Intrinsic value of Rockwell Collins - COL

Previous Close

$136.40

  Intrinsic Value

$228.10

stock screener

  Rating & Target

str. buy

+67%

Previous close

$136.40

 
Intrinsic value

$228.10

 
Up/down potential

+67%

 
Rating

str. buy

We calculate the intrinsic value of COL 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 19.9

 

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, %
  29.70
  27.23
  25.01
  23.01
  21.21
  19.59
  18.13
  16.81
  15.63
  14.57
  13.61
  12.75
  11.98
  11.28
  10.65
  10.09
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
Revenue, $m
  8,848
  11,257
  14,073
  17,310
  20,981
  25,090
  29,638
  34,621
  40,034
  45,866
  52,110
  58,754
  65,791
  73,211
  81,008
  89,178
  97,719
  106,630
  115,915
  125,578
  135,628
  146,075
  156,932
  168,214
  179,939
  192,127
  204,799
  217,981
  231,697
  245,978
Variable operating expenses, $m
  6,867
  8,430
  10,256
  12,355
  14,736
  17,401
  20,351
  23,582
  27,093
  30,875
  33,796
  38,105
  42,669
  47,481
  52,538
  57,837
  63,376
  69,155
  75,177
  81,444
  87,962
  94,737
  101,778
  109,095
  116,699
  124,604
  132,822
  141,371
  150,267
  159,529
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
  6,867
  8,430
  10,256
  12,355
  14,736
  17,401
  20,351
  23,582
  27,093
  30,875
  33,796
  38,105
  42,669
  47,481
  52,538
  57,837
  63,376
  69,155
  75,177
  81,444
  87,962
  94,737
  101,778
  109,095
  116,699
  124,604
  132,822
  141,371
  150,267
  159,529
Operating income, $m
  1,981
  2,828
  3,817
  4,955
  6,245
  7,689
  9,288
  11,039
  12,941
  14,991
  18,314
  20,649
  23,122
  25,730
  28,470
  31,342
  34,343
  37,475
  40,738
  44,134
  47,667
  51,338
  55,154
  59,119
  63,240
  67,523
  71,977
  76,609
  81,430
  86,449
EBITDA, $m
  4,167
  5,302
  6,628
  8,152
  9,881
  11,816
  13,958
  16,305
  18,854
  21,601
  24,541
  27,670
  30,984
  34,479
  38,151
  41,999
  46,021
  50,218
  54,590
  59,141
  63,874
  68,794
  73,907
  79,220
  84,742
  90,482
  96,450
  102,658
  109,118
  115,843
Interest expense (income), $m
  0
  386
  578
  806
  1,072
  1,379
  1,726
  2,115
  2,545
  3,016
  3,528
  4,080
  4,671
  5,299
  5,965
  6,667
  7,405
  8,178
  8,986
  9,829
  10,707
  11,621
  12,572
  13,561
  14,588
  15,655
  16,764
  17,917
  19,116
  20,363
  21,661
Earnings before tax, $m
  1,595
  2,250
  3,011
  3,883
  4,867
  5,963
  7,173
  8,494
  9,925
  11,463
  14,234
  15,978
  17,823
  19,765
  21,803
  23,937
  26,166
  28,489
  30,909
  33,427
  36,045
  38,766
  41,593
  44,531
  47,585
  50,759
  54,059
  57,493
  61,067
  64,788
Tax expense, $m
  431
  607
  813
  1,048
  1,314
  1,610
  1,937
  2,293
  2,680
  3,095
  3,843
  4,314
  4,812
  5,337
  5,887
  6,463
  7,065
  7,692
  8,346
  9,025
  9,732
  10,467
  11,230
  12,023
  12,848
  13,705
  14,596
  15,523
  16,488
  17,493
Net income, $m
  1,164
  1,642
  2,198
  2,834
  3,553
  4,353
  5,236
  6,201
  7,245
  8,368
  10,391
  11,664
  13,011
  14,428
  15,916
  17,474
  19,101
  20,797
  22,564
  24,402
  26,313
  28,299
  30,363
  32,508
  34,737
  37,054
  39,463
  41,970
  44,579
  47,295

