Intrinsic value of Cardinal Health, Inc. - CAH

Previous Close

$44.70

  Intrinsic Value

$147.53

stock screener

  Rating & Target

str. buy

+230%

Previous close

$44.70

 
Intrinsic value

$147.53

 
Up/down potential

+230%

 
Rating

str. buy

We calculate the intrinsic value of CAH 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 13.3

 

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, %
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.17
  5.15
  5.13
  5.12
  5.11
Revenue, $m
  146,796
  157,175
  167,961
  179,176
  190,838
  202,972
  215,602
  228,753
  242,456
  256,739
  271,635
  287,177
  303,402
  320,346
  338,049
  356,552
  375,899
  396,136
  417,310
  439,472
  462,675
  486,973
  512,424
  539,090
  567,034
  596,322
  627,024
  659,214
  692,968
  728,367
Variable operating expenses, $m
  144,358
  154,478
  164,996
  175,930
  187,302
  199,133
  211,448
  224,272
  237,632
  251,559
  264,861
  280,016
  295,835
  312,357
  329,618
  347,660
  366,525
  386,257
  406,903
  428,512
  451,136
  474,828
  499,645
  525,646
  552,893
  581,450
  611,387
  642,774
  675,686
  710,202
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
  144,358
  154,478
  164,996
  175,930
  187,302
  199,133
  211,448
  224,272
  237,632
  251,559
  264,861
  280,016
  295,835
  312,357
  329,618
  347,660
  366,525
  386,257
  406,903
  428,512
  451,136
  474,828
  499,645
  525,646
  552,893
  581,450
  611,387
  642,774
  675,686
  710,202
Operating income, $m
  2,438
  2,697
  2,966
  3,246
  3,536
  3,839
  4,154
  4,482
  4,824
  5,180
  6,774
  7,162
  7,566
  7,989
  8,431
  8,892
  9,374
  9,879
  10,407
  10,960
  11,539
  12,144
  12,779
  13,444
  14,141
  14,872
  15,637
  16,440
  17,282
  18,165
EBITDA, $m
  4,307
  4,611
  4,928
  5,257
  5,599
  5,955
  6,325
  6,711
  7,113
  7,532
  7,969
  8,425
  8,901
  9,399
  9,918
  10,461
  11,028
  11,622
  12,243
  12,894
  13,574
  14,287
  15,034
  15,816
  16,636
  17,495
  18,396
  19,340
  20,331
  21,369
Interest expense (income), $m
  200
  487
  620
  759
  903
  1,053
  1,209
  1,371
  1,540
  1,716
  1,899
  2,090
  2,289
  2,497
  2,714
  2,941
  3,178
  3,425
  3,684
  3,954
  4,238
  4,534
  4,844
  5,169
  5,510
  5,866
  6,240
  6,632
  7,042
  7,473
  7,924
Earnings before tax, $m
  1,951
  2,077
  2,207
  2,343
  2,484
  2,630
  2,783
  2,942
  3,108
  3,281
  4,684
  4,873
  5,069
  5,275
  5,490
  5,714
  5,949
  6,195
  6,453
  6,722
  7,005
  7,300
  7,610
  7,935
  8,275
  8,632
  9,006
  9,398
  9,809
  10,240
Tax expense, $m
  527
  561
  596
  633
  671
  710
  751
  794
  839
  886
  1,265
  1,316
  1,369
  1,424
  1,482
  1,543
  1,606
  1,673
  1,742
  1,815
  1,891
  1,971
  2,055
  2,142
  2,234
  2,331
  2,431
  2,537
  2,648
  2,765
Net income, $m
  1,424
  1,516
  1,611
  1,710
  1,813
  1,920
  2,032
  2,148
  2,269
  2,395
  3,419
  3,557
  3,701
  3,851
  4,007
  4,172
  4,343
  4,523
  4,711
  4,907
  5,113
  5,329
  5,555
  5,792
  6,041
  6,301
  6,574
  6,860
  7,161
  7,475

