Intrinsic value of Boeing Company (The) - BA

Previous Close

$330.45

  Intrinsic Value

$468.71

stock screener

  Rating & Target

buy

+42%

Previous close

$330.45

 
Intrinsic value

$468.71

 
Up/down potential

+42%

 
Rating

buy

We calculate the intrinsic value of BA 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 186.7

 

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, %
  14.40
  13.46
  12.61
  11.85
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.65
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.67
  5.61
  5.55
  5.49
  5.44
Revenue, $m
  115,689
  131,261
  147,818
  165,339
  183,803
  203,195
  223,505
  244,729
  266,869
  289,931
  313,930
  338,887
  364,828
  391,786
  419,801
  448,916
  479,181
  510,652
  543,389
  577,458
  612,931
  649,881
  688,391
  728,546
  770,436
  814,157
  859,809
  907,500
  957,339
  1,009,445
Variable operating expenses, $m
  89,728
  101,654
  114,335
  127,753
  141,893
  156,745
  172,300
  188,554
  205,510
  223,172
  240,425
  259,539
  279,406
  300,052
  321,507
  343,805
  366,984
  391,086
  416,158
  442,250
  469,417
  497,716
  527,209
  557,962
  590,043
  623,527
  658,491
  695,014
  733,184
  773,090
Fixed operating expenses, $m
  11,124
  11,369
  11,619
  11,875
  12,136
  12,403
  12,676
  12,955
  13,240
  13,531
  13,829
  14,133
  14,444
  14,762
  15,087
  15,419
  15,758
  16,104
  16,459
  16,821
  17,191
  17,569
  17,956
  18,351
  18,754
  19,167
  19,589
  20,020
  20,460
  20,910
Total operating expenses, $m
  100,852
  113,023
  125,954
  139,628
  154,029
  169,148
  184,976
  201,509
  218,750
  236,703
  254,254
  273,672
  293,850
  314,814
  336,594
  359,224
  382,742
  407,190
  432,617
  459,071
  486,608
  515,285
  545,165
  576,313
  608,797
  642,694
  678,080
  715,034
  753,644
  794,000
Operating income, $m
  14,837
  18,238
  21,864
  25,711
  29,773
  34,047
  38,529
  43,220
  48,119
  53,227
  59,676
  65,215
  70,978
  76,972
  83,207
  89,692
  96,439
  103,461
  110,772
  118,387
  126,323
  134,596
  143,227
  152,234
  161,638
  171,463
  181,730
  192,466
  203,695
  215,445
EBITDA, $m
  17,852
  21,507
  25,404
  29,536
  33,900
  38,490
  43,304
  48,341
  53,601
  59,086
  64,799
  70,746
  76,932
  83,367
  90,058
  97,019
  104,260
  111,796
  119,641
  127,812
  136,326
  145,203
  154,462
  164,124
  174,212
  184,750
  195,763
  207,277
  219,319
  231,920
Interest expense (income), $m
  523
  748
  951
  1,829
  2,763
  3,751
  4,792
  5,885
  7,030
  8,227
  9,475
  10,775
  12,128
  13,535
  14,998
  16,518
  18,097
  19,739
  21,445
  23,219
  25,065
  26,986
  28,986
  31,069
  33,241
  35,504
  37,866
  40,331
  42,905
  45,594
  48,404
Earnings before tax, $m
  14,089
  17,287
  20,035
  22,948
  26,023
  29,255
  32,644
  36,190
  39,892
  43,752
  48,901
  53,087
  57,443
  61,975
  66,689
  71,595
  76,701
  82,016
  87,553
  93,322
  99,337
  105,610
  112,157
  118,993
  126,134
  133,596
  141,399
  149,560
  158,101
  167,041
Tax expense, $m
  3,804
  4,667
  5,410
  6,196
  7,026
  7,899
  8,814
  9,771
  10,771
  11,813
  13,203
  14,333
  15,510
  16,733
  18,006
  19,331
  20,709
  22,144
  23,639
  25,197
  26,821
  28,515
  30,283
  32,128
  34,056
  36,071
  38,178
  40,381
  42,687
  45,101
Net income, $m
  10,285
  12,619
  14,626
  16,752
  18,996
  21,356
  23,830
  26,419
  29,121
  31,939
  35,697
  38,753
  41,933
  45,241
  48,683
  52,264
  55,991
  59,872
  63,914
  68,125
  72,516
  77,096
  81,875
  86,865
  92,078
  97,525
  103,221
  109,179
  115,414
  121,940

