Intrinsic value of Exelon - EXC

Previous Close

$42.99

  Intrinsic Value

$23.86

stock screener

  Rating & Target

sell

-45%

Previous close

$42.99

 
Intrinsic value

$23.86

 
Up/down potential

-45%

 
Rating

sell

We calculate the intrinsic value of EXC 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 41.5

 

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, %
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.15
  5.14
  5.13
  5.11
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.04
  5.03
  5.03
  5.03
  5.02
  5.02
  5.02
Revenue, $m
  35,342
  37,236
  39,218
  41,294
  43,467
  45,743
  48,127
  50,626
  53,244
  55,989
  58,866
  61,883
  65,048
  68,366
  71,847
  75,498
  79,329
  83,349
  87,566
  91,992
  96,636
  101,510
  106,626
  111,995
  117,630
  123,546
  129,755
  136,273
  143,115
  150,298
Variable operating expenses, $m
  20,427
  21,486
  22,594
  23,754
  24,969
  26,242
  27,575
  28,972
  30,436
  31,970
  32,911
  34,598
  36,367
  38,223
  40,169
  42,210
  44,352
  46,599
  48,957
  51,431
  54,028
  56,753
  59,613
  62,615
  65,766
  69,073
  72,544
  76,188
  80,014
  84,029
Fixed operating expenses, $m
  10,554
  10,786
  11,024
  11,266
  11,514
  11,767
  12,026
  12,291
  12,561
  12,838
  13,120
  13,409
  13,704
  14,005
  14,313
  14,628
  14,950
  15,279
  15,615
  15,959
  16,310
  16,668
  17,035
  17,410
  17,793
  18,184
  18,584
  18,993
  19,411
  19,838
Total operating expenses, $m
  30,981
  32,272
  33,618
  35,020
  36,483
  38,009
  39,601
  41,263
  42,997
  44,808
  46,031
  48,007
  50,071
  52,228
  54,482
  56,838
  59,302
  61,878
  64,572
  67,390
  70,338
  73,421
  76,648
  80,025
  83,559
  87,257
  91,128
  95,181
  99,425
  103,867
Operating income, $m
  4,361
  4,964
  5,601
  6,273
  6,983
  7,734
  8,526
  9,363
  10,247
  11,181
  12,835
  13,877
  14,977
  16,138
  17,365
  18,660
  20,027
  21,471
  22,994
  24,602
  26,299
  28,089
  29,978
  31,970
  34,072
  36,289
  38,626
  41,091
  43,690
  46,430
EBITDA, $m
  10,493
  11,389
  12,332
  13,326
  14,372
  15,474
  16,635
  17,859
  19,148
  20,506
  21,937
  23,445
  25,035
  26,710
  28,474
  30,334
  32,294
  34,359
  36,534
  38,826
  41,241
  43,785
  46,465
  49,287
  52,261
  55,392
  58,690
  62,162
  65,819
  69,670
Interest expense (income), $m
  1,340
  1,921
  2,178
  2,443
  2,720
  3,011
  3,315
  3,634
  3,967
  4,317
  4,684
  5,068
  5,471
  5,893
  6,336
  6,801
  7,288
  7,799
  8,335
  8,898
  9,488
  10,108
  10,758
  11,440
  12,156
  12,908
  13,697
  14,525
  15,394
  16,307
  17,264
Earnings before tax, $m
  2,439
  2,786
  3,158
  3,553
  3,973
  4,419
  4,892
  5,396
  5,930
  6,497
  7,767
  8,406
  9,084
  9,802
  10,564
  11,372
  12,228
  13,135
  14,096
  15,114
  16,191
  17,331
  18,537
  19,814
  21,164
  22,592
  24,101
  25,697
  27,384
  29,166
Tax expense, $m
  659
  752
  853
  959
  1,073
  1,193
  1,321
  1,457
  1,601
  1,754
  2,097
  2,270
  2,453
  2,647
  2,852
  3,071
  3,302
  3,547
  3,806
  4,081
  4,371
  4,679
  5,005
  5,350
  5,714
  6,100
  6,507
  6,938
  7,394
  7,875
Net income, $m
  1,781
  2,034
  2,305
  2,594
  2,900
  3,226
  3,571
  3,939
  4,329
  4,743
  5,670
  6,136
  6,631
  7,156
  7,712
  8,302
  8,927
  9,589
  10,290
  11,033
  11,819
  12,652
  13,532
  14,464
  15,450
  16,492
  17,594
  18,759
  19,990
  21,291

