Intrinsic value of Fomento Economico Mexicano ADR - FMX

Previous Close

$83.69

  Intrinsic Value

$307.46

stock screener

  Rating & Target

str. buy

+267%

Previous close

$83.69

 
Intrinsic value

$307.46

 
Up/down potential

+267%

 
Rating

str. buy

We calculate the intrinsic value of FMX 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 8.9

 

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, %
  21.50
  19.85
  18.37
  17.03
  15.83
  14.74
  13.77
  12.89
  12.10
  11.39
  10.75
  10.18
  9.66
  9.19
  8.77
  8.40
  8.06
  7.75
  7.48
  7.23
  7.01
  6.81
  6.62
  6.46
  6.32
  6.18
  6.07
  5.96
  5.86
  5.78
Revenue, $m
  28,442
  34,088
  40,348
  47,219
  54,691
  62,754
  71,395
  80,599
  90,354
  100,647
  111,470
  122,815
  134,679
  147,062
  159,966
  173,399
  187,370
  201,895
  216,990
  232,676
  248,977
  265,921
  283,538
  301,861
  320,927
  340,775
  361,447
  382,987
  405,443
  428,867
Variable operating expenses, $m
  25,572
  30,492
  35,948
  41,936
  48,449
  55,476
  63,007
  71,028
  79,530
  88,501
  97,150
  107,038
  117,378
  128,170
  139,416
  151,123
  163,300
  175,958
  189,114
  202,785
  216,992
  231,759
  247,113
  263,082
  279,699
  296,997
  315,013
  333,786
  353,358
  373,772
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
  25,572
  30,492
  35,948
  41,936
  48,449
  55,476
  63,007
  71,028
  79,530
  88,501
  97,150
  107,038
  117,378
  128,170
  139,416
  151,123
  163,300
  175,958
  189,114
  202,785
  216,992
  231,759
  247,113
  263,082
  279,699
  296,997
  315,013
  333,786
  353,358
  373,772
Operating income, $m
  2,870
  3,596
  4,400
  5,283
  6,243
  7,278
  8,388
  9,571
  10,824
  12,146
  14,320
  15,778
  17,302
  18,892
  20,550
  22,276
  24,071
  25,936
  27,876
  29,891
  31,985
  34,162
  36,425
  38,779
  41,228
  43,778
  46,433
  49,201
  52,085
  55,094
EBITDA, $m
  4,429
  5,308
  6,282
  7,352
  8,516
  9,771
  11,117
  12,550
  14,069
  15,671
  17,357
  19,123
  20,970
  22,899
  24,908
  26,999
  29,175
  31,436
  33,787
  36,229
  38,767
  41,406
  44,149
  47,002
  49,970
  53,061
  56,280
  59,634
  63,130
  66,777
Interest expense (income), $m
  277
  569
  833
  1,128
  1,456
  1,816
  2,206
  2,628
  3,080
  3,562
  4,072
  4,611
  5,177
  5,771
  6,391
  7,039
  7,714
  8,417
  9,148
  9,908
  10,698
  11,519
  12,372
  13,258
  14,180
  15,138
  16,136
  17,174
  18,256
  19,383
  20,558
Earnings before tax, $m
  2,302
  2,763
  3,271
  3,827
  4,427
  5,072
  5,760
  6,490
  7,262
  8,074
  9,709
  10,600
  11,531
  12,501
  13,511
  14,561
  15,653
  16,788
  17,967
  19,193
  20,466
  21,790
  23,167
  24,599
  26,090
  27,642
  29,259
  30,945
  32,702
  34,537
Tax expense, $m
  621
  746
  883
  1,033
  1,195
  1,369
  1,555
  1,752
  1,961
  2,180
  2,621
  2,862
  3,113
  3,375
  3,648
  3,932
  4,226
  4,533
  4,851
  5,182
  5,526
  5,883
  6,255
  6,642
  7,044
  7,463
  7,900
  8,355
  8,830
  9,325
Net income, $m
  1,680
  2,017
  2,388
  2,793
  3,232
  3,702
  4,205
  4,738
  5,301
  5,894
  7,088
  7,738
  8,418
  9,126
  9,863
  10,630
  11,427
  12,255
  13,116
  14,011
  14,940
  15,907
  16,912
  17,957
  19,045
  20,178
  21,359
  22,590
  23,873
  25,212

