Intrinsic value of Bristol-Myers Squibb Company - BMY

Previous Close

$49.34

  Intrinsic Value

$76.15

stock screener

  Rating & Target

str. buy

+54%

Previous close

$49.34

 
Intrinsic value

$76.15

 
Up/down potential

+54%

 
Rating

str. buy

We calculate the intrinsic value of BMY 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 80.6

 

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, %
  9.60
  9.14
  8.73
  8.35
  8.02
  7.72
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
Revenue, $m
  24,727
  26,987
  29,342
  31,793
  34,342
  36,992
  39,746
  42,608
  45,582
  48,673
  51,887
  55,231
  58,710
  62,332
  66,104
  70,036
  74,134
  78,410
  82,872
  87,530
  92,396
  97,481
  102,797
  108,356
  114,171
  120,257
  126,627
  133,297
  140,283
  147,601
Variable operating expenses, $m
  13,057
  14,180
  15,351
  16,570
  17,837
  19,155
  20,524
  21,947
  23,425
  24,962
  25,798
  27,460
  29,190
  30,990
  32,866
  34,821
  36,858
  38,984
  41,203
  43,519
  45,938
  48,466
  51,109
  53,873
  56,764
  59,790
  62,957
  66,273
  69,746
  73,385
Fixed operating expenses, $m
  4,816
  4,922
  5,030
  5,141
  5,254
  5,369
  5,487
  5,608
  5,731
  5,858
  5,986
  6,118
  6,253
  6,390
  6,531
  6,675
  6,821
  6,971
  7,125
  7,282
  7,442
  7,605
  7,773
  7,944
  8,119
  8,297
  8,480
  8,666
  8,857
  9,052
Total operating expenses, $m
  17,873
  19,102
  20,381
  21,711
  23,091
  24,524
  26,011
  27,555
  29,156
  30,820
  31,784
  33,578
  35,443
  37,380
  39,397
  41,496
  43,679
  45,955
  48,328
  50,801
  53,380
  56,071
  58,882
  61,817
  64,883
  68,087
  71,437
  74,939
  78,603
  82,437
Operating income, $m
  6,854
  7,885
  8,961
  10,082
  11,251
  12,468
  13,735
  15,053
  16,425
  17,853
  20,103
  21,653
  23,267
  24,951
  26,707
  28,540
  30,455
  32,454
  34,544
  36,730
  39,016
  41,409
  43,915
  46,539
  49,288
  52,170
  55,190
  58,357
  61,679
  65,164
EBITDA, $m
  8,102
  9,177
  10,299
  11,469
  12,687
  13,956
  15,277
  16,651
  18,081
  19,570
  21,121
  22,735
  24,418
  26,173
  28,003
  29,913
  31,908
  33,991
  36,169
  38,446
  40,828
  43,321
  45,930
  48,663
  51,527
  54,527
  57,673
  60,971
  64,429
  68,058
Interest expense (income), $m
  191
  397
  505
  619
  737
  860
  987
  1,120
  1,258
  1,402
  1,551
  1,706
  1,867
  2,035
  2,210
  2,391
  2,580
  2,777
  2,983
  3,197
  3,421
  3,655
  3,899
  4,154
  4,420
  4,699
  4,991
  5,296
  5,615
  5,950
  6,300
Earnings before tax, $m
  6,458
  7,380
  8,342
  9,346
  10,391
  11,480
  12,614
  13,794
  15,023
  16,302
  18,397
  19,785
  21,232
  22,742
  24,316
  25,960
  27,677
  29,471
  31,347
  33,309
  35,362
  37,511
  39,761
  42,119
  44,589
  47,179
  49,894
  52,742
  55,729
  58,864
Tax expense, $m
  1,744
  1,992
  2,252
  2,523
  2,806
  3,100
  3,406
  3,724
  4,056
  4,402
  4,967
  5,342
  5,733
  6,140
  6,565
  7,009
  7,473
  7,957
  8,464
  8,993
  9,548
  10,128
  10,736
  11,372
  12,039
  12,738
  13,471
  14,240
  15,047
  15,893
Net income, $m
  4,714
  5,387
  6,090
  6,822
  7,586
  8,381
  9,208
  10,070
  10,967
  11,900
  13,430
  14,443
  15,500
  16,601
  17,751
  18,951
  20,204
  21,514
  22,883
  24,315
  25,814
  27,383
  29,026
  30,747
  32,550
  34,441
  36,423
  38,502
  40,682
  42,971