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
  123,142
  129,742
  136,650
  143,881
  151,452
  159,382
  167,690
  176,396
  185,519
  195,083
  205,109
  215,622
  226,647
  238,209
  250,338
  263,061
  276,409
  290,414
  305,109
  320,529
  336,711
  353,694
  371,518
  390,226
  409,862
  430,473
  452,107
  474,818
  498,658
  523,685
Adjusted assets (=assets-cash), $m
  123,142
  129,742
  136,650
  143,881
  151,452
  159,382
  167,690
  176,396
  185,519
  195,083
  205,109
  215,622
  226,647
  238,209
  250,338
  263,061
  276,409
  290,414
  305,109
  320,529
  336,711
  353,694
  371,518
  390,226
  409,862
  430,473
  452,107
  474,818
  498,658
  523,685
Revenue / Adjusted assets
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
Average production assets, $m
  80,332
  84,637
  89,143
  93,861
  98,800
  103,973
  109,393
  115,072
  121,024
  127,262
  133,803
  140,661
  147,853
  155,396
  163,308
  171,608
  180,316
  189,452
  199,038
  209,097
  219,654
  230,733
  242,360
  254,564
  267,374
  280,819
  294,933
  309,748
  325,300
  341,627
Working capital, $m
  2,156
  2,271
  2,392
  2,519
  2,651
  2,790
  2,936
  3,088
  3,248
  3,415
  3,591
  3,775
  3,968
  4,170
  4,383
  4,605
  4,839
  5,084
  5,342
  5,612
  5,895
  6,192
  6,504
  6,832
  7,175
  7,536
  7,915
  8,313
  8,730
  9,168
Total debt, $m
  40,325
  45,236
  50,375
  55,755
  61,388
  67,289
  73,470
  79,946
  86,734
  93,850
  101,309
  109,131
  117,333
  125,936
  134,959
  144,425
  154,356
  164,776
  175,709
  187,182
  199,221
  211,857
  225,118
  239,036
  253,645
  268,980
  285,076
  301,973
  319,710
  338,330
Total liabilities, $m
  91,617
  96,528
  101,667
  107,047
  112,680
  118,581
  124,762
  131,238
  138,026
  145,142
  152,601
  160,423
  168,625
  177,228
  186,251
  195,717
  205,648
  216,068
  227,001
  238,474
  250,513
  263,149
  276,410
  290,328
  304,937
  320,272
  336,368
  353,265
  371,002
  389,622
Total equity, $m
  31,524
  33,214
  34,982
  36,833
  38,772
  40,802
  42,929
  45,157
  47,493
  49,941
  52,508
  55,199
  58,022
  60,982
  64,086
  67,344
  70,761
  74,346
  78,108
  82,055
  86,198
  90,546
  95,109
  99,898
  104,925
  110,201
  115,740
  121,553
  127,657
  134,063
Total liabilities and equity, $m
  123,141
  129,742
  136,649
  143,880
  151,452
  159,383
  167,691
  176,395
  185,519
  195,083
  205,109
  215,622
  226,647
  238,210
  250,337
  263,061
  276,409
  290,414
  305,109
  320,529
  336,711
  353,695
  371,519
  390,226
  409,862
  430,473
  452,108
  474,818
  498,659
  523,685
Debt-to-equity ratio
  1.280
  1.360
  1.440
  1.510
  1.580
  1.650
  1.710
  1.770
  1.830
  1.880
  1.930
  1.980
  2.020
  2.070
  2.110
  2.140
  2.180
  2.220
  2.250
  2.280
  2.310
  2.340
  2.370
  2.390
  2.420
  2.440
  2.460
  2.480
  2.500
  2.520
Adjusted equity ratio
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,781
  2,034
  2,305
  2,594
  2,900
  3,226
  3,571
  3,939
  4,329
  4,743
  5,670
  6,136
  6,631
  7,156
  7,712
  8,302
  8,927
  9,589
  10,290
  11,033
  11,819
  12,652
  13,532
  14,464
  15,450
  16,492
  17,594
  18,759
  19,990
  21,291
Depreciation, amort., depletion, $m
  6,132
  6,425
  6,732
  7,053
  7,389
  7,741
  8,109
  8,496
  8,901
  9,325
  9,102
  9,569
  10,058
  10,571
  11,109
  11,674
  12,266
  12,888
  13,540
  14,224
  14,942
  15,696
  16,487
  17,317
  18,189
  19,103
  20,063
  21,071
  22,129
  23,240
Funds from operations, $m
  7,913
  8,459
  9,037
  9,646
  10,289
  10,966
  11,681
  12,434
  13,229
  14,068
  14,772
  15,705
  16,689
  17,727