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
  35,027
  41,980
  49,690
  58,151
  67,354
  77,284
  87,925
  99,260
  111,273
  123,950
  137,278
  151,250
  165,861
  181,111
  197,003
  213,545
  230,752
  248,639
  267,229
  286,546
  306,622
  327,489
  349,184
  371,750
  395,230
  419,673
  445,131
  471,659
  499,315
  528,161
Adjusted assets (=assets-cash), $m
  35,027
  41,980
  49,690
  58,151
  67,354
  77,284
  87,925
  99,260
  111,273
  123,950
  137,278
  151,250
  165,861
  181,111
  197,003
  213,545
  230,752
  248,639
  267,229
  286,546
  306,622
  327,489
  349,184
  371,750
  395,230
  419,673
  445,131
  471,659
  499,315
  528,161
Revenue / Adjusted assets
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
Average production assets, $m
  11,235
  13,465
  15,937
  18,651
  21,603
  24,788
  28,201
  31,837
  35,690
  39,756
  44,031
  48,512
  53,198
  58,089
  63,187
  68,493
  74,011
  79,748
  85,711
  91,907
  98,346
  105,039
  111,997
  119,235
  126,766
  134,606
  142,771
  151,280
  160,150
  169,402
Working capital, $m
  171
  205
  242
  283
  328
  377
  428
  484
  542
  604
  669
  737
  808
  882
  960
  1,040
  1,124
  1,211
  1,302
  1,396
  1,494
  1,596
  1,701
  1,811
  1,926
  2,045
  2,169
  2,298
  2,433
  2,573
Total debt, $m
  10,962
  14,849
  19,158
  23,888
  29,033
  34,583
  40,532
  46,868
  53,584
  60,670
  68,120
  75,931
  84,098
  92,623
  101,506
  110,754
  120,372
  130,371
  140,763
  151,561
  162,783
  174,448
  186,576
  199,190
  212,316
  225,979
  240,210
  255,039
  270,499
  286,624
Total liabilities, $m
  19,580
  23,467
  27,776
  32,506
  37,651
  43,202
  49,150
  55,486
  62,202
  69,288
  76,739
  84,549
  92,716
  101,241
  110,124
  119,372
  128,990
  138,989
  149,381
  160,179
  171,402
  183,066
  195,194
  207,808
  220,934
  234,597
  248,828
  263,657
  279,117
  295,242
Total equity, $m
  15,447
  18,513
  21,913
  25,645
  29,703
  34,082
  38,775
  43,774
  49,071
  54,662
  60,540
  66,701
  73,145
  79,870
  86,878
  94,174
  101,762
  109,650
  117,848
  126,367
  135,220
  144,423
  153,990
  163,942
  174,297
  185,076
  196,303
  208,001
  220,198
  232,919
Total liabilities and equity, $m
  35,027
  41,980
  49,689
  58,151
  67,354
  77,284
  87,925
  99,260
  111,273
  123,950
  137,279
  151,250
  165,861
  181,111
  197,002
  213,546
  230,752
  248,639
  267,229
  286,546
  306,622
