Intrinsic value of Charter Communications, Inc. - CHTR

Previous Close

$392.08

  Intrinsic Value

$333.93

stock screener

  Rating & Target

hold

-15%

Previous close

$392.08

 
Intrinsic value

$333.93

 
Up/down potential

-15%

 
Rating

hold

We calculate the intrinsic value of CHTR 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 88.4

 

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, %
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
Revenue, $m
  46,208
  48,893
  51,694
  54,618
  57,671
  60,862
  64,196
  67,682
  71,328
  75,143
  79,136
  83,317
  87,694
  92,280
  97,083
  102,118
  107,394
  112,925
  118,723
  124,804
  131,181
  137,869
  144,884
  152,244
  159,966
  168,067
  176,569
  185,489
  194,851
  204,676
Variable operating expenses, $m
  17,953
  18,792
  19,667
  20,581
  21,535
  22,532
  23,574
  24,663
  25,803
  26,995
  24,730
  26,036
  27,404
  28,837
  30,338
  31,912
  33,560
  35,289
  37,101
  39,001
  40,994
  43,084
  45,276
  47,576
  49,989
  52,521
  55,177
  57,965
  60,891
  63,961
Fixed operating expenses, $m
  22,109
  22,595
  23,092
  23,600
  24,120
  24,650
  25,193
  25,747
  26,313
  26,892
  27,484
  28,088
  28,706
  29,338
  29,983
  30,643
  31,317
  32,006
  32,710
  33,430
  34,165
  34,917
  35,685
  36,470
  37,273
  38,093
  38,931
  39,787
  40,662
  41,557
Total operating expenses, $m
  40,062
  41,387
  42,759
  44,181
  45,655
  47,182
  48,767
  50,410
  52,116
  53,887
  52,214
  54,124
  56,110
  58,175
  60,321
  62,555
  64,877
  67,295
  69,811
  72,431
  75,159
  78,001
  80,961
  84,046
  87,262
  90,614
  94,108
  97,752
  101,553
  105,518
Operating income, $m
  6,147
  7,506
  8,935
  10,437
  12,017
  13,680
  15,429
  17,272
  19,212
  21,256
  26,923
  29,192
  31,583
  34,104
  36,762
  39,563
  42,516
  45,630
  48,912
  52,373
  56,022
  59,868
  63,923
  68,198
  72,704
  77,454
  82,461
  87,737
  93,298
  99,158
EBITDA, $m
  17,591
  19,411
  21,320
  23,324
  25,429
  27,639
  29,961
  32,402
  34,968
  37,667
  40,506
  43,493
  46,636
  49,944
  53,425
  57,091
  60,950
  65,013
  69,290
  73,795
  78,538
  83,532
  88,792
  94,330
  100,161
  106,302
  112,767
  119,575
  126,743
  134,290
Interest expense (income), $m
  0
  3,933
  4,277
  4,641
  5,022
  5,419
  5,834
  6,267
  6,720
  7,193
  7,688
  8,206
  8,749
  9,316
  9,911
  10,534
  11,186
  11,870
  12,586
  13,338
  14,125
  14,951
  15,817
  16,725
  17,678
  18,678
  19,726
  20,827
  21,981
  23,193
  24,464
Earnings before tax, $m
  2,214
  3,229
  4,293
  5,415
  6,598
  7,846
  9,163
  10,552
  12,019
  13,568
  18,716
  20,443
  22,267
  24,193
  26,228
  28,377
  30,646
  33,043
  35,575
  38,248
  41,071
  44,051
  47,198
  50,520
  54,026
  57,728
  61,634
  65,756
  70,105
  74,694
Tax expense, $m
  598
  872
  1,159
  1,462
  1,781
  2,118
  2,474
  2,849
  3,245
  3,663
  5,053
  5,520
  6,012
  6,532
  7,082
  7,662
  8,275
  8,922
  9,605
  10,327
  11,089
  11,894
  12,743
  13,640
  14,587
  15,586
  16,641
  17,754
  18,928
  20,167
Net income, $m
  1,616
  2,357
  3,134
  3,953
  4,817
  5,728
  6,689
  7,703
  8,774
  9,905
  13,663
  14,923
  16,255
  17,661
  19,146
  20,715
  22,372
  24,122
  25,969
  27,921
  29,982
  32,157
  34,454
  36,879
  39,439
  42,141
  44,993
  48,002
  51,177
  54,527