  18,821
  19,976
  21,193
  22,477
  23,830
  25,257
  26,762
  28,348
  30,019
  31,781
  33,638
  35,595
  37,657
  39,830
  42,119
  44,531
Change in working capital, $m
  110
  116
  121
  127
  133
  139
  145
  152
  160
  167
  176
  184
  193
  202
  212
  223
  234
  245
  257
  270
  283
  297
  312
  328
  344
  361
  379
  398
  417
  438
Cash from operations, $m
  7,803
  8,344
  8,916
  9,520
  10,156
  10,827
  11,535
  12,282
  13,070
  13,901
  14,597
  15,521
  16,496
  17,524
  18,609
  19,753
  20,959
  22,232
  23,573
  24,987
  26,478
  28,050
  29,707
  31,454
  33,295
  35,234
  37,279
  39,433
  41,702
  44,093
Maintenance CAPEX, $m
  -5,185
  -5,465
  -5,758
  -6,064
  -6,385
  -6,721
  -7,073
  -7,442
  -7,828
  -8,233
  -8,657
  -9,102
  -9,569
  -10,058
  -10,571
  -11,109
  -11,674
  -12,266
  -12,888
  -13,540
  -14,224
  -14,942
  -15,696
  -16,487
  -17,317
  -18,189
  -19,103
  -20,063
  -21,071
  -22,129
New CAPEX, $m
  -4,115
  -4,306
  -4,506
  -4,717
  -4,939
  -5,173
  -5,420
  -5,679
  -5,952
  -6,239
  -6,541
  -6,858
  -7,192
  -7,543
  -7,912
  -8,300
  -8,708
  -9,136
  -9,586
  -10,059
  -10,557
  -11,079
  -11,628
  -12,204
  -12,809
  -13,445
  -14,114
  -14,815
  -15,552
  -16,326
Cash from investing activities, $m
  -9,300
  -9,771
  -10,264
  -10,781
  -11,324
  -11,894
  -12,493
  -13,121
  -13,780
  -14,472
  -15,198
  -15,960
  -16,761
  -17,601
  -18,483
  -19,409
  -20,382
  -21,402
  -22,474
  -23,599
  -24,781
  -26,021
  -27,324
  -28,691
  -30,126
  -31,634
  -33,217
  -34,878
  -36,623
  -38,455
Free cash flow, $m
  -1,497
  -1,427
  -1,348
  -1,262
  -1,168
  -1,067
  -957
  -839
  -710
  -571
  -601
  -439
  -265
  -77
  126
  344
  578
  829
  1,099
  1,388
  1,698
  2,029
  2,384
  2,763
  3,168
  3,600
  4,062
  4,554
  5,078
  5,637
Issuance/(repayment) of debt, $m
  4,743
  4,911
  5,139
  5,380
  5,633
  5,900
  6,181
  6,477
  6,788
  7,115
  7,460
  7,822
  8,202
  8,603
  9,024
  9,466
  9,931
  10,420
  10,933
  11,473
  12,040
  12,635
  13,261
  13,918
  14,609
  15,334
  16,096
  16,897
  17,737
  18,620
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  
  4,743
  4,911
  5,139
  5,380
  5,633
  5,900
  6,181
  6,477
  6,788
  7,115
  7,460
  7,822
  8,202
  8,603
  9,024
  9,466
  9,931
  10,420
  10,933
  11,473
  12,040
  12,635
  13,261
  13,918
  14,609
  15,334
  16,096
  16,897
  17,737
  18,620
Total cash flow (excl. dividends), $m
  3,247
  3,484
  3,792
  4,118
  4,465
  4,833
  5,224
  5,638
  6,078
  6,544
  6,858
  7,382
  7,938
  8,526
  9,150
  9,810
  10,509
  11,249
  12,032
  12,861
  13,737
  14,664
  15,645
  16,681
  17,777
  18,935
  20,158
  21,451
  22,816
  24,257
Retained Cash Flow (-), $m
  -1,628
  -1,690
  -1,768
  -1,851
  -1,938
  -2,030
  -2,127
  -2,229
  -2,336
  -2,448
  -2,567
  -2,691
  -2,822
  -2,960
  -3,105
  -3,257
  -3,417
  -3,585
  -3,762
  -3,948
  -4,143
  -4,348
  -4,563
  -4,789
  -5,027
  -5,276
  -5,539
  -5,814
  -6,103
  -6,407
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
  1,618
  1,794
  2,023
  2,267
  2,527
  2,803
  3,097
  3,410
  3,742
  4,096
  4,292
  4,691
  5,115
  5,566
  6,045
  6,553
  7,092
  7,663
  8,270
  8,913
  9,594
  10,317
  11,082
  11,892
  12,750
  13,658
  14,620
  15,637
  16,712
  17,850
Discount rate, %
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
  1,504
  1,539
  1,589
  1,618
  1,624
  1,608
  1,571
  1,513
  1,436
  1,344
  1,189
  1,082
  970
  854
  738
  627
  522
  426
  340
  266
  203
  151
  109
  77
  53
  35
  23
  14
  9
  5
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

