Intrinsic value of Brookfield Business Partners - BBU

Previous Close

$37.22

  Intrinsic Value

$271.58

stock screener

  Rating & Target

str. buy

+630%

Previous close

$37.22

 
Intrinsic value

$271.58

 
Up/down potential

+630%

 
Rating

str. buy

We calculate the intrinsic value of BBU 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 2.5

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  36,517
  56,418
  84,374
  122,422
  172,720
  237,450
  318,727
  418,509
  538,520
  680,194
  844,647
  1,032,662
  1,244,705
  1,480,953
  1,741,338
  2,025,594
  2,333,314
  2,664,002
  3,017,121
  3,392,140
  3,788,569
  4,205,996
  4,644,102
  5,102,690
  5,581,687
  6,081,161
  6,601,319
  7,142,510
  7,705,227
  8,290,097
Variable operating expenses, $m
  35,690
  54,888
  81,855
  118,557
  167,076
  229,517
  307,920
  404,173
  519,940
  656,604
  814,776
  996,141
  1,200,685
  1,428,579
  1,679,755
  1,953,958
  2,250,796
  2,569,789
  2,910,419
  3,272,175
  3,654,585
  4,057,249
  4,479,862
  4,922,231
  5,384,288
  5,866,098
  6,367,860
  6,889,912
  7,432,728
  7,996,914
Fixed operating expenses, $m
  101
  103
  106
  108
  110
  113
  115
  118
  120
  123
  126
  129
  131
  134
  137
  140
  143
  146
  150
  153
  156
  160
  163
  167
  171
  174
  178
  182
  186
  190
Total operating expenses, $m
  35,791
  54,991
  81,961
  118,665
  167,186
  229,630
  308,035
  404,291
  520,060
  656,727
  814,902
  996,270
  1,200,816
  1,428,713
  1,679,892
  1,954,098
  2,250,939
  2,569,935
  2,910,569
  3,272,328
  3,654,741
  4,057,409
  4,480,025
  4,922,398
  5,384,459
  5,866,272
  6,368,038
  6,890,094
  7,432,914
  7,997,104
Operating income, $m
  725
  1,427
  2,413
  3,757
  5,533
  7,820
  10,692
  14,218
  18,460
  23,467
  29,746
  36,392
  43,888
  52,240
  61,446
  71,496
  82,375
  94,067
  106,552
  119,811
  133,828
  148,587
  164,077
  180,292
  197,228
  214,888
  233,280
  252,416
  272,312
  292,993
EBITDA, $m
  1,613
  2,545
  3,855
  5,639
  7,997
  11,033
  14,846
  19,527
  25,158
  31,806
  39,523
  48,345
  58,296
  69,383
  81,603
  94,943
  109,384
  124,904
  141,476
  159,077
  177,682
  197,273
  217,834
  239,357
  261,838
  285,280
  309,693
  335,093
  361,503
  388,953
Interest expense (income), $m
  0
  274
  918
  1,854
  3,168
  4,956
  7,320
  10,363
  14,183
  18,873
  24,514
  31,173
  38,903
  47,740
  57,706
  68,811
  81,050
  94,410
  108,874
  124,417
  141,015
  158,642
  177,275
  196,895
  217,488
  239,042
  261,557
  285,033
  309,482
  334,920
  361,369
Earnings before tax, $m
  451
  509
  560
  589
  577
  500
  329
  35
  -413
  -1,046
  -1,427
  -2,511
  -3,852
  -5,466
  -7,365
  -9,554
  -12,035
  -14,807
  -17,865
  -21,204
  -24,814
  -28,688
  -32,818
  -37,196
  -41,814
  -46,668
  -51,753
  -57,066
  -62,607
  -68,376
Tax expense, $m
  122
  137
  151
  159
  156
  135
  89
  9
  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
  329
  371
  409
  430
  421
  365
  240
  26
  -413
  -1,046
  -1,427
  -2,511
  -3,852
  -5,466
  -7,365
  -9,554
  -12,035
  -14,807
  -17,865
  -21,204
  -24,814
  -28,688
  -32,818
  -37,196
  -41,814
  -46,668
  -51,753
  -57,066
  -62,607
  -68,376

