Intrinsic value of Ford Motor - F

Previous Close

$9.50

  Intrinsic Value

$6.14

stock screener

  Rating & Target

sell

-35%

Previous close

$9.50

 
Intrinsic value

$6.14

 
Up/down potential

-35%

 
Rating

sell

We calculate the intrinsic value of F 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 37.7

 

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, %
  3.30
  3.47
  3.62
  3.76
  3.88
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
Revenue, $m
  161,950
  167,569
  173,640
  180,170
  187,169
  194,649
  202,623
  211,106
  220,117
  229,673
  239,795
  250,506
  261,828
  273,788
  286,413
  299,731
  313,773
  328,573
  344,163
  360,581
  377,864
  396,055
  415,194
  435,329
  456,505
  478,773
  502,186
  526,798
  552,670
  579,861
Variable operating expenses, $m
  155,796
  161,202
  167,042
  173,324
  180,057
  187,252
  194,923
  203,084
  211,752
  220,945
  230,683
  240,987
  251,879
  263,384
  275,529
  288,341
  301,850
  316,087
  331,085
  346,879
  363,506
  381,005
  399,417
  418,786
  439,158
  460,579
  483,102
  506,780
  531,668
  557,826
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
  155,796
  161,202
  167,042
  173,324
  180,057
  187,252
  194,923
  203,084
  211,752
  220,945
  230,683
  240,987
  251,879
  263,384
  275,529
  288,341
  301,850
  316,087
  331,085
  346,879
  363,506
  381,005
  399,417
  418,786
  439,158
  460,579
  483,102
  506,780
  531,668
  557,826
Operating income, $m
  6,154
  6,368
  6,598
  6,846
  7,112
  7,397
  7,700
  8,022
  8,364
  8,728
  9,112
  9,519
  9,949
  10,404
  10,884
  11,390
  11,923
  12,486
  13,078
  13,702
  14,359
  15,050
  15,777
  16,542
  17,347
  18,193
  19,083
  20,018
  21,001
  22,035
EBITDA, $m
  9,636
  9,970
  10,332
  10,720
  11,137
  11,582
  12,056
  12,561
  13,097
  13,666
  14,268
  14,905
  15,579
  16,290
  17,042
  17,834
  18,670
  19,550
  20,478
  21,455
  22,483
  23,565
  24,704
  25,902
  27,162
  28,487
  29,880
  31,345
  32,884
  34,502
Interest expense (income), $m
  0
  8,331
  8,736
  9,168
  9,634
  10,136
  10,673
  11,248
  11,861
  12,512
  13,205
  13,939
  14,716
  15,539
  16,409
  17,328
  18,298
  19,321
  20,400
  21,537
  22,734
  23,996
  25,324
  26,721
  28,192
  29,738
  31,365
  33,076
  34,875
  36,766
  38,753
Earnings before tax, $m
  -2,177
  -2,368
  -2,569
  -2,787
  -3,023
  -3,277
  -3,548
  -3,839
  -4,148
  -4,477
  -4,826
  -5,197
  -5,590
  -6,005
  -6,444
  -6,908
  -7,398
  -7,914
  -8,459
  -9,032
  -9,637
  -10,274
  -10,944
  -11,649
  -12,391
  -13,172
  -13,993
  -14,856
  -15,764
  -16,718
Tax expense, $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
Net income, $m
  -2,177
  -2,368
  -2,569
  -2,787
  -3,023
  -3,277
  -3,548
  -3,839
  -4,148
  -4,477
  -4,826
  -5,197
  -5,590
  -6,005
  -6,444
  -6,908
  -7,398
  -7,914
  -8,459
  -9,032
  -9,637
  -10,274
  -10,944
  -11,649
  -12,391
  -13,172
  -13,993
  -14,856
  -15,764
  -16,718

