Intrinsic value of Canon ADR - CAJ

Previous Close

$30.86

  Intrinsic Value

$1,732

stock screener

  Rating & Target

str. buy

+999%

Previous close

$30.86

 
Intrinsic value

$1,732

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CAJ 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 0.7

 

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, %
  24.60
  22.64
  20.88
  19.29
  17.86
  16.57
  15.42
  14.37
  13.44
  12.59
  11.83
  11.15
  10.54
  9.98
  9.48
  9.04
  8.63
  8.27
  7.94
  7.65
  7.38
  7.14
  6.93
  6.74
  6.56
  6.41
  6.27
  6.14
  6.03
  5.92
Revenue, $m
  45,114
  55,328
  66,878
  79,777
  94,025
  109,609
  126,506
  144,691
  164,134
  184,804
  206,673
  229,719
  253,921
  279,268
  305,753
  333,379
  362,156
  392,102
  423,242
  455,610
  489,248
  524,203
  560,531
  598,294
  637,563
  678,412
  720,924
  765,187
  811,295
  859,350
Variable operating expenses, $m
  38,592
  47,056
  56,628
  67,318
  79,126
  92,040
  106,044
  121,114
  137,226
  154,356
  171,275
  190,373
  210,430
  231,436
  253,385
  276,279
  300,127
  324,944
  350,751
  377,575
  405,451
  434,419
  464,525
  495,820
  528,363
  562,216
  597,446
  634,128
  672,339
  712,163
Fixed operating expenses, $m
  2,150
  2,198
  2,246
  2,295
  2,346
  2,397
  2,450
  2,504
  2,559
  2,615
  2,673
  2,732
  2,792
  2,853
  2,916
  2,980
  3,046
  3,113
  3,181
  3,251
  3,323
  3,396
  3,471
  3,547
  3,625
  3,705
  3,786
  3,870
  3,955
  4,042
Total operating expenses, $m
  40,742
  49,254
  58,874
  69,613
  81,472
  94,437
  108,494
  123,618
  139,785
  156,971
  173,948
  193,105
  213,222
  234,289
  256,301
  279,259
  303,173
  328,057
  353,932
  380,826
  408,774
  437,815
  467,996
  499,367
  531,988
  565,921
  601,232
  637,998
  676,294
  716,205
Operating income, $m
  4,372
  6,074
  8,004
  10,164
  12,554
  15,171
  18,013
  21,073
  24,348
  27,832
  32,725
  36,614
  40,699
  44,979
  49,452
  54,120
  58,983
  64,045
  69,310
  74,784
  80,474
  86,388
  92,535
  98,927
  105,575
  112,491
  119,691
  127,189
  135,001
  143,145
EBITDA, $m
  7,685
  9,865
  12,334
  15,097
  18,153
  21,499
  25,130
  29,041
  33,224
  37,674
  42,385
  47,350
  52,566
  58,031
  63,742
  69,701
  75,909
  82,371
  89,091
  96,078
  103,340
  110,887
  118,733
  126,889
  135,372
  144,198
  153,385
  162,951
  172,919
  183,308
Interest expense (income), $m
  6
  255
  530
  845
  1,201
  1,598
  2,037
  2,518
  3,038
  3,599
  4,198
  4,835
  5,509
  6,219
  6,965
  7,746
  8,562
  9,414
  10,301
  11,224
  12,183
  13,181
  14,217
  15,295
  16,414
  17,578
  18,788
  20,047
  21,357
  22,721
  24,142
Earnings before tax, $m
  4,117
  5,544
  7,159
  8,963
  10,955
  13,134
  15,495
  18,035
  20,749
  23,634
  27,890
  31,105
  34,480
  38,014
  41,706
  45,557
  49,569
  53,744
  58,087
  62,601
  67,293
  72,170
  77,241
  82,513
  87,997
  93,703
  99,644
  105,832
  112,280
  119,003
Tax expense, $m
  1,111
  1,497
  1,933
  2,420
  2,958
  3,546
  4,184
  4,869
  5,602
  6,381
  7,530
  8,398
  9,309
  10,264
  11,261
  12,300
  13,384
  14,511
  15,683
  16,902
  18,169
  19,486
  20,855
  22,278
  23,759
  25,300
  26,904
  28,575
  30,316
  32,131
Net income, $m
  3,005
  4,047
  5,226
  6,543
  7,997
  9,588
  11,311
  13,165
  15,147
  17,253
  20,360
  22,706
  25,170
  27,750
  30,445
  33,257
  36,186
  39,233
  42,403
  45,699
  49,124
  52,684
  56,386
  60,234
  64,238
  68,403
  72,740
  77,257
  81,964
  86,872

