Intrinsic value of Canadian National Railway Company - CNI

Previous Close

$92.48

  Intrinsic Value

$34.23

stock screener

  Rating & Target

str. sell

-63%

Previous close

$92.48

 
Intrinsic value

$34.23

 
Up/down potential

-63%

 
Rating

str. sell

We calculate the intrinsic value of CNI 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 67.1

 

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, %
  3.60
  3.74
  3.87
  3.98
  4.08
  4.17
  4.26
  4.33
  4.40
  4.46
  4.51
  4.56
  4.60
  4.64
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.93
Revenue, $m
  10,990
  11,401
  11,842
  12,313
  12,815
  13,350
  13,918
  14,521
  15,160
  15,835
  16,550
  17,305
  18,102
  18,942
  19,829
  20,763
  21,747
  22,784
  23,875
  25,024
  26,232
  27,504
  28,841
  30,247
  31,726
  33,280
  34,914
  36,631
  38,436
  40,333
Variable operating expenses, $m
  6,571
  6,816
  7,079
  7,360
  7,660
  7,978
  8,317
  8,676
  9,057
  9,460
  9,866
  10,316
  10,791
  11,292
  11,821
  12,377
  12,964
  13,582
  14,233
  14,917
  15,638
  16,396
  17,193
  18,031
  18,913
  19,839
  20,814
  21,837
  22,913
  24,044
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
  6,571
  6,816
  7,079
  7,360
  7,660
  7,978
  8,317
  8,676
  9,057
  9,460
  9,866
  10,316
  10,791
  11,292
  11,821
  12,377
  12,964
  13,582
  14,233
  14,917
  15,638
  16,396
  17,193
  18,031
  18,913
  19,839
  20,814
  21,837
  22,913
  24,044
Operating income, $m
  4,419
  4,585
  4,763
  4,953
  5,156
  5,372
  5,601
  5,845
  6,103
  6,376
  6,684
  6,989
  7,311
  7,650
  8,008
  8,385
  8,783
  9,202
  9,642
  10,106
  10,594
  11,108
  11,648
  12,216
  12,813
  13,441
  14,101
  14,794
  15,523
  16,289
EBITDA, $m
  5,453
  5,657
  5,876
  6,109
  6,359
  6,624
  6,906
  7,205
  7,522
  7,857
  8,212
  8,586
  8,982
  9,399
  9,839
  10,302
  10,791
  11,305
  11,846
  12,416
  13,016
  13,647
  14,310
  15,008
  15,742
  16,513
  17,324
  18,176
  19,071
  20,012
Interest expense (income), $m
  348
  503
  538
  575
  614
  656
  701
  748
  799
  852
  909
  969
  1,033
  1,100
  1,171
  1,246
  1,325
  1,408
  1,496
  1,588
  1,685
  1,787
  1,895
  2,008
  2,127
  2,252
  2,384
  2,522
  2,668
  2,821
  2,981
Earnings before tax, $m
  3,916
  4,047
  4,188
  4,339
  4,500
  4,671
  4,853
  5,046
  5,250
  5,466
  5,715
  5,956
  6,210
  6,479
  6,762
  7,061
  7,375
  7,706
  8,054
  8,421
  8,807
  9,213
  9,640
  10,089
  10,561
  11,057
  11,578
  12,127
  12,703
  13,308
Tax expense, $m
  1,057
  1,093
  1,131
  1,172
  1,215
  1,261
  1,310
  1,362
  1,418
  1,476
  1,543
  1,608
  1,677
  1,749
  1,826
  1,906
  1,991
  2,081
  2,175
  2,274
  2,378
  2,487
  2,603
  2,724
  2,851
  2,985
  3,126
  3,274
  3,430
  3,593
Net income, $m
  2,859
  2,954
  3,057
  3,168
  3,285
  3,410
  3,543
  3,684
  3,833
  3,990
  4,172
  4,348
  4,534
  4,730
  4,936
  5,154
  5,384
  5,625
  5,880
  6,147
  6,429
  6,725
  7,037
  7,365
  7,709
  8,072
  8,452
  8,852
  9,273
  9,715