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
  25,289
  39,071
  58,431
  84,780
  119,612
  164,439
  220,725
  289,826
  372,936
  471,049
  584,936
  715,140
  861,984
  1,025,591
  1,205,913
  1,402,766
  1,615,869
  1,844,877
  2,089,419
  2,349,127
  2,623,663
  2,912,739
  3,216,137
  3,533,719
  3,865,434
  4,211,330
  4,571,550
  4,946,337
  5,336,029
  5,741,065
Adjusted assets (=assets-cash), $m
  25,289
  39,071
  58,431
  84,780
  119,612
  164,439
  220,725
  289,826
  372,936
  471,049
  584,936
  715,140
  861,984
  1,025,591
  1,205,913
  1,402,766
  1,615,869
  1,844,877
  2,089,419
  2,349,127
  2,623,663
  2,912,739
  3,216,137
  3,533,719
  3,865,434
  4,211,330
  4,571,550
  4,946,337
  5,336,029
  5,741,065
Revenue / Adjusted assets
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
  1.444
Average production assets, $m
  6,171
  9,535
  14,259
  20,689
  29,190
  40,129
  53,865
  70,728
  91,010
  114,953
  142,745
  174,520
  210,355
  250,281
  294,286
  342,325
  394,330
  450,216
  509,893
  573,272
  640,268
  710,813
  784,853
  862,355
  943,305
  1,027,716
  1,115,623
  1,207,084
  1,302,183
  1,401,026
Working capital, $m
  146
  226
  337
  490
  691
  950
  1,275
  1,674
  2,154
  2,721
  3,379
  4,131
  4,979
  5,924
  6,965
  8,102
  9,333
  10,656
  12,068
  13,569
  15,154
  16,824
  18,576
  20,411
  22,327
  24,325
  26,405
  28,570
  30,821
  33,160
Total debt, $m
  10,932
  22,068
  37,711
  59,001
  87,146
  123,366
  168,845
  224,679
  291,831
  371,106
  463,127
  568,332
  686,982
  819,176
  964,876
  1,123,934
  1,296,121
  1,481,159
  1,678,750
  1,888,594
  2,110,419
  2,343,992
  2,589,138
  2,845,744
  3,113,770
  3,393,254
  3,684,312
  3,987,139
  4,302,011
  4,629,279
Total liabilities, $m
  20,433
  31,569
  47,212
  68,502
  96,647
  132,867
  178,346
  234,180
  301,332
  380,607
  472,628
  577,833
  696,483
  828,677
  974,377
  1,133,435
  1,305,622
  1,490,660
  1,688,251
  1,898,095
  2,119,920
  2,353,493
  2,598,639
  2,855,245
  3,123,271
  3,402,755
  3,693,813
  3,996,640
  4,311,512
  4,638,780
Total equity, $m
  4,855
  7,502
  11,219
  16,278
  22,966
  31,572
  42,379
  55,647
  71,604
  90,441
  112,308
  137,307
  165,501
  196,913
  231,535
  269,331
  310,247
  354,216
  401,168
  451,032
  503,743
  559,246
  617,498
  678,474
  742,163
  808,575
  877,738
  949,697
  1,024,518
  1,102,284
Total liabilities and equity, $m
  25,288
  39,071
  58,431
  84,780
  119,613
  164,439
  220,725
  289,827
  372,936
  471,048
  584,936
  715,140
  861,984
  1,025,590
  1,205,912
  1,402,766
  1,615,869
  1,844,876
  2,089,419
  2,349,127
  2,623,663
  2,912,739
  3,216,137
  3,533,719
  3,865,434
  4,211,330
  4,571,551
  4,946,337
  5,336,030
  5,741,064
Debt-to-equity ratio
  2.250
  2.940
  3.360
  3.620
  3.790
  3.910
  3.980
  4.040
  4.080
  4.100
  4.120
  4.140
  4.150
  4.160
  4.170
  4.170
  4.180
  4.180
  4.180
  4.190
  4.190
  4.190
  4.190
  4.190
  4.200
  4.200
  4.200
  4.200
  4.200
  4.200
Adjusted equity ratio
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  329
  371
  409
  430
  421
  365
  240
  26
  -413
  -1,046
  -1,427
  -2,511
  -3,852
  -5,466
  -7,365
  -9,554
  -12,035
  -14,807
  -17,865
  -21,204
  -24,814
  -28,688
  -32,818
  -37,196
  -41,814
  -46,668
  -51,753
  -57,066
  -62,607
  -68,376
Depreciation, amort., depletion, $m
  887
  1,118
  1,441
  1,882
  2,464
  3,213
  4,154
  5,309
  6,698
  8,338
  9,777
  11,953
  14,408
  17,143
  20,157
  23,447
  27,009
  30,837
  34,924
  39,265
  43,854
  48,686
  53,757
  59,065
  64,610
  70,392
  76,413
  82,677
  89,191
  95,961
Funds from operations, $m
  1,217
  1,489
  1,850
  2,312
  2,885
  3,578
  4,394
  5,335
  6,285
  7,292
  8,350
  9,443
  10,556
  11,676
  12,792
  13,893
  14,974
  16,030
  17,059
  18,062
  19,040
  19,998
  20,939
  21,870
  22,796
  23,723
  24,659
  25,611
  26,583
  27,584
Change in working capital, $m
  55
  80
  112
  152
  201
  259
  325
  399
  480
  567
  658
  752
  848
  945
  1,042
  1,137
  1,231
  1,323
  1,412
  1,500
  1,586
  1,670
  1,752
  1,834
  1,916
  1,998
  2,081
  2,165
  2,251
  2,339
