Intrinsic value of FMC - FMC

Previous Close

$79.68

  Intrinsic Value

$334.71

stock screener

  Rating & Target

str. buy

+320%

Previous close

$79.68

 
Intrinsic value

$334.71

 
Up/down potential

+320%

 
Rating

str. buy

We calculate the intrinsic value of FMC 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 10.7

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  4,606
  7,116
  10,642
  15,441
  21,785
  29,949
  40,200
  52,785
  67,922
  85,791
  106,533
  130,247
  156,991
  186,788
  219,630
  255,482
  294,294
  336,003
  380,541
  427,841
  477,841
  530,490
  585,747
  643,588
  704,002
  766,999
  832,606
  900,864
  971,838
  1,045,606
Variable operating expenses, $m
  3,934
  5,869
  8,587
  12,287
  17,177
  23,471
  31,374
  41,077
  52,746
  66,521
  82,129
  100,410
  121,028
  144,000
  169,318
  196,958
  226,879
  259,033
  293,368
  329,833
  368,380
  408,968
  451,567
  496,158
  542,733
  591,299
  641,876
  694,499
  749,214
  806,084
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
  3,934
  5,869
  8,587
  12,287
  17,177
  23,471
  31,374
  41,077
  52,746
  66,521
  82,129
  100,410
  121,028
  144,000
  169,318
  196,958
  226,879
  259,033
  293,368
  329,833
  368,380
  408,968
  451,567
  496,158
  542,733
  591,299
  641,876
  694,499
  749,214
  806,084
Operating income, $m
  672
  1,247
  2,055
  3,154
  4,607
  6,477
  8,826
  11,709
  15,176
  19,270
  24,404
  29,836
  35,963
  42,789
  50,312
  58,525
  67,415
  76,970
  87,172
  98,008
  109,462
  121,522
  134,180
  147,430
  161,269
  175,700
  190,729
  206,366
  222,624
  239,522
EBITDA, $m
  1,167
  1,803
  2,696
  3,911
  5,518
  7,586
  10,183
  13,371
  17,205
  21,731
  26,986
  32,992
  39,767
  47,315
  55,634
  64,716
  74,547
  85,112
  96,394
  108,375
  121,041
  134,377
  148,374
  163,025
  178,329
  194,286
  210,905
  228,195
  246,174
  264,860
Interest expense (income), $m
  82
  175
  386
  693
  1,124
  1,711
  2,487
  3,486
  4,740
  6,279
  8,131
  10,316
  12,854
  15,754
  19,026
  22,670
  26,688
  31,073
  35,820
  40,922
  46,370
  52,156
  58,272
  64,712
  71,471
  78,546
  85,936
  93,641
  101,666
  110,016
  118,697
Earnings before tax, $m
  497
  861
  1,362
  2,030
  2,896
  3,990
  5,340
  6,969
  8,897
  11,139
  14,088
  16,983
  20,209
  23,763
  27,641
  31,837
  36,343
  41,150
  46,250
  51,638
  57,306
  63,250
  69,468
  75,959
  82,724
  89,765
  97,088
  104,699
  112,608
  120,825
Tax expense, $m
  134
  233
  368
  548
  782
  1,077
  1,442
  1,882
  2,402
  3,007
  3,804
  4,585
  5,456
  6,416
  7,463
  8,596
  9,812
  11,110
  12,488
  13,942
  15,473
  17,078
  18,756
  20,509
  22,335
  24,236
  26,214
  28,269
  30,404
  32,623
Net income, $m
  363
  629
  994
  1,482
  2,114
  2,913
  3,898
  5,087
  6,495
  8,131
  10,284
  12,397
  14,752
  17,347
  20,178
  23,241
  26,530
  30,039
  33,763
  37,695
  41,833
  46,173
  50,712
  55,450
  60,388
  65,528
  70,874
  76,430
  82,204
  88,202