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
  42,873
  45,904
  49,054
  52,329
  55,735
  59,279
  62,968
  66,809
  70,811
  74,982
  79,333
  83,872
  88,610
  93,559
  98,729
  104,133
  109,784
  115,694
  121,878
  128,351
  135,127
  142,223
  149,657
  157,445
  165,606
  174,159
  183,126
  192,527
  202,385
  212,724
Adjusted assets (=assets-cash), $m
  42,873
  45,904
  49,054
  52,329
  55,735
  59,279
  62,968
  66,809
  70,811
  74,982
  79,333
  83,872
  88,610
  93,559
  98,729
  104,133
  109,784
  115,694
  121,878
  128,351
  135,127
  142,223
  149,657
  157,445
  165,606
  174,159
  183,126
  192,527
  202,385
  212,724
Revenue / Adjusted assets
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
  3.424
Average production assets, $m
  8,074
  8,645
  9,238
  9,855
  10,496
  11,163
  11,858
  12,581
  13,335
  14,121
  14,940
  15,795
  16,687
  17,619
  18,593
  19,610
  20,674
  21,787
  22,952
  24,171
  25,447
  26,784
  28,183
  29,650
  31,187
  32,798
  34,486
  36,257
  38,113
  40,060
Working capital, $m
  1,028
  1,100
  1,176
  1,254
  1,336
  1,421
  1,509
  1,601
  1,697
  1,797
  1,901
  2,010
  2,124
  2,242
  2,366
  2,496
  2,631
  2,773
  2,921
  3,076
  3,239
  3,409
  3,587
  3,774
  3,969
  4,174
  4,389
  4,614
  4,851
  5,099
Total debt, $m
  11,477
  14,047
  16,719
  19,496
  22,385
  25,390
  28,518
  31,775
  35,169
  38,706
  42,395
  46,244
  50,263
  54,459
  58,843
  63,426
  68,217
  73,229
  78,473
  83,962
  89,709
  95,726
  102,030
  108,634
  115,555
  122,808
  130,412
  138,384
  146,744
  155,511
Total liabilities, $m
  36,356
  38,926
  41,598
  44,375
  47,264
  50,269
  53,397
  56,654
  60,048
  63,585
  67,274
  71,123
  75,142
  79,338
  83,722
  88,305
  93,096
  98,108
  103,352
  108,841
  114,588
  120,605
  126,909
  133,513
  140,434
  147,687
  155,291
  163,263
  171,623
  180,390
Total equity, $m
  6,517
  6,977
  7,456
  7,954
  8,472
  9,010
  9,571
  10,155
  10,763
  11,397
  12,059
  12,749
  13,469
  14,221
  15,007
  15,828
  16,687
  17,585
  18,525
  19,509
  20,539
  21,618
  22,748
  23,932
  25,172
  26,472
  27,835
  29,264
  30,763
  32,334
Total liabilities and equity, $m
  42,873
  45,903
  49,054
  52,329
  55,736
  59,279
  62,968
  66,809
  70,811
  74,982
  79,333
  83,872
  88,611
  93,559
  98,729
  104,133
  109,783
  115,693
  121,877
  128,350
  135,127
  142,223
  149,657
  157,445
  165,606
  174,159
  183,126
  192,527
  202,386
  212,724
Debt-to-equity ratio
  1.760
  2.010
  2.240
  2.450
  2.640
  2.820
  2.980
  3.130
  3.270
  3.400
  3.520
  3.630
  3.730
  3.830
  3.920
  4.010
  4.090
  4.160
  4.240
  4.300
  4.370
  4.430
  4.490
  4.540
  4.590
  4.640
  4.690
  4.730
  4.770
  4.810
Adjusted equity ratio
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,424
  1,516
  1,611
  1,710
  1,813
  1,920
  2,032
  2,148
  2,269
  2,395
  3,419
  3,557
  3,701
  3,851
  4,007
  4,172
  4,343
  4,523
  4,711
  4,907
  5,113
  5,329
  5,555
  5,792
  6,041
  6,301
  6,574
  6,860
  7,161
  7,475
Depreciation, amort., depletion, $m
  1,869
  1,914
  1,962
  2,011
  2,063
  2,116
  2,172
  2,229
  2,290
  2,353
  1,195
  1,264
  1,335
  1,410
  1,487
  1,569
  1,654
  1,743
  1,836
  1,934
  2,036
  2,143
  2,255
  2,372
  2,495
  2,624
  2,759
  2,901
  3,049
  3,205
Funds from operations, $m
  3,293
  3,431
  3,573
  3,721
  3,876
  4,036
  4,203
  4,377
  4,558
  4,748
  4,615