Cash from operations, $m
  1,162
  1,410
  1,738
  2,160
  2,684
  3,319
  4,069
  4,936
  5,805
  6,725
  7,692
  8,691
  9,708
  10,731
  11,750
  12,756
  13,743
  14,707
  15,646
  16,562
  17,454
  18,328
  19,187
  20,035
  20,880
  21,725
  22,579
  23,446
  24,333
  25,245
Maintenance CAPEX, $m
  -264
  -423
  -653
  -977
  -1,417
  -1,999
  -2,749
  -3,689
  -4,844
  -6,234
  -7,873
  -9,777
  -11,953
  -14,408
  -17,143
  -20,157
  -23,447
  -27,009
  -30,837
  -34,924
  -39,265
  -43,854
  -48,686
  -53,757
  -59,065
  -64,610
  -70,392
  -76,413
  -82,677
  -89,191
New CAPEX, $m
  -2,316
  -3,363
  -4,724
  -6,430
  -8,500
  -10,939
  -13,736
  -16,863
  -20,282
  -23,943
  -27,793
  -31,775
  -35,835
  -39,926
  -44,005
  -48,039
  -52,005
  -55,886
  -59,677
  -63,378
  -66,997
  -70,545
  -74,040
  -77,501
  -80,951
  -84,411
  -87,907
  -91,461
  -95,099
  -98,843
Cash from investing activities, $m
  -2,580
  -3,786
  -5,377
  -7,407
  -9,917
  -12,938
  -16,485
  -20,552
  -25,126
  -30,177
  -35,666
  -41,552
  -47,788
  -54,334
  -61,148
  -68,196
  -75,452
  -82,895
  -90,514
  -98,302
  -106,262
  -114,399
  -122,726
  -131,258
  -140,016
  -149,021
  -158,299
  -167,874
  -177,776
  -188,034
Free cash flow, $m
  -1,418
  -2,376
  -3,639
  -5,247
  -7,233
  -9,619
  -12,415
  -15,617
  -19,321
  -23,451
  -27,974
  -32,861
  -38,081
  -43,603
  -49,397
  -55,440
  -61,709
  -68,188
  -74,867
  -81,741
  -88,807
  -96,071
  -103,539
  -111,223
  -119,136
  -127,296
  -135,719
  -144,428
  -153,443
  -162,789
Issuance/(repayment) of debt, $m
  7,667
  11,136
  15,643
  21,290
  28,144
  36,220
  45,479
  55,834
  67,153
  79,275
  92,021
  105,205
  118,650
  132,194
  145,700
  159,057
  172,187
  185,039
  197,590
  209,844
  221,825
  233,574
  245,146
  256,606
  268,026
  279,484
  291,058
  302,827
  314,872
  327,268
Issuance/(repurchase) of shares, $m
  1,488
  2,275
  3,308
  4,629
  6,267
  8,242
  10,567
  13,242
  16,370
  19,884
  23,294
  27,510
  32,046
  36,879
  41,987
  47,350
  52,951
  58,777
  64,817
  71,067
  77,525
  84,191
  91,070
  98,171
  105,504
  113,080
  120,915
  129,025
  137,428
  146,143
Cash from financing (excl. dividends), $m  
  9,155
  13,411
  18,951
  25,919
  34,411
  44,462
  56,046
  69,076
  83,523
  99,159
  115,315
  132,715
  150,696
  169,073
  187,687
  206,407
  225,138
  243,816
  262,407
  280,911
  299,350
  317,765
  336,216
  354,777
  373,530
  392,564
  411,973
  431,852
  452,300
  473,411
Total cash flow (excl. dividends), $m
  7,738
  11,034
  15,312
  20,672
  27,178
  34,843
  43,631
  53,459
  64,202
  75,708
  87,340
  99,854
  112,615
  125,471
  138,289
  150,967
  163,429
  175,627
  187,540
  199,171
  210,542
  221,693
  232,677
  243,554
  254,394
  265,269
  276,254
  287,425
  298,856
  310,623
Retained Cash Flow (-), $m
  -1,817
  -2,646
  -3,717
  -5,059
  -6,688
  -8,607
  -10,807
  -13,267
  -16,370
  -19,884
  -23,294
  -27,510
  -32,046
  -36,879
  -41,987
  -47,350
  -52,951
  -58,777
  -64,817
  -71,067
  -77,525
  -84,191
  -91,070
  -98,171
  -105,504
  -113,080
  -120,915
  -129,025
  -137,428
  -146,143
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
  5,920
  8,388
  11,595
  15,613
  20,490
  26,236
  32,824
  40,191
  47,832
  55,824
  64,046
  72,344
  80,569
  88,592
  96,303
  103,618
  110,478
  116,850
  122,723
  128,103
  133,018
  137,503
  141,606
  145,383
  148,890
  152,188
  155,338
  158,399
  161,428
  164,479
Discount rate, %
  6.40
  6.72
  7.06
  7.41
  7.78
  8.17
  8.58
  9.01
  9.46
  9.93
  10.42
  10.95
  11.49
  12.07
  12.67
  13.31
  13.97
  14.67
  15.40
  16.17
  16.98
  17.83
  18.72
  19.66
  20.64
  21.67
  22.76
  23.89
  25.09
  26.34
PV of cash for distribution, $m
  5,564
  7,365
  9,450
  11,731
  14,089
  16,379
  18,452
  20,163
  21,211
  21,663
  21,516
  20,800
  19,585
  17,974
  16,085
  14,042
  11,962
  9,945
  8,069
  6,390
  4,937
  3,721
  2,735
  1,959
  1,366
  928
  612
  393
  245
  148
Current shareholders' claim on cash, %
  62.3
  39.5
  25.6
  17.0
  11.5
  8.0
  5.6
  4.1
  3.0
  2.2
  1.7
  1.3
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0