Exelon Corporation is a utility services holding company. The Company, through its subsidiary, Exelon Generation Company, LLC (Generation), is engaged in the energy generation business. The Company, through its subsidiaries, Commonwealth Edison Company (ComEd), PECO Energy Company (PECO), Baltimore Gas and Electric Company (BGE), Pepco Holdings LLC (PHI), Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE), is engaged in the energy delivery businesses. It operates through 12 segments: Generation's six segments: Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions; ComEd; PECO; BGE, and PHI's three utility segments: Pepco, DPL and ACE. Generation's integrated business consists of the generation, physical delivery and marketing of power across geographical regions through its customer-facing business, Constellation, which sells electricity and natural gas to both wholesale and retail customers.

FINANCIAL RATIOS  of  Exelon (EXC)

Valuation Ratios
P/E Ratio 35
Price to Sales 1.3
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 4.7
Price to Free Cash Flow -367.8
Growth Rates
Sales Growth Rate 6.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 12.2%
Cap. Spend. - 3 Yr. Gr. Rate 9.7%
Financial Strength
Quick Ratio 1
Current Ratio 0.3
LT Debt to Equity 124.7%
Total Debt to Equity 139%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital 2%
Ret/ On T. Cap. - 3 Yr. Avg. 3.4%
Return On Equity 4.4%
Return On Equity - 3 Yr. Avg. 6.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 21.9%
EBITDA Margin - 3 Yr. Avg. 21.4%
Operating Margin 9.9%
Oper. Margin - 3 Yr. Avg. 12.1%
Pre-Tax Margin 6.3%
Pre-Tax Margin - 3 Yr. Avg. 8.9%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 5.7%
Effective Tax Rate 38.3%
Eff/ Tax Rate - 3 Yr. Avg. 32.4%
Payout Ratio 102.8%

EXC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EXC stock intrinsic value calculation we used $33531 million for the last fiscal year's total revenue generated by Exelon. The default revenue input number comes from 0001 income statement of Exelon. 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 EXC stock valuation model: a) initial revenue growth rate of 5.4% 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 7.6%, whose default value for EXC is calculated based on our internal credit rating of Exelon, 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 Exelon.
    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 EXC stock the variable cost ratio is equal to 57.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $10327 million in the base year in the intrinsic value calculation for EXC 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 Exelon.

Corporate tax rate of 27% is the nominal tax rate for Exelon. 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 EXC 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 EXC are equal to 227.3%.

Life of production assets of 14.7 years is the average useful life of capital assets used in Exelon 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 EXC is equal to 6.1%. 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 - $29896 million for Exelon - 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 966 million for Exelon 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 Exelon at the current share price and the inputted number of shares is $41.5 billion.

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