Intrinsic value of CSX Corporation - CSX

Previous Close

$72.52

  Intrinsic Value

$63.56

stock screener

  Rating & Target

hold

-12%

Previous close

$72.52

 
Intrinsic value

$63.56

 
Up/down potential

-12%

 
Rating

hold

We calculate the intrinsic value of CSX 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 59.2

 

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, %
  9.80
  9.32
  8.89
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
Revenue, $m
  13,451
  14,704
  16,011
  17,372
  18,787
  20,259
  21,789
  23,379
  25,031
  26,748
  28,533
  30,389
  32,321
  34,331
  36,425
  38,606
  40,880
  43,251
  45,725
  48,308
  51,005
  53,823
  56,769
  59,849
  63,070
  66,441
  69,969
  73,663
  77,531
  81,583
Variable operating expenses, $m
  9,008
  9,549
  10,113
  10,701
  11,312
  11,948
  12,608
  13,295
  14,008
  14,749
  12,320
  13,122
  13,956
  14,824
  15,728
  16,670
  17,651
  18,675
  19,744
  20,859
  22,024
  23,240
  24,512
  25,842
  27,233
  28,689
  30,212
  31,807
  33,477
  35,227
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
  9,008
  9,549
  10,113
  10,701
  11,312
  11,948
  12,608
  13,295
  14,008
  14,749
  12,320
  13,122
  13,956
  14,824
  15,728
  16,670
  17,651
  18,675
  19,744
  20,859
  22,024
  23,240
  24,512
  25,842
  27,233
  28,689
  30,212
  31,807
  33,477
  35,227
Operating income, $m
  4,443
  5,155
  5,898
  6,671
  7,475
  8,312
  9,181
  10,084
  11,023
  11,999
  16,213
  17,267
  18,365
  19,507
  20,697
  21,936
  23,228
  24,575
  25,981
  27,449
  28,981
  30,583
  32,256
  34,006
  35,837
  37,752
  39,757
  41,856
  44,054
  46,356
EBITDA, $m
  9,102
  9,950
  10,834
  11,755
  12,713
  13,709
  14,744
  15,820
  16,938
  18,099
  19,307
  20,563
  21,870
  23,231
  24,647
  26,123
  27,662
  29,266
  30,941
  32,688
  34,513
  36,420
  38,413
  40,498
  42,677
  44,958
  47,346
  49,845
  52,463
  55,204
Interest expense (income), $m
  606
  797
  922
  1,055
  1,194
  1,338
  1,488
  1,645
  1,807
  1,976
  2,152
  2,334
  2,524
  2,721
  2,926
  3,140
  3,362
  3,594
  3,835
  4,087
  4,350
  4,624
  4,911
  5,210
  5,523
  5,850
  6,192
  6,550
  6,925
  7,317
  7,728
Earnings before tax, $m
  3,646
  4,234
  4,843
  5,477
  6,137
  6,823
  7,536
  8,277
  9,047
  9,847
  13,879
  14,744
  15,644
  16,581
  17,557
  18,574
  19,634
  20,740
  21,894
  23,099
  24,357
  25,672
  27,046
  28,484
  29,987
  31,560
  33,207
  34,931
  36,736
  38,628
Tax expense, $m
  984
  1,143
  1,308
  1,479
  1,657
  1,842
  2,035
  2,235
  2,443
  2,659
  3,747
  3,981
  4,224
  4,477
  4,740
  5,015
  5,301
  5,600
  5,911
  6,237
  6,576
  6,931
  7,303
  7,691
  8,096
  8,521
  8,966
  9,431
  9,919
  10,429
Net income, $m
  2,662
  3,091
  3,535
  3,999
  4,480
  4,981
  5,501
  6,042
  6,604
  7,188
  10,131
  10,763
  11,420
  12,104
  12,817
  13,559
  14,333
  15,140
  15,983
  16,862
  17,781
  18,741
  19,744
  20,793
  21,890
  23,039
  24,241
  25,499
  26,818
  28,198

