Intrinsic value of Cboe Global Markets - CBOE

Previous Close

$93.46

  Intrinsic Value

$1,584

stock screener

  Rating & Target

str. buy

+999%

Previous close

$93.46

 
Intrinsic value

$1,584

 
Up/down potential

+999%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as CBOE.

We calculate the intrinsic value of CBOE 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 2017), $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 10.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  3,566
  5,510
  8,240
  11,956
  16,869
  23,190
  31,128
  40,874
  52,594
  66,431
  82,492
  100,855
  121,564
  144,637
  170,067
  197,829
  227,882
  260,179
  294,666
  331,292
  370,009
  410,777
  453,565
  498,352
  545,133
  593,914
  644,715
  697,571
  752,528
  809,649
Variable operating expenses, $m
  1,778
  2,495
  3,503
  4,875
  6,689
  9,022
  11,953
  15,551
  19,878
  24,986
  30,455
  37,234
  44,879
  53,397
  62,786
  73,035
  84,130
  96,053
  108,785
  122,307
  136,600
  151,651
  167,447
  183,982
  201,253
  219,262
  238,017
  257,530
  277,819
  298,907
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
  1,778
  2,495
  3,503
  4,875
  6,689
  9,022
  11,953
  15,551
  19,878
  24,986
  30,455
  37,234
  44,879
  53,397
  62,786
  73,035
  84,130
  96,053
  108,785
  122,307
  136,600
  151,651
  167,447
  183,982
  201,253
  219,262
  238,017
  257,530
  277,819
  298,907
Operating income, $m
  1,789
  3,015
  4,737
  7,081
  10,180
  14,168
  19,175
  25,323
  32,717
  41,445
  52,038
  63,621
  76,685
  91,240
  107,282
  124,794
  143,753
  164,126
  185,881
  208,985
  233,409
  259,126
  286,117
  314,370
  343,881
  374,653
  406,699
  440,041
  474,709
  510,742
EBITDA, $m
  2,632
  4,067
  6,082
  8,825
  12,451
  17,117
  22,976
  30,170
  38,821
  49,034
  60,889
  74,443
  89,728
  106,759
  125,530
  146,021
  168,204
  192,043
  217,499
  244,533
  273,111
  303,202
  334,785
  367,843
  402,373
  438,380
  475,877
  514,890
  555,455
  597,618
Interest expense (income), $m
  0
  83
  170
  296
  472
  713
  1,031
  1,441
  1,955
  2,586
  3,346
  4,242
  5,283
  6,472
  7,814
  9,309
  10,956
  12,754
  14,701
  16,794
  19,028
  21,401
  23,909
  26,550
  29,322
  32,223
  35,254
  38,414
  41,705
  45,129
  48,689
Earnings before tax, $m
  1,706
  2,845
  4,442
  6,609
  9,467
  13,137
  17,734
  23,368
  30,130
  38,099
  47,795
  58,338
  70,212
  83,426
  97,973
  113,838
  130,998
  149,424
  169,087
  189,958
  212,008
  235,217
  259,567
  285,049
  311,658
  339,399
  368,285
  398,336
  429,580
  462,053
Tax expense, $m
  461
  768
  1,199
  1,784
  2,556
  3,547
  4,788
  6,309
  8,135
  10,287
  12,905
  15,751
  18,957
  22,525
  26,453
  30,736
  35,369
  40,345
  45,654
  51,289
  57,242
  63,509
  70,083
  76,963
  84,148
  91,638
  99,437
  107,551
  115,987
  124,754
Net income, $m
  1,245
  2,077
  3,242
  4,824
  6,911
  9,590
  12,946
  17,058
  21,995
  27,812
  34,891
  42,587
  51,255
  60,901
  71,520
  83,102
  95,629
  109,080
  123,434
  138,669
  154,766
  171,709
  189,484
  208,085
  227,510
  247,761
  268,848
  290,785
  313,594
  337,299