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
  57,470
  70,481
  85,195
  101,627
  119,778
  139,629
  161,155
  184,320
  209,087
  235,419
  263,278
  292,636
  323,467
  355,755
  389,494
  424,687
  461,346
  499,493
  539,162
  580,395
  623,245
  667,774
  714,052
  762,158
  812,182
  864,219
  918,374
  974,760
  1,033,497
  1,094,713
Adjusted assets (=assets-cash), $m
  57,470
  70,481
  85,195
  101,627
  119,778
  139,629
  161,155
  184,320
  209,087
  235,419
  263,278
  292,636
  323,467
  355,755
  389,494
  424,687
  461,346
  499,493
  539,162
  580,395
  623,245
  667,774
  714,052
  762,158
  812,182
  864,219
  918,374
  974,760
  1,033,497
  1,094,713
Revenue / Adjusted assets
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
Average production assets, $m
  20,031
  24,565
  29,694
  35,421
  41,747
  48,666
  56,169
  64,243
  72,875
  82,053
  91,763
  101,995
  112,741
  123,995
  135,754
  148,020
  160,797
  174,093
  187,920
  202,291
  217,226
  232,746
  248,876
  265,643
  283,078
  301,215
  320,090
  339,743
  360,215
  381,551
Working capital, $m
  4,872
  5,975
  7,223
  8,616
  10,155
  11,838
  13,663
  15,627
  17,726
  19,959
  22,321
  24,810
  27,423
  30,161
  33,021
  36,005
  39,113
  42,347
  45,710
  49,206
  52,839
  56,614
  60,537
  64,616
  68,857
  73,269
  77,860
  82,640
  87,620
  92,810
Total debt, $m
  9,816
  15,645
  22,237
  29,599
  37,730
  46,624
  56,267
  66,645
  77,741
  89,537
  102,019
  115,171
  128,983
  143,448
  158,563
  174,330
  190,753
  207,843
  225,615
  244,087
  263,284
  283,233
  303,965
  325,517
  347,927
  371,240
  395,502
  420,762
  447,077
  474,501
Total liabilities, $m
  25,746
  31,576
  38,167
  45,529
  53,660
  62,554
  72,197
  82,575
  93,671
  105,468
  117,949
  131,101
  144,913
  159,378
  174,493
  190,260
  206,683
  223,773
  241,545
  260,017
  279,214
  299,163
  319,895
  341,447
  363,858
  387,170
  411,432
  436,693
  463,007
  490,431
Total equity, $m
  31,723
  38,906
  47,027
  56,098
  66,117
  77,075
  88,957
  101,745
  115,416
  129,951
  145,330
  161,535
  178,554
  196,377
  215,001
  234,427
  254,663
  275,720
  297,617
  320,378
  344,032
  368,611
  394,157
  420,711
  448,324
  477,049
  506,943
  538,068
  570,490
  604,281
Total liabilities and equity, $m
  57,469
  70,482
  85,194
  101,627
  119,777
  139,629
  161,154
  184,320
  209,087
  235,419
  263,279
  292,636
  323,467
  355,755
  389,494
  424,687
  461,346
  499,493
  539,162
  580,395
  623,246
  667,774
  714,052
  762,158
  812,182
  864,219
  918,375
  974,761
  1,033,497
  1,094,712
Debt-to-equity ratio
  0.310
  0.400
  0.470
  0.530
  0.570
  0.600
  0.630
  0.660
  0.670
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.740
  0.750
  0.750
  0.760
  0.760
  0.770
  0.770
  0.770
  0.770
  0.780
  0.780
  0.780
  0.780
  0.780
  0.790
Adjusted equity ratio
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,005
  4,047
  5,226
  6,543
  7,997
  9,588
  11,311
  13,165
  15,147
  17,253
  20,360
  22,706
  25,170
  27,750
  30,445
  33,257
  36,186
  39,233
  42,403
  45,699
  49,124
  52,684
  56,386
  60,234
  64,238
  68,403
  72,740
  77,257
  81,964
  86,872
Depreciation, amort., depletion, $m
  3,313
  3,791
  4,331
  4,933
  5,599
  6,328
  7,117
  7,967
  8,876
  9,842
  9,659
  10,736
  11,867
  13,052
  14,290
  15,581
  16,926
  18,326
  19,781
  21,294
  22,866
  24,500
  26,197
  27,962
  29,798
  31,707
  33,694
  35,762
  37,917
  40,163
Funds from operations, $m
  6,318
  7,838
  9,557
  11,476
  13,597
  15,915
  18,429
  21,133
  24,023
  27,095
  30,019
  33,443
  37,038
  40,802
  44,735
  48,838
  53,112
  57,559
  62,184
  66,992
  71,990
  77,184
  82,583
  88,197
  94,035
  100,110
  106,434
  113,020
  119,882
  127,035
Change in working capital, $m