  327,489
  349,184
  371,750
  395,231
  419,673
  445,131
  471,658
  499,315
  528,161
Debt-to-equity ratio
  0.710
  0.800
  0.870
  0.930
  0.980
  1.010
  1.050
  1.070
  1.090
  1.110
  1.130
  1.140
  1.150
  1.160
  1.170
  1.180
  1.180
  1.190
  1.190
  1.200
  1.200
  1.210
  1.210
  1.220
  1.220
  1.220
  1.220
  1.230
  1.230
  1.230
Adjusted equity ratio
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,680
  2,017
  2,388
  2,793
  3,232
  3,702
  4,205
  4,738
  5,301
  5,894
  7,088
  7,738
  8,418
  9,126
  9,863
  10,630
  11,427
  12,255
  13,116
  14,011
  14,940
  15,907
  16,912
  17,957
  19,045
  20,178
  21,359
  22,590
  23,873
  25,212
Depreciation, amort., depletion, $m
  1,558
  1,712
  1,883
  2,070
  2,273
  2,493
  2,728
  2,979
  3,245
  3,525
  3,037
  3,346
  3,669
  4,006
  4,358
  4,724
  5,104
  5,500
  5,911
  6,338
  6,782
  7,244
  7,724
  8,223
  8,742
  9,283
  9,846
  10,433
  11,045
  11,683
Funds from operations, $m
  3,238
  3,729
  4,271
  4,863
  5,505
  6,195
  6,933
  7,717
  8,546
  9,419
  10,124
  11,084
  12,086
  13,132
  14,221
  15,353
  16,531
  17,755
  19,027
  20,349
  21,723
  23,151
  24,636
  26,180
  27,788
  29,462
  31,205
  33,023
  34,918
  36,895
Change in working capital, $m
  30
  34
  38
  41
  45
  48
  52
  55
  59
  62
  65
  68
  71
  74
  77
  81
  84
  87
  91
  94
  98
  102
  106
  110
  114
  119
  124
  129
  135
  141
Cash from operations, $m
  3,208
  3,695
  4,233
  4,822
  5,460
  6,147
  6,881
  7,662
  8,487
  9,357
  10,059
  11,016
  12,015
  13,058
  14,143
  15,273
  16,447
  17,668
  18,937
  20,255
  21,625
  23,049
  24,530
  26,070
  27,673
  29,343
  31,081
  32,893
  34,783
  36,754
Maintenance CAPEX, $m
  -637
  -775
  -929
  -1,099
  -1,286
  -1,490
  -1,710
  -1,945
  -2,196
  -2,461
  -2,742
  -3,037
  -3,346
  -3,669
  -4,006
  -4,358
  -4,724
  -5,104
  -5,500
  -5,911
  -6,338
  -6,782
  -7,244
  -7,724
  -8,223
  -8,742
  -9,283
  -9,846
  -10,433
  -11,045
New CAPEX, $m
  -1,996
  -2,230
  -2,473
  -2,714
  -2,952
  -3,185
  -3,413
  -3,636
  -3,853
  -4,066
  -4,275
  -4,481
  -4,686
  -4,891
  -5,097
  -5,306
  -5,519
  -5,737
  -5,962
  -6,196
  -6,439
  -6,693
  -6,959
  -7,238
  -7,531
  -7,840
  -8,165
  -8,508
  -8,870
  -9,252
Cash from investing activities, $m
  -2,633
  -3,005
  -3,402
  -3,813
  -4,238
  -4,675
  -5,123
  -5,581
  -6,049
  -6,527
  -7,017
  -7,518
  -8,032
