Intrinsic value of Cboe Global Markets - CBOE

Previous Close

$126.28

  Intrinsic Value

$700.91

stock screener

  Rating & Target

str. buy

+455%

Previous close

$126.28

 
Intrinsic value

$700.91

 
Up/down potential

+455%

 
Rating

str. buy

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

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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 2016), $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 14.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.46
  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
  657
  1,051
  1,624
  2,429
  3,524
  4,972
  6,835
  9,175
  12,048
  15,502
  19,581
  24,315
  29,727
  35,831
  42,632
  50,127
  58,310
  67,169
  76,688
  86,853
  97,649
  109,061
  121,077
  133,689
  146,890
  160,679
  175,057
  190,031
  205,610
  221,808
  238,645
Variable operating expenses, $m
 
  520
  802
  1,198
  1,737
  2,449
  3,366
  4,517
  5,930
  7,630
  9,637
  11,964
  14,627
  17,630
  20,977
  24,665
  28,691
  33,050
  37,734
  42,735
  48,047
  53,662
  59,575
  65,780
  72,276
  79,061
  86,135
  93,503
  101,169
  109,139
  117,423
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
  359
  520
  802
  1,198
  1,737
  2,449
  3,366
  4,517
  5,930
  7,630
  9,637
  11,964
  14,627
  17,630
  20,977
  24,665
  28,691
  33,050
  37,734
  42,735
  48,047
  53,662
  59,575
  65,780
  72,276
  79,061
  86,135
  93,503
  101,169
  109,139
  117,423
Operating income, $m
  298
  531
  822
  1,231
  1,788
  2,523
  3,470
  4,658
  6,117
  7,872
  9,944
  12,351
  15,100
  18,201
  21,655
  25,463
  29,619
  34,119
  38,954
  44,118
  49,601
  55,398
  61,502
  67,908
  74,614
  81,618
  88,921
  96,527
  104,441
  112,669
  121,221
EBITDA, $m
  342
  575
  889
  1,329
  1,928
  2,720
  3,740
  5,020
  6,592
  8,482
  10,714
  13,304
  16,265
  19,605
  23,326
  27,428
  31,905
  36,752
  41,960
  47,522
  53,429
  59,673
  66,248
  73,149
  80,372
  87,916
  95,784
  103,977
  112,501
  121,364
  130,576
Interest expense (income), $m
  0
  0
  3
  8
  15
  24
  37
  52
  72
  96
  126
  160
  200
  246
  298
  355
  419
  488
  563
  643
  729
  821
  917
  1,019
  1,126
  1,237
  1,354
  1,476
  1,602
  1,734
  1,871
Earnings before tax, $m
  307
  531
  819
  1,223
  1,773
  2,499
  3,433
  4,606
  6,045
  7,775
  9,818
  12,191
  14,900
  17,955
  21,358
  25,107
  29,201
  33,631
  38,391
  43,474
  48,872
  54,577
  60,585
  66,889
  73,488
  80,381
  87,567
  95,052
  102,839
  110,935
  119,350
Tax expense, $m
  121
  143
  221
  330
  479
  675
  927
  1,244
  1,632
  2,099
  2,651
  3,291
  4,023
  4,848
  5,767
  6,779
  7,884
  9,080
  10,366
  11,738
  13,195
  14,736
  16,358
  18,060
  19,842
  21,703
  23,643
  25,664
  27,766
  29,952
  32,225
Net income, $m
  187
  388
  598
  893
  1,294
  1,824
  2,506
  3,362
  4,413
  5,676
  7,167
  8,899
  10,877
  13,107
  15,591
  18,328
  21,316
  24,551
  28,026
  31,736
  35,677
  39,842
  44,227
  48,829
  53,646
  58,678
  63,924
  69,388
  75,072
  80,983
  87,126

