Intrinsic value of Cleveland-Cliffs Inc. - CLF

Previous Close

$7.26

  Intrinsic Value

$255.38

stock screener

  Rating & Target

str. buy

+999%

Previous close

$7.26

 
Intrinsic value

$255.38

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CLF 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 2.1

 

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, %
  36.00
  32.90
  30.11
  27.60
  25.34
  23.31
  21.47
  19.83
  18.34
  17.01
  15.81
  14.73
  13.76
  12.88
  12.09
  11.38
  10.74
  10.17
  9.65
  9.19
  8.77
  8.39
  8.05
  7.75
  7.47
  7.23
  7.00
  6.80
  6.62
  6.46
Revenue, $m
  3,172
  4,215
  5,484
  6,998
  8,771
  10,815
  13,137
  15,742
  18,630
  21,799
  25,245
  28,963
  32,947
  37,190
  41,687
  46,433
  51,421
  56,651
  62,119
  67,827
  73,774
  79,965
  86,405
  93,099
  100,056
  107,286
  114,799
  122,608
  130,728
  139,173
Variable operating expenses, $m
  942
  1,252
  1,629
  2,078
  2,605
  3,212
  3,902
  4,675
  5,533
  6,474
  7,498
  8,602
  9,785
  11,046
  12,381
  13,790
  15,272
  16,825
  18,449
  20,145
  21,911
  23,750
  25,662
  27,650
  29,717
  31,864
  34,095
  36,415
  38,826
  41,334
Fixed operating expenses, $m
  989
  1,011
  1,033
  1,056
  1,079
  1,103
  1,127
  1,152
  1,177
  1,203
  1,230
  1,257
  1,285
  1,313
  1,342
  1,371
  1,401
  1,432
  1,464
  1,496
  1,529
  1,562
  1,597
  1,632
  1,668
  1,705
  1,742
  1,780
  1,819
  1,860
Total operating expenses, $m
  1,931
  2,263
  2,662
  3,134
  3,684
  4,315
  5,029
  5,827
  6,710
  7,677
  8,728
  9,859
  11,070
  12,359
  13,723
  15,161
  16,673
  18,257
  19,913
  21,641
  23,440
  25,312
  27,259
  29,282
  31,385
  33,569
  35,837
  38,195
  40,645
  43,194
Operating income, $m
  1,240
  1,952
  2,822
  3,863
  5,087
  6,500
  8,108
  9,915
  11,919
  14,121
  16,517
  19,104
  21,877
  24,832
  27,965
  31,271
  34,748
  38,393
  42,206
  46,186
  50,335
  54,653
  59,146
  63,817
  68,672
  73,717
  78,962
  84,413
  90,082
  95,979
EBITDA, $m
  1,362
  2,113
  3,032
  4,131
  5,422
  6,913
  8,610
  10,516
  12,632
  14,955
  17,482
  20,211
  23,137
  26,254
  29,558
  33,046
  36,714
  40,559
  44,581
  48,779
  53,155
  57,710
  62,449
  67,376
  72,497
  77,819
  83,350
  89,101
  95,080
  101,300
Interest expense (income), $m
  184
  113
  149
  216
  298
  395
  509
  641
  790
  957
  1,143
  1,347
  1,568
  1,807
  2,063
  2,336
  2,625
  2,930
  3,251
  3,587
  3,939
  4,306
  4,688
  5,086
  5,500
  5,930
  6,378
  6,842
  7,325
  7,827
  8,349
Earnings before tax, $m
  1,127
  1,803
  2,606
  3,565
  4,691
  5,991
  7,468
  9,125
  10,962
  12,978
  15,171
  17,536
  20,070
  22,769
  25,628
  28,646
  31,818
  35,142
  38,619
  42,248
  46,029
  49,965
  54,060
  58,317
  62,741
  67,340
  72,119
  77,088
  82,255
  87,630
Tax expense, $m
  304
  487
  704
  963
  1,267
  1,617
  2,016
  2,464
  2,960
  3,504
  4,096
  4,735
  5,419
  6,148
  6,920
  7,734
  8,591
  9,488
  10,427
  11,407
  12,428
  13,491
  14,596
  15,746
  16,940
  18,182
  19,472
  20,814
  22,209
  23,660
Net income, $m
  823
  1,316
  1,902
  2,603
  3,425
  4,373
  5,451
  6,661
  8,002
  9,474
  11,075
  12,801
  14,651
  16,621
  18,709
  20,911
  23,227
  25,654
  28,192
  30,841
  33,601
  36,475
  39,464
  42,571
  45,801
  49,158
  52,647
  56,274
  60,046
  63,970

