Intrinsic value of 21st Century Fox Cl B - FOX

Previous Close

$34.22

  Intrinsic Value

$29.34

stock screener

  Rating & Target

hold

-14%

Previous close

$34.22

 
Intrinsic value

$29.34

 
Up/down potential

-14%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of FOX 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 64.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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, %
  4.30
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  28,500
  29,070
  29,739
  30,503
  31,361
  32,312
  33,355
  34,491
  35,720
  37,045
  38,467
  39,988
  41,611
  43,339
  45,175
  47,124
  49,189
  51,375
  53,687
  56,129
  58,708
  61,430
  64,300
  67,325
  70,512
  73,869
  77,403
  81,123
  85,038
  89,156
  93,488
Variable operating expenses, $m
 
  15,788
  16,122
  16,504
  16,932
  17,406
  17,927
  18,494
  19,108
  19,769
  20,479
  19,959
  20,769
  21,631
  22,548
  23,520
  24,551
  25,642
  26,796
  28,015
  29,302
  30,661
  32,093
  33,603
  35,194
  36,869
  38,633
  40,490
  42,444
  44,499
  46,661
Fixed operating expenses, $m
 
  8,719
  8,937
  9,160
  9,389
  9,624
  9,864
  10,111
  10,364
  10,623
  10,888
  11,161
  11,440
  11,726
  12,019
  12,319
  12,627
  12,943
  13,266
  13,598
  13,938
  14,287
  14,644
  15,010
  15,385
  15,770
  16,164
  16,568
  16,982
  17,407
  17,842
Total operating expenses, $m
  23,811
  24,507
  25,059
  25,664
  26,321
  27,030
  27,791
  28,605
  29,472
  30,392
  31,367
  31,120
  32,209
  33,357
  34,567
  35,839
  37,178
  38,585
  40,062
  41,613
  43,240
  44,948
  46,737
  48,613
  50,579
  52,639
  54,797
  57,058
  59,426
  61,906
  64,503
Operating income, $m
  4,689
  4,563
  4,680
  4,839
  5,040
  5,281
  5,563
  5,886
  6,249
  6,653
  7,100
  8,869
  9,403
  9,982
  10,609
  11,284
  12,011
  12,790
  13,624
  14,516
  15,468
  16,483
  17,563
  18,712
  19,933
  21,230
  22,606
  24,065
  25,612
  27,250
  28,985
EBITDA, $m
  5,242
  6,128
  6,251
  6,418
  6,628
  6,878
  7,171
  7,504
  7,879
  8,297
  8,757
  9,262
  9,812
  10,408
  11,053
  11,748
  12,495
  13,295
  14,152
  15,068
  16,045
  17,087
  18,195
  19,374
  20,627
  21,956
  23,367
  24,863
  26,448
  28,127
  29,904
Interest expense (income), $m
  0
  681
  704
  732
  765
  801
  841
  886
  934
  986
  1,042
  1,102
  1,167
  1,235
  1,309
  1,387
  1,469
  1,557
  1,649
  1,747
  1,851
  1,960
  2,075
  2,197
  2,325
  2,460
  2,603
  2,752
  2,910
  3,076
  3,251
Earnings before tax, $m
  4,689
  3,882
  3,976
  4,107
  4,275
  4,480
  4,722
  5,000
  5,315
  5,668
  6,058
  7,766
  8,236
  8,747
  9,300
  9,898
  10,542
  11,233
  11,975
  12,769
  13,617
  14,523
  15,488
  16,515
  17,608
  18,770
  20,003
  21,313
  22,702
  24,174
  25,734
Tax expense, $m
  1,419
  1,048
  1,073
  1,109
  1,154
  1,210
  1,275
  1,350
  1,435
  1,530
  1,636
  2,097
  2,224
  2,362
  2,511
  2,672
  2,846
  3,033
  3,233
  3,448
  3,677
  3,921
  4,182
  4,459
  4,754
  5,068
  5,401
  5,754
  6,129
  6,527
  6,948
Net income, $m
  2,952
  2,834
  2,902
  2,998
  3,121
  3,271
  3,447
  3,650
  3,880
  4,137
  4,422
  5,670
  6,012
  6,385
  6,789
  7,225
  7,695
  8,200
  8,742
  9,321
  9,941
  10,601
  11,306
  12,056
  12,854
  13,702
  14,602
  15,558
  16,572
  17,647
  18,786

