Intrinsic value of Frontier Communications Corporation - FTR

Previous Close

$2.02

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$2.02

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of FTR 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 0.2

 

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, %
  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
  8,783
  8,985
  9,216
  9,475
  9,763
  10,078
  10,421
  10,793
  11,193
  11,622
  12,082
  12,572
  13,094
  13,649
  14,238
  14,862
  15,522
  16,221
  16,959
  17,738
  18,560
  19,427
  20,341
  21,304
  22,319
  23,387
  24,511
  25,693
  26,938
  28,246
Variable operating expenses, $m
  10,266
  10,469
  10,702
  10,963
  11,252
  11,570
  11,915
  12,290
  12,693
  13,125
  12,169
  12,663
  13,189
  13,748
  14,341
  14,970
  15,635
  16,338
  17,082
  17,867
  18,695
  19,568
  20,489
  21,459
  22,480
  23,556
  24,688
  25,880
  27,133
  28,451
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
  10,266
  10,469
  10,702
  10,963
  11,252
  11,570
  11,915
  12,290
  12,693
  13,125
  12,169
  12,663
  13,189
  13,748
  14,341
  14,970
  15,635
  16,338
  17,082
  17,867
  18,695
  19,568
  20,489
  21,459
  22,480
  23,556
  24,688
  25,880
  27,133
  28,451
Operating income, $m
  -1,482
  -1,484
  -1,485
  -1,487
  -1,489
  -1,492
  -1,494
  -1,497
  -1,500
  -1,503
  -88
  -91
  -95
  -99
  -103
  -108
  -112
  -118
  -123
  -129
  -134
  -141
  -147
  -154
  -162
  -169
  -178
  -186
  -195
  -205
EBITDA, $m
  1,565
  1,601
  1,642
  1,688
  1,740
  1,796
  1,857
  1,923
  1,994
  2,071
  2,153
  2,240
  2,333
  2,432
  2,537
  2,648
  2,766
  2,890
  3,022
  3,161
  3,307
  3,462
  3,625
  3,796
  3,977
  4,167
  4,367
  4,578
  4,800
  5,033
Interest expense (income), $m
  1,467
  1,511
  1,481
  1,525
  1,575
  1,632
  1,694
  1,763
  1,837
  1,918
  2,005
  2,099
  2,199
  2,305
  2,419
  2,540
  2,668
  2,804
  2,947
  3,099
  3,260
  3,429
  3,608
  3,797
  3,996
  4,205
  4,426
  4,658
  4,903
  5,160
  5,431
Earnings before tax, $m
  -2,993
  -2,965
  -3,010
  -3,063
  -3,121
  -3,186
  -3,257
  -3,334
  -3,418
  -3,508
  -2,186
  -2,290
  -2,400
  -2,518
  -2,643
  -2,776
  -2,916
  -3,065
  -3,222
  -3,388
  -3,564
  -3,749
  -3,944
  -4,150
  -4,367
  -4,596
  -4,836
  -5,089
  -5,356
  -5,636
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
  -2,993
  -2,965
  -3,010
  -3,063
  -3,121
  -3,186
  -3,257
  -3,334
  -3,418
  -3,508
  -2,186
  -2,290
  -2,400
  -2,518
  -2,643
  -2,776
  -2,916
  -3,065
  -3,222
  -3,388
  -3,564
  -3,749
  -3,944
  -4,150
  -4,367
  -4,596
  -4,836
  -5,089
  -5,356
  -5,636

