Intrinsic value of CME Group Cl A - CME

Previous Close

$168.22

  Intrinsic Value

$106.74

stock screener

  Rating & Target

sell

-37%

Previous close

$168.22

 
Intrinsic value

$106.74

 
Up/down potential

-37%

 
Rating

sell

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

We calculate the intrinsic value of CME 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 57.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  3,718
  3,803
  3,901
  4,011
  4,132
  4,266
  4,411
  4,568
  4,738
  4,920
  5,114
  5,322
  5,543
  5,778
  6,027
  6,291
  6,571
  6,866
  7,179
  7,509
  7,857
  8,224
  8,610
  9,018
  9,447
  9,899
  10,375
  10,876
  11,403
  11,957
Variable operating expenses, $m
  1,385
  1,354
  1,319
  1,280
  1,237
  1,189
  1,138
  1,082
  1,021
  957
  -1,822
  -1,896
  -1,975
  -2,058
  -2,147
  -2,241
  -2,341
  -2,446
  -2,557
  -2,675
  -2,799
  -2,930
  -3,067
  -3,213
  -3,366
  -3,527
  -3,696
  -3,874
  -4,062
  -4,259
Fixed operating expenses, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Total operating expenses, $m
  1,384
  1,353
  1,318
  1,279
  1,236
  1,188
  1,137
  1,081
  1,020
  956
  -1,823
  -1,897
  -1,976
  -2,059
  -2,148
  -2,242
  -2,342
  -2,447
  -2,559
  -2,677
  -2,801
  -2,932
  -3,069
  -3,215
  -3,368
  -3,529
  -3,698
  -3,876
  -4,064
  -4,261
Operating income, $m
  2,334
  2,450
  2,583
  2,732
  2,897
  3,078
  3,275
  3,488
  3,718
  3,964
  6,937
  7,219
  7,519
  7,837
  8,175
  8,534
  8,913
  9,314
  9,737
  10,185
  10,657
  11,155
  11,679
  12,232
  12,815
  13,428
  14,073
  14,752
  15,467
  16,218
EBITDA, $m
  7,854
  8,034
  8,241
  8,473
  8,730
  9,011
  9,318
  9,650
  10,008
  10,392
  10,803
  11,242
  11,708
  12,205
  12,731
  13,289
  13,879
  14,504
  15,164
  15,861
  16,596
  17,371
  18,188
  19,049
  19,956
  20,911
  21,916
  22,973
  24,086
  25,256
Interest expense (income), $m
  85
  2,479
  2,560
  2,628
  2,705
  2,792
  2,888
  2,993
  3,108
  3,232
  3,366
  3,509
  3,663
  3,827
  4,002
  4,187
  4,384
  4,592
  4,813
  5,047
  5,293
  5,554
  5,829
  6,119
  6,424
  6,746
  7,085
  7,442
  7,818
  8,213
  8,629
Earnings before tax, $m
  -145
  -110
  -45
  27
  105
  190
  282
  380
  486
  599
  3,428
  3,556
  3,692
  3,836
  3,988
  4,150
  4,320
  4,501
  4,691
  4,891
  5,103
  5,326
  5,561
  5,808
  6,069
  6,343
  6,631
  6,934
  7,253
  7,589
Tax expense, $m
  0
  0
  0
  7
  28
  51
  76
  103
  131
  162
  926
  960
  997
  1,036
  1,077
  1,120
  1,166
  1,215
  1,266
  1,321
  1,378
  1,438
  1,501
  1,568
  1,638
  1,712
  1,790
  1,872
  1,958
  2,049
Net income, $m
  -145
  -110
  -45
  19
  77
  139
  206
  278
  355
  437
  2,502
  2,596
  2,695
  2,800
  2,911
  3,029
  3,154
  3,285
  3,424
  3,571
  3,725
  3,888
  4,059
  4,240
  4,430
  4,630
  4,841
  5,062
  5,295
  5,540