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
  14,715
  22,735
  33,999
  49,331
  69,600
  95,683
  128,435
  168,643
  217,003
  274,093
  340,361
  416,124
  501,569
  596,768
  701,693
  816,238
  940,237
  1,073,492
  1,215,786
  1,366,904
  1,526,650
  1,694,857
  1,871,397
  2,056,191
  2,249,209
  2,450,478
  2,660,082
  2,878,161
  3,104,915
  3,340,595
Adjusted assets (=assets-cash), $m
  14,715
  22,735
  33,999
  49,331
  69,600
  95,683
  128,435
  168,643
  217,003
  274,093
  340,361
  416,124
  501,569
  596,768
  701,693
  816,238
  940,237
  1,073,492
  1,215,786
  1,366,904
  1,526,650
  1,694,857
  1,871,397
  2,056,191
  2,249,209
  2,450,478
  2,660,082
  2,878,161
  3,104,915
  3,340,595
Revenue / Adjusted assets
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
Average production assets, $m
  3,270
  5,052
  7,556
  10,963
  15,467
  21,264
  28,542
  37,478
  48,225
  60,912
  75,638
  92,475
  111,464
  132,620
  155,937
  181,393
  208,949
  238,562
  270,184
  303,767
  339,267
  376,648
  415,881
  456,947
  499,842
  544,570
  591,150
  639,614
  690,005
  742,381
Working capital, $m
  2,248
  3,473
  5,193
  7,535
  10,631
  14,615
  19,618
  25,759
  33,146
  41,866
  51,988
  63,560
  76,612
  91,153
  107,179
  124,675
  143,616
  163,969
  185,704
  208,786
  233,187
  258,879
  285,845
  314,071
  343,553
  374,296
  406,311
  439,622
  474,257
  510,256
Total debt, $m
  7,145
  12,831
  20,818
  31,689
  46,059
  64,552
  87,773
  116,281
  150,568
  191,044
  238,028
  291,744
  352,325
  419,821
  494,213
  575,425
  663,341
  757,818
  858,705
  965,847
  1,079,107
  1,198,366
  1,323,533
  1,454,552
  1,591,401
  1,734,101
  1,882,710
  2,037,329
  2,198,097
  2,365,195
Total liabilities, $m
  10,433
  16,119
  24,106
  34,976
  49,346
  67,840
  91,060
  119,568
  153,855
  194,332
  241,316
  295,032
  355,612
  423,109
  497,500
  578,713
  666,628
  761,106
  861,992
  969,135
  1,082,395
  1,201,654
  1,326,821
  1,457,839
  1,594,689
  1,737,389
  1,885,998
  2,040,616
  2,201,384
  2,368,482
Total equity, $m
  4,282
  6,616
  9,894
  14,355
  20,253
  27,844
  37,375
  49,075
  63,148
  79,761
  99,045
  121,092
  145,957
  173,659
  204,193
  237,525
  273,609
  312,386
  353,794
  397,769
  444,255
  493,203
  544,577
  598,352
  654,520
  713,089
  774,084
  837,545
  903,530
  972,113
Total liabilities and equity, $m
  14,715
  22,735
  34,000
  49,331
  69,599
  95,684
  128,435
  168,643
  217,003
  274,093
  340,361
  416,124
  501,569
  596,768
  701,693
  816,238
  940,237
  1,073,492
  1,215,786
  1,366,904
  1,526,650
  1,694,857
  1,871,398
  2,056,191
  2,249,209
  2,450,478
  2,660,082
  2,878,161
  3,104,914
  3,340,595
Debt-to-equity ratio
  1.670
  1.940
  2.100
  2.210
  2.270
  2.320
  2.350
  2.370
  2.380
  2.400
  2.400
  2.410
  2.410
  2.420
  2.420
  2.420
  2.420
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
Adjusted equity ratio
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  363
  629
  994
  1,482
  2,114
  2,913
  3,898
  5,087
  6,495
  8,131
  10,284
  12,397
  14,752
  17,347
  20,178
  23,241
  26,530
  30,039
  33,763
  37,695
  41,833
  46,173
  50,712
  55,450
  60,388
  65,528
  70,874
  76,430
  82,204
  88,202
Depreciation, amort., depletion, $m
  495
  556
  641
  757
  911
  1,109
  1,357
  1,662
  2,029
  2,462
  2,582
  3,156
  3,804
  4,526
  5,322
  6,191
  7,131
  8,142
  9,221
  10,367
  11,579
  12,855
  14,194
  15,595
  17,059
  18,586
  20,176
  21,830
  23,550
  25,337
Funds from operations, $m
  858
  1,184
  1,635
  2,239
  3,025
  4,022
  5,255
  6,750
  8,524
  10,593
  12,866
  15,554
  18,556
  21,873
  25,500
  29,432
  33,661
  38,181
  42,984
  48,063
  53,412
  59,028
  64,906
  71,046
  77,448
  84,114
  91,050
  98,260
  105,754
  113,540
Change in working capital, $m
  843
  1,225
  1,721
  2,342
  3,096
  3,984
  5,003
  6,142
  7,387
  8,720
  10,122
  11,572
  13,051
  14,541
  16,027
  17,496
