Intrinsic value of Beacon Roofing Supply, Inc. - BECN

Previous Close

$33.32

  Intrinsic Value

$105.58

stock screener

  Rating & Target

str. buy

+217%

Previous close

$33.32

 
Intrinsic value

$105.58

 
Up/down potential

+217%

 
Rating

str. buy

We calculate the intrinsic value of BECN 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 2.3

 

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, %
  53.40
  48.56
  44.20
  40.28
  36.76
  33.58
  30.72
  28.15
  25.83
  23.75
  21.88
  20.19
  18.67
  17.30
  16.07
  14.97
  13.97
  13.07
  12.26
  11.54
  10.88
  10.30
  9.77
  9.29
  8.86
  8.47
  8.13
  7.81
  7.53
  7.28
Revenue, $m
  9,845
  14,626
  21,091
  29,588
  40,463
  54,050
  70,655
  90,544
  113,936
  140,997
  171,842
  206,534
  245,093
  287,500
  333,708
  383,648
  437,239
  494,393
  555,029
  619,068
  686,450
  757,126
  831,069
  908,272
  988,752
  1,072,545
  1,159,712
  1,250,337
  1,344,525
  1,442,403
Variable operating expenses, $m
  9,348
  13,874
  19,994
  28,037
  38,332
  51,194
  66,913
  85,741
  107,884
  133,501
  162,672
  195,513
  232,014
  272,158
  315,901
  363,176
  413,906
  468,011
  525,411
  586,033
  649,819
  716,724
  786,721
  859,805
  935,989
  1,015,311
  1,097,827
  1,183,616
  1,272,778
  1,365,432
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
  9,348
  13,874
  19,994
  28,037
  38,332
  51,194
  66,913
  85,741
  107,884
  133,501
  162,672
  195,513
  232,014
  272,158
  315,901
  363,176
  413,906
  468,011
  525,411
  586,033
  649,819
  716,724
  786,721
  859,805
  935,989
  1,015,311
  1,097,827
  1,183,616
  1,272,778
  1,365,432
Operating income, $m
  497
  752
  1,097
  1,551
  2,131
  2,856
  3,742
  4,804
  6,052
  7,496
  9,170
  11,021
  13,079
  15,342
  17,808
  20,473
  23,332
  26,382
  29,618
  33,035
  36,631
  40,402
  44,348
  48,468
  52,762
  57,234
  61,885
  66,721
  71,748
  76,971
EBITDA, $m
  692
  1,028
  1,483
  2,080
  2,845
  3,800
  4,967
  6,365
  8,010
  9,912
  12,081
  14,520
  17,230
  20,212
  23,460
  26,971
  30,739
  34,757
  39,019
  43,521
  48,258
  53,227
  58,425
  63,853
  69,511
  75,402
  81,530
  87,901
  94,522
  101,403
Interest expense (income), $m
  49
  212
  412
  691
  1,068
  1,563
  2,198
  2,990
  3,959
  5,119
  6,483
  8,062
  9,861
  11,884
  14,133
  16,607
  19,302
  22,215
  25,340
  28,674
  32,211
  35,946
  39,876
  43,998
  48,311
  52,814
  57,508
  62,396
  67,480
  72,766
  78,259
Earnings before tax, $m
  285
  341
  407
  483
  568
  659
  752
  845
  933
  1,013
  1,108
  1,161
  1,195
  1,209
  1,201
  1,171
  1,118
  1,042
  944
  825
  685
  526
  350
  157
  -52
  -274
  -510
  -758
  -1,018
  -1,289
Tax expense, $m
  77
  92
  110
  130
  153
  178
  203
  228
  252
  273
  299
  313
  323
  326
  324
  316
  302
  281
  255
  223
  185
  142
  94
  42
  0
  0
  0
  0
  0
  0
Net income, $m
  208
  249
  297
  353
  414
  481
  549
  617
  681
  739
  809
  847
  872
  882
  877
  855
  816
  761
  689
  602
  500
  384
  255
  114
  -52
  -274
  -510
  -758
  -1,018
  -1,289

