Intrinsic value of BT Group ADR - BT

Previous Close

$15.10

  Intrinsic Value

$1,324

stock screener

  Rating & Target

str. buy

+999%

Previous close

$15.10

 
Intrinsic value

$1,324

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of BT 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 0.5

 

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, %
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  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
Revenue, $m
  36,428
  39,922
  43,567
  47,365
  51,318
  55,430
  59,703
  64,145
  68,760
  73,557
  78,543
  83,727
  89,119
  94,731
  100,572
  106,657
  112,998
  119,609
  126,505
  133,702
  141,216
  149,065
  157,266
  165,841
  174,807
  184,188
  194,004
  204,280
  215,039
  226,307
Variable operating expenses, $m
  27,114
  29,517
  32,025
  34,638
  37,357
  40,186
  43,126
  46,182
  49,357
  52,657
  54,034
  57,600
  61,310
  65,170
  69,189
  73,375
  77,737
  82,285
  87,030
  91,981
  97,150
  102,550
  108,192
  114,091
  120,259
  126,713
  133,466
  140,535
  147,937
  155,689
Fixed operating expenses, $m
  3,711
  3,793
  3,876
  3,961
  4,048
  4,137
  4,228
  4,321
  4,417
  4,514
  4,613
  4,715
  4,818
  4,924
  5,033
  5,143
  5,256
  5,372
  5,490
  5,611
  5,734
  5,861
  5,990
  6,121
  6,256
  6,394
  6,534
  6,678
  6,825
  6,975
Total operating expenses, $m
  30,825
  33,310
  35,901
  38,599
  41,405
  44,323
  47,354
  50,503
  53,774
  57,171
  58,647
  62,315
  66,128
  70,094
  74,222
  78,518
  82,993
  87,657
  92,520
  97,592
  102,884
  108,411
  114,182
  120,212
  126,515
  133,107
  140,000
  147,213
  154,762
  162,664
Operating income, $m
  5,604
  6,612
  7,666
  8,766
  9,912
  11,106
  12,349
  13,642
  14,987
  16,387
  19,896
  21,412
  22,991
  24,636
  26,351
  28,139
  30,004
  31,951
  33,985
  36,110
  38,331
  40,654
  43,085
  45,628
  48,292
  51,081
  54,004
  57,066
  60,277
  63,643
EBITDA, $m
  11,761
  13,163
  14,628
  16,156
  17,747
  19,405
  21,129
  22,922
  24,787
  26,727
  28,746
  30,846
  33,033
  35,310
  37,682
  40,156
  42,736
  45,428
  48,239
  51,175
  54,243
  57,450
  60,805
  64,314
  67,988
  71,834
  75,863
  80,083
  84,506
  89,142
Interest expense (income), $m
  765
  1,195
  1,178
  1,161
  1,143
  1,124
  1,105
  1,084
  1,063
  1,041
  1,018
  995
  970
  944
  918
  890
  861
  831
  800
  767
  733
  697
  660
  621
  581
  539
  494
  448
  399
  349
  295
Earnings before tax, $m
  4,409
  5,434
  6,505
  7,623
  8,788
  10,002
  11,265
  12,579
  13,946
  15,368
  18,901
  20,442
  22,047
  23,718
  25,461
  27,277
  29,173
  31,152
  33,218
  35,377
  37,634
  39,994
  42,463
  45,047
  47,753
  50,587
  53,556
  56,667
  59,928
  63,348
Tax expense, $m
  1,190
  1,467
  1,756
  2,058
  2,373
  2,700
  3,041
  3,396
  3,765
  4,149
  5,103
  5,519
  5,953
  6,404
  6,874
  7,365
  7,877
  8,411
  8,969
  9,552
  10,161
  10,798
  11,465
  12,163
  12,893
  13,658
  14,460
  15,300
  16,181
  17,104
Net income, $m
  3,219
  3,967
  4,749
  5,565
  6,415
  7,301
  8,223
  9,182
  10,180
  11,219
  13,798
  14,923
  16,094
  17,314
  18,586
  19,913
  21,296
  22,741
  24,249
  25,825
  27,473
  29,196
  30,998
  32,885
  34,860
  36,928
  39,096
  41,367
  43,748
  46,244