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
  23,346
  29,703
  37,131
  45,673
  55,359
  66,201
  78,201
  91,349
  105,630
  121,019
  137,493
  155,025
  173,590
  193,169
  213,742
  235,299
  257,834
  281,346
  305,844
  331,341
  357,858
  385,423
  414,069
  443,837
  474,773
  506,931
  540,367
  575,147
  611,339
  649,018
Adjusted assets (=assets-cash), $m
  23,346
  29,703
  37,131
  45,673
  55,359
  66,201
  78,201
  91,349
  105,630
  121,019
  137,493
  155,025
  173,590
  193,169
  213,742
  235,299
  257,834
  281,346
  305,844
  331,341
  357,858
  385,423
  414,069
  443,837
  474,773
  506,931
  540,367
  575,147
  611,339
  649,018
Revenue / Adjusted assets
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
Average production assets, $m
  10,574
  13,453
  16,817
  20,686
  25,072
  29,983
  35,418
  41,373
  47,840
  54,810
  62,271
  70,211
  78,620
  87,487
  96,805
  106,568
  116,774
  127,423
  138,518
  150,066
  162,076
  174,560
  187,534
  201,016
  215,027
  229,591
  244,735
  260,487
  276,878
  293,944
Working capital, $m
  1,973
  2,510
  3,138
  3,860
  4,679
  5,595
  6,609
  7,721
  8,928
  10,228
  11,620
  13,102
  14,671
  16,326
  18,065
  19,887
  21,791
  23,779
  25,849
  28,004
  30,245
  32,575
  34,996
  37,512
  40,126
  42,844
  45,670
  48,610
  51,669
  54,853
Total debt, $m
  10,703
  14,924
  19,856
  25,528
  31,959
  39,158
  47,126
  55,857
  65,339
  75,558
  86,496
  98,137
  110,465
  123,465
  137,126
  151,440
  166,403
  182,015
  198,281
  215,211
  232,819
  251,122
  270,143
  289,909
  310,450
  331,803
  354,005
  377,098
  401,130
  426,149
Total liabilities, $m
  15,502
  19,723
  24,655
  30,327
  36,758
  43,957
  51,925
  60,656
  70,138
  80,357
  91,295
  102,936
  115,264
  128,264
  141,925
  156,239
  171,202
  186,814
  203,080
  220,010
  237,618
  255,921
  274,942
  294,708
  315,249
  336,602
  358,804
  381,897
  405,929
  430,948
Total equity, $m
  7,844
  9,980
  12,476
  15,346
  18,601
  22,243
  26,275
  30,693
  35,492
  40,662
  46,198
  52,088
  58,326
  64,905
  71,817
  79,061
  86,632
  94,532
  102,764
  111,331
  120,240
  129,502
  139,127
  149,129
  159,524
  170,329
  181,563
  193,249
  205,410
  218,070
Total liabilities and equity, $m
  23,346
  29,703
  37,131
  45,673
  55,359
  66,200
  78,200
  91,349
  105,630
  121,019
  137,493
  155,024
  173,590
  193,169
  213,742
  235,300
  257,834
  281,346
  305,844
  331,341
  357,858
  385,423
  414,069
  443,837
  474,773
  506,931
  540,367
  575,146
  611,339
  649,018
Debt-to-equity ratio
  1.360
  1.500
  1.590
  1.660
  1.720
  1.760
  1.790
  1.820
  1.840
  1.860
  1.870
  1.880
  1.890
  1.900
  1.910
  1.920
  1.920
  1.930
  1.930
  1.930
  1.940
  1.940
  1.940
  1.940
  1.950
  1.950
  1.950
  1.950
  1.950
  1.950
Adjusted equity ratio
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,164
  1,642
  2,198
  2,834
  3,553
  4,353
  5,236
  6,201
  7,245
  8,368
  10,391
  11,664
  13,011
  14,428
  15,916
  17,474
  19,101
  20,797
  22,564
  24,402
  26,313
  28,299
  30,363
  32,508
  34,737
  37,054
  39,463
  41,970
  44,579
  47,295
Depreciation, amort., depletion, $m
  2,186
  2,474
  2,810
  3,197
  3,636
  4,127
  4,670
  5,266
  5,913
  6,610
  6,227
  7,021
  7,862
  8,749
  9,680
  10,657
  11,677
  12,742
  13,852
  15,007
  16,208
  17,456
  18,753
  20,102
  21,503
  22,959
  24,473
  26,049
  27,688
  29,394
Funds from operations, $m
  3,350
  4,116
  5,009
  6,032
  7,189
  8,480
  9,907
  11,467
  13,158
  14,977
  16,618
  18,685
  20,873
  23,177
  25,597
  28,131
  30,778
  33,540
  36,416
  39,409
  42,521
  45,755
  49,116
  52,609
  56,239
  60,013
  63,937
  68,019
  72,267
  76,690
Change in working capital, $m
  452
  537
  628
  722
  819
  916
  1,014
  1,111
  1,207
  1,301
  1,392
  1,482
  1,569
  1,655
  1,739
  1,822
  1,905