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
  9,985
  14,834
  21,391
  30,008
  41,037
  54,817
  71,658
  91,830
  115,554
  142,999
  174,282
  209,466
  248,573
  291,582
  338,447
  389,096
  443,447
  501,413
  562,909
  627,858
  696,197
  767,876
  842,869
  921,169
  1,002,791
  1,087,774
  1,176,179
  1,268,091
  1,363,616
  1,462,883
Adjusted assets (=assets-cash), $m
  9,985
  14,834
  21,391
  30,008
  41,037
  54,817
  71,658
  91,830
  115,554
  142,999
  174,282
  209,466
  248,573
  291,582
  338,447
  389,096
  443,447
  501,413
  562,909
  627,858
  696,197
  767,876
  842,869
  921,169
  1,002,791
  1,087,774
  1,176,179
  1,268,091
  1,363,616
  1,462,883
Revenue / Adjusted assets
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
  0.986
Average production assets, $m
  2,451
  3,642
  5,252
  7,367
  10,075
  13,458
  17,593
  22,546
  28,370
  35,108
  42,789
  51,427
  61,028
  71,588
  83,093
  95,528
  108,872
  123,104
  138,202
  154,148
  170,926
  188,524
  206,936
  226,160
  246,199
  267,064
  288,768
  311,334
  334,787
  359,158
Working capital, $m
  1,191
  1,770
  2,552
  3,580
  4,896
  6,540
  8,549
  10,956
  13,786
  17,061
  20,793
  24,991
  29,656
  34,788
  40,379
  46,421
  52,906
  59,822
  67,158
  74,907
  83,060
  91,612
  100,559
  109,901
  119,639
  129,778
  140,325
  151,291
  162,688
  174,531
Total debt, $m
  5,085
  8,528
  13,184
  19,302
  27,133
  36,916
  48,874
  63,195
  80,039
  99,525
  121,736
  146,717
  174,483
  205,020
  238,293
  274,254
  312,843
  353,999
  397,662
  443,776
  492,296
  543,188
  596,433
  652,026
  709,978
  770,315
  833,083
  898,340
  966,163
  1,036,643
Total liabilities, $m
  7,089
  10,532
  15,187
  21,306
  29,136
  38,920
  50,877
  65,199
  82,043
  101,529
  123,740
  148,721
  176,487
  207,023
  240,297
  276,258
  314,847
  356,003
  399,666
  445,780
  494,300
  545,192
  598,437
  654,030
  711,981
  772,319
  835,087
  900,344
  968,167
  1,038,647
Total equity, $m
  2,896
  4,302
  6,203
  8,702
  11,901
  15,897
  20,781
  26,631
  33,511
  41,470
  50,542
  60,745
  72,086
  84,559
  98,150
  112,838
  128,600
  145,410
  163,244
  182,079
  201,897
  222,684
  244,432
  267,139
  290,809
  315,454
  341,092
  367,746
  395,449
  424,236
Total liabilities and equity, $m
  9,985
  14,834
  21,390
  30,008
  41,037
  54,817
  71,658
  91,830
  115,554
  142,999
  174,282
  209,466
  248,573
  291,582
  338,447
  389,096
  443,447
  501,413
  562,910
  627,859
  696,197
  767,876
  842,869
  921,169
  1,002,790
  1,087,773
  1,176,179
  1,268,090
  1,363,616
  1,462,883
Debt-to-equity ratio
  1.760
  1.980
  2.130
  2.220
  2.280
  2.320
  2.350
  2.370
  2.390
  2.400
  2.410
  2.420
  2.420
  2.420
  2.430
  2.430
  2.430
  2.430
  2.440
  2.440
  2.440
  2.440
  2.440
  2.440
  2.440
  2.440
  2.440
  2.440
  2.440
  2.440
Adjusted equity ratio
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  208
  249
  297
  353
  414
  481
  549
  617
  681
  739
  809
  847
  872
  882
  877
  855
  816
  761
  689
  602
  500
  384
  255
  114
  -52
  -274
  -510
  -758
  -1,018
  -1,289
Depreciation, amort., depletion, $m
  195
  276
  385
  529
  713
  944
  1,225
  1,562
  1,958
  2,416
  2,911
  3,498
  4,152
  4,870
  5,653
  6,499
  7,406
  8,374
  9,402
  10,486
  11,628
  12,825
  14,077
  15,385
  16,748
  18,168
  19,644
  21,179
  22,775
  24,433
Funds from operations, $m
  403
  524
  682
  882
  1,128
  1,424
  1,774
  2,179
  2,639
  3,156
  3,720
  4,346
  5,024
  5,752
  6,529
  7,353
  8,222
  9,135
  10,091
  11,088
  12,128
  13,209
  14,333
  15,499
  16,697
  17,893
  19,134
  20,421
  21,757
  23,144
Change in working capital, $m
  415
  578
  782
  1,028
  1,316
  1,644
  2,009
  2,407
  2,830
  3,274
  3,732
  4,198
  4,666
  5,131
  5,591
  6,043
  6,484
  6,916
  7,337
  7,749
  8,153
  8,552