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
  12,822
  14,052
  15,335
  16,672
  18,063
  19,511
  21,015
  22,578
  24,203
  25,891
  27,646
  29,471
  31,369
  33,344
  35,400
  37,542
  39,774
  42,101
  44,528
  47,061
  49,706
  52,469
  55,356
  58,374
  61,530
  64,832
  68,287
  71,904
  75,691
  79,658
Adjusted assets (=assets-cash), $m
  12,822
  14,052
  15,335
  16,672
  18,063
  19,511
  21,015
  22,578
  24,203
  25,891
  27,646
  29,471
  31,369
  33,344
  35,400
  37,542
  39,774
  42,101
  44,528
  47,061
  49,706
  52,469
  55,356
  58,374
  61,530
  64,832
  68,287
  71,904
  75,691
  79,658
Revenue / Adjusted assets
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
  2.841
Average production assets, $m
  35,299
  38,684
  42,216
  45,897
  49,727
  53,711
  57,853
  62,156
  66,629
  71,277
  76,108
  81,131
  86,357
  91,794
  97,455
  103,351
  109,495
  115,901
  122,583
  129,557
  136,838
  144,444
  152,391
  160,700
  169,388
  178,478
  187,990
  197,947
  208,373
  219,292
Working capital, $m
  -5,974
  -6,547
  -7,145
  -7,768
  -8,416
  -9,090
  -9,791
  -10,520
  -11,277
  -12,063
  -12,881
  -13,731
  -14,616
  -15,536
  -16,494
  -17,492
  -18,532
  -19,616
  -20,747
  -21,927
  -23,159
  -24,447
  -25,792
  -27,198
  -28,668
  -30,207
  -31,817
  -33,502
  -35,266
  -37,114
Total debt, $m
  19,636
  19,348
  19,048
  18,735
  18,409
  18,071
  17,718
  17,353
  16,973
  16,577
  16,167
  15,740
  15,296
  14,833
  14,352
  13,851
  13,329
  12,784
  12,216
  11,624
  11,005
  10,358
  9,683
  8,976
  8,238
  7,465
  6,657
  5,810
  4,924
  3,996
Total liabilities, $m
  -3,000
  -3,288
  -3,588
  -3,901
  -4,227
  -4,565
  -4,917
  -5,283
  -5,663
  -6,059
  -6,469
  -6,896
  -7,340
  -7,803
  -8,284
  -8,785
  -9,307
  -9,852
  -10,420
  -11,012
  -11,631
  -12,278
  -12,953
  -13,660
  -14,398
  -15,171
  -15,979
  -16,826
  -17,712
  -18,640
Total equity, $m
  15,823
  17,340
  18,923
  20,573
  22,290
  24,076
  25,932
  27,862
  29,866
  31,950
  34,115
  36,367
  38,709
  41,147
  43,684
  46,327
  49,081
  51,953
  54,948
  58,074
  61,338
  64,747
  68,309
  72,034
  75,928
  80,003
  84,266
  88,730
  93,403
  98,297
Total liabilities and equity, $m
  12,823
  14,052
  15,335
  16,672
  18,063
  19,511
  21,015
  22,579
  24,203
  25,891
  27,646
  29,471
  31,369
  33,344
  35,400
  37,542
  39,774
  42,101
  44,528
  47,062
  49,707
  52,469
  55,356
  58,374
  61,530
  64,832
  68,287
  71,904
  75,691
  79,657
Debt-to-equity ratio
  1.240
  1.120
  1.010
  0.910
  0.830
  0.750
  0.680
  0.620
  0.570
  0.520
  0.470
  0.430
  0.400
  0.360
  0.330
  0.300
  0.270
  0.250
  0.220
  0.200
  0.180
  0.160
  0.140
  0.120
  0.110
  0.090
  0.080
  0.070
  0.050
  0.040
Adjusted equity ratio
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234
  1.234