  962
  1,103
  1,247
  1,393
  1,539
  1,683
  1,825
  1,964
  2,100
  2,232
  2,362
  2,489
  2,614
  2,737
  2,860
  2,984
  3,108
  3,234
  3,363
  3,496
  3,633
  3,775
  3,923
  4,078
  4,241
  4,412
  4,591
  4,780
  4,980
  5,190
Cash from operations, $m
  5,357
  6,735
  8,309
  10,083
  12,058
  14,232
  16,604
  19,169
  21,923
  24,863
  27,657
  30,954
  34,424
  38,065
  41,875
  45,854
  50,004
  54,325
  58,821
  63,497
  68,357
  73,409
  78,660
  84,118
  89,794
  95,698
  101,843
  108,239
  114,902
  121,845
Maintenance CAPEX, $m
  -1,692
  -2,108
  -2,586
  -3,126
  -3,729
  -4,394
  -5,123
  -5,913
  -6,762
  -7,671
  -8,637
  -9,659
  -10,736
  -11,867
  -13,052
  -14,290
  -15,581
  -16,926
  -18,326
  -19,781
  -21,294
  -22,866
  -24,500
  -26,197
  -27,962
  -29,798
  -31,707
  -33,694
  -35,762
  -37,917
New CAPEX, $m
  -3,959
  -4,535
  -5,128
  -5,727
  -6,326
  -6,919
  -7,503
  -8,074
  -8,632
  -9,178
  -9,710
  -10,232
  -10,746
  -11,254
  -11,759
  -12,266
  -12,777
  -13,296
  -13,826
  -14,371
  -14,935
  -15,520
  -16,130
  -16,767
  -17,435
  -18,137
  -18,875
  -19,653
  -20,472
  -21,336
Cash from investing activities, $m
  -5,651
  -6,643
  -7,714
  -8,853
  -10,055
  -11,313
  -12,626
  -13,987
  -15,394
  -16,849
  -18,347
  -19,891
  -21,482
  -23,121
  -24,811
  -26,556
  -28,358
  -30,222
  -32,152
  -34,152
  -36,229
  -38,386
  -40,630
  -42,964
  -45,397
  -47,935
  -50,582
  -53,347
  -56,234
  -59,253
Free cash flow, $m
  -294
  91
  595
  1,230
  2,003
  2,919
  3,978
  5,182
  6,528
  8,014
  9,310
  11,062
  12,942
  14,943
  17,063
  19,298
  21,646
  24,103
  26,669
  29,344
  32,128
  35,023
  38,030
  41,154
  44,397
  47,764
  51,261
  54,893
  58,668
  62,592
Issuance/(repayment) of debt, $m
  5,090
  5,829
  6,592
  7,362
  8,131
  8,893
  9,643
  10,378
  11,096
  11,796
  12,481
  13,152
  13,812
  14,465
  15,115
  15,766
  16,423
  17,090
  17,772
  18,473
  19,197
  19,949
  20,732
  21,552
  22,411
  23,313
  24,262
  25,261
  26,314
  27,425
Issuance/(repurchase) of shares, $m
  3,244
  3,135
  2,896
  2,528
  2,022
  1,370
  571
  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  
  8,334
  8,964
  9,488
  9,890
  10,153
  10,263
  10,214
  10,378
  11,096
  11,796
  12,481
  13,152
  13,812
  14,465
  15,115
  15,766
  16,423
  17,090
  17,772
  18,473
  19,197
  19,949
  20,732
  21,552
  22,411
  23,313
  24,262
  25,261
  26,314
  27,425
Total cash flow (excl. dividends), $m
  8,040
  9,055
  10,083
  11,120
  12,156
  13,183
  14,193
  15,560
  17,624
  19,810
  21,791
  24,214
  26,754
  29,409
  32,179
  35,065
  38,069
  41,193
  44,441
  47,817
  51,325
  54,972
  58,763
  62,705
  66,807
  71,076
  75,522
  80,154
  84,982
  90,016
Retained Cash Flow (-), $m
  -6,249
  -7,182
  -8,122
  -9,071
  -10,019
  -10,958
  -11,882
  -12,787
  -13,672
  -14,535
  -15,379
  -16,205
  -17,019
  -17,823
  -18,624
  -19,426
  -20,236
  -21,057
  -21,897
  -22,761
  -23,653
  -24,580
  -25,545
  -26,555
  -27,613
  -28,725
  -29,894
  -31,125
  -32,423
  -33,791
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
  1,791
  1,873
  1,961
  2,049
  2,137
  2,225
  2,311
  2,773
  3,953
  5,276
  6,412
  8,009
  9,735
  11,585
  13,554
  15,638
  17,833
  20,136
  22,544
  25,056
  27,672
  30,392
  33,218
  36,151
  39,194
  42,352
  45,628
  49,029
  52,559
  56,225
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
  1,717
  1,715
  1,706
  1,687
  1,657
  1,614
  1,561
  1,733
  2,271
  2,766
  3,045
  3,418
  3,701
  3,889
  3,979
  3,974
  3,880
  3,708
  3,471
  3,184
  2,862
  2,522
  2,177
  1,841
  1,525
  1,236
  979
  759
  574
  423
Current shareholders' claim on cash, %
  84.6
  74.1
  67.0
  62.2
  59.2
  57.5
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9
  56.9

