Intrinsic value of DowDuPont Inc. - DWDP

Previous Close

$39.00

  Intrinsic Value

$39.79

stock screener

  Rating & Target

hold

+2%

Previous close

$39.00

 
Intrinsic value

$39.79

 
Up/down potential

+2%

 
Rating

hold

We calculate the intrinsic value of DWDP 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 87.9

 

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, %
  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
  87,697
  89,714
  92,019
  94,608
  97,476
  100,623
  104,050
  107,759
  111,756
  116,045
  120,633
  125,529
  130,742
  136,282
  142,161
  148,391
  154,985
  161,959
  169,328
  177,108
  185,317
  193,975
  203,101
  212,716
  222,842
  233,505
  244,727
  256,537
  268,961
  282,029
Variable operating expenses, $m
  70,767
  72,187
  73,811
  75,634
  77,654
  79,871
  82,285
  84,897
  87,712
  90,733
  84,965
  88,413
  92,085
  95,987
  100,127
  104,515
  109,160
  114,072
  119,262
  124,741
  130,524
  136,621
  143,049
  149,821
  156,953
  164,463
  172,367
  180,685
  189,436
  198,640
Fixed operating expenses, $m
  10,881
  11,121
  11,365
  11,615
  11,871
  12,132
  12,399
  12,672
  12,950
  13,235
  13,527
  13,824
  14,128
  14,439
  14,757
  15,081
  15,413
  15,752
  16,099
  16,453
  16,815
  17,185
  17,563
  17,949
  18,344
  18,748
  19,160
  19,582
  20,013
  20,453
Total operating expenses, $m
  81,648
  83,308
  85,176
  87,249
  89,525
  92,003
  94,684
  97,569
  100,662
  103,968
  98,492
  102,237
  106,213
  110,426
  114,884
  119,596
  124,573
  129,824
  135,361
  141,194
  147,339
  153,806
  160,612
  167,770
  175,297
  183,211
  191,527
  200,267
  209,449
  219,093
Operating income, $m
  6,049
  6,406
  6,843
  7,358
  7,951
  8,620
  9,366
  10,190
  11,093
  12,076
  22,142
  23,292
  24,529
  25,856
  27,277
  28,794
  30,412
  32,135
  33,967
  35,914
  37,979
  40,169
  42,489
  44,945
  47,545
  50,294
  53,200
  56,270
  59,513
  62,936
EBITDA, $m
  18,928
  19,374
  19,913
  20,543
  21,262
  22,071
  22,968
  23,957
  25,036
  26,209
  27,478
  28,844
  30,312
  31,884
  33,565
  35,358
  37,268
  39,299
  41,457
  43,747
  46,176
  48,749
  51,473
  54,354
  57,402
  60,622
  64,025
  67,617
  71,409
  75,411
Interest expense (income), $m
  0
  2,185
  2,288
  2,407
  2,542
  2,694
  2,863
  3,048
  3,249
  3,467
  3,701
  3,953
  4,223
  4,510
  4,816
  5,142
  5,487
  5,853
  6,240
  6,650
  7,082
  7,539
  8,021
  8,530
  9,066
  9,630
  10,225
  10,851
  11,510
  12,204
  12,933
Earnings before tax, $m
  3,864
  4,117
  4,436
  4,816
  5,256
  5,757
  6,319
  6,942
  7,627
  8,375
  18,189
  19,069
  20,019
  21,040
  22,135
  23,307
  24,559
  25,895
  27,318
  28,831
  30,440
  32,147
  33,959
  35,880
  37,915
  40,069
  42,348
  44,760
  47,309
  50,003
Tax expense, $m
  1,043
  1,112
  1,198
  1,300
  1,419
  1,554
  1,706
  1,874
  2,059
  2,261
  4,911
  5,149
  5,405
  5,681
  5,976
  6,293
  6,631
  6,992
  7,376
  7,784
  8,219
  8,680
  9,169
  9,688
  10,237
  10,819
  11,434
  12,085
  12,773
  13,501
Net income, $m
  2,821
  3,006
  3,238
  3,516
  3,837
  4,203
  4,613
  5,067
  5,567
  6,114
  13,278
  13,920
  14,614
  15,359
  16,159
  17,014
  17,928
  18,903
  19,942
  21,047
  22,221
  23,468
  24,790
  26,192
  27,678
  29,250
  30,914
  32,675
  34,535
  36,502