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  6,163
  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
  50,724
  45,422
  46,467
  47,661
  49,001
  50,487
  52,117
  53,892
  55,813
  57,883
  60,105
  62,481
  65,017
  67,717
  70,586
  73,631
  76,858
  80,274
  83,886
  87,702
  91,732
  95,984
  100,468
  105,195
  110,175
  115,420
  120,942
  126,755
  132,872
  139,306
  146,075
Adjusted assets (=assets-cash), $m
  44,561
  45,422
  46,467
  47,661
  49,001
  50,487
  52,117
  53,892
  55,813
  57,883
  60,105
  62,481
  65,017
  67,717
  70,586
  73,631
  76,858
  80,274
  83,886
  87,702
  91,732
  95,984
  100,468
  105,195
  110,175
  115,420
  120,942
  126,755
  132,872
  139,306
  146,075
Revenue / Adjusted assets
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
Average production assets, $m
  8,412
  8,576
  8,773
  8,998
  9,251
  9,532
  9,840
  10,175
  10,538
  10,928
  11,348
  11,796
  12,275
  12,785
  13,327
  13,902
  14,511
  15,156
  15,838
  16,558
  17,319
  18,122
  18,968
  19,861
  20,801
  21,791
  22,834
  23,931
  25,086
  26,301
  27,579
Working capital, $m
  9,048
  3,401
  3,479
  3,569
  3,669
  3,780
  3,903
  4,035
  4,179
  4,334
  4,501
  4,679
  4,868
  5,071
  5,286
  5,514
  5,755
  6,011
  6,281
  6,567
  6,869
  7,187
  7,523
  7,877
  8,250
  8,643
  9,056
  9,491
  9,949
  10,431
  10,938
Total debt, $m
  19,913
  20,113
  20,923
  21,848
  22,887
  24,038
  25,302
  26,677
  28,166
  29,770
  31,492
  33,334
  35,299
  37,392
  39,615
  41,975
  44,476
  47,123
  49,922
  52,880
  56,003
  59,299
  62,774
  66,437
  70,296
  74,361
  78,641
  83,146
  87,886
  92,874
  98,119
Total liabilities, $m
  35,002
  35,202
  36,012
  36,937
  37,976
  39,127
  40,391
  41,766
  43,255
  44,859
  46,581
  48,423
  50,388
  52,481
  54,704
  57,064
  59,565
  62,212
  65,011
  67,969
  71,092
  74,388
  77,863
  81,526
  85,385
  89,450
  93,730
  98,235
  102,975
  107,963
  113,208
Total equity, $m
  15,722
  10,220
  10,455
  10,724
  11,025
  11,360
  11,726
  12,126
  12,558
  13,024
  13,524
  14,058
  14,629
  15,236
  15,882
  16,567
  17,293
  18,062
  18,874
  19,733
  20,640
  21,596
  22,605
  23,669
  24,789
  25,969
  27,212
  28,520
  29,896
  31,344
  32,867
Total liabilities and equity, $m
  50,724
  45,422
  46,467
  47,661
  49,001
  50,487
  52,117
  53,892
  55,813
  57,883
  60,105
  62,481
  65,017
  67,717
  70,586
  73,631
  76,858
  80,274
  83,885
  87,702
  91,732
  95,984
  100,468
  105,195
  110,174
  115,419
  120,942
  126,755
  132,871
  139,307
  146,075
Debt-to-equity ratio
  1.267
  1.970
  2.000
  2.040
  2.080
  2.120
  2.160
  2.200
  2.240
  2.290
  2.330
  2.370
  2.410
  2.450
  2.490
  2.530
  2.570
  2.610
  2.640
  2.680
  2.710
  2.750
  2.780
  2.810
  2.840
  2.860
  2.890
  2.920
  2.940
  2.960
  2.990
Adjusted equity ratio
  0.215
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225
  0.225