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
  77,456
  79,238
  81,274
  83,560
  86,094
  88,873
  91,900
  95,176
  98,706
  102,494
  106,547
  110,871
  115,475
  120,368
  125,561
  131,063
  136,888
  143,047
  149,555
  156,427
  163,678
  171,325
  179,385
  187,877
  196,821
  206,238
  216,150
  226,581
  237,554
  249,096
Adjusted assets (=assets-cash), $m
  77,456
  79,238
  81,274
  83,560
  86,094
  88,873
  91,900
  95,176
  98,706
  102,494
  106,547
  110,871
  115,475
  120,368
  125,561
  131,063
  136,888
  143,047
  149,555
  156,427
  163,678
  171,325
  179,385
  187,877
  196,821
  206,238
  216,150
  226,581
  237,554
  249,096
Revenue / Adjusted assets
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
Average production assets, $m
  28,104
  28,750
  29,489
  30,318
  31,238
  32,246
  33,344
  34,533
  35,814
  37,188
  38,659
  40,228
  41,898
  43,673
  45,557
  47,554
  49,667
  51,902
  54,263
  56,757
  59,388
  62,162
  65,086
  68,168
  71,413
  74,830
  78,426
  82,211
  86,192
  90,380
Working capital, $m
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -74
  -77
  -81
  -85
  -89
  -93
  -98
  -103
  -108
Total debt, $m
  47,413
  48,664
  50,094
  51,699
  53,477
  55,428
  57,553
  59,853
  62,331
  64,990
  67,835
  70,871
  74,103
  77,538
  81,183
  85,046
  89,134
  93,458
  98,027
  102,851
  107,941
  113,309
  118,967
  124,929
  131,208
  137,819
  144,777
  152,099
  159,802
  167,905
Total liabilities, $m
  54,374
  55,625
  57,054
  58,659
  60,438
  62,389
  64,514
  66,814
  69,292
  71,951
  74,796
  77,831
  81,064
  84,499
  88,144
  92,006
  96,095
  100,419
  104,988
  109,812
  114,902
  120,270
  125,928
  131,890
  138,168
  144,779
  151,738
  159,060
  166,763
  174,866
Total equity, $m
  23,082
  23,613
  24,220
  24,901
  25,656
  26,484
  27,386
  28,363
  29,414
  30,543
  31,751
  33,040
  34,412
  35,870
  37,417
  39,057
  40,793
  42,628
  44,568
  46,615
  48,776
  51,055
  53,457
  55,987
  58,653
  61,459
  64,413
  67,521
  70,791
  74,231
Total liabilities and equity, $m
  77,456
  79,238
  81,274
  83,560
  86,094
  88,873
  91,900
  95,177
  98,706
  102,494
  106,547
  110,871
  115,476
  120,369
  125,561
  131,063
  136,888
  143,047
  149,556
  156,427
  163,678
  171,325
  179,385
  187,877
  196,821
  206,238
  216,151
  226,581
  237,554
  249,097
Debt-to-equity ratio
  2.050
  2.060
  2.070
  2.080
  2.080
  2.090
  2.100
  2.110
  2.120
  2.130
  2.140
  2.150
  2.150
  2.160
  2.170
  2.180
  2.190
  2.190
  2.200
  2.210
  2.210
  2.220
  2.230
  2.230
  2.240
  2.240
  2.250
  2.250
  2.260
  2.260
Adjusted equity ratio
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -145
  -110
  -45
  19
  77
  139
  206
  278
  355
  437
  2,502
  2,596
  2,695
  2,800
  2,911
  3,029
  3,154
  3,285
  3,424
  3,571
  3,725
  3,888
  4,059
  4,240
  4,430
  4,630
  4,841
  5,062
  5,295
  5,540
Depreciation, amort., depletion, $m
  5,519
  5,584
  5,658
  5,741
  5,833
  5,934
  6,044
  6,162
  6,290
  6,428
  3,866
  4,023
  4,190
  4,367
  4,556
  4,755
  4,967
  5,190
  5,426
  5,676
  5,939
  6,216
  6,509
  6,817
  7,141
  7,483
  7,843
  8,221
  8,619
  9,038
Funds from operations, $m
  5,374
  5,474
  5,613
  5,760
  5,909
  6,072
  6,249
  6,440
  6,645
  6,865
  6,368
  6,619
  6,885
  7,167
  7,467
  7,785
  8,121
  8,476
  8,851
  9,246
  9,664
  10,104
  10,568
  11,057
  11,571
  12,113
  12,683
  13,283
  13,914
  14,578
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