  18,940
  20,354
  21,734
  23,082
  24,400
  25,693
  26,965
  28,226
  29,482
  30,743
  32,016
  33,310
  34,635
  35,999
Cash from operations, $m
  15
  -41
  -86
  -103
  -71
  38
  253
  608
  1,137
  1,873
  2,743
  3,981
  5,505
  7,332
  9,474
  11,936
  14,721
  17,827
  21,249
  24,981
  29,012
  33,335
  37,940
  42,820
  47,965
  53,372
  59,034
  64,950
  71,118
  77,541
Maintenance CAPEX, $m
  -70
  -112
  -172
  -258
  -374
  -528
  -726
  -974
  -1,279
  -1,646
  -2,079
  -2,582
  -3,156
  -3,804
  -4,526
  -5,322
  -6,191
  -7,131
  -8,142
  -9,221
  -10,367
  -11,579
  -12,855
  -14,194
  -15,595
  -17,059
  -18,586
  -20,176
  -21,830
  -23,550
New CAPEX, $m
  -1,226
  -1,782
  -2,503
  -3,407
  -4,504
  -5,797
  -7,278
  -8,935
  -10,747
  -12,687
  -14,727
  -16,837
  -18,989
  -21,156
  -23,318
  -25,455
  -27,556
  -29,613
  -31,622
  -33,583
  -35,500
  -37,381
  -39,233
  -41,067
  -42,894
  -44,728
  -46,580
  -48,464
  -50,391
  -52,375
Cash from investing activities, $m
  -1,296
  -1,894
  -2,675
  -3,665
  -4,878
  -6,325
  -8,004
  -9,909
  -12,026
  -14,333
  -16,806
  -19,419
  -22,145
  -24,960
  -27,844
  -30,777
  -33,747
  -36,744
  -39,764
  -42,804
  -45,867
  -48,960
  -52,088
  -55,261
  -58,489
  -61,787
  -65,166
  -68,640
  -72,221
  -75,925
Free cash flow, $m
  -1,281
  -1,935
  -2,761
  -3,768
  -4,949
  -6,287
  -7,751
  -9,302
  -10,889
  -12,460
  -14,062
  -15,437
  -16,639
  -17,628
  -18,370
  -18,841
  -19,026
  -18,917
  -18,514
  -17,824
  -16,856
  -15,625
  -14,147
  -12,441
  -10,524
  -8,416
  -6,132
  -3,690
  -1,103
  1,616
Issuance/(repayment) of debt, $m
  3,908
  5,686
  7,987
  10,870
  14,370
  18,493
  23,221
  28,508
  34,287
  40,476
  46,984
  53,716
  60,581
  67,496
  74,392
  81,212
  87,916
  94,478
  100,886
  107,143
  113,260
  119,259
  125,167
  131,018
  136,850
  142,700
  148,609
  154,619
  160,768
  167,098
Issuance/(repurchase) of shares, $m
  1,237
  1,705
  2,284
  2,980
  3,784
  4,677
  5,633
  6,613
  7,578
  8,482
  9,000
  9,650
  10,112
  10,356
  10,355
  10,091
  9,554
  8,738
  7,645
  6,280
  4,653
  2,776
  661
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  5,145
  7,391
  10,271
  13,850
  18,154
  23,170
  28,854
  35,121
  41,865
  48,958
  55,984
  63,366
  70,693
  77,852
  84,747
  91,303
  97,470
  103,216
  108,531
  113,423
  117,913
  122,035
  125,828
  131,018
  136,850
  142,700
  148,609
  154,619
  160,768
  167,098
Total cash flow (excl. dividends), $m
  3,865
  5,456
  7,509
  10,082
  13,205
  16,884
  21,102
  25,819
  30,976
  36,498
  41,922
  47,928
  54,054
  60,224
  66,377
  72,462
  78,444
  84,298
  90,016
  95,599
  101,057
  106,410
  111,681
  118,578
  126,325
  134,284
  142,477
  150,929
  159,665
  168,713
Retained Cash Flow (-), $m
  -1,600
  -2,334
  -3,278
  -4,462
  -5,898
  -7,590
  -9,531
  -11,701
  -14,073
  -16,613
  -19,284
  -22,047
  -24,865
  -27,703
  -30,533
  -33,332
  -36,084
  -38,777
  -41,407
  -43,975
  -46,486
  -48,948
  -51,373
  -53,775
  -56,168
  -58,569
  -60,995
  -63,461
  -65,985
  -68,583
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
  2,264
  3,123
  4,231
  5,621
  7,307
  9,294
  11,571
  14,119
  16,903
  19,885
  22,638
  25,881
  29,189
  32,521
  35,844
  39,130
  42,360
  45,521
  48,609
  51,624
  54,571
  57,461
  60,308
  64,803
  70,157
  75,715
  81,482
  87,468
  93,680
  100,130
Discount rate, %
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
  34.58
PV of cash for distribution, $m
  2,089
  2,637
  3,244
  3,878
  4,494
  5,044
  5,484
  5,776
  5,898
  5,842
  5,523
  5,169
  4,699
  4,151
  3,566
  2,979
  2,421
  1,913
  1,470
  1,099
  798
  563
  385
  263
  175
  113
  70
  42
  24
  14
Current shareholders' claim on cash, %
  89.7
  81.5
  75.1
  69.8
  65.5
  61.9
  58.9
  56.4
  54.3
  52.6
  51.1
  49.9
  48.9
  48.0
  47.3
  46.8
  46.3
  45.9
  45.7
  45.4
  45.3
  45.2
  45.2
  45.2
  45.2
  45.2
  45.2
  45.2
  45.2
  45.2