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
  134,210
  152,275
  171,483
  191,808
  213,228
  235,725
  259,287
  283,909
  309,592
  336,346
  364,188
  393,140
  423,234
  454,509
  487,008
  520,784
  555,894
  592,403
  630,382
  669,905
  711,056
  753,923
  798,598
  845,181
  893,777
  944,497
  997,459
  1,052,784
  1,110,602
  1,171,049
Adjusted assets (=assets-cash), $m
  134,210
  152,275
  171,483
  191,808
  213,228
  235,725
  259,287
  283,909
  309,592
  336,346
  364,188
  393,140
  423,234
  454,509
  487,008
  520,784
  555,894
  592,403
  630,382
  669,905
  711,056
  753,923
  798,598
  845,181
  893,777
  944,497
  997,459
  1,052,784
  1,110,602
  1,171,049
Revenue / Adjusted assets
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
  0.862
Average production assets, $m
  20,014
  22,708
  25,573
  28,604
  31,798
  35,153
  38,666
  42,338
  46,168
  50,158
  54,310
  58,627
  63,115
  67,779
  72,626
  77,662
  82,898
  88,343
  94,006
  99,900
  106,037
  112,429
  119,092
  126,038
  133,285
  140,849
  148,747
  156,997
  165,620
  174,634
Working capital, $m
  1,041
  1,181
  1,330
  1,488
  1,654
  1,829
  2,012
  2,203
  2,402
  2,609
  2,825
  3,050
  3,283
  3,526
  3,778
  4,040
  4,313
  4,596
  4,891
  5,197
  5,516
  5,849
  6,196
  6,557
  6,934
  7,327
  7,738
  8,167
  8,616
  9,085
Total debt, $m
  17,616
  33,875
  51,162
  69,454
  88,732
  108,979
  130,185
  152,345
  175,460
  199,539
  224,596
  250,653
  277,738
  305,885
  335,134
  365,532
  397,132
  429,990
  464,170
  499,742
  536,778
  575,357
  615,565
  657,490
  701,226
  746,875
  794,540
  844,332
  896,369
  950,771
Total liabilities, $m
  120,789
  137,048
  154,335
  172,627
  191,905
  212,152
  233,358
  255,518
  278,633
  302,712
  327,769
  353,826
  380,911
  409,058
  438,307
  468,705
  500,305
  533,163
  567,343
  602,915
  639,951
  678,530
  718,738
  760,663
  804,399
  850,048
  897,713
  947,505
  999,542
  1,053,944
Total equity, $m
  13,421
  15,228
  17,148
  19,181
  21,323
  23,572
  25,929
  28,391
  30,959
  33,635
  36,419
  39,314
  42,323
  45,451
  48,701
  52,078
  55,589
  59,240
  63,038
  66,991
  71,106
  75,392
  79,860
  84,518
  89,378
  94,450
  99,746
  105,278
  111,060
  117,105
Total liabilities and equity, $m
  134,210
  152,276
  171,483
  191,808
  213,228
  235,724
  259,287
  283,909
  309,592
  336,347
  364,188
  393,140
  423,234
  454,509
  487,008
  520,783
  555,894
  592,403
  630,381
  669,906
  711,057
  753,922
  798,598
  845,181
  893,777
  944,498
  997,459
  1,052,783
  1,110,602
  1,171,049
Debt-to-equity ratio
  1.310
  2.220
  2.980
  3.620
  4.160
  4.620
  5.020
  5.370
  5.670
  5.930
  6.170
  6.380
  6.560
  6.730
  6.880
  7.020
  7.140
  7.260
  7.360
  7.460
  7.550
  7.630
  7.710
  7.780
  7.850
  7.910
  7.970
  8.020
  8.070
  8.120
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
  10,285
  12,619
  14,626
  16,752
  18,996
  21,356
  23,830
  26,419
  29,121
  31,939
  35,697
  38,753
  41,933
  45,241
  48,683
  52,264
  55,991
  59,872
  63,914
  68,125
  72,516
  77,096
  81,875
  86,865
  92,078
  97,525
  103,221
  109,179
  115,414
  121,940
Depreciation, amort., depletion, $m
  3,015
  3,269
  3,539
  3,825
  4,127
  4,443
  4,775
  5,121
  5,482
  5,859
  5,124
  5,531
  5,954
  6,394
  6,851
  7,327
  7,821
  8,334
  8,869
  9,425
  10,003
  10,607
  11,235
  11,890
  12,574
  13,288
  14,033
  14,811
  15,624
  16,475
Funds from operations, $m
  13,300
  15,888
  18,165
  20,578
  23,123
  25,799
  28,605
  31,540
  34,604
  37,798
  40,821
  44,284
  47,887
  51,636
  55,535
  59,591
  63,812
  68,206
  72,782
  77,550
  82,519
  87,702
  93,110
  98,755
  104,652
  110,813
  117,254