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
  31,671
  32,856
  34,126
  35,484
  36,932
  38,473
  40,111
  41,848
  43,688
  45,635
  47,694
  49,870
  52,166
  54,589
  57,143
  59,836
  62,672
  65,659
  68,804
  72,115
  75,597
  79,262
  83,115
  87,168
  91,429
  95,909
  100,617
  105,566
  110,767
  116,233
Adjusted assets (=assets-cash), $m
  31,671
  32,856
  34,126
  35,484
  36,932
  38,473
  40,111
  41,848
  43,688
  45,635
  47,694
  49,870
  52,166
  54,589
  57,143
  59,836
  62,672
  65,659
  68,804
  72,115
  75,597
  79,262
  83,115
  87,168
  91,429
  95,909
  100,617
  105,566
  110,767
  116,233
Revenue / Adjusted assets
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
  0.347
Average production assets, $m
  28,508
  29,574
  30,717
  31,940
  33,243
  34,631
  36,104
  37,668
  39,324
  41,077
  42,931
  44,889
  46,955
  49,136
  51,436
  53,859
  56,412
  59,101
  61,932
  64,912
  68,047
  71,345
  74,814
  78,461
  82,297
  86,329
  90,567
  95,022
  99,704
  104,623
Working capital, $m
  -264
  -274
  -284
  -296
  -308
  -320
  -334
  -349
  -364
  -380
  -397
  -415
  -434
  -455
  -476
  -498
  -522
  -547
  -573
  -601
  -630
  -660
  -692
  -726
  -761
  -799
  -838
  -879
  -922
  -968
Total debt, $m
  9,965
  10,642
  11,369
  12,146
  12,974
  13,856
  14,792
  15,786
  16,838
  17,952
  19,130
  20,374
  21,688
  23,074
  24,535
  26,075
  27,697
  29,406
  31,205
  33,098
  35,091
  37,187
  39,391
  41,709
  44,146
  46,709
  49,402
  52,233
  55,208
  58,334
Total liabilities, $m
  18,116
  18,793
  19,520
  20,297
  21,125
  22,007
  22,943
  23,937
  24,990
  26,103
  27,281
  28,525
  29,839
  31,225
  32,686
  34,226
  35,848
  37,557
  39,356
  41,249
  43,242
  45,338
  47,542
  49,860
  52,297
  54,860
  57,553
  60,384
  63,359
  66,485
Total equity, $m
  13,555
  14,062
  14,606
  15,187
  15,807
  16,467
  17,167
  17,911
  18,698
  19,532
  20,413
  21,344
  22,327
  23,364
  24,457
  25,610
  26,824
  28,102
  29,448
  30,865
  32,356
  33,924
  35,573
  37,308
  39,132
  41,049
  43,064
  45,182
  47,408
  49,748
Total liabilities and equity, $m
  31,671
  32,855
  34,126
  35,484
  36,932
  38,474
  40,110
  41,848
  43,688
  45,635
  47,694
  49,869
  52,166
  54,589
  57,143
  59,836
  62,672
  65,659
  68,804
  72,114
  75,598
  79,262
  83,115
  87,168
  91,429
  95,909
  100,617
  105,566
  110,767
  116,233
Debt-to-equity ratio
  0.740
  0.760
  0.780
  0.800
  0.820
  0.840
  0.860
  0.880
  0.900
  0.920
  0.940
  0.950
  0.970
  0.990
  1.000
  1.020
  1.030
  1.050
  1.060
  1.070
  1.080
  1.100
  1.110
  1.120
  1.130
  1.140
  1.150
  1.160
  1.160
  1.170
Adjusted equity ratio
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,859
  2,954
  3,057
  3,168
  3,285
  3,410
  3,543
  3,684
  3,833
  3,990
  4,172
  4,348
  4,534
  4,730
  4,936
  5,154
  5,384
  5,625
  5,880
  6,147
  6,429
  6,725
  7,037
  7,365
  7,709
  8,072
  8,452
  8,852
  9,273
  9,715
Depreciation, amort., depletion, $m
  1,034
  1,072
  1,113
  1,156
  1,203
  1,252
  1,305
  1,360
  1,419
  1,482
  1,528
  1,597
  1,671
  1,749
  1,830
  1,917
  2,008
  2,103
  2,204
  2,310
  2,422
  2,539
  2,662
  2,792
  2,929
  3,072
  3,223
  3,382
  3,548
  3,723
Funds from operations, $m
  3,893
  4,026
  4,170
  4,324
  4,488
  4,662
  4,847
  5,044
  5,252