  1,987
  2,070
  2,155
  2,241
  2,330
  2,421
  2,516
  2,615
  2,718
  2,826
  2,939
  3,059
  3,185
Cash from operations, $m
  2,898
  3,579
  4,381
  5,310
  6,370
  7,564
  8,893
  10,355
  11,951
  13,677
  15,226
  17,204
  19,303
  21,522
  23,858
  26,309
  28,874
  31,552
  34,345
  37,254
  40,279
  43,425
  46,695
  50,093
  53,625
  57,295
  61,111
  65,079
  69,208
  73,505
Maintenance CAPEX, $m
  -815
  -1,057
  -1,345
  -1,682
  -2,069
  -2,507
  -2,998
  -3,542
  -4,137
  -4,784
  -5,481
  -6,227
  -7,021
  -7,862
  -8,749
  -9,680
  -10,657
  -11,677
  -12,742
  -13,852
  -15,007
  -16,208
  -17,456
  -18,753
  -20,102
  -21,503
  -22,959
  -24,473
  -26,049
  -27,688
New CAPEX, $m
  -2,421
  -2,879
  -3,364
  -3,869
  -4,387
  -4,910
  -5,435
  -5,955
  -6,468
  -6,970
  -7,461
  -7,940
  -8,409
  -8,867
  -9,318
  -9,763
  -10,206
  -10,649
  -11,095
  -11,548
  -12,010
  -12,484
  -12,974
  -13,482
  -14,011
  -14,564
  -15,144
  -15,752
  -16,392
  -17,065
Cash from investing activities, $m
  -3,236
  -3,936
  -4,709
  -5,551
  -6,456
  -7,417
  -8,433
  -9,497
  -10,605
  -11,754
  -12,942
  -14,167
  -15,430
  -16,729
  -18,067
  -19,443
  -20,863
  -22,326
  -23,837
  -25,400
  -27,017
  -28,692
  -30,430
  -32,235
  -34,113
  -36,067
  -38,103
  -40,225
  -42,441
  -44,753
Free cash flow, $m
  -338
  -357
  -329
  -241
  -85
  146
  459
  859
  1,346
  1,923
  2,284
  3,036
  3,874
  4,793
  5,791
  6,865
  8,011
  9,226
  10,508
  11,854
  13,263
  14,734
  16,265
  17,858
  19,512
  21,228
  23,008
  24,854
  26,767
  28,752
Issuance/(repayment) of debt, $m
  3,548
  4,221
  4,932
  5,672
  6,431
  7,199
  7,968
  8,731
  9,482
  10,219
  10,938
  11,641
  12,328
  13,000
  13,661
  14,314
  14,963
  15,612
  16,267
  16,930
  17,607
  18,303
  19,021
  19,766
  20,542
  21,352
  22,202
  23,094
  24,032
  25,019
Issuance/(repurchase) of shares, $m
  637
  494
  298
  36
  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  
  4,185
  4,715
  5,230
  5,708
  6,431
  7,199
  7,968
  8,731
  9,482
  10,219
  10,938
  11,641
  12,328
  13,000
  13,661
  14,314
  14,963
  15,612
  16,267
  16,930
  17,607
  18,303
  19,021
  19,766
  20,542
  21,352
  22,202
  23,094
  24,032
  25,019
Total cash flow (excl. dividends), $m
  3,847
  4,357
  4,901
  5,467
  6,346
  7,345
  8,427
  9,589
  10,828
  12,141
  13,222
  14,677
  16,201
  17,793
  19,452
  21,179
  22,974
  24,838
  26,774
  28,784
  30,870
  33,037
  35,286
  37,624
  40,054
  42,581
  45,210
  47,947
  50,799
  53,771
Retained Cash Flow (-), $m
  -1,801
  -2,136
  -2,496
  -2,870
  -3,254
  -3,643
  -4,032
  -4,418
  -4,798
  -5,171
  -5,535
  -5,891
  -6,238
  -6,578
  -6,913
  -7,243
  -7,572
  -7,900
  -8,231
  -8,567
  -8,910
  -9,262
  -9,625
  -10,002
  -10,395
  -10,805
  -11,235
  -11,686
  -12,161
  -12,660
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
  96
  124
  158
  197
  242
  294
  351
  415
  485
  560
  642
  730
  823
  921
  1,025
  1,134
  1,248
  1,368
  1,493
  1,623
  1,758
  1,899
  2,045
  2,197
  2,355
  2,519
  2,690
  2,867
  3,052
  3,244
Cash available for distribution, $m
  2,046
  2,221
  2,405
  2,597
  3,092
  3,702
  4,395
  5,171
  6,030
  6,971
  7,687
  8,787
  9,963
  11,215
  12,540
  13,936
  15,402
  16,938
  18,543
  20,217
  21,961
  23,775
  25,661
  27,622
  29,659
  31,776
  33,975
  36,261
  38,638
  41,111
Discount rate, %
  7.80
  8.19
  8.60
  9.03
  9.48
  9.95
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.41
  27.73
  29.12
  30.58
  32.11
PV of cash for distribution, $m
  1,898
  1,898
  1,878
  1,838
  1,966
  2,095
  2,192
  2,248
  2,259
  2,224
  2,062
  1,955
  1,812
  1,642
  1,455
  1,259
  1,064
  877
  706
  553
  423
  314
  227
  159
  109
  72
  46
  28
  17
  10
Current shareholders' claim on cash, %
  96.9
  95.1
  94.2
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1