  123,990
  131,038
  138,415
Change in working capital, $m
  131
  140
  149
  158
  166
  175
  183
  191
  199
  208
  216
  225
  233
  243
  252
  262
  272
  283
  295
  307
  319
  333
  347
  361
  377
  393
  411
  429
  449
  469
Cash from operations, $m
  13,169
  15,748
  18,016
  20,420
  22,957
  25,625
  28,422
  31,349
  34,404
  37,590
  40,605
  44,060
  47,654
  51,393
  55,282
  59,329
  63,540
  67,923
  72,487
  77,243
  82,200
  87,370
  92,763
  98,394
  104,275
  110,419
  116,843
  123,561
  130,589
  137,946
Maintenance CAPEX, $m
  -1,652
  -1,888
  -2,142
  -2,413
  -2,698
  -3,000
  -3,316
  -3,648
  -3,994
  -4,355
  -4,732
  -5,124
  -5,531
  -5,954
  -6,394
  -6,851
  -7,327
  -7,821
  -8,334
  -8,869
  -9,425
  -10,003
  -10,607
  -11,235
  -11,890
  -12,574
  -13,288
  -14,033
  -14,811
  -15,624
New CAPEX, $m
  -2,505
  -2,694
  -2,864
  -3,031
  -3,194
  -3,355
  -3,514
  -3,672
  -3,830
  -3,990
  -4,152
  -4,318
  -4,488
  -4,664
  -4,846
  -5,037
  -5,236
  -5,444
  -5,664
  -5,894
  -6,137
  -6,392
  -6,662
  -6,947
  -7,247
  -7,564
  -7,898
  -8,250
  -8,622
  -9,014
Cash from investing activities, $m
  -4,157
  -4,582
  -5,006
  -5,444
  -5,892
  -6,355
  -6,830
  -7,320
  -7,824
  -8,345
  -8,884
  -9,442
  -10,019
  -10,618
  -11,240
  -11,888
  -12,563
  -13,265
  -13,998
  -14,763
  -15,562
  -16,395
  -17,269
  -18,182
  -19,137
  -20,138
  -21,186
  -22,283
  -23,433
  -24,638
Free cash flow, $m
  9,012
  11,166
  13,009
  14,976
  17,064
  19,270
  21,592
  24,029
  26,580
  29,245
  31,721
  34,618
  37,635
  40,775
  44,042
  47,441
  50,977
  54,658
  58,490
  62,481
  66,639
  70,974
  75,495
  80,212
  85,137
  90,282
  95,658
  101,278
  107,156
  113,307
Issuance/(repayment) of debt, $m
  3,769
  16,258
  17,287
  18,293
  19,278
  20,247
  21,206
  22,160
  23,115
  24,079
  25,057
  26,057
  27,085
  28,147
  29,249
  30,398
  31,599
  32,858
  34,180
  35,571
  37,036
  38,580
  40,208
  41,925
  43,737
  45,648
  47,665
  49,793
  52,036
  54,403
Issuance/(repurchase) of shares, $m
  2,797
  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  
  6,566
  16,258
  17,287
  18,293
  19,278
  20,247
  21,206
  22,160
  23,115
  24,079
  25,057
  26,057
  27,085
  28,147
  29,249
  30,398
  31,599
  32,858
  34,180
  35,571
  37,036
  38,580
  40,208
  41,925
  43,737
  45,648
  47,665
  49,793
  52,036
  54,403
Total cash flow (excl. dividends), $m
  15,578
  27,424
  30,297
  33,269
  36,342
  39,517
  42,798
  46,189
  49,695
  53,324
  56,778
  60,676
  64,720
  68,922
  73,291
  77,839
  82,576
  87,516
  92,670
  98,052
  103,675
  109,553
  115,702
  122,137
  128,874
  135,930
  143,323
  151,070
  159,193
  167,710
Retained Cash Flow (-), $m
  -13,082
  -1,806
  -1,921
  -2,033
  -2,142
  -2,250
  -2,356
  -2,462
  -2,568
  -2,675
  -2,784
  -2,895
  -3,009
  -3,127
  -3,250
  -3,378
  -3,511
  -3,651
  -3,798
  -3,952
  -4,115
  -4,287
  -4,468
  -4,658
  -4,860
  -5,072
  -5,296
  -5,533
  -5,782
  -6,045
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
  2,496
  25,618
  28,376
  31,237
  34,200
  37,268
  40,442
  43,727
  47,127
  50,649
  53,994
  57,780
  61,711
  65,794
  70,041
  74,461
  79,065
  83,865
  88,872
  94,099
  99,560
  105,267
  111,235
  117,479
  124,014
  130,858
  138,026
  145,538
  153,411
  161,665
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
  2,393
  23,452
  24,695
  25,720
  26,509
  27,047
  27,322
  27,330
  27,072
  26,553
  25,641
  24,657
  23,464
  22,088
  20,563
  18,922
  17,203
  15,445
  13,684
  11,957
  10,298
  8,734
  7,290
  5,983
  4,824
  3,818
  2,962
  2,252
  1,675
  1,217
Current shareholders' claim on cash, %
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8
  54.8