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
  38,336
  41,840
  45,491
  49,291
  53,243
  57,352
  61,621
  66,058
  70,669
  75,462
  80,446
  85,629
  91,023
  96,638
  102,487
  108,582
  114,937
  121,566
  128,483
  135,706
  143,250
  151,133
  159,375
  167,993
  177,009
  186,444
  196,321
  206,662
  217,492
  228,838
Adjusted assets (=assets-cash), $m
  38,336
  41,840
  45,491
  49,291
  53,243
  57,352
  61,621
  66,058
  70,669
  75,462
  80,446
  85,629
  91,023
  96,638
  102,487
  108,582
  114,937
  121,566
  128,483
  135,706
  143,250
  151,133
  159,375
  167,993
  177,009
  186,444
  196,321
  206,662
  217,492
  228,838
Revenue / Adjusted assets
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
  0.645
Average production assets, $m
  9,792
  10,687
  11,619
  12,590
  13,599
  14,649
  15,739
  16,873
  18,050
  19,275
  20,547
  21,871
  23,249
  24,683
  26,177
  27,734
  29,357
  31,050
  32,817
  34,662
  36,589
  38,603
  40,707
  42,909
  45,212
  47,622
  50,144
  52,786
  55,552
  58,450
Working capital, $m
  -742
  -810
  -880
  -954
  -1,030
  -1,110
  -1,192
  -1,278
  -1,367
  -1,460
  -1,557
  -1,657
  -1,761
  -1,870
  -1,983
  -2,101
  -2,224
  -2,352
  -2,486
  -2,626
  -2,772
  -2,924
  -3,084
  -3,251
  -3,425
  -3,608
  -3,799
  -3,999
  -4,208
  -4,428
Total debt, $m
  9,357
  11,456
  13,643
  15,919
  18,287
  20,748
  23,305
  25,963
  28,725
  31,596
  34,581
  37,686
  40,917
  44,280
  47,784
  51,435
  55,241
  59,212
  63,355
  67,682
  72,201
  76,923
  81,859
  87,022
  92,423
  98,074
  103,990
  110,184
  116,672
  123,468
Total liabilities, $m
  22,963
  25,062
  27,249
  29,525
  31,893
  34,354
  36,911
  39,569
  42,331
  45,202
  48,187
  51,292
  54,523
  57,886
  61,390
  65,041
  68,847
  72,818
  76,961
  81,288
  85,807
  90,529
  95,465
  100,628
  106,029
  111,680
  117,596
  123,790
  130,278
  137,074
Total equity, $m
  15,373
  16,778
  18,242
  19,766
  21,351
  22,998
  24,710
  26,489
  28,338
  30,260
  32,259
  34,337
  36,500
  38,752
  41,097
  43,542
  46,090
  48,748
  51,522
  54,418
  57,443
  60,605
  63,909
  67,365
  70,981
  74,764
  78,725
  82,871
  87,214
  91,764
Total liabilities and equity, $m
  38,336
  41,840
  45,491
  49,291
  53,244
  57,352
  61,621
  66,058
  70,669
  75,462
  80,446
  85,629
  91,023
  96,638
  102,487
  108,583
  114,937
  121,566
  128,483
  135,706
  143,250
  151,134
  159,374
  167,993
  177,010
  186,444
  196,321
  206,661
  217,492
  228,838
Debt-to-equity ratio
  0.610
  0.680
  0.750
  0.810
  0.860
  0.900
  0.940
  0.980
  1.010
  1.040
  1.070
  1.100
  1.120
  1.140
  1.160
  1.180
  1.200
  1.210
  1.230
  1.240
  1.260
  1.270
  1.280
  1.290
  1.300
  1.310
  1.320
  1.330
  1.340
  1.350
Adjusted equity ratio
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401
  0.401