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,219
  3,967
  4,749
  5,565
  6,415
  7,301
  8,223
  9,182
  10,180
  11,219
  13,798
  14,923
  16,094
  17,314
  18,586
  19,913
  21,296
  22,741
  24,249
  25,825
  27,473
  29,196
  30,998
  32,885
  34,860
  36,928
  39,096
  41,367
  43,748
  46,244
Depreciation, amort., depletion, $m
  6,157
  6,551
  6,962
  7,390
  7,835
  8,298
  8,780
  9,280
  9,800
  10,341
  8,850
  9,434
  10,041
  10,674
  11,332
  12,018
  12,732
  13,477
  14,254
  15,065
  15,911
  16,796
  17,720
  18,686
  19,696
  20,753
  21,859
  23,017
  24,229
  25,499
Funds from operations, $m
  9,376
  10,518
  11,711
  12,955
  14,251
  15,600
  17,003
  18,463
  19,981
  21,560
  22,648
  24,357
  26,136
  27,988
  29,918
  31,930
  34,028
  36,217
  38,503
  40,890
  43,384
  45,991
  48,718
  51,571
  54,556
  57,682
  60,955
  64,384
  67,977
  71,743
Change in working capital, $m
  -548
  -573
  -598
  -623
  -648
  -674
  -701
  -728
  -757
  -787
  -818
  -850
  -884
  -920
  -958
  -998
  -1,040
  -1,084
  -1,131
  -1,180
  -1,232
  -1,287
  -1,345
  -1,406
  -1,471
  -1,538
  -1,610
  -1,685
  -1,765
  -1,848
Cash from operations, $m
  9,924
  11,091
  12,308
  13,577
  14,899
  16,274
  17,704
  19,191
  20,738
  22,346
  23,465
  25,207
  27,020
  28,908
  30,876
  32,928
  35,068
  37,302
  39,634
  42,070
  44,616
  47,279
  50,063
  52,977
  56,027
  59,220
  62,565
  66,069
  69,741
  73,591
Maintenance CAPEX, $m
  -3,728
  -4,105
  -4,498
  -4,909
  -5,337
  -5,782
  -6,245
  -6,727
  -7,227
  -7,748
  -8,288
  -8,850
  -9,434
  -10,041
  -10,674
  -11,332
  -12,018
  -12,732
  -13,477
  -14,254
  -15,065
  -15,911
  -16,796
  -17,720
  -18,686
  -19,696
  -20,753
  -21,859
  -23,017
  -24,229
New CAPEX, $m
  -3,240
  -3,385
  -3,532
  -3,680
  -3,831
  -3,984
  -4,141
  -4,304
  -4,472
  -4,648
  -4,831
  -5,023
  -5,225
  -5,437
  -5,661
  -5,896
  -6,144
  -6,406
  -6,682
  -6,974
  -7,281
  -7,606
  -7,948
  -8,308
  -8,689
  -9,090
  -9,512
  -9,957
  -10,426
  -10,919
Cash from investing activities, $m
  -6,968
  -7,490
  -8,030
  -8,589
  -9,168
  -9,766
  -10,386
  -11,031
  -11,699
  -12,396
  -13,119
  -13,873
  -14,659
  -15,478
  -16,335
  -17,228
  -18,162
  -19,138
  -20,159
  -21,228
  -22,346
  -23,517
  -24,744
  -26,028
  -27,375
  -28,786
  -30,265
  -31,816
  -33,443
  -35,148
Free cash flow, $m
  2,956
  3,601
  4,278
  4,988
  5,731
  6,508
  7,317
  8,160
  9,038
  9,951
  10,346
  11,334
  12,361
  13,430
  14,542
  15,700
  16,906
  18,164
  19,475
  20,843
  22,270
  23,762
  25,320
  26,949
  28,652
  30,434
  32,300
  34,253
  36,299
  38,442
Issuance/(repayment) of debt, $m
  -274
  -288
  -300
  -313
  -326
  -339
  -352
  -366
  -380
  -395
  -411
  -427
  -444
  -462
  -481
  -501
  -522
  -545
  -568
  -593
  -619
  -646
  -676
  -706
  -739
  -773
  -809
  -846
  -886
  -928
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  
  -274
  -288
  -300
  -313
  -326
  -339
  -352
  -366
  -380
  -395
  -411
  -427
  -444
  -462
  -481
  -501
  -522
  -545
  -568
  -593
  -619
  -646
  -676
  -706
  -739
  -773
  -809
  -846
  -886
  -928
Total cash flow (excl. dividends), $m
  2,682
  3,313
  3,978
  4,675
  5,406
  6,169
  6,965
  7,794
  8,658
  9,556
  9,935
  10,907
  11,917
  12,967
  14,061
  15,199
  16,384
  17,619
  18,907
  20,250
  21,652
  23,115
  24,644
  26,242
  27,913
  29,662
  31,491
  33,407
  35,413
  37,514
Retained Cash Flow (-), $m
  -1,452
  -1,517
  -1,583
  -1,650
  -1,717
  -1,786
  -1,856
  -1,929
  -2,005
  -2,083
  -2,166
  -2,252
  -2,342
  -2,437
  -2,537
  -2,643
  -2,754
  -2,872
  -2,995
  -3,126
  -3,264
  -3,409
  -3,563
  -3,724
  -3,895
  -4,074
  -4,264
  -4,463
  -4,673
  -4,895
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
  1,230
  1,796
  2,394
  3,026
  3,689
  4,383
  5,109
  5,865
  6,653
  7,472
  7,770
  8,655
  9,574
  10,530
  11,523
  12,556
  13,630
  14,748
  15,911
  17,124
  18,388
  19,706
  21,082
  22,518
  24,019
  25,587
  27,227
  28,943
  30,739
  32,620
Discount rate, %
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
  1,153
  1,568
  1,933
  2,244
  2,494
  2,679
  2,799
  2,853
  2,845
  2,780
  2,486
  2,354
  2,186
  1,991
  1,779
  1,559
  1,339
  1,127
  929
  750
  592
  456
  344
  252
  181
  126
  85
  56
  36
  22
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

BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.

FINANCIAL RATIOS  of  BT Group ADR (BT)

Valuation Ratios
P/E Ratio 64.8
Price to Sales 5.1
Price to Book 14.8
Price to Tangible Book
Price to Cash Flow 20
Price to Free Cash Flow 40.8
Growth Rates
Sales Growth Rate 27.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 27.5%
Cap. Spend. - 3 Yr. Gr. Rate 5.9%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 120.9%
Total Debt to Equity 152.5%
Interest Coverage 5
Management Effectiveness
Return On Assets 5.7%
Ret/ On Assets - 3 Yr. Avg. 8%
Return On Total Capital 8.3%
Ret/ On T. Cap. - 3 Yr. Avg. 14.6%
Return On Equity 20.7%
Return On Equity - 3 Yr. Avg. 682.5%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 76.9%
Gross Margin - 3 Yr. Avg. 77%
EBITDA Margin 27.2%
EBITDA Margin - 3 Yr. Avg. 30.6%
Operating Margin 12.3%
Oper. Margin - 3 Yr. Avg. 16%
Pre-Tax Margin 9.8%
Pre-Tax Margin - 3 Yr. Avg. 13.3%
Net Profit Margin 7.9%
Net Profit Margin - 3 Yr. Avg. 11%
Effective Tax Rate 18.9%
Eff/ Tax Rate - 3 Yr. Avg. 17.8%
Payout Ratio 75.2%

BT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BT stock intrinsic value calculation we used $33086.4714086 million for the last fiscal year's total revenue generated by BT Group ADR. The default revenue input number comes from 0001 income statement of BT Group ADR. 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 BT stock valuation model: a) initial revenue growth rate of 10.1% 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 6.7%, whose default value for BT is calculated based on our internal credit rating of BT Group ADR, 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 BT Group ADR.
    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 BT stock the variable cost ratio is equal to 75%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3631 million in the base year in the intrinsic value calculation for BT 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 6% for BT Group ADR.