Cash from operations, $m
  5,375
  5,475
  5,614
  5,761
  5,911
  6,074
  6,250
  6,441
  6,647
  6,867
  6,370
  6,620
  6,887
  7,170
  7,469
  7,787
  8,123
  8,478
  8,853
  9,249
  9,667
  10,107
  10,572
  11,060
  11,575
  12,117
  12,687
  13,288
  13,919
  14,583
Maintenance CAPEX, $m
  -2,755
  -2,810
  -2,875
  -2,949
  -3,032
  -3,124
  -3,225
  -3,334
  -3,453
  -3,581
  -3,719
  -3,866
  -4,023
  -4,190
  -4,367
  -4,556
  -4,755
  -4,967
  -5,190
  -5,426
  -5,676
  -5,939
  -6,216
  -6,509
  -6,817
  -7,141
  -7,483
  -7,843
  -8,221
  -8,619
New CAPEX, $m
  -553
  -646
  -739
  -830
  -919
  -1,009
  -1,098
  -1,189
  -1,281
  -1,374
  -1,470
  -1,569
  -1,671
  -1,775
  -1,884
  -1,996
  -2,113
  -2,235
  -2,361
  -2,493
  -2,631
  -2,774
  -2,924
  -3,081
  -3,245
  -3,417
  -3,596
  -3,785
  -3,981
  -4,188
Cash from investing activities, $m
  -3,308
  -3,456
  -3,614
  -3,779
  -3,951
  -4,133
  -4,323
  -4,523
  -4,734
  -4,955
  -5,189
  -5,435
  -5,694
  -5,965
  -6,251
  -6,552
  -6,868
  -7,202
  -7,551
  -7,919
  -8,307
  -8,713
  -9,140
  -9,590
  -10,062
  -10,558
  -11,079
  -11,628
  -12,202
  -12,807
Free cash flow, $m
  2,067
  2,018
  2,000
  1,983
  1,960
  1,941
  1,928
  1,918
  1,913
  1,911
  1,181
  1,186
  1,193
  1,204
  1,218
  1,235
  1,254
  1,277
  1,302
  1,330
  1,361
  1,394
  1,431
  1,470
  1,513
  1,559
  1,608
  1,660
  1,716
  1,776
Issuance/(repayment) of debt, $m
  1,501
  1,251
  1,430
  1,605
  1,778
  1,951
  2,125
  2,300
  2,478
  2,659
  2,845
  3,036
  3,232
  3,435
  3,645
  3,863
  4,089
  4,324
  4,569
  4,824
  5,090
  5,368
  5,658
  5,962
  6,279
  6,611
  6,958
  7,322
  7,703
  8,103
Issuance/(repurchase) of shares, $m
  815
  641
  652
  662
  678
  690
  696
  699
  697
  692
  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  
  2,316
  1,892
  2,082
  2,267
  2,456
  2,641
  2,821
  2,999
  3,175
  3,351
  2,845
  3,036
  3,232
  3,435
  3,645
  3,863
  4,089
  4,324
  4,569
  4,824
  5,090
  5,368
  5,658
  5,962
  6,279
  6,611
  6,958
  7,322
  7,703
  8,103
Total cash flow (excl. dividends), $m
  4,383
  3,910
  4,081
  4,250
  4,416
  4,582
  4,749
  4,917
  5,088
  5,262
  4,026
  4,221
  4,426
  4,639
  4,863
  5,098
  5,343
  5,601
  5,871
  6,154
  6,451
  6,762
  7,089
  7,432
  7,792
  8,170
  8,566
  8,983
  9,419
  9,878
Retained Cash Flow (-), $m
  -815
  -641
  -652
  -681
  -755
  -828
  -902
  -976
  -1,052
  -1,129
  -1,208
  -1,289
  -1,372
  -1,458
  -1,547
  -1,640
  -1,736
  -1,836
  -1,939
  -2,048
  -2,161
  -2,279
  -2,402
  -2,531
  -2,665
  -2,806
  -2,954
  -3,108
  -3,270
  -3,440
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
  58
  59
  61
  62
  64
  66
  68
  71
  73
  76
  79
  82
  85
  89
  92
  96
  101
  105
  110
  115
  120
  126
  132
  138
  144
  151
  158
  166
  174
  182
Cash available for distribution, $m
  3,568
  3,269
  3,430
  3,568
  3,661
  3,754
  3,847
  3,941
  4,036
  4,133
  2,818
  2,933
  3,054
  3,181
  3,316
  3,458
  3,607
  3,765
  3,931
  4,106
  4,290
  4,483
  4,687
  4,901
  5,127
  5,363
  5,613
  5,874
  6,149
  6,439
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
  3,421
  2,992
  2,985
  2,938
  2,838
  2,724
  2,599
  2,463
  2,318
  2,167
  1,338
  1,251
  1,161
  1,068
  973
  879
  785
  693
  605
  522
  444
  372
  307
  250
  199
  156
  120
  91
  67
  48
Current shareholders' claim on cash, %
  98.6
  97.5
  96.5
  95.5
  94.4
  93.5
  92.5
  91.6
  90.7
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9
  89.9