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,952
  2,834
  2,902
  2,998
  3,121
  3,271
  3,447
  3,650
  3,880
  4,137
  4,422
  5,670
  6,012
  6,385
  6,789
  7,225
  7,695
  8,200
  8,742
  9,321
  9,941
  10,601
  11,306
  12,056
  12,854
  13,702
  14,602
  15,558
  16,572
  17,647
  18,786
Depreciation, amort., depletion, $m
  553
  1,565
  1,572
  1,579
  1,588
  1,597
  1,607
  1,618
  1,630
  1,643
  1,657
  393
  409
  426
  444
  463
  484
  505
  528
  552
  577
  604
  632
  662
  693
  726
  761
  798
  836
  877
  919
Funds from operations, $m
  2,756
  4,399
  4,474
  4,577
  4,709
  4,868
  5,054
  5,269
  5,511
  5,781
  6,080
  6,063
  6,421
  6,811
  7,233
  7,689
  8,179
  8,706
  9,270
  9,873
  10,518
  11,206
  11,938
  12,718
  13,547
  14,428
  15,364
  16,356
  17,409
  18,524
  19,705
Change in working capital, $m
  -1,001
  67
  78
  89
  100
  111
  122
  133
  144
  155
  166
  178
  190
  202
  215
  228
  242
  256
  270
  286
  302
  318
  336
  354
  373
  393
  414
  435
  458
  482
  507
Cash from operations, $m
  3,757
  4,332
  4,396
  4,488
  4,608
  4,756
  4,932
  5,136
  5,367
  5,626
  5,913
  5,885
  6,231
  6,609
  7,018
  7,461
  7,938
  8,450
  8,999
  9,587
  10,216
  10,887
  11,602
  12,364
  13,174
  14,035
  14,950
  15,921
  16,950
  18,042
  19,198
Maintenance CAPEX, $m
  0
  -280
  -286
  -292
  -300
  -308
  -318
  -328
  -339
  -351
  -364
  -378
  -393
  -409
  -426
  -444
  -463
  -484
  -505
  -528
  -552
  -577
  -604
  -632
  -662
  -693
  -726
  -761
  -798
  -836
  -877
New CAPEX, $m
  -377
  -164
  -197
  -225
  -253
  -280
  -308
  -335
  -363
  -391
  -419
  -449
  -479
  -510
  -542
  -575
  -609
  -645
  -682
  -721
  -761
  -803
  -847
  -892
  -940
  -990
  -1,043
  -1,097
  -1,155
  -1,215
  -1,278
Cash from investing activities, $m
  -752
  -444
  -483
  -517
  -553
  -588
  -626
  -663
  -702
  -742
  -783
  -827
  -872
  -919
  -968
  -1,019
  -1,072
  -1,129
  -1,187
  -1,249
  -1,313
  -1,380
  -1,451
  -1,524
  -1,602
  -1,683
  -1,769
  -1,858
  -1,953
  -2,051
  -2,155
Free cash flow, $m
  3,005
  3,888
  3,913
  3,970
  4,055
  4,168
  4,307
  4,473
  4,665
  4,884
  5,130
  5,058
  5,360
  5,690
  6,051
  6,442
  6,865
  7,321
  7,812
  8,339
  8,903
  9,507
  10,152
  10,839
  11,572
  12,352
  13,181
  14,062
  14,998
  15,991
  17,044
Issuance/(repayment) of debt, $m
  345
  657
  810
  925
  1,039
  1,151
  1,263
  1,376
  1,489
  1,604
  1,722
  1,842
  1,965
  2,092
  2,224
  2,360
  2,501
  2,647
  2,799
  2,958
  3,123
  3,295
  3,475
  3,663
  3,860
  4,065
  4,280
  4,505
  4,740
  4,987
  5,246
Issuance/(repurchase) of shares, $m
  -619
  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  
  -338
  657
  810
  925
  1,039
  1,151
  1,263
  1,376
  1,489
  1,604
  1,722
  1,842
  1,965
  2,092
  2,224
  2,360
  2,501
  2,647
  2,799
  2,958
  3,123
  3,295
  3,475
  3,663
  3,860
  4,065
  4,280
  4,505
  4,740
  4,987
  5,246
Total cash flow (excl. dividends), $m
  2,682
  4,545
  4,722
  4,895
  5,094
  5,319
  5,570
  5,848
  6,154
  6,488
  6,851
  6,900
  7,325
  7,783
  8,274
  8,802
  9,366
  9,968
  10,611
  11,297
  12,026
  12,802
  13,627
  14,502
  15,432
  16,417
  17,461
  18,567
  19,738
  20,978
  22,289
Retained Cash Flow (-), $m
  -2,061
  -204
  -235
  -269
  -302
  -334
  -367
  -399
  -432
  -466
  -500
  -535
  -571
  -607
  -646
  -685
  -726
  -769
  -813
  -859
  -907
  -957
  -1,009
  -1,063
  -1,121
  -1,180
  -1,243
  -1,308
  -1,376
  -1,448
  -1,523
Prev. year cash balance distribution, $m
 