Rockwell Collins, Inc. designs, produces and supports communications and aviation systems for commercial and military customers. The Company provides information management services through voice and data communication networks and solutions across the world. The Company operates through three segments: Commercial Systems, Government Systems and Information Management Services. The Commercial Systems segment supplies aviation electronics systems, products and services to customers located throughout the world. The Government Systems segment provides a range of electronic products, systems and services to customers including the United States Department of Defense, various ministries of defense, other government agencies and defense contractors around the world. The Information Management Services segment provides communications services, systems integration and security solutions across the aviation, airport, rail and nuclear security markets.

FINANCIAL RATIOS  of  Rockwell Collins (COL)

Valuation Ratios
P/E Ratio 31.5
Price to Sales 3.3
Price to Book 3.7
Price to Tangible Book
Price to Cash Flow 17.6
Price to Free Cash Flow 21.7
Growth Rates
Sales Growth Rate 29.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 24.4%
Cap. Spend. - 3 Yr. Gr. Rate 7.9%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 110.5%
Total Debt to Equity 118.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 5.5%
Ret/ On Assets - 3 Yr. Avg. 8.2%
Return On Total Capital 8.1%
Ret/ On T. Cap. - 3 Yr. Avg. 14.3%
Return On Equity 17.4%
Return On Equity - 3 Yr. Avg. 30.2%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 28.6%
Gross Margin - 3 Yr. Avg. 30.1%
EBITDA Margin 19.4%
EBITDA Margin - 3 Yr. Avg. 21.7%
Operating Margin 15.7%
Oper. Margin - 3 Yr. Avg. 17.9%
Pre-Tax Margin 13.6%
Pre-Tax Margin - 3 Yr. Avg. 16.6%
Net Profit Margin 10.3%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 24.3%
Eff/ Tax Rate - 3 Yr. Avg. 24.8%
Payout Ratio 27.5%