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  97
  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
  477
  608
  939
  1,405
  2,038
  2,876
  3,953
  5,307
  6,968
  8,966
  11,325
  14,063
  17,193
  20,724
  24,657
  28,992
  33,725
  38,848
  44,354
  50,233
  56,477
  63,077
  70,027
  77,321
  84,957
  92,932
  101,247
  109,908
  118,918
  128,287
  138,025
Adjusted assets (=assets-cash), $m
  380
  608
  939
  1,405
  2,038
  2,876
  3,953
  5,307
  6,968
  8,966
  11,325
  14,063
  17,193
  20,724
  24,657
  28,992
  33,725
  38,848
  44,354
  50,233
  56,477
  63,077
  70,027
  77,321
  84,957
  92,932
  101,247
  109,908
  118,918
  128,287
  138,025
Revenue / Adjusted assets
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
  1.729
Average production assets, $m
  129
  206
  318
  476
  691
  975
  1,340
  1,798
  2,361
  3,038
  3,838
  4,766
  5,826
  7,023
  8,356
  9,825
  11,429
  13,165
  15,031
  17,023
  19,139
  21,376
  23,731
  26,203
  28,790
  31,493
  34,311
  37,246
  40,299
  43,474
  46,774
Working capital, $m
  145
  77
  119
  177
  257
  363
  499
  670
  879
  1,132
  1,429
  1,775
  2,170
  2,616
  3,112
  3,659
  4,257
  4,903
  5,598
  6,340
  7,128
  7,961
  8,839
  9,759
  10,723
  11,730
  12,779
  13,872
  15,010
  16,192
  17,421
Total debt, $m
  0
  95
  234
  428
  693
  1,043
  1,494
  2,059
  2,754
  3,589
  4,575
  5,719
  7,028
  8,503
  10,148
  11,960
  13,938
  16,080
  18,381
  20,838
  23,448
  26,207
  29,112
  32,161
  35,353
  38,686
  42,162
  45,782
  49,549
  53,465
  57,535
Total liabilities, $m
  159
  254
  393
  587
  852
  1,202
  1,653
  2,218
  2,913
  3,748
  4,734
  5,878
  7,187
  8,662
  10,307
  12,119
  14,097
  16,239
  18,540
  20,997
  23,607
  26,366
  29,271
  32,320
  35,512
  38,845
  42,321
  45,941
  49,708
  53,624
  57,694
Total equity, $m
  318
  354
  547
  818
  1,186
  1,674
  2,301
  3,088
  4,055
  5,218
  6,591
  8,185
  10,006
  12,061
  14,350
  16,873
  19,628
  22,610
  25,814
  29,236
  32,870
  36,711
  40,756
  45,001
  49,445
  54,086
  58,926
  63,966
  69,210
  74,663
  80,330
Total liabilities and equity, $m
  477
  608
  940
  1,405
  2,038
  2,876
  3,954
  5,306
  6,968
  8,966
  11,325
  14,063
  17,193
  20,723
  24,657
  28,992
  33,725
  38,849
  44,354
  50,233
  56,477
  63,077
  70,027
  77,321
  84,957
  92,931
  101,247
  109,907
  118,918
  128,287
  138,024
Debt-to-equity ratio
  0.000
  0.270
  0.430
  0.520
  0.580
  0.620
  0.650
  0.670
  0.680
  0.690
  0.690
  0.700
  0.700
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.720
  0.720
  0.720
  0.720
  0.720
  0.720
Adjusted equity ratio
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  187
  388
  598
  893
  1,294
  1,824
  2,506
  3,362
  4,413
  5,676
  7,167
  8,899
  10,877
  13,107
  15,591
  18,328
  21,316
  24,551
  28,026
  31,736
  35,677
  39,842
  44,227
  48,829
  53,646
  58,678
  63,924
  69,388
  75,072
  80,983
  87,126
Depreciation, amort., depletion, $m
  44
  44
  66
  98
  141
  198
  271
  362
  475
  610
  770
  953
  1,165
  1,405
  1,671
  1,965
  2,286
  2,633
  3,006
  3,405
  3,828
  4,275
  4,746
  5,241
  5,758
  6,299
  6,862
  7,449
  8,060
  8,695
  9,355
Funds from operations, $m
  226
  432
  664
  991
  1,435
  2,022
  2,777
  3,724
  4,888
  6,286
  7,937
  9,852
  12,042
  14,511
  17,262
  20,293
  23,602
  27,184
  31,032
  35,141
  39,504
  44,117
  48,973
  54,070
  59,404
  64,976
  70,786
  76,837
  83,132
  89,677
  96,481
Change in working capital, $m
  -4
  29
  42
  59
  80
  106
  136
  171
  210
  252
  298
  346
  395
  446
  496
  547
  597
  647
  695
  742
  788
  833
  877
  921
  964
  1,007
  1,050
  1,093
  1,137
  1,183
  1,229
Cash from operations, $m
  230
  403
  622
  932
  1,355
  1,916
  2,641
  3,554
  4,678
  6,034
  7,640
  9,507
  11,647
  14,066
  16,766
  19,746
  23,005
  26,537
  30,337
  34,399
  38,716
  43,284
  48,096
  53,149
  58,441
  63,970
  69,737
  75,744
  81,995
  88,495
  95,251
Maintenance CAPEX, $m
  0
  -26
  -41
  -64
  -95
  -138
  -195
  -268
  -360
  -472
  -608
  -768
  -953
  -1,165
  -1,405
  -1,671
  -1,965
  -2,286
  -2,633
  -3,006
  -3,405
  -3,828
  -4,275
  -4,746
  -5,241
  -5,758
  -6,299
  -6,862
  -7,449
  -8,060
  -8,695
New CAPEX, $m
  -44
  -78
  -112
  -158
  -215
  -284
  -365
  -459
  -563
  -677
  -799
  -928
  -1,061
  -1,196
  -1,333
  -1,469
  -1,604
  -1,736
  -1,866
  -1,992
  -2,116
  -2,237
  -2,355
  -2,472
  -2,587
  -2,703
  -2,818
  -2,935
  -3,054
  -3,175
  -3,300
Cash from investing activities, $m
  -84
  -104
  -153
  -222
  -310
  -422
  -560
  -727
  -923
  -1,149
  -1,407
  -1,696
  -2,014
  -2,361
  -2,738
  -3,140
  -3,569
  -4,022
  -4,499
  -4,998
  -5,521
  -6,065
  -6,630
  -7,218
  -7,828
  -8,461
  -9,117
  -9,797
  -10,503
  -11,235
  -11,995
Free cash flow, $m
  146
  300
  469
  710
  1,045
  1,494
  2,080
  2,827
  3,755
  4,885
  6,232
  7,811
  9,633
  11,704
  14,028
  16,606
  19,436
  22,515
  25,838
  29,400
  33,196
  37,219
  41,465
  45,931
  50,613
  55,509
  60,620
  65,947
  71,492
  77,260
  83,257
Issuance/(repayment) of debt, $m
  0
  95
  139
  195
  265
  350
  450
  566
  694
  835
  986
  1,144
  1,308
  1,476
  1,644
  1,812
  1,978
  2,142
  2,301
  2,458
  2,610
  2,759
  2,905
  3,049
  3,192
  3,334
  3,476
  3,620
  3,766
  3,916
  4,070
Issuance/(repurchase) of shares, $m
  -65
  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  
  -71
  95
  139
  195
  265
  350
  450
  566
  694
  835
  986
  1,144
  1,308
  1,476
  1,644
  1,812
  1,978
  2,142
  2,301
  2,458
  2,610
  2,759
  2,905
  3,049
  3,192
  3,334
  3,476
  3,620
  3,766
  3,916
  4,070
Total cash flow (excl. dividends), $m
  74
  395
  607
  905
  1,310
  1,844
  2,531
  3,393
  4,450
  5,720
  7,218
  8,956
  10,942
  13,180
  15,672
  18,418
  21,414
  24,657
  28,140
  31,858
  35,806
  39,978
  44,371
  48,980
  53,804
  58,843
  64,096
  69,567
  75,258
  81,176
  87,327
Retained Cash Flow (-), $m
  -58
  -133
  -193
  -271
  -369
  -487
  -627
  -788
  -967
  -1,163
  -1,373
  -1,594
  -1,822
  -2,055
  -2,289
  -2,523
  -2,754
  -2,982
  -3,204
  -3,422
  -3,634
  -3,841
  -4,045
  -4,245
  -4,444
  -4,641
  -4,840
  -5,040
  -5,244
  -5,453
  -5,667
Prev. year cash balance distribution, $m
 