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
  266,364
  275,607
  285,593
  296,333
  307,844
  320,146
  333,261
  347,215
  362,034
  377,752
  394,400
  412,016
  430,639
  450,310
  471,074
  492,979
  516,075
  540,415
  566,057
  593,060
  621,487
  651,406
  682,886
  716,001
  750,830
  787,455
  825,963
  866,445
  908,996
  953,718
Adjusted assets (=assets-cash), $m
  266,364
  275,607
  285,593
  296,333
  307,844
  320,146
  333,261
  347,215
  362,034
  377,752
  394,400
  412,016
  430,639
  450,310
  471,074
  492,979
  516,075
  540,415
  566,057
  593,060
  621,487
  651,406
  682,886
  716,001
  750,830
  787,455
  825,963
  866,445
  908,996
  953,718
Revenue / Adjusted assets
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
Average production assets, $m
  34,819
  36,027
  37,333
  38,737
  40,241
  41,850
  43,564
  45,388
  47,325
  49,380
  51,556
  53,859
  56,293
  58,864
  61,579
  64,442
  67,461
  70,643
  73,995
  77,525
  81,241
  85,152
  89,267
  93,596
  98,149
  102,936
  107,970
  113,262
  118,824
  124,670
Working capital, $m
  -13,442
  -13,908
  -14,412
  -14,954
  -15,535
  -16,156
  -16,818
  -17,522
  -18,270
  -19,063
  -19,903
  -20,792
  -21,732
  -22,724
  -23,772
  -24,878
  -26,043
  -27,272
  -28,566
  -29,928
  -31,363
  -32,873
  -34,461
  -36,132
  -37,890
  -39,738
  -41,681
  -43,724
  -45,872
  -48,128
Total debt, $m
  161,774
  169,769
  178,407
  187,697
  197,654
  208,296
  219,640
  231,710
  244,529
  258,124
  272,525
  287,763
  303,871
  320,887
  338,848
  357,796
  377,774
  398,828
  421,009
  444,366
  468,956
  494,835
  522,065
  550,710
  580,837
  612,518
  645,827
  680,844
  717,651
  756,335
Total liabilities, $m
  230,405
  238,400
  247,038
  256,328
  266,285
  276,927
  288,271
  300,341
  313,160
  326,755
  341,156
  356,394
  372,502
  389,518
  407,479
  426,427
  446,405
  467,459
  489,640
  512,997
  537,587
  563,466
  590,696
  619,341
  649,468
  681,149
  714,458
  749,475
  786,282
  824,966
Total equity, $m
  35,959
  37,207
  38,555
  40,005
  41,559
  43,220
  44,990
  46,874
  48,875
  50,996
  53,244
  55,622
  58,136
  60,792
  63,595
  66,552
  69,670
  72,956
  76,418
  80,063
  83,901
  87,940
  92,190
  96,660
  101,362
  106,306
  111,505
  116,970
  122,714
  128,752
Total liabilities and equity, $m
  266,364
  275,607
  285,593
  296,333
  307,844
  320,147
  333,261
  347,215
  362,035
  377,751
  394,400
  412,016
  430,638
  450,310
  471,074
  492,979
  516,075
  540,415
  566,058
  593,060
  621,488
  651,406
  682,886
  716,001
  750,830
  787,455
  825,963
  866,445
  908,996
  953,718
Debt-to-equity ratio
  4.500
  4.560
  4.630
  4.690
  4.760
  4.820
  4.880
  4.940
  5.000
  5.060
  5.120
  5.170
  5.230
  5.280
  5.330
  5.380
  5.420
  5.470
  5.510
  5.550
  5.590
  5.630
  5.660
  5.700
  5.730
  5.760
  5.790
  5.820
  5.850
  5.870
Adjusted equity ratio
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,177
  -2,368
  -2,569
  -2,787
  -3,023
  -3,277
  -3,548
  -3,839
  -4,148
  -4,477
  -4,826
  -5,197
  -5,590
  -6,005
  -6,444
  -6,908
  -7,398
  -7,914
  -8,459
  -9,032
  -9,637
  -10,274
  -10,944
  -11,649
  -12,391
  -13,172
  -13,993
  -14,856
  -15,764
  -16,718
Depreciation, amort., depletion, $m
  3,482
  3,603
  3,733
  3,874
  4,024
  4,185
  4,356
  4,539
  4,733
  4,938
  5,156
  5,386
  5,629
  5,886
  6,158
  6,444
  6,746
  7,064
  7,400
  7,752
  8,124
  8,515
  8,927
  9,360
  9,815
  10,294
  10,797
  11,326
  11,882
  12,467
Funds from operations, $m
  1,305
  1,235
  1,164
  1,086
  1,001
  908
  808
  700
  585
  461
  329
  189
  40
  -119
  -286
  -464
  -651
  -850
  -1,059
  -1,280
  -1,513
  -1,758
  -2,017
  -2,289
  -2,576
  -2,878
  -3,196
  -3,530
  -3,882
  -4,251
Change in working capital, $m
  -429
  -466
  -504
  -542
  -581
  -621
  -662
  -704
  -748
  -793
  -840
  -889
  -940
  -993
  -1,048
  -1,105
  -1,166
  -1,228
  -1,294
  -1,363
  -1,435
  -1,510
  -1,589
  -1,671
  -1,758
  -1,848
  -1,943
  -2,043
  -2,147
  -2,257
Cash from operations, $m
  1,734
  1,701
  1,668
  1,628
  1,582
  1,529