FMC Corporation is a diversified chemical company serving agricultural, consumer and industrial markets. The Company operates in three business segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Lithium. As of December 31, 2016, the FMC Agricultural Solutions segment developed, marketed and sold three classes of crop protection chemicals: insecticides, herbicides and fungicides. The Company's FMC Agricultural Solutions segment operates in the agrochemicals industry. This segment develops, manufactures and sells a portfolio of professional pest control, and lawn and garden products. The FMC Health and Nutrition segment focuses on nutritional ingredients, health excipients and functional health ingredients. The Company's FMC Health and Nutrition segment focuses on food ingredients, pharmaceutical excipients and omega-3 oils. The Company's FMC Lithium segment manufactures lithium for use in a range of lithium products.

FINANCIAL RATIOS  of  FMC (FMC)

Valuation Ratios
P/E Ratio 51
Price to Sales 3.2
Price to Book 5.4
Price to Tangible Book
Price to Cash Flow 21.4
Price to Free Cash Flow 29
Growth Rates
Sales Growth Rate 0.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 20.2%
Cap. Spend. - 3 Yr. Gr. Rate -10%
Financial Strength
Quick Ratio 1
Current Ratio 0.3
LT Debt to Equity 91.9%
Total Debt to Equity 96.7%
Interest Coverage 5
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 7.1%
Return On Total Capital 5.3%
Ret/ On T. Cap. - 3 Yr. Avg. 9.4%
Return On Equity 10.9%
Return On Equity - 3 Yr. Avg. 20%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 36.6%
Gross Margin - 3 Yr. Avg. 35.5%
EBITDA Margin 17%
EBITDA Margin - 3 Yr. Avg. 11.9%
Operating Margin 13.3%
Oper. Margin - 3 Yr. Avg. 8.2%
Pre-Tax Margin 10.3%
Pre-Tax Margin - 3 Yr. Avg. 5.8%
Net Profit Margin 6.4%
Net Profit Margin - 3 Yr. Avg. 10.2%
Effective Tax Rate 27.7%
Eff/ Tax Rate - 3 Yr. Avg. 2.4%
Payout Ratio 42.6%