Corporate tax rate of 27% is the nominal tax rate for BT Group ADR. 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 BT 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 BT are equal to 96.9%.

Life of production assets of 8.6 years is the average useful life of capital assets used in BT Group ADR 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 BT is equal to -16.4%. 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 - $14370.9902371 million for BT Group ADR - 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 31.733 million for BT Group ADR 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 BT Group ADR at the current share price and the inputted number of shares is $0.5 billion.

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COMPANY NEWS

▶ BT Group PLC Announces Amended Form 20-F   [Sep-20-18 11:50AM  ACCESSWIRE]
▶ What Do BT Group plc (LON:BT.A) Insiders Know That You Dont?   [Aug-21-18 04:43AM  Simply Wall St.]
▶ [$$] European Equities Market Talk Roundup   [Jul-30-18 05:28AM  The Wall Street Journal]
▶ [$$] European Equities Market Talk Roundup   [04:52AM  The Wall Street Journal]
▶ [$$] Stocks to watch: Indivior, Metro Bank, GSK, Boohoo, BT   [Jul-24-18 09:05PM  Financial Times]
▶ [$$] BT: reaching out   [08:32AM  Financial Times]
▶ PRESS DIGEST- Financial Times - July 13   [Jul-12-18 07:45PM  Reuters]
▶ PRESS DIGEST- British Business - July 12   [Jul-11-18 07:55PM  Reuters]
▶ BT's Fundamental Value Is Overlooked   [Jun-22-18 07:00AM  Morningstar]
▶ PRESS DIGEST- British Business - June 20   [Jun-19-18 08:36PM  Reuters]
▶ S&P cuts BT Group's credit rating   [Jun-12-18 10:44AM  Reuters]
▶ BT chief executive to step down this year   [09:27AM  Associated Press]
▶ Best-In-Class Utilities Dividend Stocks   [03:02AM  Simply Wall St.]
▶ [$$] BT Chief to Leave Later This Year   [02:31AM  The Wall Street Journal]
▶ BTs U.K. Fixed Network Openreach Draws Buyer Interest   [May-24-18 01:08PM  Bloomberg]
▶ PRESS DIGEST- British Business - May 11   [May-10-18 08:37PM  Reuters]
▶ Why BT Group Shares Fell Today   [03:45PM  Motley Fool]
▶ [$$] BT to Cut 13,000 Jobs, Freeze Dividend   [07:39AM  The Wall Street Journal]
▶ BT Group: Fiscal 4Q Earnings Snapshot   [05:16AM  Associated Press]
▶ PRESS DIGEST- Financial Times - May 4   [May-03-18 08:07PM  Reuters]
▶ BT Group plc (LON:BT.A) Is Trading At A 44% Discount   [Apr-26-18 12:02PM  Simply Wall St.]
▶ BT Group plc (LON:BT.A): Time For A Financial Health Check   [Apr-19-18 08:26AM  Simply Wall St.]
▶ Best Undervalued Stock Picks   [Mar-31-18 05:02AM  Simply Wall St.]
▶ BT Group (BT) Enters Oversold Territory   [Mar-22-18 11:33AM  Zacks]
▶ Is BT Group plc (LON:BT.A) A Buy At Its Current PE Ratio?   [Mar-14-18 10:54AM  Simply Wall St.]
▶ Top Ranked Income Stocks to Buy for March 13th   [Mar-13-18 10:17AM  Zacks]
▶ Premier League Should Give Amazon an Open Goal   [Feb-28-18 01:30AM  Bloomberg]
▶ FTSE 100 closes lower as RBS, IAG tank after results   [Feb-23-18 12:45PM  MarketWatch]
▶ Stocks That Fell to 3-Year Lows in the Week of Feb. 16   [Feb-18-18 06:20PM  GuruFocus.com]
▶ [$$] Sky/football rights: glacier mint   [Feb-13-18 09:14PM  Financial Times]
▶ Top Cheap Stocks in February   [Feb-11-18 04:02AM  Simply Wall St.]
▶ PRESS DIGEST- British Business - Feb 9   [Feb-08-18 07:41PM  Reuters]

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