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
  40,271
  44,024
  47,937
  52,011
  56,250
  60,657
  65,237
  69,996
  74,943
  80,083
  85,428
  90,986
  96,769
  102,788
  109,056
  115,587
  122,394
  129,493
  136,901
  144,634
  152,709
  161,147
  169,966
  179,187
  188,833
  198,925
  209,488
  220,548
  232,129
  244,260
Adjusted assets (=assets-cash), $m
  40,271
  44,024
  47,937
  52,011
  56,250
  60,657
  65,237
  69,996
  74,943
  80,083
  85,428
  90,986
  96,769
  102,788
  109,056
  115,587
  122,394
  129,493
  136,901
  144,634
  152,709
  161,147
  169,966
  179,187
  188,833
  198,925
  209,488
  220,548
  232,129
  244,260
Revenue / Adjusted assets
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
Average production assets, $m
  35,012
  38,275
  41,677
  45,219
  48,904
  52,735
  56,717
  60,855
  65,155
  69,625
  74,271
  79,103
  84,131
  89,364
  94,813
  100,491
  106,410
  112,582
  119,022
  125,745
  132,766
  140,101
  147,769
  155,786
  164,172
  172,946
  182,130
  191,744
  201,813
  212,360
Working capital, $m
  -484
  -529
  -576
  -625
  -676
  -729
  -784
  -842
  -901
  -963
  -1,027
  -1,094
  -1,164
  -1,236
  -1,311
  -1,390
  -1,472
  -1,557
  -1,646
  -1,739
  -1,836
  -1,938
  -2,044
  -2,155
  -2,271
  -2,392
  -2,519
  -2,652
  -2,791
  -2,937
Total debt, $m
  17,066
  19,532
  22,103
  24,779
  27,564
  30,459
  33,469
  36,596
  39,845
  43,223
  46,734
  50,386
  54,185
  58,140
  62,258
  66,548
  71,021
  75,685
  80,552
  85,632
  90,938
  96,482
  102,276
  108,334
  114,671
  121,302
  128,242
  135,508
  143,117
  151,087
Total liabilities, $m
  26,458
  28,924
  31,495
  34,171
  36,956
  39,851
  42,861
  45,988
  49,237
  52,615
  56,126
  59,778
  63,577
  67,532
  71,650
  75,940
  80,413
  85,077
  89,944
  95,024
  100,330
  105,874
  111,668
  117,726
  124,063
  130,694
  137,634
  144,900
  152,509
  160,479
Total equity, $m
  13,813
  15,100
  16,442
  17,840
  19,294
  20,805
  22,376
  24,009
  25,705
  27,469
  29,302
  31,208
  33,192
  35,256
  37,406
  39,646
  41,981
  44,416
  46,957
  49,609
  52,379
  55,273
  58,298
  61,461
  64,770
  68,231
  71,855
  75,648
  79,620
  83,781
Total liabilities and equity, $m
  40,271
  44,024
  47,937
  52,011
  56,250
  60,656
  65,237
  69,997
  74,942
  80,084
  85,428
  90,986
  96,769
  102,788
  109,056
  115,586
  122,394
  129,493
  136,901
  144,633
  152,709
  161,147
  169,966
  179,187
  188,833
  198,925
  209,489
  220,548
  232,129
  244,260
Debt-to-equity ratio
  1.240
  1.290
  1.340
  1.390
  1.430
  1.460
  1.500
  1.520
  1.550
  1.570
  1.590
  1.610
  1.630
  1.650
  1.660
  1.680
  1.690
  1.700
  1.720
  1.730
  1.740
  1.750
  1.750
  1.760
  1.770
  1.780
  1.780
  1.790
  1.800
  1.800
Adjusted equity ratio
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,662
  3,091
  3,535
  3,999
  4,480
  4,981
  5,501
  6,042
  6,604
  7,188
  10,131
  10,763
  11,420
  12,104
  12,817
  13,559
  14,333
  15,140
  15,983
  16,862
  17,781
  18,741
  19,744
  20,793
  21,890
  23,039
  24,241
  25,499
  26,818
  28,198
Depreciation, amort., depletion, $m
  4,659
  4,795
  4,936
  5,084
  5,237
  5,397
  5,563
  5,735
  5,915
  6,101
  3,095
  3,296
  3,505
  3,723
  3,951
  4,187
  4,434
  4,691
  4,959
  5,239
  5,532
  5,838
  6,157
  6,491
  6,840
  7,206
  7,589
  7,989
  8,409
  8,848
Funds from operations, $m
  7,320
  7,885
  8,472
  9,082
  9,718
  10,378
  11,064
  11,778
  12,519
  13,289
  13,226
  14,059
  14,926
  15,828
  16,767
  17,746
  18,767
  19,831