  5,472
  5,699
  5,945
  6,205
  6,478
  6,767
  7,071
  7,391
  7,729
  8,084
  8,457
  8,851
  9,264
  9,700
  10,157
  10,638
  11,144
  11,675
  12,234
  12,821
  13,438
Change in working capital, $m
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -43
  -46
Cash from operations, $m
  3,902
  4,036
  4,181
  4,335
  4,500
  4,675
  4,861
  5,058
  5,267
  5,488
  5,717
  5,963
  6,224
  6,498
  6,788
  7,093
  7,415
  7,753
  8,110
  8,485
  8,880
  9,295
  9,732
  10,191
  10,674
  11,181
  11,714
  12,275
  12,864
  13,483
Maintenance CAPEX, $m
  -979
  -1,015
  -1,052
  -1,093
  -1,137
  -1,183
  -1,232
  -1,285
  -1,340
  -1,399
  -1,462
  -1,528
  -1,597
  -1,671
  -1,749
  -1,830
  -1,917
  -2,008
  -2,103
  -2,204
  -2,310
  -2,422
  -2,539
  -2,662
  -2,792
  -2,929
  -3,072
  -3,223
  -3,382
  -3,548
New CAPEX, $m
  -990
  -1,066
  -1,143
  -1,222
  -1,304
  -1,387
  -1,474
  -1,563
  -1,656
  -1,753
  -1,853
  -1,958
  -2,067
  -2,181
  -2,299
  -2,424
  -2,553
  -2,689
  -2,831
  -2,979
  -3,135
  -3,298
  -3,469
  -3,648
  -3,835
  -4,032
  -4,238
  -4,455
  -4,681
  -4,919
Cash from investing activities, $m
  -1,969
  -2,081
  -2,195
  -2,315
  -2,441
  -2,570
  -2,706
  -2,848
  -2,996
  -3,152
  -3,315
  -3,486
  -3,664
  -3,852
  -4,048
  -4,254
  -4,470
  -4,697
  -4,934
  -5,183
  -5,445
  -5,720
  -6,008
  -6,310
  -6,627
  -6,961
  -7,310
  -7,678
  -8,063
  -8,467
Free cash flow, $m
  1,933
  1,955
  1,985
  2,020
  2,060
  2,105
  2,155
  2,210
  2,270
  2,336
  2,401
  2,478
  2,559
  2,647
  2,740
  2,839
  2,945
  3,057
  3,176
  3,302
  3,435
  3,575
  3,724
  3,881
  4,046
  4,220
  4,404
  4,597
  4,801
  5,016
Issuance/(repayment) of debt, $m
  654
  678
  727
  777
  828
  882
  937
  994
  1,053
  1,114
  1,178
  1,244
  1,313
  1,386
  1,461
  1,540
  1,623
  1,709
  1,799
  1,893
  1,992
  2,096
  2,204
  2,318
  2,437
  2,562
  2,693
  2,831
  2,975
  3,126
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  
  654
  678
  727
  777
  828
  882
  937
  994
  1,053
  1,114
  1,178
  1,244
  1,313
  1,386
  1,461
  1,540
  1,623
  1,709
  1,799
  1,893
  1,992
  2,096
  2,204
  2,318
  2,437
  2,562
  2,693
  2,831
  2,975
  3,126
Total cash flow (excl. dividends), $m
  2,588
  2,633
  2,712
  2,797
  2,888
  2,986
  3,091
  3,204
  3,323
  3,450
  3,579
  3,722
  3,873
  4,033
  4,201
  4,379
  4,567
  4,766
  4,975
  5,195
  5,427
  5,671
  5,928
  6,199
  6,483
  6,783
  7,097
  7,428
  7,776
  8,142
Retained Cash Flow (-), $m
  -488
  -507
  -544
  -581
  -620
  -660
  -701
  -743
  -788
  -834
  -881
  -931
  -983
  -1,037
  -1,093
  -1,152
  -1,214
  -1,279
  -1,346
  -1,417
  -1,491
  -1,568
  -1,649
  -1,735
  -1,824
  -1,917
  -2,015
  -2,118
  -2,226
  -2,339
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
  2,100
  2,126
  2,168
  2,215
  2,268
  2,327
  2,391
  2,460
  2,535
  2,616
  2,698
  2,791
  2,890
  2,996
  3,108
  3,227
  3,353
  3,487
  3,629
  3,778
  3,936
  4,103
  4,279
  4,464
  4,659
  4,865
  5,082
  5,310
  5,550
  5,803
Discount rate, %
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
  2,000
  1,919
  1,846
  1,769
  1,689
  1,605
  1,518
  1,428
  1,335
  1,240
  1,140
  1,043
  945
  849
  754
  663
  576
  495
  419
  350
  288
  233
  185
  145
  111
  83
  61
  44
  31
  21
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