COL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the COL stock intrinsic value calculation we used $6822 million for the last fiscal year's total revenue generated by Rockwell Collins. The default revenue input number comes from 2017 income statement of Rockwell Collins. 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 COL stock valuation model: a) initial revenue growth rate of 29.7% 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 7.8%, whose default value for COL is calculated based on our internal credit rating of Rockwell Collins, 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 Rockwell Collins.
    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 COL stock the variable cost ratio is equal to 81.4%.

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 COL 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 Rockwell Collins.

Corporate tax rate of 27% is the nominal tax rate for Rockwell Collins. 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 COL stock is equal to 1.4%.

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 COL are equal to 119.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Rockwell Collins 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 COL is equal to 22.3%. 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 - $6043 million for Rockwell Collins - 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 146 million for Rockwell Collins 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 Rockwell Collins at the current share price and the inputted number of shares is $19.9 billion.

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COMPANY NEWS

▶ FARNBOROUGH: UTAS looks to 'transformative' big data   [Jul-17-18 10:15AM  Flightglobal]
▶ Is Rockwell Collins Inc (NYSE:COL) Undervalued?   [Jun-21-18 08:53AM  Simply Wall St.]
▶ United Technologies to See Lift From M&A   [Jun-15-18 10:52AM  Barrons.com]
▶ Boeing Continues Assault on Supplier Base With New JV   [Jun-09-18 11:15AM  Motley Fool]
▶ Boeing Puts a $30 Billion Deal to the Test   [Jun-04-18 01:31PM  Bloomberg]
▶ German auto giant boosts bet on cutting-edge AR from Silicon Valley   [May-17-18 09:37AM  American City Business Journals]
▶ Rockwell Collins sale to UTC approved by EU Commission   [May-07-18 01:53PM  American City Business Journals]
▶ [$$] Boeing Eyes Air Supremacy   [May-05-18 12:01AM  Barrons.com]
▶ [$$] Activist Third Point Pushes for Breakup of United Technologies   [May-04-18 11:02PM  The Wall Street Journal]
▶ Rockwell Collins: Fiscal 2Q Earnings Snapshot   [06:37AM  Associated Press]
▶ Rockwell Collins Declares Regular Quarterly Dividend   [Apr-19-18 07:30AM  Business Wire]
▶ Should You Buy Rockwell Collins Inc (NYSE:COL) Now?   [Apr-12-18 02:15PM  Simply Wall St.]
▶ 9 Stocks Fueled By High-Octane Sales Growth   [Apr-10-18 01:30PM  Investopedia]
▶ [$$] United Technologies' Planned Breakup: An Idea of What It'll Cost   [Mar-16-18 04:28PM  The Wall Street Journal]
▶ Closing Bell: LIVE MARKETS BLOG   [Mar-13-18 04:02PM  TheStreet.com]
▶ A year later, Rockwell Collins shuttering Arizona facility, nixing 413 jobs   [Mar-09-18 10:30AM  American City Business Journals]
▶ Will United Technologies Rock the Rockwell Collins Deal?   [Mar-05-18 12:27PM  Barrons.com]
▶ Rockwell Collins: Executive team will be based in Florida, post-UTC deal   [Feb-23-18 07:25AM  American City Business Journals]
▶ Leucadia National's Largest Sales of the 4th Quarter   [Feb-19-18 03:40PM  GuruFocus.com]
▶ Rockwell Collins Declares Regular Quarterly Dividend   [Feb-01-18 04:37PM  Business Wire]
▶ December 2017 Quarter Update   [Jan-30-18 05:08PM  GlobeNewswire]
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