
  6,845
  7,325
  7,847
  8,411
  9,019
  9,673
  10,375
  11,128
  11,933
  12,793
  13,710
  14,688
  15,729
  16,837
  18,014
  19,265
  20,592
  22,000
  23,493
  25,075
Discount rate, %
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
  4,614
  4,451
  4,256
  4,063
  3,868
  3,669
  3,463
  3,249
  3,027
  2,798
  2,262
  2,068
  1,868
  1,667
  1,467
  1,273
  1,087
  914
  754
  611
  485
  377
  287
  213
  155
  109
  75
  50
  33
  20
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

AstraZeneca PLC (AstraZeneca) is a biopharmaceutical company. The Company focuses on discovery and development of products, which are then manufactured, marketed and sold. The Company focuses on three main therapy areas: Oncology, Cardiovascular & Metabolic Disease (CVMD) and Respiratory, while selectively pursuing therapies in Autoimmunity, Infection and Neuroscience. In CVMD, it is expanding its portfolio into the cardiovascular-renal area with late-stage assets, such as ZS-9 and roxadustat, as well as investing to explore the benefits of its SGLT2 and GLP-1 franchises in chronic kidney disease (CKD) and heart failure (HF). The Company has approximately 40 projects in Phase I, including 29 new molecular entities (NMEs), and 11 oncology combination projects. It has approximately 40 projects in Phase II, including 25 NMEs; four significant additional indications for projects that have reached phase II, and seven oncology combination projects.

FINANCIAL RATIOS  of  Astrazeneca PLC (AZN)

Valuation Ratios
P/E Ratio 15
Price to Sales 2.3
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 12.6
Price to Free Cash Flow 28.6
Growth Rates
Sales Growth Rate -6.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -17%
Cap. Spend. - 3 Yr. Gr. Rate -12.9%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 97.6%
Total Debt to Equity 113.2%
Interest Coverage 6
Management Effectiveness
Return On Assets 6.8%
Ret/ On Assets - 3 Yr. Avg. 5.1%
Return On Total Capital 10.7%
Ret/ On T. Cap. - 3 Yr. Avg. 7.8%
Return On Equity 21%
Return On Equity - 3 Yr. Avg. 13.9%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 82.6%
Gross Margin - 3 Yr. Avg. 81.1%
EBITDA Margin 28.6%
EBITDA Margin - 3 Yr. Avg. 26.1%
Operating Margin 21.3%
Oper. Margin - 3 Yr. Avg. 15.3%
Pre-Tax Margin 15.4%
Pre-Tax Margin - 3 Yr. Avg. 10.9%
Net Profit Margin 15.2%
Net Profit Margin - 3 Yr. Avg. 10.4%
Effective Tax Rate 4.1%
Eff/ Tax Rate - 3 Yr. Avg. 4.3%
Payout Ratio 101.8%

AZN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AZN stock intrinsic value calculation we used $22090 million for the last fiscal year's total revenue generated by Astrazeneca PLC. The default revenue input number comes from 0001 income statement of Astrazeneca PLC. 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 AZN 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 6.5%, whose default value for AZN is calculated based on our internal credit rating of Astrazeneca PLC, 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 Astrazeneca PLC.
    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 AZN stock the variable cost ratio is equal to 22.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $13997 million in the base year in the intrinsic value calculation for AZN 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 7.7% for Astrazeneca PLC.

Corporate tax rate of 27% is the nominal tax rate for Astrazeneca PLC. 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 AZN 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 AZN are equal to 115.2%.

Life of production assets of 11.6 years is the average useful life of capital assets used in Astrazeneca PLC 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 AZN is equal to -20.9%. 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 - $12468 million for Astrazeneca PLC - 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 2534.462 million for Astrazeneca PLC 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 Astrazeneca PLC at the current share price and the inputted number of shares is $104.8 billion.

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