Canadian National Railway Company is engaged in the rail and related transportation business. The Company's network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico and serving the cities and ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth (Minnesota)/Superior (Wisconsin), and Jackson (Mississippi), with connections to all points in North America. Its network and connections to all Class I railroads provide its customers access to the three North American Free Trade Agreement nations. It carries over 300 million tons of cargo, serving exporters, importers, retailers, farmers and manufacturers. Its freight includes seven commodity representing a portfolio of goods.

FINANCIAL RATIOS  of  Canadian National Railway Company (CNI)

Valuation Ratios
P/E Ratio 26.2
Price to Sales 7.9
Price to Book 6.4
Price to Tangible Book
Price to Cash Flow 18.3
Price to Free Cash Flow 38
Growth Rates
Sales Growth Rate -4.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -0.4%
Cap. Spend. - 3 Yr. Gr. Rate 6.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 63.7%
Total Debt to Equity 73.7%
Interest Coverage 11
Management Effectiveness
Return On Assets 10.9%
Ret/ On Assets - 3 Yr. Avg. 11.1%
Return On Total Capital 14.2%
Ret/ On T. Cap. - 3 Yr. Avg. 14.7%
Return On Equity 24.4%
Return On Equity - 3 Yr. Avg. 24.4%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 67.9%
Gross Margin - 3 Yr. Avg. 65.9%
EBITDA Margin 55%
EBITDA Margin - 3 Yr. Avg. 51.4%
Operating Margin 44.1%
Oper. Margin - 3 Yr. Avg. 41.3%
Pre-Tax Margin 40.9%
Pre-Tax Margin - 3 Yr. Avg. 38.5%
Net Profit Margin 30.2%
Net Profit Margin - 3 Yr. Avg. 28.1%
Effective Tax Rate 26.1%
Eff/ Tax Rate - 3 Yr. Avg. 27%
Payout Ratio 31.8%

CNI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CNI stock intrinsic value calculation we used $10608 million for the last fiscal year's total revenue generated by Canadian National Railway Company. The default revenue input number comes from 0001 income statement of Canadian National Railway Company. 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 CNI stock valuation model: a) initial revenue growth rate of 3.6% 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 5%, whose default value for CNI is calculated based on our internal credit rating of Canadian National Railway Company, 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 Canadian National Railway Company.
    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 CNI stock the variable cost ratio is equal to 59.8%.

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 CNI 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 Canadian National Railway Company.

Corporate tax rate of 27% is the nominal tax rate for Canadian National Railway Company. 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 CNI 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 CNI are equal to 259.4%.

Life of production assets of 28.1 years is the average useful life of capital assets used in Canadian National Railway Company 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 CNI is equal to -2.4%. 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 - $13067.4074074 million for Canadian National Railway Company - 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 725.051 million for Canadian National Railway Company 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 Canadian National Railway Company at the current share price and the inputted number of shares is $67.1 billion.

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