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
  191,896
  196,310
  201,355
  207,019
  213,295
  220,182
  227,680
  235,797
  244,542
  253,927
  263,967
  274,680
  286,087
  298,210
  311,074
  324,706
  339,136
  354,396
  370,520
  387,545
  405,508
  424,453
  444,421
  465,461
  487,620
  510,951
  535,508
  561,349
  588,535
  617,131
Adjusted assets (=assets-cash), $m
  191,896
  196,310
  201,355
  207,019
  213,295
  220,182
  227,680
  235,797
  244,542
  253,927
  263,967
  274,680
  286,087
  298,210
  311,074
  324,706
  339,136
  354,396
  370,520
  387,545
  405,508
  424,453
  444,421
  465,461
  487,620
  510,951
  535,508
  561,349
  588,535
  617,131
Revenue / Adjusted assets
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
  0.457
Average production assets, $m
  83,399
  85,318
  87,510
  89,972
  92,700
  95,692
  98,951
  102,479
  106,280
  110,358
  114,722
  119,378
  124,335
  129,604
  135,195
  141,119
  147,391
  154,023
  161,031
  168,430
  176,237
  184,470
  193,149
  202,293
  211,923
  222,063
  232,736
  243,966
  255,782
  268,209
Working capital, $m
  14,382
  14,713
  15,091
  15,516
  15,986
  16,502
  17,064
  17,673
  18,328
  19,031
  19,784
  20,587
  21,442
  22,350
  23,314
  24,336
  25,418
  26,561
  27,770
  29,046
  30,392
  31,812
  33,309
  34,885
  36,546
  38,295
  40,135
  42,072
  44,110
  46,253
Total debt, $m
  42,377
  44,571
  47,078
  49,893
  53,013
  56,435
  60,162
  64,196
  68,542
  73,207
  78,197
  83,521
  89,190
  95,215
  101,609
  108,384
  115,556
  123,140
  131,154
  139,615
  148,543
  157,958
  167,882
  178,339
  189,352
  200,948
  213,153
  225,996
  239,507
  253,719
Total liabilities, $m
  95,372
  97,566
  100,073
  102,888
  106,008
  109,430
  113,157
  117,191
  121,537
  126,202
  131,192
  136,516
  142,185
  148,210
  154,604
  161,379
  168,551
  176,135
  184,149
  192,610
  201,538
  210,953
  220,877
  231,334
  242,347
  253,943
  266,148
  278,991
  292,502
  306,714
Total equity, $m
  96,524
  98,744
  101,282
  104,131
  107,288
  110,751
  114,523
  118,606
  123,005
  127,725
  132,775
  138,164
  143,902
  150,000
  156,470
  163,327
  170,586
  178,261
  186,372
  194,935
  203,971
  213,500
  223,544
  234,127
  245,273
  257,008
  269,361
  282,359
  296,033
  310,417
Total liabilities and equity, $m
  191,896
  196,310
  201,355
  207,019
  213,296
  220,181
  227,680
  235,797
  244,542
  253,927
  263,967
  274,680
  286,087
  298,210
  311,074
  324,706
  339,137
  354,396
  370,521
  387,545
  405,509
  424,453
  444,421
  465,461
  487,620
  510,951
  535,509
  561,350
  588,535
  617,131
Debt-to-equity ratio
  0.440
  0.450
  0.460
  0.480
  0.490
  0.510
  0.530
  0.540
  0.560
  0.570
  0.590
  0.600
  0.620
  0.630
  0.650
  0.660
  0.680
  0.690
  0.700
  0.720
  0.730
  0.740
  0.750
  0.760
  0.770
  0.780
  0.790
  0.800
  0.810
  0.820
Adjusted equity ratio
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503
  0.503