  20,942
  22,102
  23,313
  24,578
  25,901
  27,284
  28,731
  30,245
  31,830
  33,489
  35,226
  37,047
Change in working capital, $m
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -64
  -67
  -70
  -72
  -75
  -79
  -82
  -85
  -89
  -93
  -97
  -101
  -106
  -111
  -116
  -121
  -127
  -133
  -139
  -146
Cash from operations, $m
  7,363
  7,930
  8,519
  9,131
  9,769
  10,431
  11,119
  11,835
  12,578
  13,351
  13,290
  14,126
  14,995
  15,900
  16,843
  17,825
  18,849
  19,917
  21,031
  22,195
  23,410
  24,680
  26,007
  27,395
  28,847
  30,366
  31,957
  33,622
  35,366
  37,192
Maintenance CAPEX, $m
  -1,328
  -1,459
  -1,595
  -1,737
  -1,884
  -2,038
  -2,197
  -2,363
  -2,536
  -2,715
  -2,901
  -3,095
  -3,296
  -3,505
  -3,723
  -3,951
  -4,187
  -4,434
  -4,691
  -4,959
  -5,239
  -5,532
  -5,838
  -6,157
  -6,491
  -6,840
  -7,206
  -7,589
  -7,989
  -8,409
New CAPEX, $m
  -3,131
  -3,263
  -3,402
  -3,542
  -3,685
  -3,831
  -3,982
  -4,138
  -4,300
  -4,469
  -4,647
  -4,832
  -5,028
  -5,233
  -5,449
  -5,678
  -5,918
  -6,172
  -6,440
  -6,723
  -7,021
  -7,336
  -7,667
  -8,017
  -8,386
  -8,774
  -9,184
  -9,615
  -10,069
  -10,547
Cash from investing activities, $m
  -4,459
  -4,722
  -4,997
  -5,279
  -5,569
  -5,869
  -6,179
  -6,501
  -6,836
  -7,184
  -7,548
  -7,927
  -8,324
  -8,738
  -9,172
  -9,629
  -10,105
  -10,606
  -11,131
  -11,682
  -12,260
  -12,868
  -13,505
  -14,174
  -14,877
  -15,614
  -16,390
  -17,204
  -18,058
  -18,956
Free cash flow, $m
  2,904
  3,208
  3,522
  3,853
  4,200
  4,562
  4,940
  5,334
  5,742
  6,167
  5,743
  6,199
  6,672
  7,162
  7,670
  8,197
  8,743
  9,311
  9,900
  10,513
  11,149
  11,812
  12,502
  13,221
  13,970
  14,752
  15,567
  16,418
  17,307
  18,237
Issuance/(repayment) of debt, $m
  2,309
  2,466
  2,571
  2,677
  2,785
  2,895
  3,009
  3,127
  3,250
  3,377
  3,511
  3,652
  3,799
  3,955
  4,118
  4,291
  4,472
  4,664
  4,867
  5,080
  5,306
  5,543
  5,794
  6,058
  6,337
  6,631
  6,940
  7,266
  7,609
  7,970
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  
  2,309
  2,466
  2,571
  2,677
  2,785
  2,895
  3,009
  3,127
  3,250
  3,377
  3,511
  3,652
  3,799
  3,955
  4,118
  4,291
  4,472
  4,664
  4,867
  5,080
  5,306
  5,543
  5,794
  6,058
  6,337
  6,631
  6,940
  7,266
  7,609
  7,970
Total cash flow (excl. dividends), $m
  5,213
  5,674
  6,093
  6,530
  6,984
  7,457
  7,949
  8,461
  8,992
  9,544
  9,254
  9,851
  10,471
  11,116
  11,788
  12,487
  13,216
  13,975
  14,767
  15,593
  16,455
  17,356
  18,296
  19,279
  20,307
  21,382
  22,507
  23,684
  24,916
  26,207
Retained Cash Flow (-), $m
  -1,233
  -1,287
  -1,342
  -1,397
  -1,454
  -1,512
  -1,571
  -1,633
  -1,697
  -1,763
  -1,833
  -1,906
  -1,983
  -2,065
  -2,150
  -2,240
  -2,335
  -2,435
  -2,541
  -2,652
  -2,770
  -2,894
  -3,025
  -3,163
  -3,308
  -3,462
  -3,623
  -3,793
  -3,972
  -4,161
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
  3,980
  4,387
  4,751
  5,132
  5,530
  5,946
  6,378
  6,828
  7,295
  7,781
  7,421
  7,944
  8,487
  9,052
  9,638
  10,247
  10,881
  11,540
  12,226
  12,941
  13,685
  14,461
  15,271
  16,116
  16,999
  17,920
  18,884
  19,891
  20,944
  22,046
Discount rate, %
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
  3,734
  3,837
  3,848
  3,823
  3,760
  3,660
  3,524
  3,356
  3,158
  2,936
  2,413
  2,201
  1,979
  1,752
  1,527
  1,310
  1,104
  914
  743
  592
  462
  353
  263
  192
  137
  95
  64
  42
  26
  16
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