  1,470
  1,404
  1,333
  1,254
  1,169
  1,078
  979
  874
  762
  642
  514
  379
  235
  83
  -78
  -249
  -428
  -618
  -819
  -1,030
  -1,253
  -1,487
  -1,734
  -1,995
Maintenance CAPEX, $m
  -3,370
  -3,482
  -3,603
  -3,733
  -3,874
  -4,024
  -4,185
  -4,356
  -4,539
  -4,733
  -4,938
  -5,156
  -5,386
  -5,629
  -5,886
  -6,158
  -6,444
  -6,746
  -7,064
  -7,400
  -7,752
  -8,124
  -8,515
  -8,927
  -9,360
  -9,815
  -10,294
  -10,797
  -11,326
  -11,882
New CAPEX, $m
  -1,120
  -1,208
  -1,305
  -1,404
  -1,505
  -1,608
  -1,714
  -1,824
  -1,937
  -2,055
  -2,176
  -2,303
  -2,434
  -2,571
  -2,714
  -2,863
  -3,019
  -3,182
  -3,352
  -3,530
  -3,716
  -3,911
  -4,115
  -4,329
  -4,553
  -4,788
  -5,034
  -5,292
  -5,562
  -5,846
Cash from investing activities, $m
  -4,490
  -4,690
  -4,908
  -5,137
  -5,379
  -5,632
  -5,899
  -6,180
  -6,476
  -6,788
  -7,114
  -7,459
  -7,820
  -8,200
  -8,600
  -9,021
  -9,463
  -9,928
  -10,416
  -10,930
  -11,468
  -12,035
  -12,630
  -13,256
  -13,913
  -14,603
  -15,328
  -16,089
  -16,888
  -17,728
Free cash flow, $m
  -2,756
  -2,989
  -3,240
  -3,509
  -3,797
  -4,103
  -4,429
  -4,776
  -5,144
  -5,533
  -5,945
  -6,381
  -6,841
  -7,327
  -7,839
  -8,380
  -8,949
  -9,549
  -10,181
  -10,847
  -11,547
  -12,284
  -13,059
  -13,874
  -14,731
  -15,632
  -16,580
  -17,576
  -18,623
  -19,723
Issuance/(repayment) of debt, $m
  7,487
  7,995
  8,637
  9,290
  9,957
  10,641
  11,344
  12,070
  12,819
  13,595
  14,401
  15,238
  16,109
  17,015
  17,961
  18,948
  19,978
  21,055
  22,180
  23,358
  24,590
  25,879
  27,230
  28,645
  30,127
  31,681
  33,309
  35,017
  36,807
  38,684
Issuance/(repurchase) of shares, $m
  3,247
  3,616
  3,917
  4,237
  4,577
  4,937
  5,319
  5,722
  6,149
  6,599
  7,074
  7,575
  8,104
  8,661
  9,247
  9,865
  10,516
  11,200
  11,920
  12,678
  13,475
  14,313
  15,193
  16,120
  17,093
  18,116
  19,191
  20,321
  21,509
  22,756
Cash from financing (excl. dividends), $m  
  10,734
  11,611
  12,554
  13,527
  14,534
  15,578
  16,663
  17,792
  18,968
  20,194
  21,475
  22,813
  24,213
  25,676
  27,208
  28,813
  30,494
  32,255
  34,100
  36,036
  38,065
  40,192
  42,423
  44,765
  47,220
  49,797
  52,500
  55,338
  58,316
  61,440
Total cash flow (excl. dividends), $m
  7,978
  8,622
  9,314
  10,019
  10,738
  11,475
  12,234
  13,016
  13,824
  14,661
  15,530
  16,432
  17,371
  18,349
  19,369
  20,433
  21,544
  22,705
  23,919
  25,189
  26,517
  27,908
  29,365
  30,891
  32,489
  34,165
  35,921
  37,762
  39,693
  41,717
Retained Cash Flow (-), $m
  -3,247
  -3,616
  -3,917
  -4,237
  -4,577
  -4,937
  -5,319
  -5,722
  -6,149
  -6,599
  -7,074
  -7,575
  -8,104
  -8,661
  -9,247
  -9,865
  -10,516
  -11,200
  -11,920
  -12,678
  -13,475
  -14,313
  -15,193
  -16,120
  -17,093
  -18,116
  -19,191
  -20,321
  -21,509
  -22,756
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
  314
  324
  335
  347
  360
  374
  389
  405
  422
  440
  459
  480
  501
  524
  548
  573
  599
  628
  657
  688
  721
  756
  792
  830
  871
  913
  958
  1,004
  1,054
  1,105
Cash available for distribution, $m
  4,732
  5,006
  5,397
  5,781
  6,161
  6,538
  6,915
  7,294
  7,676
  8,063
  8,456
  8,857
  9,268
  9,689
  10,122
  10,568
  11,029
  11,505
  11,999
  12,511
  13,043
  13,596
  14,171
  14,771
  15,396
  16,048
  16,729
  17,441
  18,184
  18,961
Discount rate, %
  9.00
  9.45
  9.92
  10.42
  10.94
  11.49
  12.06
  12.66
  13.30
  13.96
  14.66
  15.39
  16.16
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.74
  23.88
  25.07
  26.33
  27.64
  29.03
  30.48
  32.00
  33.60
  35.28
  37.05
PV of cash for distribution, $m
  4,341
  4,179
  4,064
  3,889
  3,666
  3,405
  3,116
  2,810
  2,495
  2,182
  1,878
  1,589
  1,322
  1,079
  865
  679
  523
  393
  289
  208
  145
  99
  66
  42
  26
  16
  9
  5
  3
  1
Current shareholders' claim on cash, %
  92.1
  84.2
  76.8
  69.7
  63.0
  56.8
  51.0
  45.6
  40.7
  36.2
  32.1
  28.3
  25.0
  21.9
  19.2
  16.8
  14.7
  12.8
  11.1
  9.6
  8.3
  7.2
  6.2
  5.3
  4.6
  3.9
  3.4
  2.9
  2.5
  2.1