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,821
  3,006
  3,238
  3,516
  3,837
  4,203
  4,613
  5,067
  5,567
  6,114
  13,278
  13,920
  14,614
  15,359
  16,159
  17,014
  17,928
  18,903
  19,942
  21,047
  22,221
  23,468
  24,790
  26,192
  27,678
  29,250
  30,914
  32,675
  34,535
  36,502
Depreciation, amort., depletion, $m
  12,879
  12,968
  13,070
  13,184
  13,311
  13,451
  13,602
  13,766
  13,943
  14,133
  5,336
  5,552
  5,783
  6,028
  6,288
  6,564
  6,855
  7,164
  7,490
  7,834
  8,197
  8,580
  8,984
  9,409
  9,857
  10,329
  10,825
  11,347
  11,897
  12,475
Funds from operations, $m
  15,699
  15,974
  16,308
  16,700
  17,149
  17,653
  18,215
  18,834
  19,510
  20,247
  18,614
  19,473
  20,397
  21,387
  22,447
  23,578
  24,784
  26,067
  27,432
  28,881
  30,418
  32,048
  33,774
  35,601
  37,534
  39,579
  41,739
  44,022
  46,432
  48,977
Change in working capital, $m
  282
  331
  378
  425
  470
  516
  562
  608
  655
  703
  752
  803
  855
  909
  964
  1,022
  1,082
  1,144
  1,208
  1,276
  1,346
  1,420
  1,497
  1,577
  1,661
  1,749
  1,841
  1,937
  2,038
  2,143
Cash from operations, $m
  15,417
  15,643
  15,930
  16,276
  16,678
  17,137
  17,653
  18,225
  18,855
  19,543
  17,861
  18,670
  19,542
  20,479
  21,483
  22,556
  23,702
  24,924
  26,223
  27,605
  29,072
  30,628
  32,277
  34,024
  35,874
  37,830
  39,899
  42,085
  44,395
  46,834
Maintenance CAPEX, $m
  -3,802
  -3,879
  -3,968
  -4,070
  -4,185
  -4,312
  -4,451
  -4,602
  -4,766
  -4,943
  -5,133
  -5,336
  -5,552
  -5,783
  -6,028
  -6,288
  -6,564
  -6,855
  -7,164
  -7,490
  -7,834
  -8,197
  -8,580
  -8,984
  -9,409
  -9,857
  -10,329
  -10,825
  -11,347
  -11,897
New CAPEX, $m
  -1,652
  -1,918
  -2,193
  -2,462
  -2,728
  -2,993
  -3,259
  -3,528
  -3,801
  -4,079
  -4,364
  -4,656
  -4,957
  -5,269
  -5,591
  -5,925
  -6,271
  -6,632
  -7,008
  -7,399
  -7,807
  -8,233
  -8,679
  -9,144
  -9,631
  -10,140
  -10,673
  -11,231
  -11,815
  -12,428
Cash from investing activities, $m
  -5,454
  -5,797
  -6,161
  -6,532
  -6,913
  -7,305
  -7,710
  -8,130
  -8,567
  -9,022
  -9,497
  -9,992
  -10,509
  -11,052
  -11,619
  -12,213
  -12,835
  -13,487
  -14,172
  -14,889
  -15,641
  -16,430
  -17,259
  -18,128
  -19,040
  -19,997
  -21,002
  -22,056
  -23,162
  -24,325
Free cash flow, $m
  9,963
  9,846
  9,769
  9,744
  9,766
  9,833
  9,943
  10,095
  10,288
  10,521
  8,365
  8,678
  9,032
  9,427
  9,864
  10,343
  10,867
  11,436
  12,052
  12,716
  13,431
  14,197
  15,019
  15,897
  16,834
  17,833
  18,898
  20,029
  21,232
  22,509
Issuance/(repayment) of debt, $m
  1,913
  2,194
  2,507
  2,815
  3,119
  3,422
  3,727
  4,034
  4,346
  4,664
  4,990
  5,325
  5,669
  6,025
  6,393
  6,775
  7,172
  7,584
  8,014
  8,461
  8,928
  9,415
  9,924
  10,457
  11,013
  11,595
  12,205
  12,843
  13,512
  14,212
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  
  1,913
  2,194
  2,507
  2,815
  3,119
  3,422
  3,727
  4,034
  4,346
  4,664
  4,990
  5,325
  5,669
  6,025
  6,393
  6,775
  7,172
  7,584
  8,014
  8,461
  8,928
  9,415
  9,924
  10,457
  11,013
  11,595
  12,205
  12,843
  13,512
  14,212
Total cash flow (excl. dividends), $m
  11,876
  12,039
  12,277
  12,559
  12,885
  13,255
  13,670
  14,129
  14,634
  15,185
  13,355
  14,002
  14,701
  15,452
  16,257
  17,119
  18,039
  19,020
  20,065
  21,177
  22,359
  23,613
  24,943
  26,353
  27,847
  29,429
  31,102
  32,872
  34,744
  36,721
Retained Cash Flow (-), $m
  -1,953
  -2,220
  -2,538
  -2,849
  -3,157
  -3,464
  -3,772
  -4,083
  -4,399
  -4,721
  -5,050
  -5,389
  -5,738
  -6,098
  -6,471
  -6,857
  -7,258
  -7,676
  -8,110
  -8,563
  -9,036
  -9,529
  -10,044
  -10,583
  -11,146
  -11,735
  -12,352
  -12,998
  -13,675
  -14,383
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
  9,923
  9,819
  9,739
  9,710
  9,728
  9,792
  9,898
  10,046
  10,236
  10,465
  8,304
  8,614
  8,963
  9,354
  9,787
  10,262
  10,781
  11,344
  11,955
  12,614
  13,323
  14,084
  14,899
  15,771
  16,701
  17,694
  18,750
  19,874
  21,069
  22,338
Discount rate, %
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
  9,388
  8,742
  8,112
  7,520
  6,959
  6,425
  5,913
  5,420
  4,944
  4,485
  3,127
  2,821
  2,525
  2,240
  1,968
  1,710
  1,468
  1,244
  1,039
  855
  692
  550
  429
  328
  246
  180
  129
  90
  61
  40
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