  8,947
  9,342
  9,738
  10,139
  10,547
  10,966
  11,397
  11,843
Cash from operations, $m
  -12
  -54
  -100
  -146
  -188
  -220
  -235
  -228
  -191
  -119
  -12
  148
  358
  621
  938
  1,310
  1,738
  2,219
  2,754
  3,339
  3,975
  4,657
  5,386
  6,158
  6,959
  7,754
  8,587
  9,455
  10,360
  11,301
Maintenance CAPEX, $m
  -109
  -167
  -248
  -357
  -501
  -685
  -916
  -1,197
  -1,534
  -1,930
  -2,388
  -2,911
  -3,498
  -4,152
  -4,870
  -5,653
  -6,499
  -7,406
  -8,374
  -9,402
  -10,486
  -11,628
  -12,825
  -14,077
  -15,385
  -16,748
  -18,168
  -19,644
  -21,179
  -22,775
New CAPEX, $m
  -856
  -1,190
  -1,610
  -2,116
  -2,708
  -3,383
  -4,135
  -4,952
  -5,825
  -6,738
  -7,680
  -8,638
  -9,601
  -10,559
  -11,506
  -12,435
  -13,344
  -14,232
  -15,098
  -15,946
  -16,778
  -17,598
  -18,412
  -19,224
  -20,039
  -20,864
  -21,705
  -22,566
  -23,453
  -24,371
Cash from investing activities, $m
  -965
  -1,357
  -1,858
  -2,473
  -3,209
  -4,068
  -5,051
  -6,149
  -7,359
  -8,668
  -10,068
  -11,549
  -13,099
  -14,711
  -16,376
  -18,088
  -19,843
  -21,638
  -23,472
  -25,348
  -27,264
  -29,226
  -31,237
  -33,301
  -35,424
  -37,612
  -39,873
  -42,210
  -44,632
  -47,146
Free cash flow, $m
  -977
  -1,411
  -1,958
  -2,619
  -3,397
  -4,288
  -5,286
  -6,377
  -7,550
  -8,787
  -10,081
  -11,401
  -12,742
  -14,090
  -15,438
  -16,777
  -18,105
  -19,419
  -20,719
  -22,008
  -23,290
  -24,569
  -25,851
  -27,143
  -28,466
  -29,858
  -31,286
  -32,755
  -34,272
  -35,845
Issuance/(repayment) of debt, $m
  2,465
  3,443
  4,656
  6,118
  7,831
  9,784
  11,957
  14,322
  16,844
  19,486
  22,211
  24,981
  27,766
  30,537
  33,274
  35,961
  38,589
  41,156
  43,662
  46,114
  48,520
  50,892
  53,245
  55,593
  57,952
  60,338
  62,768
  65,257
  67,823
  70,480
Issuance/(repurchase) of shares, $m
  803
  1,158
  1,605
  2,146
  2,784
  3,516
  4,335
  5,233
  6,199
  7,220
  8,263
  9,356
  10,469
  11,590
  12,714
  13,834
  14,946
  16,050
  17,145
  18,233
  19,318
  20,403
  21,493
  22,592
  23,722
  24,919
  26,148
  27,413
  28,720
  30,076
Cash from financing (excl. dividends), $m  
  3,268
  4,601
  6,261
  8,264
  10,615
  13,300
  16,292
  19,555
  23,043
  26,706
  30,474
  34,337
  38,235
  42,127
  45,988
  49,795
  53,535
  57,206
  60,807
  64,347
  67,838
  71,295
  74,738
  78,185
  81,674
  85,257
  88,916
  92,670
  96,543
  100,556
Total cash flow (excl. dividends), $m
  2,292
  3,189
  4,302
  5,645
  7,218
  9,011
  11,006
  13,177
  15,493
  17,919
  20,393
  22,936
  25,493
  28,037
  30,550
  33,017
  35,431
  37,787
  40,088
  42,339
  44,548
  46,727
  48,887
  51,042
  53,208
  55,399
  57,630
  59,916
  62,271
  64,710
Retained Cash Flow (-), $m
  -1,011
  -1,406
  -1,902
  -2,499
  -3,199
  -3,996
  -4,884
  -5,850
  -6,880
  -7,959
  -9,072
  -10,204
  -11,341
  -12,473
  -13,591
  -14,688
  -15,762
  -16,810
  -17,834
  -18,835
  -19,818
  -20,787
  -21,748
  -22,707
  -23,722
  -24,919
  -26,148
  -27,413
  -28,720
  -30,076
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
  1,280
  1,783
  2,401
  3,146
  4,019
  5,015
  6,122
  7,328
  8,613
  9,960
  11,321
  12,733
  14,152
  15,564
  16,959
  18,329
  19,669
  20,977
  22,254
  23,504
  24,730
  25,940
  27,139
  28,335
  29,486
  30,479
  31,482
  32,503
  33,551
  34,634
Discount rate, %
  8.00
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
PV of cash for distribution, $m
  1,185
  1,517
  1,863
  2,208
  2,527
  2,798
  3,001
  3,121
  3,151
  3,092
  2,942
  2,733
  2,471
  2,177
  1,869
  1,563
  1,275
  1,013
  784
  591
  434
  310
  215
  145
  95
  60
  37
  22
  12
  7
Current shareholders' claim on cash, %
  74.0
  55.6
  42.5
  33.1
  26.1
  21.0
  17.2
  14.2
  11.9
  10.1
  8.7
  7.5
  6.6
  5.8
  5.2
  4.6
  4.2
  3.8
  3.5
  3.2
  2.9
  2.7
  2.5
  2.3
  2.1
  2.0
  1.9
  1.8
  1.7
  1.6