  4,821
  5,036
  5,260
  5,495
  5,740
  5,997
  6,266
  6,547
  6,841
  7,149
  7,472
  7,810
  8,164
  8,536
  8,925
  9,333
  9,761
  10,210
  10,680
Change in working capital, $m
  70
  73
  76
  78
  82
  85
  88
  92
  96
  100
  104
  109
  114
  119
  124
  130
  135
  142
  148
  155
  162
  170
  178
  187
  196
  205
  215
  225
  236
  248
Cash from operations, $m
  3,223
  3,358
  3,498
  3,643
  3,794
  3,951
  4,115
  4,285
  4,462
  4,648
  4,510
  4,712
  4,922
  5,142
  5,371
  5,611
  5,862
  6,124
  6,398
  6,686
  6,987
  7,302
  7,632
  7,978
  8,340
  8,720
  9,118
  9,536
  9,973
  10,433
Maintenance CAPEX, $m
  -603
  -646
  -692
  -739
  -788
  -840
  -893
  -949
  -1,007
  -1,067
  -1,130
  -1,195
  -1,264
  -1,335
  -1,410
  -1,487
  -1,569
  -1,654
  -1,743
  -1,836
  -1,934
  -2,036
  -2,143
  -2,255
  -2,372
  -2,495
  -2,624
  -2,759
  -2,901
  -3,049
New CAPEX, $m
  -532
  -571
  -593
  -617
  -641
  -667
  -695
  -723
  -754
  -786
  -819
  -855
  -892
  -932
  -974
  -1,018
  -1,064
  -1,113
  -1,165
  -1,219
  -1,276
  -1,336
  -1,400
  -1,467
  -1,537
  -1,611
  -1,689
  -1,770
  -1,856
  -1,947
Cash from investing activities, $m
  -1,135
  -1,217
  -1,285
  -1,356
  -1,429
  -1,507
  -1,588
  -1,672
  -1,761
  -1,853
  -1,949
  -2,050
  -2,156
  -2,267
  -2,384
  -2,505
  -2,633
  -2,767
  -2,908
  -3,055
  -3,210
  -3,372
  -3,543
  -3,722
  -3,909
  -4,106
  -4,313
  -4,529
  -4,757
  -4,996
Free cash flow, $m
  2,088
  2,141
  2,213
  2,287
  2,364
  2,444
  2,527
  2,613
  2,702
  2,795
  2,561
  2,662
  2,766
  2,875
  2,988
  3,106
  3,229
  3,357
  3,491
  3,631
  3,777
  3,930
  4,089
  4,256
  4,431
  4,614
  4,806
  5,006
  5,216
  5,436
Issuance/(repayment) of debt, $m
  2,464
  2,570
  2,672
  2,777
  2,888
  3,005
  3,128
  3,257
  3,394
  3,537
  3,689
  3,849
  4,018
  4,196
  4,384
  4,583
  4,792
  5,012
  5,244
  5,489
  5,746
  6,018
  6,303
  6,604
  6,921
  7,254
  7,604
  7,972
  8,360
  8,767
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  
  2,464
  2,570
  2,672
  2,777
  2,888
  3,005
  3,128
  3,257
  3,394
  3,537
  3,689
  3,849
  4,018
  4,196
  4,384
  4,583
  4,792
  5,012
  5,244
  5,489
  5,746
  6,018
  6,303
  6,604
  6,921
  7,254
  7,604
  7,972
  8,360
  8,767
Total cash flow (excl. dividends), $m
  4,552
  4,712
  4,884
  5,064
  5,253
  5,449
  5,655
  5,870
  6,096
  6,333
  6,251
  6,511
  6,784
  7,071
  7,372
  7,688
  8,020
  8,369
  8,735
  9,119
  9,523
  9,947
  10,393
  10,860
  11,352
  11,868
  12,409
  12,978
  13,576
  14,204
Retained Cash Flow (-), $m
  -458
  -461
  -479
  -498
  -518
  -539
  -561
  -584
  -608
  -634
  -661
  -690
  -720
  -752
  -786
  -821
  -859
  -898
  -940
  -984
  -1,030
  -1,079
  -1,130
  -1,184
  -1,240
  -1,300
  -1,363
  -1,429
  -1,498
  -1,571
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
  4,095
  4,251
  4,406
  4,567
  4,735
  4,910
  5,094
  5,286
  5,488
  5,699
  5,589
  5,821
  6,064
  6,319
  6,586
  6,867
  7,161
  7,471
  7,795
  8,136
  8,493
  8,869
  9,263
  9,677
  10,111
  10,567
  11,046
  11,549
  12,078
  12,632
Discount rate, %
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
  3,856
  3,747
  3,613
  3,461
  3,293
  3,109
  2,914
  2,707
  2,493
  2,275
  1,940
  1,737
  1,537
  1,344
  1,160
  987
  828
  683
  555
  443
  347
  266
  200
  148
  106
  74
  51
  34
  22
  14
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