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
  4,195
  5,575
  7,254
  9,256
  11,602
  14,305
  17,377
  20,823
  24,643
  28,834
  33,393
  38,311
  43,581
  49,194
  55,142
  61,419
  68,018
  74,935
  82,168
  89,718
  97,585
  105,774
  114,292
  123,147
  132,349
  141,912
  151,850
  162,180
  172,920
  184,091
Adjusted assets (=assets-cash), $m
  4,195
  5,575
  7,254
  9,256
  11,602
  14,305
  17,377
  20,823
  24,643
  28,834
  33,393
  38,311
  43,581
  49,194
  55,142
  61,419
  68,018
  74,935
  82,168
  89,718
  97,585
  105,774
  114,292
  123,147
  132,349
  141,912
  151,850
  162,180
  172,920
  184,091
Revenue / Adjusted assets
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
Average production assets, $m
  1,576
  2,095
  2,726
  3,478
  4,359
  5,375
  6,529
  7,824
  9,259
  10,834
  12,547
  14,395
  16,375
  18,484
  20,719
  23,077
  25,556
  28,155
  30,873
  33,710
  36,666
  39,743
  42,943
  46,270
  49,728
  53,321
  57,055
  60,936
  64,972
  69,169
Working capital, $m
  130
  173
  225
  287
  360
  443
  539
  645
  764
  894
  1,035
  1,187
  1,351
  1,525
  1,709
  1,904
  2,108
  2,323
  2,547
  2,781
  3,025
  3,279
  3,543
  3,817
  4,102
  4,399
  4,707
  5,027
  5,360
  5,706
Total debt, $m
  2,763
  4,005
  5,516
  7,318
  9,429
  11,862
  14,627
  17,728
  21,166
  24,938
  29,041
  33,467
  38,210
  43,262
  48,615
  54,264
  60,203
  66,429
  72,939
  79,734
  86,814
  94,184
  101,850
  109,820
  118,102
  126,709
  135,653
  144,950
  154,616
  164,670
Total liabilities, $m
  3,776
  5,018
  6,529
  8,331
  10,441
  12,875
  15,640
  18,740
  22,178
  25,951
  30,053
  34,480
  39,223
  44,274
  49,628
  55,277
  61,216
  67,442
  73,952
  80,746
  87,827
  95,197
  102,863
  110,832
  119,115
  127,721
  136,665
  145,962
  155,628
  165,682
Total equity, $m
  420
  558
  725
  926
  1,160
  1,431
  1,738
  2,082
  2,464
  2,883
  3,339
  3,831
  4,358
  4,919
  5,514
  6,142
  6,802
  7,494
  8,217
  8,972
  9,759
  10,577
  11,429
  12,315
  13,235
  14,191
  15,185
  16,218
  17,292
  18,409
Total liabilities and equity, $m
  4,196
  5,576
  7,254
  9,257
  11,601
  14,306
  17,378
  20,822
  24,642
  28,834
  33,392
  38,311
  43,581
  49,193
  55,142
  61,419
  68,018
  74,936
  82,169
  89,718
  97,586
  105,774
  114,292
  123,147
  132,350
  141,912
  151,850
  162,180
  172,920
  184,091
Debt-to-equity ratio
  6.590
  7.180
  7.600
  7.910
  8.130
  8.290
  8.420
  8.510
  8.590
  8.650
  8.700
  8.740
  8.770
  8.790
  8.820
  8.840
  8.850
  8.860
  8.880
  8.890
  8.900
  8.900
  8.910
  8.920
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  823
  1,316
  1,902
  2,603
  3,425
  4,373
  5,451
  6,661
  8,002
  9,474
  11,075
  12,801
  14,651
  16,621
  18,709
  20,911
  23,227
  25,654
  28,192
  30,841
  33,601
  36,475
  39,464
  42,571
  45,801
  49,158
  52,647
  56,274
  60,046
  63,970
Depreciation, amort., depletion, $m
  121
  161
  210
  268
  335
  413
  502
  602
  712
  833
  965
  1,107
  1,260
  1,422
  1,594
  1,775
  1,966
  2,166
  2,375
  2,593
  2,820
  3,057
  3,303
  3,559
  3,825
  4,102
  4,389
  4,687
  4,998
  5,321
Funds from operations, $m
  944
  1,477
  2,112
  2,870
  3,760
  4,787
  5,954
  7,263
  8,714
  10,307
  12,040
  13,908
  15,911
  18,043
  20,303
  22,686
  25,193
  27,820
  30,567
  33,434
  36,422
  39,532
  42,767
  46,131
  49,626
  53,260
  57,036
  60,962