Canon Inc. (Canon) is a manufacturer of office multifunction devices (MFDs), plain paper copying machines, laser printers, inkjet printers, cameras and lithography equipment. Canon sells its products principally under the Canon brand name and through sales subsidiaries. Each of these subsidiaries is responsible for marketing and distribution to retail dealers in an assigned territory. Canon operates its business in three segments: the Office Business Unit, the Imaging System Business Unit, and the Industry and Others Business Unit. Canon's research and development activities range from basic research to product-oriented research directed at maintaining Canon's technological operations in the marketplace. Canon has manufacturing subsidiaries in a range of countries, including the United States, Germany, France, the Netherlands, Taiwan, China, Malaysia, Thailand, Vietnam and the Philippines.

FINANCIAL RATIOS  of  Canon ADR (CAJ)

Valuation Ratios
P/E Ratio 25.7
Price to Sales 1.1
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 7.7
Price to Free Cash Flow 13.2
Growth Rates
Sales Growth Rate -10.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -18.2%
Cap. Spend. - 3 Yr. Gr. Rate -2.4%
Financial Strength
Quick Ratio 345
Current Ratio 0
LT Debt to Equity 22%
Total Debt to Equity 22%
Interest Coverage 356
Management Effectiveness
Return On Assets 3.2%
Ret/ On Assets - 3 Yr. Avg. 4.7%
Return On Total Capital 4.7%
Ret/ On T. Cap. - 3 Yr. Avg. 6.9%
Return On Equity 5.2%
Return On Equity - 3 Yr. Avg. 7.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 49.2%
Gross Margin - 3 Yr. Avg. 50%
EBITDA Margin 14.6%
EBITDA Margin - 3 Yr. Avg. 16.1%
Operating Margin 6.7%
Oper. Margin - 3 Yr. Avg. 8.6%
Pre-Tax Margin 7.2%
Pre-Tax Margin - 3 Yr. Avg. 8.9%
Net Profit Margin 4.4%
Net Profit Margin - 3 Yr. Avg. 5.7%
Effective Tax Rate 33.8%
Eff/ Tax Rate - 3 Yr. Avg. 32.7%
Payout Ratio 108.8%

CAJ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CAJ stock intrinsic value calculation we used $36206.9378627 million for the last fiscal year's total revenue generated by Canon ADR. The default revenue input number comes from 0001 income statement of Canon 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 CAJ stock valuation model: a) initial revenue growth rate of 24.6% 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 CAJ is calculated based on our internal credit rating of Canon 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 Canon 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 CAJ stock the variable cost ratio is equal to 86.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2104 million in the base year in the intrinsic value calculation for CAJ 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 Canon ADR.

Corporate tax rate of 27% is the nominal tax rate for Canon 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 CAJ 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 CAJ are equal to 44.4%.

Life of production assets of 9.5 years is the average useful life of capital assets used in Canon 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 CAJ is equal to 10.8%. 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 - $25474.5931172 million for Canon 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 23.781 million for Canon 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 Canon ADR at the current share price and the inputted number of shares is $0.7 billion.

RELATED COMPANIES Price Int.Val. Rating
HPQ HP 23.67 36.87  str.buy
XRX Xerox 25.22 24.99  hold

COMPANY NEWS

▶ Two Ways to Profit From Extended Pain in Cognex Stock   [Oct-10-18 10:20AM  InvestorPlace]
▶ 3 High-Yield Stocks Still Worth Buying   [06:00AM  Motley Fool]
▶ Nikon Takes on Sony With Mirrorless Camera   [Aug-23-18 12:16AM  Bloomberg]
▶ New Strong Sell Stocks for July 30th   [Jul-30-18 07:56AM  Zacks]
▶ Canon: 2Q Earnings Snapshot   [Jul-26-18 05:05AM  Associated Press]
▶ Canon spinoff launches intelligent video cloud platform   [Jul-24-18 05:07PM  American City Business Journals]
▶ Arcules Launches Intelligent Video Cloud Platform   [Jul-23-18 12:00PM  PR Newswire]
▶ Canon Wont Sell Film Cameras Anymore   [May-31-18 01:07PM  Fortune]
▶ Canon has sold its last film camera   [11:29AM  TechCrunch]
▶ Top Ranked Income Stocks to Buy for March 29th   [Mar-29-18 07:49AM  Zacks]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.