  -8,560
  -9,103
  -9,664
  -10,243
  -10,841
  -11,462
  -12,107
  -12,777
  -13,475
  -14,203
  -14,962
  -15,754
  -16,582
  -17,448
  -18,354
  -19,303
  -20,297
Free cash flow, $m
  575
  690
  832
  1,009
  1,222
  1,472
  1,759
  2,081
  2,439
  2,830
  3,043
  3,498
  3,983
  4,498
  5,040
  5,609
  6,205
  6,827
  7,474
  8,148
  8,848
  9,574
  10,327
  11,109
  11,919
  12,760
  13,633
  14,539
  15,479
  16,457
Issuance/(repayment) of debt, $m
  3,477
  3,887
  4,310
  4,730
  5,144
  5,551
  5,948
  6,336
  6,715
  7,086
  7,451
  7,810
  8,168
  8,524
  8,884
  9,247
  9,618
  9,999
  10,392
  10,799
  11,222
  11,665
  12,128
  12,614
  13,125
  13,664
  14,231
  14,829
  15,460
  16,125
Issuance/(repurchase) of shares, $m
  1,042
  1,050
  1,012
  938
  827
  677
  488
  261
  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  
  4,519
  4,937
  5,322
  5,668
  5,971
  6,228
  6,436
  6,597
  6,715
  7,086
  7,451
  7,810
  8,168
  8,524
  8,884
  9,247
  9,618
  9,999
  10,392
  10,799
  11,222
  11,665
  12,128
  12,614
  13,125
  13,664
  14,231
  14,829
  15,460
  16,125
Total cash flow (excl. dividends), $m
  5,095
  5,626
  6,153
  6,677
  7,193
  7,700
  8,195
  8,678
  9,154
  9,916
  10,493
  11,308
  12,151
  13,022
  13,923
  14,857
  15,823
  16,826
  17,866
  18,947
  20,070
  21,238
  22,455
  23,723
  25,045
  26,424
  27,864
  29,367
  30,939
  32,582
Retained Cash Flow (-), $m
  -2,722
  -3,066
  -3,400
  -3,731
  -4,058
  -4,379
  -4,693
  -4,999
  -5,298
  -5,590
  -5,878
  -6,162
  -6,443
  -6,725
  -7,008
  -7,295
  -7,588
  -7,888
  -8,198
  -8,519
  -8,853
  -9,202
  -9,568
  -9,951
  -10,355
  -10,779
  -11,227
  -11,699
  -12,196
  -12,721
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
  2,372
  2,560
  2,753
  2,945
  3,135
  3,321
  3,502
  3,680
  3,856
  4,326
  4,615
  5,147
  5,707
  6,297
  6,915
  7,561
  8,235
  8,937
  9,668
  10,427
  11,217
  12,036
  12,887
  13,771
  14,690
  15,644
  16,637
  17,669
  18,743
  19,861
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  2,275
  2,344
  2,396
  2,425
  2,430
  2,410
  2,366
  2,300
  2,215
  2,268
  2,192
  2,196
  2,170
  2,114
  2,030
  1,921
  1,792
  1,646
  1,489
  1,325
  1,160
  999
  845
  701
  571
  456
  357
  273
  205
  150
Current shareholders' claim on cash, %
  89.5
  81.6
  75.7
  71.3
  68.2
  66.0
  64.7
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1
  64.1

Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA) is a holding company. The Company's segments are Coca-Cola FEMSA, FEMSA Comercio-Retail Division and FEMSA Comercio-Fuel Division. The Company conducts its operations through holding companies, such as Coca-Cola FEMSA, S.A.B. de C.V. and subsidiaries (Coca-Cola FEMSA), which produces, distributes and sells beverages; FEMSA Comercio, S.A. de C.V. and subsidiaries (FEMSA Comercio), which consists of a Retail Division operating various small-format chain stores, and CB Equity LLP, which holds its equity investment in Heineken N.V., and Heineken Holding N.V. The Company's Coca-Cola FEMSA produces, markets, sells and distributes Coca-Cola trademark beverages through standard bottler agreements in certain territories in the countries, in which it operates. Coca-Cola FEMSA also sells bottled water products. FEMSA participates in the retail sector primarily through FEMSA Comercio.

FINANCIAL RATIOS  of  Fomento Economico Mexicano ADR (FMX)

Valuation Ratios
P/E Ratio 1398
Price to Sales 74
Price to Book 139.5
Price to Tangible Book
Price to Cash Flow 589.5
Price to Free Cash Flow 1028.4
Growth Rates
Sales Growth Rate 28.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 15.9%
Cap. Spend. - 3 Yr. Gr. Rate 4.2%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 62.3%
Total Debt to Equity 65.8%
Interest Coverage 6
Management Effectiveness
Return On Assets 5.3%
Ret/ On Assets - 3 Yr. Avg. 5.3%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 6.5%
Return On Equity 10.7%
Return On Equity - 3 Yr. Avg. 9.8%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 37.1%
Gross Margin - 3 Yr. Avg. 39.5%
EBITDA Margin 12%
EBITDA Margin - 3 Yr. Avg. 13.1%
Operating Margin 8.3%
Oper. Margin - 3 Yr. Avg. 10.2%
Pre-Tax Margin 7.1%
Pre-Tax Margin - 3 Yr. Avg. 8.1%
Net Profit Margin 5.3%
Net Profit Margin - 3 Yr. Avg. 5.8%
Effective Tax Rate 27.6%
Eff/ Tax Rate - 3 Yr. Avg. 28.5%
Payout Ratio 57%

FMX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FMX stock intrinsic value calculation we used $23409.0493137 million for the last fiscal year's total revenue generated by Fomento Economico Mexicano ADR. The default revenue input number comes from 0001 income statement of Fomento Economico Mexicano ADR. 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 FMX stock valuation model: a) initial revenue growth rate of 21.5% 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 4.3%, whose default value for FMX is calculated based on our internal credit rating of Fomento Economico Mexicano ADR, 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 Fomento Economico Mexicano ADR.
    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 FMX stock the variable cost ratio is equal to 90.5%.

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 FMX 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 7.6% for Fomento Economico Mexicano ADR.

Corporate tax rate of 27% is the nominal tax rate for Fomento Economico Mexicano ADR. 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 FMX 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 FMX are equal to 39.5%.

Life of production assets of 14.5 years is the average useful life of capital assets used in Fomento Economico Mexicano ADR 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 FMX is equal to 0.6%. 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 - $12724.5043213 million for Fomento Economico Mexicano ADR - 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 105.985 million for Fomento Economico Mexicano ADR 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 Fomento Economico Mexicano ADR at the current share price and the inputted number of shares is $8.9 billion.

RELATED COMPANIES Price Int.Val. Rating
KOF Coca-Cola Fems 59.20 1,500.94  str.buy
PEP PepsiCo 116.80 118.49  hold
KO Coca-Cola 49.74 17.04  str.sell
COKE Coca-Cola Bott 193.50 303.09  str.buy

COMPANY NEWS

▶ Fomento Economico: 3Q Earnings Snapshot   [09:13AM  Associated Press]
▶ FEMSA Announces Third Quarter 2018 Results   [08:30AM  GlobeNewswire]
▶ FEMSA Announces Second Quarter 2018 Results   [08:51AM  GlobeNewswire]
▶ FEMSA Announces First Quarter 2018 Results   [08:34AM  GlobeNewswire]
▶ FEMSA Files 2017 SEC Annual Report   [Apr-24-18 07:17PM  GlobeNewswire]
▶ FEMSA Shareholders Approved Ps. 9,221 Million Dividend   [Mar-16-18 05:05PM  GlobeNewswire]
▶ Fomento Economico posts 3Q profit   [03:35PM  Associated Press]
▶ Mexico's Femsa third-quarter profit jumps 385 pct   [Oct-26-17 06:04PM  Reuters]
▶ FEMSA Announces Third Quarter 2017 Results   [05:05PM  GlobeNewswire]
▶ Fomento Economico Mexicano Sees RS Rating Improve To 73   [03:00AM  Investor's Business Daily]
▶ FEMSA Announces Senior Leadership Succession Plan   [Aug-29-17 09:58PM  Marketwired]
▶ Fomento Economico posts 2Q profit   [12:29AM  Associated Press]
▶ The 4 Best Dividend Stocks in Mexico   [Jul-24-17 12:59PM  Motley Fool]
▶ Stock Market News for May 01, 2017   [May-01-17 09:56AM  Zacks]
▶ Fomento Economico posts 1Q profit   [10:31AM  Associated Press]
▶ FEMSA Files 2016 SEC Annual Report   [Apr-21-17 05:30PM  Marketwired]

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