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
  154,543
  163,522
  172,890
  182,669
  192,881
  203,550
  214,701
  226,361
  238,556
  251,315
  264,670
  278,651
  293,292
  308,627
  324,694
  341,530
  359,176
  377,674
  397,068
  417,404
  438,731
  461,100
  484,564
  509,178
  535,003
  562,098
  590,530
  620,366
  651,676
  684,536
Adjusted assets (=assets-cash), $m
  154,543
  163,522
  172,890
  182,669
  192,881
  203,550
  214,701
  226,361
  238,556
  251,315
  264,670
  278,651
  293,292
  308,627
  324,694
  341,530
  359,176
  377,674
  397,068
  417,404
  438,731
  461,100
  484,564
  509,178
  535,003
  562,098
  590,530
  620,366
  651,676
  684,536
Revenue / Adjusted assets
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
Average production assets, $m
  57,899
  61,263
  64,773
  68,436
  72,262
  76,260
  80,437
  84,805
  89,374
  94,155
  99,158
  104,396
  109,881
  115,626
  121,646
  127,953
  134,564
  141,495
  148,760
  156,379
  164,369
  172,750
  181,540
  190,762
  200,437
  210,589
  221,240
  232,418
  244,149
  256,460
Working capital, $m
  -7,255
  -7,676
  -8,116
  -8,575
  -9,054
  -9,555
  -10,079
  -10,626
  -11,199
  -11,797
  -12,424
  -13,081
  -13,768
  -14,488
  -15,242
  -16,032
  -16,861
  -17,729
  -18,640
  -19,594
  -20,595
  -21,645
  -22,747
  -23,902
  -25,115
  -26,387
  -27,721
  -29,122
  -30,592
  -32,134
Total debt, $m
  79,198
  85,951
  92,996
  100,349
  108,029
  116,052
  124,437
  133,205
  142,376
  151,971
  162,014
  172,527
  183,537
  195,070
  207,152
  219,813
  233,083
  246,993
  261,577
  276,870
  292,908
  309,729
  327,374
  345,884
  365,304
  385,680
  407,061
  429,497
  453,043
  477,753
Total liabilities, $m
  116,216
  122,969
  130,014
  137,367
  145,047
  153,070
  161,455
  170,223
  179,394
  188,989
  199,032
  209,545
  220,555
  232,088
  244,170
  256,831
  270,101
  284,011
  298,595
  313,888
  329,926
  346,747
  364,392
  382,902
  402,322
  422,698
  444,079
  466,515
  490,061
  514,771
Total equity, $m
  38,327
  40,553
  42,877
  45,302
  47,835
  50,480
  53,246
  56,137
  59,162
  62,326
  65,638
  69,105
  72,736
  76,540
  80,524
  84,700
  89,076
  93,663
  98,473
  103,516
  108,805
  114,353
  120,172
  126,276
  132,681
  139,400
  146,452
  153,851
  161,616
  169,765
Total liabilities and equity, $m
  154,543
  163,522
  172,891
  182,669
  192,882
  203,550
  214,701
  226,360
  238,556
  251,315
  264,670
  278,650
  293,291
  308,628
  324,694
  341,531
  359,177
  377,674
  397,068
  417,404
  438,731
  461,100
  484,564
  509,178
  535,003
  562,098
  590,531
  620,366
  651,677
  684,536
Debt-to-equity ratio
  2.070
  2.120
  2.170
  2.220
  2.260
  2.300
  2.340
  2.370
  2.410
  2.440
  2.470
  2.500
  2.520
  2.550
  2.570
  2.600
  2.620
  2.640
  2.660
  2.670
  2.690
  2.710
  2.720
  2.740
  2.750
  2.770
  2.780
  2.790
  2.800
  2.810
Adjusted equity ratio
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248
  0.248