CSX Corporation is a transportation company. The Company provides rail-based freight transportation services, including traditional rail service and transport of intermodal containers and trailers, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations. The Company categorizes its products into three primary lines of business: merchandise, intermodal and coal. The Company's intermodal business links customers to railroads through trucks and terminals. The Company's merchandise business consists of shipments in markets, such as agricultural and food products, fertilizers, chemicals, automotive, metals and equipment, minerals and forest products. The Company's coal business transports domestic coal, coke and iron ore to electricity-generating power plants, steel manufacturers and industrial plants, as well as export coal to deep-water port facilities.

FINANCIAL RATIOS  of  CSX Corporation (CSX)

Valuation Ratios
P/E Ratio 39.3
Price to Sales 6.1
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow 22.1
Price to Free Cash Flow 104.7
Growth Rates
Sales Growth Rate -6.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.4%
Cap. Spend. - 3 Yr. Gr. Rate 0.7%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 93.9%
Total Debt to Equity 96.7%
Interest Coverage 6
Management Effectiveness
Return On Assets 6%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 7.6%
Ret/ On T. Cap. - 3 Yr. Avg. 8.7%
Return On Equity 14.7%
Return On Equity - 3 Yr. Avg. 16.6%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 63.1%
Gross Margin - 3 Yr. Avg. 61.2%
EBITDA Margin 42%
EBITDA Margin - 3 Yr. Avg. 40.4%
Operating Margin 29.6%
Oper. Margin - 3 Yr. Avg. 29.5%
Pre-Tax Margin 24.8%
Pre-Tax Margin - 3 Yr. Avg. 25.1%
Net Profit Margin 15.5%
Net Profit Margin - 3 Yr. Avg. 15.8%
Effective Tax Rate 37.5%
Eff/ Tax Rate - 3 Yr. Avg. 37.1%
Payout Ratio 39.7%

CSX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CSX stock intrinsic value calculation we used $12250 million for the last fiscal year's total revenue generated by CSX Corporation. The default revenue input number comes from 0001 income statement of CSX Corporation. 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 CSX stock valuation model: a) initial revenue growth rate of 9.8% 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 6.6%, whose default value for CSX is calculated based on our internal credit rating of CSX Corporation, 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 CSX Corporation.
    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 CSX stock the variable cost ratio is equal to 69.3%.

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 CSX 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 CSX Corporation.

Corporate tax rate of 27% is the nominal tax rate for CSX Corporation. 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 CSX 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 CSX are equal to 260.3%.

Life of production assets of 24 years is the average useful life of capital assets used in CSX Corporation 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 CSX is equal to -3.6%. 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 - $12580 million for CSX Corporation - 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 815.685 million for CSX Corporation 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 CSX Corporation at the current share price and the inputted number of shares is $59.2 billion.

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