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
  8,431
  13,026
  19,481
  28,266
  39,879
  54,824
  73,590
  96,628
  124,337
  157,047
  195,017
  238,427
  287,385
  341,931
  402,050
  467,681
  538,729
  615,080
  696,610
  783,196
  874,726
  971,104
  1,072,257
  1,178,138
  1,288,731
  1,404,053
  1,524,150
  1,649,103
  1,779,026
  1,914,065
Adjusted assets (=assets-cash), $m
  8,431
  13,026
  19,481
  28,266
  39,879
  54,824
  73,590
  96,628
  124,337
  157,047
  195,017
  238,427
  287,385
  341,931
  402,050
  467,681
  538,729
  615,080
  696,610
  783,196
  874,726
  971,104
  1,072,257
  1,178,138
  1,288,731
  1,404,053
  1,524,150
  1,649,103
  1,779,026
  1,914,065
Revenue / Adjusted assets
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
Average production assets, $m
  3,827
  5,912
  8,842
  12,829
  18,100
  24,883
  33,401
  43,857
  56,434
  71,280
  88,514
  108,217
  130,438
  155,195
  182,482
  212,270
  244,518
  279,172
  316,177
  355,476
  397,020
  440,764
  486,675
  534,732
  584,928
  637,270
  691,780
  748,493
  807,463
  868,754
Working capital, $m
  -414
  -639
  -956
  -1,387
  -1,957
  -2,690
  -3,611
  -4,741
  -6,101
  -7,706
  -9,569
  -11,699
  -14,101
  -16,778
  -19,728
  -22,948
  -26,434
  -30,181
  -34,181
  -38,430
  -42,921
  -47,650
  -52,613
  -57,809
  -63,235
  -68,894
  -74,787
  -80,918
  -87,293
  -93,919
Total debt, $m
  2,532
  4,411
  7,051
  10,644
  15,394
  21,506
  29,181
  38,604
  49,937
  63,315
  78,845
  96,600
  116,623
  138,933
  163,522
  190,365
  219,423
  250,651
  283,997
  319,411
  356,846
  396,265
  437,636
  480,942
  526,174
  573,341
  622,460
  673,566
  726,705
  781,936
Total liabilities, $m
  3,448
  5,328
  7,968
  11,561
  16,310
  22,423
  30,098
  39,521
  50,854
  64,232
  79,762
  97,517
  117,540
  139,850
  164,438
  191,281
  220,340
  251,568
  284,913
  320,327
  357,763
  397,182
  438,553
  481,858
  527,091
  574,258
  623,377
  674,483
  727,622
  782,852
Total equity, $m
  4,983
  7,698
  11,513
  16,705
  23,568
  32,401
  43,491
  57,107
  73,483
  92,815
  115,255
  140,910
  169,844
  202,081
  237,612
  276,399
  318,389
  363,512
  411,697
  462,869
  516,963
  573,923
  633,704
  696,279
  761,640
  829,795
  900,773
  974,620
  1,051,405
  1,131,212
Total liabilities and equity, $m
  8,431
  13,026
  19,481
  28,266
  39,878
  54,824
  73,589
  96,628
  124,337
  157,047
  195,017
  238,427
  287,384
  341,931
  402,050
  467,680
  538,729
  615,080
  696,610
  783,196
  874,726
  971,105
  1,072,257
  1,178,137
  1,288,731
  1,404,053
  1,524,150
  1,649,103
  1,779,027
  1,914,064
Debt-to-equity ratio
  0.510
  0.570
  0.610
  0.640
  0.650
  0.660
  0.670
  0.680
  0.680
  0.680
  0.680
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
Adjusted equity ratio
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591
  0.591