  5,706
  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
 
  10,047
  4,487
  4,627
  4,792
  4,985
  5,203
  5,449
  5,721
  6,022
  6,351
  6,365
  6,754
  7,175
  7,629
  8,116
  8,640
  9,200
  9,799
  10,438
  11,120
  11,846
  12,618
  13,439
  14,311
  15,237
  16,218
  17,259
  18,362
  19,530
  20,766
Discount rate, %
 
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
 
  9,469
  3,963
  3,806
  3,648
  3,486
  3,318
  3,144
  2,961
  2,770
  2,572
  2,245
  2,053
  1,858
  1,661
  1,468
  1,279
  1,099
  929
  773
  632
  507
  399
  308
  232
  171
  123
  86
  59
  39
  25
Current shareholders' claim on cash, %
  100
  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

Twenty-First Century Fox, Inc. is a media and entertainment company. The Company's segments include Cable Network Programming; Television; Filmed Entertainment, and Other, Corporate and Eliminations. The Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, factual entertainment and movie programming for distribution. The Television segment is engaged in the operation of broadcast television stations and the broadcasting of network programming in the United States. The Filmed Entertainment segment is engaged in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media, and the production and licensing of television programming around the world. The Other, Corporate and Eliminations segment consists primarily of corporate overhead and eliminations, and other businesses.

FINANCIAL RATIOS  of  21st Century Fox Cl B (FOX)

Valuation Ratios
P/E Ratio 21.5
Price to Sales 2.2
Price to Book 4
Price to Tangible Book
Price to Cash Flow 16.9
Price to Free Cash Flow 18.7
Growth Rates
Sales Growth Rate 4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 43.3%
Cap. Spend. - 3 Yr. Gr. Rate -11.1%
Financial Strength
Quick Ratio 13
Current Ratio 0.1
LT Debt to Equity 123.8%
Total Debt to Equity 126.7%
Interest Coverage 0
Management Effectiveness
Return On Assets 6%
Ret/ On Assets - 3 Yr. Avg. 9.8%
Return On Total Capital 8.6%
Ret/ On T. Cap. - 3 Yr. Avg. 13.1%
Return On Equity 20.1%
Return On Equity - 3 Yr. Avg. 28.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 37.6%
Gross Margin - 3 Yr. Avg. 37%
EBITDA Margin 18.4%
EBITDA Margin - 3 Yr. Avg. 25.4%
Operating Margin 16.5%
Oper. Margin - 3 Yr. Avg. 21.9%
Pre-Tax Margin 16.5%
Pre-Tax Margin - 3 Yr. Avg. 21.9%
Net Profit Margin 10.4%
Net Profit Margin - 3 Yr. Avg. 16.4%
Effective Tax Rate 30.3%
Eff/ Tax Rate - 3 Yr. Avg. 23.4%
Payout Ratio 31.9%