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,616
  2,357
  3,134
  3,953
  4,817
  5,728
  6,689
  7,703
  8,774
  9,905
  13,663
  14,923
  16,255
  17,661
  19,146
  20,715
  22,372
  24,122
  25,969
  27,921
  29,982
  32,157
  34,454
  36,879
  39,439
  42,141
  44,993
  48,002
  51,177
  54,527
Depreciation, amort., depletion, $m
  11,444
  11,905
  12,386
  12,887
  13,412
  13,959
  14,531
  15,130
  15,756
  16,410
  13,583
  14,301
  15,052
  15,839
  16,664
  17,528
  18,433
  19,383
  20,378
  21,422
  22,516
  23,664
  24,869
  26,132
  27,457
  28,848
  30,307
  31,838
  33,445
  35,131
Funds from operations, $m
  13,060
  14,262
  15,520
  16,841
  18,228
  19,687
  21,220
  22,833
  24,530
  26,315
  27,246
  29,224
  31,307
  33,500
  35,810
  38,243
  40,805
  43,504
  46,348
  49,343
  52,498
  55,822
  59,323
  63,011
  66,896
  70,989
  75,300
  79,840
  84,622
  89,658
Change in working capital, $m
  -404
  -421
  -440
  -459
  -479
  -501
  -523
  -547
  -572
  -599
  -627
  -656
  -687
  -720
  -754
  -790
  -828
  -868
  -910
  -955
  -1,001
  -1,050
  -1,101
  -1,155
  -1,212
  -1,272
  -1,335
  -1,401
  -1,470
  -1,543
Cash from operations, $m
  13,465
  14,684
  15,960
  17,300
  18,708
  20,188
  21,744
  23,380
  25,102
  26,914
  27,873
  29,881
  31,994
  34,220
  36,564
  39,033
  41,634
  44,373
  47,258
  50,297
  53,499
  56,872
  60,424
  64,167
  68,109
  72,261
  76,634
  81,240
  86,092
  91,201
Maintenance CAPEX, $m
  -7,488
  -7,931
  -8,392
  -8,873
  -9,375
  -9,899
  -10,447
  -11,019
  -11,617
  -12,243
  -12,898
  -13,583
  -14,301
  -15,052
  -15,839
  -16,664
  -17,528
  -18,433
  -19,383
  -20,378
  -21,422
  -22,516
  -23,664
  -24,869
  -26,132
  -27,457
  -28,848
  -30,307
  -31,838
  -33,445
New CAPEX, $m
  -3,236
  -3,364
  -3,510
  -3,664
  -3,826
  -3,997
  -4,178
  -4,368
  -4,569
  -4,780
  -5,003
  -5,238
  -5,485
  -5,745
  -6,019
  -6,308
  -6,611
  -6,930
  -7,266
  -7,619
  -7,990
  -8,380
  -8,791
  -9,222
  -9,675
  -10,151
  -10,652
  -11,178
  -11,730
  -12,311
Cash from investing activities, $m
  -10,724
  -11,295
  -11,902
  -12,537
  -13,201
  -13,896
  -14,625
  -15,387
  -16,186
  -17,023
  -17,901
  -18,821
  -19,786
  -20,797
  -21,858
  -22,972
  -24,139
  -25,363
  -26,649
  -27,997
  -29,412
  -30,896
  -32,455
  -34,091
  -35,807
  -37,608
  -39,500
  -41,485
  -43,568
  -45,756
Free cash flow, $m
  2,740
  3,388
  4,058
  4,763
  5,507
  6,291
  7,119
  7,993
  8,916
  9,891
  9,972
  11,059
  12,208
  13,423
  14,706
  16,062
  17,495
  19,009
  20,609
  22,300
  24,087
  25,975
  27,969
  30,076
  32,302
  34,652
  37,135
  39,756
  42,523
  45,445
Issuance/(repayment) of debt, $m
  6,371
  6,752
  7,045
  7,354
  7,679
  8,023
  8,386
  8,768
  9,171
  9,595
  10,043
  10,514
  11,010
  11,532
  12,082
  12,661
  13,270
  13,910
  14,584
  15,293
  16,038
  16,821
  17,645
  18,510
  19,420
  20,376
  21,381
  22,436
  23,545
  24,711
Issuance/(repurchase) of shares, $m
  425
  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  
  6,796
  6,752
  7,045
  7,354
  7,679
  8,023
  8,386
  8,768
  9,171
  9,595
  10,043
  10,514
  11,010
  11,532
  12,082
  12,661
  13,270
  13,910
  14,584
  15,293
  16,038
  16,821
  17,645
  18,510
  19,420
  20,376
  21,381
  22,436
  23,545
  24,711
Total cash flow (excl. dividends), $m
  9,537
  10,141
  11,103
  12,117
  13,186
  14,315
  15,505
  16,761
  18,087
  19,486
  20,014
  21,573
  23,218
  24,955
  26,788
  28,723
  30,765
  32,920
  35,194
  37,593
  40,125
  42,796
  45,614
  48,587
  51,722
  55,028
  58,515
  62,192
  66,069
  70,155
Retained Cash Flow (-), $m
  -2,042
  -2,227
  -2,323
  -2,425
  -2,533
  -2,646
  -2,765
  -2,892
  -3,024
  -3,164
  -3,312
  -3,467
  -3,631
  -3,803
  -3,985
  -4,175
  -4,376
  -4,587
  -4,810
  -5,043
  -5,289
  -5,547
  -5,819
  -6,104
  -6,404
  -6,720
  -7,051
  -7,399
  -7,765
  -8,149
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
  7,495
  7,914
  8,779
  9,692
  10,654
  11,669
  12,740
  13,870
  15,062
  16,322
  16,702
  18,106
  19,587
  21,152
  22,803
  24,547
  26,388
  28,332
  30,384
  32,550
  34,836
  37,249
  39,795
  42,482
  45,317
  48,309
  51,464
  54,793
  58,304
  62,006
Discount rate, %
  9.50
  9.98
  10.47
  11.00
  11.55
  12.12
  12.73
  13.37
  14.04
  14.74
  15.47
  16.25
  17.06
  17.91
  18.81
  19.75
  20.74
  21.77
  22.86
  24.01
  25.21
  26.47
  27.79
  29.18
  30.64
  32.17
  33.78
  35.47
  37.24
  39.10
PV of cash for distribution, $m
  6,845
  6,543
  6,511
  6,385
  6,169
  5,872
  5,506
  5,083
  4,619
  4,128
  3,431
  2,973
  2,527
  2,106
  1,719
  1,373
  1,072
  817
  608
  440
  310
  213
  141
  91
  57
  34
  20
  11
  6
  3
Current shareholders' claim on cash, %
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5