  65,044
  69,290
Change in working capital, $m
  34
  43
  52
  62
  73
  84
  95
  107
  118
  130
  141
  152
  163
  174
  184
  195
  205
  214
  224
  234
  244
  254
  264
  274
  285
  296
  308
  320
  333
  346
Cash from operations, $m
  910
  1,434
  2,060
  2,808
  3,687
  4,703
  5,858
  7,156
  8,596
  10,178
  11,898
  13,756
  15,747
  17,869
  20,118
  22,492
  24,988
  27,605
  30,343
  33,200
  36,178
  39,278
  42,503
  45,856
  49,341
  52,963
  56,728
  60,641
  64,711
  68,944
Maintenance CAPEX, $m
  -89
  -121
  -161
  -210
  -268
  -335
  -413
  -502
  -602
  -712
  -833
  -965
  -1,107
  -1,260
  -1,422
  -1,594
  -1,775
  -1,966
  -2,166
  -2,375
  -2,593
  -2,820
  -3,057
  -3,303
  -3,559
  -3,825
  -4,102
  -4,389
  -4,687
  -4,998
New CAPEX, $m
  -416
  -519
  -631
  -752
  -881
  -1,016
  -1,154
  -1,295
  -1,435
  -1,575
  -1,713
  -1,848
  -1,980
  -2,109
  -2,235
  -2,358
  -2,479
  -2,599
  -2,718
  -2,837
  -2,956
  -3,077
  -3,200
  -3,327
  -3,458
  -3,593
  -3,734
  -3,881
  -4,035
  -4,197
Cash from investing activities, $m
  -505
  -640
  -792
  -962
  -1,149
  -1,351
  -1,567
  -1,797
  -2,037
  -2,287
  -2,546
  -2,813
  -3,087
  -3,369
  -3,657
  -3,952
  -4,254
  -4,565
  -4,884
  -5,212
  -5,549
  -5,897
  -6,257
  -6,630
  -7,017
  -7,418
  -7,836
  -8,270
  -8,722
  -9,195
Free cash flow, $m
  404
  795
  1,268
  1,846
  2,539
  3,352
  4,291
  5,359
  6,559
  7,890
  9,352
  10,943
  12,660
  14,500
  16,461
  18,540
  20,734
  23,040
  25,459
  27,988
  30,629
  33,381
  36,245
  39,226
  42,324
  45,545
  48,892
  52,371
  55,988
  59,749
Issuance/(repayment) of debt, $m
  670
  1,242
  1,511
  1,802
  2,111
  2,433
  2,765
  3,101
  3,438
  3,773
  4,103
  4,426
  4,743
  5,052
  5,354
  5,649
  5,939
  6,226
  6,510
  6,794
  7,081
  7,370
  7,666
  7,969
  8,282
  8,607
  8,944
  9,297
  9,666
  10,054
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  
  670
  1,242
  1,511
  1,802
  2,111
  2,433
  2,765
  3,101
  3,438
  3,773
  4,103
  4,426
  4,743
  5,052
  5,354
  5,649
  5,939
  6,226
  6,510
  6,794
  7,081
  7,370
  7,666
  7,969
  8,282
  8,607
  8,944
  9,297
  9,666
  10,054
Total cash flow (excl. dividends), $m
  1,075
  2,037
  2,779
  3,648
  4,649
  5,785
  7,056
  8,460
  9,997
  11,663
  13,455
  15,369
  17,403
  19,552
  21,815
  24,189
  26,673
  29,266
  31,969
  34,783
  37,709
  40,751
  43,911
  47,195
  50,607
  54,152
  57,837
  61,668
  65,654
  69,803
Retained Cash Flow (-), $m
  -442
  -138
  -168
  -200
  -235
  -270
  -307
  -345
  -382
  -419
  -456
  -492
  -527
  -561
  -595
  -628
  -660
  -692
  -723
  -755
  -787
  -819
  -852
  -885
  -920
  -956
  -994
  -1,033
  -1,074
  -1,117
Prev. year cash balance distribution, $m
  447
  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
  1,079
  1,899
  2,611
  3,448
  4,415
  5,515
  6,748
  8,116
  9,615
  11,244
  12,999
  14,878
  16,876
  18,991
  21,220
  23,561
  26,013
  28,574
  31,246
  34,028
  36,922
  39,932
  43,060
  46,310
  49,686
  53,195
  56,843
  60,635
  64,580
  68,686
Discount rate, %
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
  1,018
  1,680
  2,154
  2,636
  3,105
  3,542
  3,927
  4,243
  4,477
  4,617
  4,661
  4,607
  4,462
  4,235
  3,940
  3,592
  3,210
  2,810
  2,409
  2,021
  1,660
  1,332
  1,044
  799
  597
  434
  307
  211
  141
  91
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

Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company's segments include U.S. Iron Ore and Asia Pacific Iron Ore. The Company is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States, Canada and Mexico. Its Asia Pacific Iron Ore operations are located in Western Australia and consist of its Koolyanobbing operation. The Koolyanobbing operations serve the Asian iron ore markets with direct-shipped fines and lump ore. In addition, the Company operates an iron ore mining complex in Western Australia. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine.

FINANCIAL RATIOS  of  Cleveland-Cliffs Inc. (CLF)

Valuation Ratios
P/E Ratio 9.7
Price to Sales 0.8
Price to Book -1.2
Price to Tangible Book
Price to Cash Flow 5.6
Price to Free Cash Flow 7.2
Growth Rates
Sales Growth Rate 4.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -14.8%
Cap. Spend. - 3 Yr. Gr. Rate -39.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity -148.6%
Total Debt to Equity -148.6%
Interest Coverage 2
Management Effectiveness
Return On Assets 18.2%
Ret/ On Assets - 3 Yr. Avg. -34.3%
Return On Total Capital 24.4%
Ret/ On T. Cap. - 3 Yr. Avg. -61.3%
Return On Equity -10.1%
Return On Equity - 3 Yr. Avg. -92.5%
Asset Turnover 1
Profitability Ratios
Gross Margin 18.4%
Gross Margin - 3 Yr. Avg. 18.8%
EBITDA Margin 24%
EBITDA Margin - 3 Yr. Avg. 25%
Operating Margin 19.3%
Oper. Margin - 3 Yr. Avg. 16.9%
Pre-Tax Margin 9.8%
Pre-Tax Margin - 3 Yr. Avg. 8.3%
Net Profit Margin 8.3%
Net Profit Margin - 3 Yr. Avg. -81%
Effective Tax Rate -5.8%
Eff/ Tax Rate - 3 Yr. Avg. 159.4%
Payout Ratio 0%

CLF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CLF stock intrinsic value calculation we used $2332 million for the last fiscal year's total revenue generated by Cleveland-Cliffs Inc.. The default revenue input number comes from 0001 income statement of Cleveland-Cliffs 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 CLF stock valuation model: a) initial revenue growth rate of 36% 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%, whose default value for CLF is calculated based on our internal credit rating of Cleveland-Cliffs 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 Cleveland-Cliffs 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 CLF stock the variable cost ratio is equal to 29.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $968 million in the base year in the intrinsic value calculation for CLF 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 Cleveland-Cliffs Inc..

Corporate tax rate of 27% is the nominal tax rate for Cleveland-Cliffs 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 CLF 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 CLF are equal to 49.7%.

Life of production assets of 13 years is the average useful life of capital assets used in Cleveland-Cliffs 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 CLF is equal to 4.1%. 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 - $424.2 million for Cleveland-Cliffs 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 290.161 million for Cleveland-Cliffs 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 Cleveland-Cliffs Inc. at the current share price and the inputted number of shares is $2.1 billion.

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