FOX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FOX stock intrinsic value calculation we used $28500 million for the last fiscal year's total revenue generated by 21st Century Fox Cl B. The default revenue input number comes from 2017 income statement of 21st Century Fox Cl B. 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 FOX stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.1%, whose default value for FOX is calculated based on our internal credit rating of 21st Century Fox Cl B, 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 21st Century Fox Cl B.
    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 FOX stock the variable cost ratio is equal to 54.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8506 million in the base year in the intrinsic value calculation for FOX 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 3.5% for 21st Century Fox Cl B.

Corporate tax rate of 27% is the nominal tax rate for 21st Century Fox Cl B. 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 FOX 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 FOX are equal to 29.5%.

Life of production assets of 38.3 years is the average useful life of capital assets used in 21st Century Fox Cl B 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 FOX is equal to 11.7%. 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 - $15722 million for 21st Century Fox Cl B - 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 1878.54 million for 21st Century Fox Cl B 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 21st Century Fox Cl B at the current share price and the inputted number of shares is $64.3 billion.

RELATED COMPANIES Price Int.Val. Rating
TWX Time Warner 90.25 143.47  buy
CMCSA Comcast Cl A 39.71 31.96  hold
DIS Walt Disney 111.27 104.06  hold
VIAB Viacom Cl B 30.24 144.32  str.buy
CBS CBS Cl B 58.90 74.22  buy
DISCA Discovery Comm 21.04 55.63  str.buy
QVCA Liberty Intera 24.82 8.40  str.sell
NFLX Netflix 190.12 103.69  sell
SNI Scripps Networ 83.21 67.29  sell
AMCX AMC Networks C 55.33 48.88  hold

COMPANY NEWS

▶ 'The Last Jedi' opens with $220M, 2nd best weekend all-time   [Dec-17-17 03:39PM  Associated Press]
▶ [$$] Fox Deal Adds Hulu to Disneys Arsenal in Attack on Netflix   [Dec-15-17 11:42PM  The Wall Street Journal]
▶ Be Worried About Disney, Fox Deal Structure   [03:47PM  TheStreet.com]
▶ 'Content' is key to Disney, Fox take-over   [08:35AM  Reuters Videos]
▶ [$$] Fox Gives Disney Muscle for Next Net Fight   [12:19AM  The Wall Street Journal]
▶ What the Disney-Fox Deal Means for Hulu   [07:40PM  Bloomberg Video]
▶ How Disneys acquisition of Fox takes on Netflix   [06:20PM  American City Business Journals]
▶ Disney to lease Fox lot for 7 years   [06:20PM  American City Business Journals]
▶ A deal with Disney allows young Murdoch a chance to slide from Fox News   [05:59PM  American City Business Journals]
▶ What Hollywood Thinks of the Disney-Fox Deal   [05:40PM  Bloomberg Video]
▶ What Happened in the Stock Market Today   [05:04PM  Motley Fool]
▶ Disney buying Fox film, TV units for $52 bln   [04:40PM  Reuters Videos]
▶ Walt Disney Up in Pre-Market Thursday   [03:28PM  GuruFocus.com]
▶ [$$] Fox Gives Disney Muscle for Next Net Fight   [01:18PM  The Wall Street Journal]
Financial statements of FOX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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