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,714
  5,387
  6,090
  6,822
  7,586
  8,381
  9,208
  10,070
  10,967
  11,900
  13,430
  14,443
  15,500
  16,601
  17,751
  18,951
  20,204
  21,514
  22,883
  24,315
  25,814
  27,383
  29,026
  30,747
  32,550
  34,441
  36,423
  38,502
  40,682
  42,971
Depreciation, amort., depletion, $m
  1,248
  1,292
  1,338
  1,386
  1,436
  1,488
  1,542
  1,598
  1,656
  1,717
  1,017
  1,083
  1,151
  1,222
  1,296
  1,373
  1,453
  1,537
  1,625
  1,716
  1,811
  1,911
  2,015
  2,124
  2,238
  2,358
  2,482
  2,613
  2,750
  2,894
Funds from operations, $m
  5,962
  6,679
  7,428
  8,209
  9,022
  9,869
  10,750
  11,668
  12,623
  13,618
  14,447
  15,526
  16,651
  17,823
  19,047
  20,324
  21,658
  23,051
  24,508
  26,031
  27,625
  29,294
  31,041
  32,871
  34,788
  36,798
  38,905
  41,115
  43,433
  45,864
Change in working capital, $m
  -65
  -68
  -71
  -74
  -76
  -79
  -83
  -86
  -89
  -93
  -96
  -100
  -104
  -109
  -113
  -118
  -123
  -128
  -134
  -140
  -146
  -153
  -159
  -167
  -174
  -183
  -191
  -200
  -210
  -220
Cash from operations, $m
  6,027
  6,747
  7,498
  8,282
  9,098
  9,948
  10,833
  11,754
  12,712
  13,710
  14,544
  15,626
  16,755
  17,932
  19,160
  20,442
  21,781
  23,179
  24,642
  26,171
  27,771
  29,446
  31,200
  33,038
  34,963
  36,981
  39,096
  41,315
  43,642
  46,084
Maintenance CAPEX, $m
  -443
  -485
  -529
  -575
  -623
  -673
  -725
  -779
  -835
  -894
  -954
  -1,017
  -1,083
  -1,151
  -1,222
  -1,296
  -1,373
  -1,453
  -1,537
  -1,625
  -1,716
  -1,811
  -1,911
  -2,015
  -2,124
  -2,238
  -2,358
  -2,482
  -2,613
  -2,750
New CAPEX, $m
  -852
  -895
  -933
  -971
  -1,009
  -1,049
  -1,091
  -1,133
  -1,178
  -1,224
  -1,273
  -1,324
  -1,378
  -1,434
  -1,494
  -1,557
  -1,623
  -1,693
  -1,767
  -1,845
  -1,927
  -2,014
  -2,105
  -2,201
  -2,303
  -2,410
  -2,523
  -2,641
  -2,766
  -2,898
Cash from investing activities, $m
  -1,295
  -1,380
  -1,462
  -1,546
  -1,632
  -1,722
  -1,816
  -1,912
  -2,013
  -2,118
  -2,227
  -2,341
  -2,461
  -2,585
  -2,716
  -2,853
  -2,996
  -3,146
  -3,304
  -3,470
  -3,643
  -3,825
  -4,016
  -4,216
  -4,427
  -4,648
  -4,881
  -5,123
  -5,379
  -5,648
Free cash flow, $m
  4,732
  5,367
  6,037
  6,736
  7,466
  8,226
  9,017
  9,841
  10,699
  11,592
  12,317
  13,285
  14,295
  15,347
  16,444
  17,589
  18,784
  20,033
  21,338
  22,702
  24,128
  25,621
  27,184
  28,821
  30,536
  32,333
  34,216
  36,191
  38,263
  40,436
Issuance/(repayment) of debt, $m
  2,008
  2,099
  2,187
  2,276
  2,367
  2,461
  2,558
  2,658
  2,762
  2,871
  2,985
  3,105
  3,231
  3,364
  3,503
  3,651
  3,806
  3,971
  4,144
  4,326
  4,519
  4,722
  4,937
  5,162
  5,401
  5,652
  5,916
  6,194
  6,488
  6,796
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  
  2,008
  2,099
  2,187
  2,276
  2,367
  2,461
  2,558
  2,658
  2,762
  2,871
  2,985
  3,105
  3,231
  3,364
  3,503
  3,651
  3,806
  3,971
  4,144
  4,326
  4,519
  4,722
  4,937
  5,162
  5,401
  5,652
  5,916
  6,194
  6,488
  6,796
Total cash flow (excl. dividends), $m
  6,740
  7,466
  8,224
  9,012
  9,833
  10,687
  11,575
  12,499
  13,461
  14,463
  15,302
  16,390
  17,526
  18,710
  19,948
  21,240
  22,591
  24,003
  25,481
  27,028
  28,647
  30,344
  32,121
  33,984
  35,936
  37,984
  40,132
  42,386
  44,750
  47,232
Retained Cash Flow (-), $m
  -1,342
  -1,405
  -1,464
  -1,524
  -1,585
  -1,647
  -1,712
  -1,779
  -1,849
  -1,922
  -1,998
  -2,079
  -2,163
  -2,252
  -2,345
  -2,444
  -2,548
  -2,658
  -2,774
  -2,896
  -3,025
  -3,161
  -3,305
  -3,456
  -3,615
  -3,783
  -3,960
  -4,147
  -4,343
  -4,550
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
  5,398
  6,061
  6,760
  7,489
  8,248
  9,039
  9,863
  10,720
  11,612
  12,541
  13,303
  14,312
  15,363
  16,459
  17,602
  18,796
  20,043
  21,345
  22,707
  24,132
  25,622
  27,182
  28,816
  30,527
  32,321
  34,201
  36,172
  38,239
  40,407
  42,682
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
  5,176
  5,549
  5,883
  6,166
  6,393
  6,560
  6,663
  6,700
  6,671
  6,575
  6,318
  6,107
  5,841
  5,525
  5,168
  4,776
  4,361
  3,931
  3,496
  3,066
  2,650
  2,255
  1,889
  1,555
  1,257
  998
  776
  592
  441
  321
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