CME Group Inc., through its exchanges, provides products across all asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The Company's segment primarily consists of the Chicago Mercantile Exchange Inc. (CME), Board of Trade of the City of Chicago, Inc. (CBOT), New York Mercantile Exchange, Inc. (NYMEX) and Commodity Exchange, Inc. (COMEX) exchanges. The Company provides electronic trading around the globe on its CME Globex platform. The Company also offers clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives through its clearinghouses CME Clearing and CME Clearing Europe. It also provides hosting, connectivity and customer support for electronic trading through its co-location services. The Company's CME Direct platform offers side-by-side trading of exchange-listed and privately negotiated markets.

FINANCIAL RATIOS  of  CME Group Cl A (CME)

Valuation Ratios
P/E Ratio 37.1
Price to Sales 15.8
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 33.2
Price to Free Cash Flow 35
Growth Rates
Sales Growth Rate 8.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -19.3%
Cap. Spend. - 3 Yr. Gr. Rate -6.1%
Financial Strength
Quick Ratio NaN
Current Ratio 1
LT Debt to Equity 11%
Total Debt to Equity 11%
Interest Coverage 28
Management Effectiveness
Return On Assets 2.3%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 5.7%
Return On Equity 7.5%
Return On Equity - 3 Yr. Avg. 6.3%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 72.3%
EBITDA Margin - 3 Yr. Avg. 69.5%
Operating Margin 61.3%
Oper. Margin - 3 Yr. Avg. 59.3%
Pre-Tax Margin 63.6%
Pre-Tax Margin - 3 Yr. Avg. 59.8%
Net Profit Margin 42.7%
Net Profit Margin - 3 Yr. Avg. 38.8%
Effective Tax Rate 33%
Eff/ Tax Rate - 3 Yr. Avg. 35.2%
Payout Ratio 116.5%

CME stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CME stock intrinsic value calculation we used $3645 million for the last fiscal year's total revenue generated by CME Group Cl A. The default revenue input number comes from 2017 income statement of CME Group Cl A. 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 CME stock valuation model: a) initial revenue growth rate of 2% 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 CME is calculated based on our internal credit rating of CME Group Cl A, 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 CME Group Cl A.
    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 CME stock the variable cost ratio is equal to 38.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $-1 million in the base year in the intrinsic value calculation for CME 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 CME Group Cl A.

Corporate tax rate of 27% is the nominal tax rate for CME Group Cl A. 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 CME stock is equal to 1.6%.

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 CME are equal to 755.9%.

Life of production assets of 10 years is the average useful life of capital assets used in CME Group Cl A 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 CME is equal to -0.9%. 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 - $22412 million for CME Group Cl A - 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 339 million for CME Group Cl A 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 CME Group Cl A at the current share price and the inputted number of shares is $57.0 billion.

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