Beacon Roofing Supply, Inc. is engaged in the distribution of residential and non-residential roofing materials in the United States and Canada. It also distributes complementary building products for residential and non-residential building exteriors. Its product portfolio includes residential roofing products, non-residential roofing products and complementary building products. The residential roofing products include asphalt shingles, clay tile, slate and metal roofing, among others. The non-residential roofing products include single-ply roofing, asphalt, metal, modified bitumen and build-up roofing, among others. The complementary building products include vinyl siding, fiber cement siding, stone veneer and windows, among others. The Company offers its products under various trade names, including Alabama Roofing Supply, Atlantic Building Products, Applicators Sales, Southern Roof Center, Statewide Wholesale, Structural Materials and The Roof Center.

FINANCIAL RATIOS  of  Beacon Roofing Supply, Inc. (BECN)

Valuation Ratios
P/E Ratio 22.3
Price to Sales 0.5
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 7.2
Price to Free Cash Flow 8.2
Growth Rates
Sales Growth Rate 6.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 53.8%
Cap. Spend. - 3 Yr. Gr. Rate 1.6%
Financial Strength
Quick Ratio 10
Current Ratio 0
LT Debt to Equity 42.1%
Total Debt to Equity 42.9%
Interest Coverage 4
Management Effectiveness
Return On Assets 4%
Ret/ On Assets - 3 Yr. Avg. 4.6%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.9%
Return On Equity 6.5%
Return On Equity - 3 Yr. Avg. 7.3%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 24.6%
Gross Margin - 3 Yr. Avg. 24.3%
EBITDA Margin 7.5%
EBITDA Margin - 3 Yr. Avg. 6.9%
Operating Margin 4.9%
Oper. Margin - 3 Yr. Avg. 4.9%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 3.8%
Net Profit Margin 2.3%
Net Profit Margin - 3 Yr. Avg. 2.3%
Effective Tax Rate 38%
Eff/ Tax Rate - 3 Yr. Avg. 39.4%
Payout Ratio 0%

BECN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BECN stock intrinsic value calculation we used $6418 million for the last fiscal year's total revenue generated by Beacon Roofing Supply, Inc.. The default revenue input number comes from 0001 income statement of Beacon Roofing Supply, Inc.. 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 BECN stock valuation model: a) initial revenue growth rate of 53.4% 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 8%, whose default value for BECN is calculated based on our internal credit rating of Beacon Roofing Supply, Inc., 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 Beacon Roofing Supply, Inc..
    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 BECN stock the variable cost ratio is equal to 95.1%.

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 BECN 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 8.1% for Beacon Roofing Supply, Inc..

Corporate tax rate of 27% is the nominal tax rate for Beacon Roofing Supply, Inc.. 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 BECN 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 BECN are equal to 24.9%.

Life of production assets of 14.7 years is the average useful life of capital assets used in Beacon Roofing Supply, Inc. 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 BECN is equal to 12.1%. 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 - $1884.305 million for Beacon Roofing Supply, Inc. - 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 68.458 million for Beacon Roofing Supply, Inc. 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 Beacon Roofing Supply, Inc. at the current share price and the inputted number of shares is $2.3 billion.

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