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,245
  2,077
  3,242
  4,824
  6,911
  9,590
  12,946
  17,058
  21,995
  27,812
  34,891
  42,587
  51,255
  60,901
  71,520
  83,102
  95,629
  109,080
  123,434
  138,669
  154,766
  171,709
  189,484
  208,085
  227,510
  247,761
  268,848
  290,785
  313,594
  337,299
Depreciation, amort., depletion, $m
  844
  1,052
  1,345
  1,744
  2,271
  2,949
  3,801
  4,847
  6,104
  7,589
  8,851
  10,822
  13,044
  15,520
  18,248
  21,227
  24,452
  27,917
  31,618
  35,548
  39,702
  44,076
  48,667
  53,473
  58,493
  63,727
  69,178
  74,849
  80,746
  86,875
Funds from operations, $m
  2,089
  3,129
  4,588
  6,568
  9,182
  12,539
  16,747
  21,905
  28,099
  35,401
  43,742
  53,409
  64,299
  76,420
  89,769
  104,329
  120,080
  136,997
  155,051
  174,217
  194,468
  215,785
  238,152
  261,559
  286,003
  311,488
  338,026
  365,635
  394,340
  424,174
Change in working capital, $m
  -155
  -225
  -317
  -431
  -570
  -733
  -921
  -1,130
  -1,360
  -1,605
  -1,863
  -2,130
  -2,402
  -2,676
  -2,950
  -3,220
  -3,486
  -3,746
  -4,001
  -4,249
  -4,491
  -4,729
  -4,963
  -5,195
  -5,427
  -5,659
  -5,893
  -6,131
  -6,375
  -6,626
Cash from operations, $m
  2,244
  3,355
  4,904
  6,999
  9,752
  13,272
  17,668
  23,036
  29,459
  37,006
  45,605
  55,539
  66,701
  79,097
  92,718
  107,549
  123,567
  140,743
  159,052
  178,465
  198,959
  220,514
  243,115
  266,754
  291,429
  317,147
  343,919
  371,766
  400,715
  430,800
Maintenance CAPEX, $m
  -239
  -383
  -591
  -884
  -1,283
  -1,810
  -2,488
  -3,340
  -4,386
  -5,643
  -7,128
  -8,851
  -10,822
  -13,044
  -15,520
  -18,248
  -21,227
  -24,452
  -27,917
  -31,618
  -35,548
  -39,702
  -44,076
  -48,667
  -53,473
  -58,493
  -63,727
  -69,178
  -74,849
  -80,746
New CAPEX, $m
  -1,434
  -2,086
  -2,930
  -3,987
  -5,271
  -6,783
  -8,517
  -10,457
  -12,576
  -14,847
  -17,234
  -19,703
  -22,221
  -24,757
  -27,287
  -29,788
  -32,247
  -34,654
  -37,005
  -39,300
  -41,544
  -43,744
  -45,911
  -48,057
  -50,196
  -52,342
  -54,510
  -56,714
  -58,969
  -61,291
Cash from investing activities, $m
  -1,673
  -2,469
  -3,521
  -4,871
  -6,554
  -8,593
  -11,005
  -13,797
  -16,962
  -20,490
  -24,362
  -28,554
  -33,043
  -37,801
  -42,807
  -48,036
  -53,474
  -59,106
  -64,922
  -70,918
  -77,092
  -83,446
  -89,987
  -96,724
  -103,669
  -110,835
  -118,237
  -125,892
  -133,818
  -142,037
Free cash flow, $m
  570
  886
  1,383
  2,128
  3,198
  4,679
  6,662
  9,239
  12,497
  16,516
  21,243
  26,984
  33,659
  41,296
  49,912
  59,513
  70,092
  81,637
  94,130
  107,548
  121,868
  137,068
  153,128
  170,029
  187,760
  206,312
  225,682
  245,874
  266,896
  288,763
Issuance/(repayment) of debt, $m
  1,294
  1,879
  2,640
  3,593
  4,750
  6,113
  7,675
  9,423
  11,333
  13,379
  15,530
  17,755
  20,024
  22,309
  24,589
  26,843
  29,059
  31,228
  33,346
  35,414
  37,436
  39,418
  41,371
  43,305
  45,233
  47,166
  49,120
  51,106
  53,139
  55,231
Issuance/(repurchase) of shares, $m
  627
  639
  572
  367
  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  
  1,921
  2,518
  3,212
  3,960
  4,750
  6,113
  7,675
  9,423
  11,333
  13,379
  15,530
  17,755
  20,024
  22,309
  24,589
  26,843
  29,059
  31,228
  33,346
  35,414
  37,436
  39,418
  41,371
  43,305
  45,233
  47,166
  49,120
  51,106
  53,139
  55,231
Total cash flow (excl. dividends), $m
  2,491
  3,404
  4,596
  6,088
  7,948
  10,792
  14,338
  18,662
  23,830
  29,895
  36,773
  44,739
  53,682
  63,605
  74,501
  86,356
  99,151
  112,865
  127,476
  142,962
  159,304
  176,487
  194,499
  213,335
  232,993
  253,478
  274,802
  296,980
  320,035
  343,994
Retained Cash Flow (-), $m
  -1,872
  -2,716
  -3,815
  -5,192
  -6,863
  -8,833
  -11,091
  -13,616
  -16,376
  -19,332
  -22,440
  -25,655
  -28,934
  -32,237
  -35,530
  -38,788
  -41,989
  -45,123
  -48,184
  -51,173
  -54,094
  -56,959
  -59,781
  -62,576
  -65,361
  -68,155
  -70,977
  -73,847
  -76,785
  -79,808
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
  53
  86
  132
  198
  287
  405
  557
  747
  981
  1,262
  1,594
  1,980
  2,421
  2,918
  3,471
  4,082
  4,748
  5,469
  6,244
  7,072
  7,951
  8,880
  9,859
  10,886
  11,960
  13,083
  14,254
  15,473
  16,742
  18,061
Cash available for distribution, $m
  619
  689
  781
  897
  1,084
  1,959
  3,247
  5,046
  7,454
  10,563
  14,333
  19,084
  24,748
  31,368
  38,971
  47,568
  57,161
  67,742
  79,292
  91,789
  105,210
  119,528
  134,718
  150,759
  167,632
  185,324
  203,825
  223,133
  243,250
  264,186
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
  593
  631
  680
  738
  840
  1,422
  2,194
  3,154
  4,282
  5,538
  6,807
  8,144
  9,410
  10,531
  11,441
  12,088
  12,437
  12,475
  12,209
  11,664
  10,882
  9,918
  8,830
  7,678
  6,521
  5,407
  4,375
  3,452
  2,655
  1,989
Current shareholders' claim on cash, %
  94.1
  90.5
  88.5
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6
  87.6