Cardinal Health, Inc. is a healthcare services and products company. The Company operates through two segments: Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, over-the-counter healthcare and consumer products. This segment also operates nuclear pharmacies and cyclotron facilities; provides pharmacy management services to hospitals, as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers, and provides services to healthcare companies. The Medical segment distributes a range of medical, surgical and laboratory products, and provides services to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers. This segment also manufactures, sources and develops its own Cardinal Health brand medical and surgical products. It provides post-acute care management and transition services, and software to hospitals.

FINANCIAL RATIOS  of  Cardinal Health, Inc. (CAH)

Valuation Ratios
P/E Ratio 11
Price to Sales 0.1
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 11.9
Price to Free Cash Flow 17.7
Growth Rates
Sales Growth Rate 6.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.8%
Cap. Spend. - 3 Yr. Gr. Rate 9.2%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 133.2%
Total Debt to Equity 152.7%
Interest Coverage 11
Management Effectiveness
Return On Assets 3.8%
Ret/ On Assets - 3 Yr. Avg. 4.4%
Return On Total Capital 8.8%
Ret/ On T. Cap. - 3 Yr. Avg. 10.6%
Return On Equity 19.3%
Return On Equity - 3 Yr. Avg. 20.3%
Asset Turnover 3.5
Profitability Ratios
Gross Margin 5%
Gross Margin - 3 Yr. Avg. 5.3%
EBITDA Margin 2.2%
EBITDA Margin - 3 Yr. Avg. 2.4%
Operating Margin 1.6%
Oper. Margin - 3 Yr. Avg. 1.9%
Pre-Tax Margin 1.5%
Pre-Tax Margin - 3 Yr. Avg. 1.8%
Net Profit Margin 1%
Net Profit Margin - 3 Yr. Avg. 1.1%
Effective Tax Rate 32.7%
Eff/ Tax Rate - 3 Yr. Avg. 36.1%
Payout Ratio 44.8%

CAH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CAH stock intrinsic value calculation we used $136809 million for the last fiscal year's total revenue generated by Cardinal Health, Inc.. The default revenue input number comes from 0001 income statement of Cardinal Health, 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 CAH stock valuation model: a) initial revenue growth rate of 7.3% 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 6.2%, whose default value for CAH is calculated based on our internal credit rating of Cardinal Health, 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 Cardinal Health, 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 CAH stock the variable cost ratio is equal to 98.4%.

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 CAH 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 Cardinal Health, Inc..

Corporate tax rate of 27% is the nominal tax rate for Cardinal Health, 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 CAH 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 CAH are equal to 5.5%.

Life of production assets of 12.5 years is the average useful life of capital assets used in Cardinal Health, 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 CAH is equal to 0.7%. 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 - $6059 million for Cardinal Health, 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 297.991 million for Cardinal Health, 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 Cardinal Health, Inc. at the current share price and the inputted number of shares is $13.3 billion.

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