Brookfield Business Partners L.P. seeks returns of at least 15% on its investments. Brookfield Business Partners L.P. is based in Hamilton, Bermuda. Brookfield Business Partners L.P. operates as a subsidiary of Brookfield Asset Management Inc.

FINANCIAL RATIOS  of  Brookfield Business Partners (BBU)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BBU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BBU stock intrinsic value calculation we used $22823 million for the last fiscal year's total revenue generated by Brookfield Business Partners. The default revenue input number comes from 0001 income statement of Brookfield Business Partners. 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 BBU stock valuation model: a) initial revenue growth rate of 60% 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 6.4%, whose default value for BBU is calculated based on our internal credit rating of Brookfield Business Partners, 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 Brookfield Business Partners.
    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 BBU stock the variable cost ratio is equal to 98.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $99 million in the base year in the intrinsic value calculation for BBU 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 8.4% for Brookfield Business Partners.

Corporate tax rate of 27% is the nominal tax rate for Brookfield Business Partners. 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 BBU 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 BBU are equal to 16.9%.

Life of production assets of 14.6 years is the average useful life of capital assets used in Brookfield Business Partners 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 BBU is equal to 0.4%. 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 - $3038 million for Brookfield Business Partners - 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 66.186 million for Brookfield Business Partners 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 Brookfield Business Partners at the current share price and the inputted number of shares is $2.5 billion.

RELATED COMPANIES Price Int.Val. Rating

COMPANY NEWS

▶ [$$] Randles's Take: Brookfield Accused of Westinghouse Cash Grab   [Nov-02-18 02:10PM  The Wall Street Journal]
▶ Brookfield Business Partners Announces Management Changes   [Sep-10-18 06:45AM  GlobeNewswire]
▶ Brookfield Business Partners LP to Host Earnings Call   [Aug-03-18 07:00AM  ACCESSWIRE]
▶ Westinghouse Sale to Brookfield Complete   [Aug-01-18 04:15PM  Business Wire]
▶ Brookfield Business Partners LP to Host Earnings Call   [May-07-18 08:15AM  ACCESSWIRE]
▶ [$$] Judge Approves Brookfield's $4.6 Billion Deal for Westinghouse   [Mar-27-18 04:17PM  The Wall Street Journal]
▶ Brookfield Business Partners Completes Annual Filings   [Mar-09-18 05:55PM  GlobeNewswire]
▶ BGIS provides update on UK transaction   [Mar-08-18 08:12AM  GlobeNewswire]
▶ BGIS Appoints Peter Poolsaar to Chief Information Officer   [Feb-20-18 09:56AM  GlobeNewswire]
▶ BGIS recognized as a 2018 Military Friendly® Employer   [Jan-09-18 12:00PM  GlobeNewswire]
▶ Westinghouse to be acquired for $4.6B   [10:55AM  American City Business Journals]
▶ Brookfield Business Partners LP to Host Earnings Call   [Nov-06-17 06:55AM  ACCESSWIRE]
▶ BGIS named as one of Canadas Safest Employers   [Oct-25-17 09:00AM  GlobeNewswire]
▶ Stocks With Rising Relative Strength: Granite Construction   [Sep-13-17 03:00AM  Investor's Business Daily]
▶ Mastec Earns IBD Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ KBR Clears Technical Benchmark, Hitting 80-Plus RS Rating   [Sep-07-17 03:00AM  Investor's Business Daily]
▶ Stocks Showing Improved Relative Strength: Mastec   [Aug-30-17 03:00AM  Investor's Business Daily]

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