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
  24,130
  24,685
  25,319
  26,031
  26,821
  27,686
  28,629
  29,650
  30,750
  31,930
  33,192
  34,539
  35,974
  37,498
  39,116
  40,830
  42,644
  44,563
  46,591
  48,731
  50,990
  53,372
  55,883
  58,529
  61,315
  64,249
  67,337
  70,586
  74,005
  77,600
Adjusted assets (=assets-cash), $m
  24,130
  24,685
  25,319
  26,031
  26,821
  27,686
  28,629
  29,650
  30,750
  31,930
  33,192
  34,539
  35,974
  37,498
  39,116
  40,830
  42,644
  44,563
  46,591
  48,731
  50,990
  53,372
  55,883
  58,529
  61,315
  64,249
  67,337
  70,586
  74,005
  77,600
Revenue / Adjusted assets
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
Average production assets, $m
  18,893
  19,327
  19,824
  20,382
  21,000
  21,677
  22,416
  23,215
  24,076
  25,000
  25,988
  27,043
  28,166
  29,360
  30,626
  31,968
  33,389
  34,891
  36,479
  38,155
  39,923
  41,789
  43,755
  45,826
  48,008
  50,305
  52,722
  55,266
  57,943
  60,758
Working capital, $m
  -790
  -809
  -829
  -853
  -879
  -907
  -938
  -971
  -1,007
  -1,046
  -1,087
  -1,132
  -1,178
  -1,228
  -1,281
  -1,338
  -1,397
  -1,460
  -1,526
  -1,596
  -1,670
  -1,748
  -1,831
  -1,917
  -2,009
  -2,105
  -2,206
  -2,312
  -2,424
  -2,542
Total debt, $m
  16,830
  17,329
  17,900
  18,541
  19,251
  20,031
  20,879
  21,798
  22,788
  23,850
  24,986
  26,198
  27,489
  28,861
  30,317
  31,860
  33,493
  35,220
  37,045
  38,971
  41,004
  43,148
  45,408
  47,789
  50,297
  52,937
  55,716
  58,641
  61,717
  64,953
Total liabilities, $m
  21,717
  22,216
  22,787
  23,428
  24,138
  24,918
  25,766
  26,685
  27,675
  28,737
  29,873
  31,085
  32,376
  33,748
  35,204
  36,747
  38,380
  40,107
  41,932
  43,858
  45,891
  48,035
  50,295
  52,676
  55,184
  57,824
  60,603
  63,528
  66,604
  69,840
Total equity, $m
  2,413
  2,468
  2,532
  2,603
  2,682
  2,769
  2,863
  2,965
  3,075
  3,193
  3,319
  3,454
  3,597
  3,750
  3,912
  4,083
  4,264
  4,456
  4,659
  4,873
  5,099
  5,337
  5,588
  5,853
  6,132
  6,425
  6,734
  7,059
  7,400
  7,760
Total liabilities and equity, $m
  24,130
  24,684
  25,319
  26,031
  26,820
  27,687
  28,629
  29,650
  30,750
  31,930
  33,192
  34,539
  35,973
  37,498
  39,116
  40,830
  42,644
  44,563
  46,591
  48,731
  50,990
  53,372
  55,883
  58,529
  61,316
  64,249
  67,337
  70,587
  74,004
  77,600
Debt-to-equity ratio
  6.970
  7.020
  7.070
  7.120
  7.180
  7.230
  7.290
  7.350
  7.410
  7.470
  7.530
  7.590
  7.640
  7.700
  7.750
  7.800
  7.850
  7.900
  7.950
  8.000
  8.040
  8.080
  8.130
  8.170
  8.200
  8.240
  8.270
  8.310
  8.340
  8.370
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,993
  -2,965
  -3,010
  -3,063
  -3,121
  -3,186
  -3,257
  -3,334
  -3,418
  -3,508
  -2,186
  -2,290
  -2,400
  -2,518
  -2,643
  -2,776
  -2,916
  -3,065
  -3,222
  -3,388
  -3,564
  -3,749
  -3,944
  -4,150
  -4,367
  -4,596
  -4,836
  -5,089
  -5,356
  -5,636
Depreciation, amort., depletion, $m
  3,047
  3,085
  3,128
  3,176
  3,229
  3,287
  3,351
  3,420
  3,494
  3,574
  2,240