The Boeing Company is an aerospace company. The Company's segments include Commercial Airplanes; Defense, Space & Security (BDS), such as Boeing Military Aircraft (BMA), Network & Space Systems (N&SS) and Global Services & Support (GS&S), and Boeing Capital (BCC). The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and provides related support services, to the commercial airline industry. The Commercial Airplanes segment also produces commercial aircraft and offers a family of commercial jetliners. The BDS segment's operations involve research, development, production, modification and support of the products and related systems. The BMA segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems. The BCC segment's portfolio consists of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments.

FINANCIAL RATIOS  of  Boeing Company (The) (BA)

Valuation Ratios
P/E Ratio 41.7
Price to Sales 2.2
Price to Book 249.6
Price to Tangible Book
Price to Cash Flow 19.4
Price to Free Cash Flow 25.9
Growth Rates
Sales Growth Rate -1.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 6.7%
Cap. Spend. - 3 Yr. Gr. Rate 4.5%
Financial Strength
Quick Ratio 26
Current Ratio 0
LT Debt to Equity 1171.1%
Total Debt to Equity 1218.1%
Interest Coverage 12
Management Effectiveness
Return On Assets 5.8%
Ret/ On Assets - 3 Yr. Avg. 6%
Return On Total Capital 36.2%
Ret/ On T. Cap. - 3 Yr. Avg. 30.8%
Return On Equity 136.9%
Return On Equity - 3 Yr. Avg. 84.1%
Asset Turnover 1
Profitability Ratios
Gross Margin 14.6%
Gross Margin - 3 Yr. Avg. 14.9%
EBITDA Margin 8.5%
EBITDA Margin - 3 Yr. Avg. 9.6%
Operating Margin 6.2%
Oper. Margin - 3 Yr. Avg. 7.4%
Pre-Tax Margin 5.9%
Pre-Tax Margin - 3 Yr. Avg. 7.1%
Net Profit Margin 5.2%
Net Profit Margin - 3 Yr. Avg. 5.5%
Effective Tax Rate 12.1%
Eff/ Tax Rate - 3 Yr. Avg. 21.1%
Payout Ratio 56.3%

BA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BA stock intrinsic value calculation we used $101127 million for the last fiscal year's total revenue generated by Boeing Company (The). The default revenue input number comes from 0001 income statement of Boeing Company (The). 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 BA stock valuation model: a) initial revenue growth rate of 14.4% 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 BA is calculated based on our internal credit rating of Boeing Company (The), 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 Boeing Company (The).
    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 BA stock the variable cost ratio is equal to 77.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $10885 million in the base year in the intrinsic value calculation for BA 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 Boeing Company (The).

Corporate tax rate of 27% is the nominal tax rate for Boeing Company (The). 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 BA 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 BA are equal to 17.3%.

Life of production assets of 10.6 years is the average useful life of capital assets used in Boeing Company (The) 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 BA is equal to 0.9%. 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 - $339 million for Boeing Company (The) - 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 564.975 million for Boeing Company (The) 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 Boeing Company (The) at the current share price and the inputted number of shares is $186.7 billion.

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