  97
  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
 
  359
  415
  634
  941
  1,357
  1,904
  2,605
  3,483
  4,557
  5,846
  7,362
  9,120
  11,125
  13,383
  15,895
  18,660
  21,675
  24,935
  28,436
  32,172
  36,137
  40,326
  44,735
  49,361
  54,201
  59,256
  64,527
  70,014
  75,724
  81,660
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
 
  344
  379
  552
  775
  1,052
  1,382
  1,760
  2,177
  2,618
  3,065
  3,496
  3,892
  4,230
  4,493
  4,666
  4,742
  4,716
  4,592
  4,378
  4,088
  3,738
  3,346
  2,932
  2,514
  2,108
  1,729
  1,385
  1,083
  827
  615
Current shareholders' claim on cash, %
  100
  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

Cboe Global Markets, Inc., formerly CBOE Holdings, Inc., is a holding company. The Company's principal business is operating markets that offer for trading options on various market indexes (index options), on an exclusive basis, and futures contracts, as well as on non-exclusive multiply listed options, such as options on the stocks of individual corporations (equity options), and options on other exchange-traded products (ETP options), such as exchange-traded funds (ETF options) and exchange-traded notes (ETN options). The Company's subsidiaries include Chicago Board Options Exchange, Incorporated (CBOE), CBOE Futures Exchange, LLC (CFE), C2 Options Exchange, Incorporated (C2), Market Data Express, LLC and Chicago Options Exchange Building Corporation. The Company operates CBOE, CFE and C2 as stand-alone exchanges. The options contracts listed for trading include options on indexes, equities and ETPs.

FINANCIAL RATIOS  of  Cboe Global Markets (CBOE)

Valuation Ratios
P/E Ratio 54.9
Price to Sales 15.6
Price to Book 32.3
Price to Tangible Book
Price to Cash Flow 44.6
Price to Free Cash Flow 55.2
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 $657 million for the last fiscal year's total revenue generated by Cboe Global Markets. The default revenue input number comes from 2016 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 49.6%.

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 3.5% 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 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 CBOE are equal to 19.6%.

Life of production assets of 3.3 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 7.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $318 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 112.738 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 $14.2 billion.

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Financial statements of CBOE
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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