Cboe Global Markets, Inc., formerly CBOE Holdings, Inc., is a holding company. The Company provides trading and investment solutions to investors around the world. It offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, United States and European equities, exchange-traded products (ETPs), global foreign exchange (FX) and multi-asset volatility products based on the Cboe Volatility Index (VIX Index). The Company’s trading venues include the options exchange in the United States and the stock exchange in Europe. Its products include VIX Index & Volatility, stock exchange options, options on single stocks and exchange traded products, Mini Options, Weeklys Options, Strategy Benchmark Indexes, Social Media Indexes, Contract Specs and Trading Hours and Trader Incentive Programs.

FINANCIAL RATIOS  of  Cboe Global Markets (CBOE)

Valuation Ratios
P/E Ratio 40.6
Price to Sales 11.6
Price to Book 23.9
Price to Tangible Book
Price to Cash Flow 33
Price to Free Cash Flow 40.8
Growth Rates
Sales Growth Rate 3.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 12.8%
Cap. Spend. - 3 Yr. Gr. Rate 8.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0.7
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 43.4%
Ret/ On Assets - 3 Yr. Avg. 47.6%
Return On Total Capital 64.7%
Ret/ On T. Cap. - 3 Yr. Avg. 72%
Return On Equity 64.7%
Return On Equity - 3 Yr. Avg. 72%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 88.1%
Gross Margin - 3 Yr. Avg. 88.7%
EBITDA Margin 53.4%
EBITDA Margin - 3 Yr. Avg. 56.1%
Operating Margin 45.4%
Oper. Margin - 3 Yr. Avg. 48.9%
Pre-Tax Margin 46.7%
Pre-Tax Margin - 3 Yr. Avg. 49.3%
Net Profit Margin 28.5%
Net Profit Margin - 3 Yr. Avg. 30.5%
Effective Tax Rate 39.4%
Eff/ Tax Rate - 3 Yr. Avg. 38.3%
Payout Ratio 42.2%

CBOE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBOE stock intrinsic value calculation we used $2229 million for the last fiscal year's total revenue generated by Cboe Global Markets. The default revenue input number comes from 2017 income statement of Cboe Global Markets. 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 CBOE stock valuation model: a) initial revenue growth rate of 60% 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 CBOE is calculated based on our internal credit rating of Cboe Global Markets, 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 Cboe Global Markets.
    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 CBOE stock the variable cost ratio is equal to 57.6%.

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 CBOE 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 6.7% for Cboe Global Markets.

Corporate tax rate of 27% is the nominal tax rate for Cboe Global Markets. 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 CBOE stock is equal to 2.4%.

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 CBOE are equal to 107.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Cboe Global Markets 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 CBOE is equal to -11.6%. 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 - $3111 million for Cboe Global Markets - 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 107 million for Cboe Global Markets 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 Cboe Global Markets at the current share price and the inputted number of shares is $10.0 billion.

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