Ford Motor Company is a global automotive and mobility company. The Company's business includes designing, manufacturing, marketing, and servicing a full line of Ford cars, trucks, and sport utility vehicles (SUVs), as well as Lincoln luxury vehicles. The Company operates in four segments: Automotive, Financial Services, Ford Smart Mobility LLC, and Central Treasury Operations. The Automotive segment primarily includes the sale of Ford and Lincoln brand vehicles, service parts, and accessories across the world. The Financial Services segment primarily includes its vehicle-related financing and leasing activities at Ford Motor Credit Company LLC. Ford Smart Mobility LLC is a subsidiary formed to design, build, grow, and invest in emerging mobility services. The Central Treasury Operations segment is primarily engaged in decision making for investments, risk management activities, and providing financing for the Automotive segment.

FINANCIAL RATIOS  of  Ford Motor (F)

Valuation Ratios
P/E Ratio 8.4
Price to Sales 0.3
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 1.9
Price to Free Cash Flow 3
Growth Rates
Sales Growth Rate 1.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.8%
Cap. Spend. - 3 Yr. Gr. Rate 1.2%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 319.9%
Total Debt to Equity 490.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 2%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 2.8%
Ret/ On T. Cap. - 3 Yr. Avg. 2.8%
Return On Equity 15.9%
Return On Equity - 3 Yr. Avg. 16.2%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 19.6%
Gross Margin - 3 Yr. Avg. 15.4%
EBITDA Margin 10.4%
EBITDA Margin - 3 Yr. Avg. 9.5%
Operating Margin 2.7%
Oper. Margin - 3 Yr. Avg. 2.7%
Pre-Tax Margin 4.5%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 3%
Net Profit Margin - 3 Yr. Avg. 2.9%
Effective Tax Rate 32.2%
Eff/ Tax Rate - 3 Yr. Avg. 20.2%
Payout Ratio 73.5%

F stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the F stock intrinsic value calculation we used $156776 million for the last fiscal year's total revenue generated by Ford Motor. The default revenue input number comes from 2017 income statement of Ford Motor. 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 F stock valuation model: a) initial revenue growth rate of 3.3% 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 9%, whose default value for F is calculated based on our internal credit rating of Ford Motor, 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 Ford Motor.
    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 F stock the variable cost ratio is equal to 96.2%.

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 F 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 Ford Motor.

Corporate tax rate of 27% is the nominal tax rate for Ford Motor. 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 F stock is equal to 0.2%.

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 F are equal to 21.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Ford Motor 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 F is equal to -8.3%. 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 - $34890 million for Ford Motor - 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 3972 million for Ford Motor 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 Ford Motor at the current share price and the inputted number of shares is $37.7 billion.

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