Bristol-Myers Squibb Company is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical products. The Company's pharmaceutical products include chemically synthesized drugs, or small molecules, and products produced from biological processes called biologics. Small molecule drugs are administered orally in the form of a pill or tablet. Biologics are administered to patients through injections or by infusion. The Company's products include Empliciti, Opdivo, Sprycel, Yervoy, Eliquis, Orencia, Baraclude, Hepatitis C Franchise, Reyataz Franchise and Sustiva Franchise. It offers products for a range of therapeutic classes, which include virology, including human immunodeficiency virus (HIV) infection; oncology; immunoscience, and cardiovascular. Its products are sold to wholesalers, retail pharmacies, hospitals, government entities and the medical profession across the world.

FINANCIAL RATIOS  of  Bristol-Myers Squibb Company (BMY)

Valuation Ratios
P/E Ratio 18.4
Price to Sales 4.2
Price to Book 5.1
Price to Tangible Book
Price to Cash Flow 28.8
Price to Free Cash Flow 50.2
Growth Rates
Sales Growth Rate 17.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 48.2%
Cap. Spend. - 3 Yr. Gr. Rate 17.7%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 35.3%
Total Debt to Equity 41.5%
Interest Coverage 32
Management Effectiveness
Return On Assets 14.1%
Ret/ On Assets - 3 Yr. Avg. 8.5%
Return On Total Capital 20.3%
Ret/ On T. Cap. - 3 Yr. Avg. 12.1%
Return On Equity 29.3%
Return On Equity - 3 Yr. Avg. 17.8%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 74.6%
Gross Margin - 3 Yr. Avg. 75.9%
EBITDA Margin 33.4%
EBITDA Margin - 3 Yr. Avg. 23%
Operating Margin 30.6%
Oper. Margin - 3 Yr. Avg. 18.1%
Pre-Tax Margin 30.4%
Pre-Tax Margin - 3 Yr. Avg. 19.3%
Net Profit Margin 22.9%
Net Profit Margin - 3 Yr. Avg. 15%
Effective Tax Rate 23.8%
Eff/ Tax Rate - 3 Yr. Avg. 20%
Payout Ratio 57.1%

BMY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BMY stock intrinsic value calculation we used $22561 million for the last fiscal year's total revenue generated by Bristol-Myers Squibb Company. The default revenue input number comes from 0001 income statement of Bristol-Myers Squibb Company. 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 BMY stock valuation model: a) initial revenue growth rate of 9.6% 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 BMY is calculated based on our internal credit rating of Bristol-Myers Squibb Company, 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 Bristol-Myers Squibb Company.
    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 BMY stock the variable cost ratio is equal to 53.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4712 million in the base year in the intrinsic value calculation for BMY 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 Bristol-Myers Squibb Company.

Corporate tax rate of 27% is the nominal tax rate for Bristol-Myers Squibb Company. 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 BMY 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 BMY are equal to 39.6%.

Life of production assets of 20.2 years is the average useful life of capital assets used in Bristol-Myers Squibb Company 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 BMY is equal to -3%. 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 - $14031 million for Bristol-Myers Squibb Company - 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 1632.706 million for Bristol-Myers Squibb Company 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 Bristol-Myers Squibb Company at the current share price and the inputted number of shares is $80.6 billion.

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