Charter Communications, Inc., through its subsidiaries, provides cable services to residential and commercial customers in the United States. It offers subscription-based video services, including a package of basic video programming, video on demand, high definition television, digital video recorder, pay-per-view, and Spectrum guide services, as well as ad-supported free online video products. The company also provides Internet services, such as security suite that protects computers from viruses and spyware; in-home WiFi, which permits customers to lease high performance wireless routers to enhance their in-home wireless Internet experience; out-of-home WiFi; parental control features; and residential Internet services. In addition, it offers voice communications services using voice over Internet protocol technology; and broadband communications solutions, such as Internet access, data networking, fiber connectivity, video entertainment, and business telephone services to cellular towers and office buildings for business and carrier organizations. Further, the company provides video programming and music, Web hosting, e-mail and security, and multi-line telephone services, as well as Web-based service management; and sells video and online advertising inventory to local, regional, and national advertising customers. Additionally, it offers fiber-delivered communications and managed information technology solutions; and security and home management services, as well as owns and operates regional sports networks and local sports, news, and lifestyle channels. As of December 31, 2016, the company served approximately 26.2 million residential and business customers. Charter Communications, Inc. was founded in 1999 and is headquartered in Stamford, Connecticut.

FINANCIAL RATIOS  of  Charter Communications, Inc. (CHTR)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

CHTR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CHTR stock intrinsic value calculation we used $43634 million for the last fiscal year's total revenue generated by Charter Communications, Inc.. The default revenue input number comes from 0001 income statement of Charter Communications, 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 CHTR stock valuation model: a) initial revenue growth rate of 5.9% 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 9.5%, whose default value for CHTR is calculated based on our internal credit rating of Charter Communications, 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 Charter Communications, 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 CHTR stock the variable cost ratio is equal to 39.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $21633 million in the base year in the intrinsic value calculation for CHTR 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 Charter Communications, Inc..

Corporate tax rate of 27% is the nominal tax rate for Charter Communications, 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 CHTR 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 CHTR are equal to 125.3%.

Life of production assets of 7.3 years is the average useful life of capital assets used in Charter Communications, 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 CHTR is equal to -15.7%. 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 - $36285 million for Charter Communications, 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 225.360 million for Charter Communications, 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 Charter Communications, Inc. at the current share price and the inputted number of shares is $88.4 billion.

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