DowDuPont Inc. is a holding company formed through the merger of equals between The Dow Chemical Company and E. I. du Pont de Nemours and Company (DuPont). The Company's business divisions include Agriculture division, Material Science division, and a Specialty Products division. The Agriculture Division offers a complete portfolio of products and technologies, traits and crop protection. The Materials Science Division provides solutions, such as packaging, transportation, infrastructure and customer care. The Specialty Products division provides solution for industrial, safety, energy, food, nutrition, construction, electronics and consumer goods industries. The company provides solutions to a range of markets, including aerospace, automotive, consumer electronics, military, printing, renewable energy, semiconductors, child nutrition, dietary supplements, carpet and apparel, fertilizer, and oil and gas/energy.

FINANCIAL RATIOS  of  DowDuPont Inc. (DWDP)

Valuation Ratios
P/E Ratio 9.8
Price to Sales 1.2
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 6
Current Ratio 0.1
LT Debt to Equity 30.6%
Total Debt to Equity 33.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 11.3%
Ret/ On Assets - 3 Yr. Avg. 3.8%
Return On Total Capital 17%
Ret/ On T. Cap. - 3 Yr. Avg. 5.7%
Return On Equity 22.7%
Return On Equity - 3 Yr. Avg. 7.6%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 28.4%
Gross Margin - 3 Yr. Avg. 9.5%
EBITDA Margin 15.8%
EBITDA Margin - 3 Yr. Avg. 5.3%
Operating Margin 16.4%
Oper. Margin - 3 Yr. Avg. 5.5%
Pre-Tax Margin 15.8%
Pre-Tax Margin - 3 Yr. Avg. 5.3%
Net Profit Margin 12.1%
Net Profit Margin - 3 Yr. Avg. 4%
Effective Tax Rate 22.5%
Eff/ Tax Rate - 3 Yr. Avg. 7.5%
Payout Ratio 0%

DWDP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DWDP stock intrinsic value calculation we used $85977 million for the last fiscal year's total revenue generated by DowDuPont Inc.. The default revenue input number comes from 0001 income statement of DowDuPont 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 DWDP 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 5.7%, whose default value for DWDP is calculated based on our internal credit rating of DowDuPont 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 DowDuPont 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 DWDP stock the variable cost ratio is equal to 80.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $10647 million in the base year in the intrinsic value calculation for DWDP 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 DowDuPont Inc..

Corporate tax rate of 27% is the nominal tax rate for DowDuPont 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 DWDP 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 DWDP are equal to 95.1%.

Life of production assets of 21.5 years is the average useful life of capital assets used in DowDuPont 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 DWDP is equal to 16.4%. 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 - $94571 million for DowDuPont 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 2254.703 million for DowDuPont 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 DowDuPont Inc. at the current share price and the inputted number of shares is $87.9 billion.

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