FMC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FMC stock intrinsic value calculation we used $2878.6 million for the last fiscal year's total revenue generated by FMC. The default revenue input number comes from 0001 income statement of FMC. 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 FMC stock valuation model: a) initial revenue growth rate of 60% 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 8.4%, whose default value for FMC is calculated based on our internal credit rating of FMC, 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 FMC.
    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 FMC stock the variable cost ratio is equal to 90.4%.

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 FMC 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 FMC.

Corporate tax rate of 27% is the nominal tax rate for FMC. 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 FMC 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 FMC are equal to 71%.

Life of production assets of 29.3 years is the average useful life of capital assets used in FMC 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 FMC is equal to 48.8%. 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 - $2681.8 million for FMC - 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 134.63 million for FMC 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 FMC at the current share price and the inputted number of shares is $10.7 billion.

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COMPANY NEWS

▶ BoliviasĀ AlmostĀ Impossible Lithium Dream   [Dec-03-18 06:00PM  Bloomberg]
▶ If Commodities Day Has Come, This Fund Should Score   [Nov-29-18 08:00AM  Barrons.com]
▶ Hedge Fund Ownership of FMC Corp (FMC) Has Flatlined   [Nov-27-18 09:39PM  Insider Monkey]
▶ Here's Why FMC Corporation Dropped 10.4% in October   [Nov-07-18 10:01AM  Motley Fool]
▶ FMC: 3Q Earnings Snapshot   [04:57PM  Associated Press]
▶ FMC's Q3 Earnings Outlook   [08:08AM  Benzinga]
▶ What Does FMC Corporations (NYSE:FMC) P/E Ratio Tell You?   [Oct-28-18 11:02AM  Simply Wall St.]
▶ Lithium Producer Livent Ends First Day Flat as Markets Fall   [Oct-11-18 06:06PM  The Wall Street Journal]
▶ What Happened in the Stock Market Today   [05:03PM  Motley Fool]
▶ Livent's IPO: What You Need To Know   [05:28PM  Benzinga]
▶ Does FMC Corporations (NYSE:FMC) Debt Level Pose A Problem?   [Oct-05-18 02:21PM  Simply Wall St.]
▶ [$$] Lithium Producer Livent Sets IPOs Price Range   [Oct-01-18 08:39PM  The Wall Street Journal]
▶ [$$] Lithium Producer Livent Sets IPO's Price Range   [03:58PM  The Wall Street Journal]
▶ [$$] Ganfeng Lithium listing to test appetite for key metal   [Sep-30-18 08:18AM  Financial Times]
▶ Here's My Top Stock to Buy in September   [Sep-04-18 06:32AM  Motley Fool]
▶ How Confident Are Insiders About FMC Corporation (NYSE:FMC)?   [Aug-30-18 02:04PM  Simply Wall St.]
▶ [$$] Trio of lithium IPOs will test investors view of market   [Aug-28-18 11:47PM  Financial Times]
▶ Is FMC Corporation a Buy?   [Aug-20-18 06:04AM  Motley Fool]
▶ FMC Corporation to Host Earnings Call   [07:00AM  ACCESSWIRE]
▶ FMC: 2Q Earnings Snapshot   [04:54PM  Associated Press]
▶ FMC's Lithium Business to be Named Livent Corporation   [Jul-26-18 07:30AM  PR Newswire]
▶ Ag sector bounces on news of US tariff aid for farmers   [Jul-24-18 05:17PM  Associated Press]
▶ FMC Corporation's Board Declares Quarterly Dividend   [Jul-19-18 04:30PM  PR Newswire]
▶ [$$] Lithium sell-off is overdone Goldman Sachs   [Jul-02-18 11:04PM  Financial Times]
▶ The Upside in FMC Stock Remains HUGE   [06:28AM  InvestorPlace]

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