  2,331
  2,428
  2,531
  2,640
  2,756
  2,878
  3,008
  3,145
  3,289
  3,442
  3,602
  3,772
  3,951
  4,139
  4,337
  4,545
  4,764
  4,995
  5,238
Funds from operations, $m
  54
  120
  117
  113
  108
  102
  94
  86
  76
  66
  54
  41
  28
  13
  -3
  -20
  -38
  -57
  -77
  -99
  -122
  -147
  -172
  -200
  -229
  -259
  -291
  -325
  -360
  -398
Change in working capital, $m
  -15
  -18
  -21
  -23
  -26
  -28
  -31
  -33
  -36
  -39
  -41
  -44
  -47
  -50
  -53
  -56
  -59
  -63
  -66
  -70
  -74
  -78
  -82
  -87
  -91
  -96
  -101
  -106
  -112
  -118
Cash from operations, $m
  69
  138
  138
  136
  134
  130
  125
  119
  112
  104
  95
  86
  75
  63
  50
  36
  22
  6
  -11
  -29
  -48
  -69
  -90
  -113
  -137
  -163
  -190
  -218
  -248
  -280
Maintenance CAPEX, $m
  -1,597
  -1,629
  -1,666
  -1,709
  -1,757
  -1,810
  -1,869
  -1,932
  -2,001
  -2,076
  -2,155
  -2,240
  -2,331
  -2,428
  -2,531
  -2,640
  -2,756
  -2,878
  -3,008
  -3,145
  -3,289
  -3,442
  -3,602
  -3,772
  -3,951
  -4,139
  -4,337
  -4,545
  -4,764
  -4,995
New CAPEX, $m
  -370
  -435
  -497
  -558
  -618
  -678
  -738
  -799
  -861
  -924
  -988
  -1,055
  -1,123
  -1,194
  -1,266
  -1,342
  -1,421
  -1,502
  -1,587
  -1,676
  -1,769
  -1,865
  -1,966
  -2,071
  -2,182
  -2,297
  -2,418
  -2,544
  -2,677
  -2,815
Cash from investing activities, $m
  -1,967
  -2,064
  -2,163
  -2,267
  -2,375
  -2,488
  -2,607
  -2,731
  -2,862
  -3,000
  -3,143
  -3,295
  -3,454
  -3,622
  -3,797
  -3,982
  -4,177
  -4,380
  -4,595
  -4,821
  -5,058
  -5,307
  -5,568
  -5,843
  -6,133
  -6,436
  -6,755
  -7,089
  -7,441
  -7,810
Free cash flow, $m
  -1,897
  -1,925
  -2,025
  -2,130
  -2,241
  -2,358
  -2,482
  -2,612
  -2,750
  -2,895
  -3,048
  -3,210
  -3,380
  -3,559
  -3,747
  -3,946
  -4,155
  -4,375
  -4,606
  -4,850
  -5,106
  -5,375
  -5,659
  -5,956
  -6,269
  -6,598
  -6,944
  -7,308
  -7,689
  -8,091
Issuance/(repayment) of debt, $m
  -342
  499
  571
  641
  710
  779
  849
  919
  990
  1,062
  1,136
  1,212
  1,291
  1,372
  1,456
  1,543
  1,633
  1,727
  1,825
  1,927
  2,033
  2,144
  2,260
  2,381
  2,508
  2,640
  2,779
  2,924
  3,077
  3,236
Issuance/(repurchase) of shares, $m
  3,806
  3,020
  3,074
  3,134
  3,200
  3,272
  3,351
  3,436
  3,528
  3,626
  2,313
  2,425
  2,544
  2,670
  2,805
  2,947
  3,098
  3,257
  3,425
  3,603
  3,790
  3,987
  4,196
  4,415
  4,646
  4,889
  5,145
  5,414
  5,697
  5,995
Cash from financing (excl. dividends), $m  
  3,464
  3,519
  3,645
  3,775
  3,910
  4,051
  4,200
  4,355
  4,518
  4,688
  3,449
  3,637
  3,835
  4,042
  4,261
  4,490
  4,731
  4,984
  5,250
  5,530
  5,823
  6,131
  6,456
  6,796
  7,154
  7,529
  7,924
  8,338
  8,774
  9,231
Total cash flow (excl. dividends), $m
  1,567
  1,595
  1,620
  1,645
  1,669
  1,693
  1,718
  1,743
  1,768
  1,793
  401
  427
  455
  484
  513
  544
  576
  609
  643
  679
  717
  756
  797
  839
  884
  931
  980
  1,031
  1,085
  1,141
Retained Cash Flow (-), $m
  -3,806
  -3,020
  -3,074
  -3,134
  -3,200
  -3,272
  -3,351
  -3,436
  -3,528
  -3,626
  -2,313
  -2,425
  -2,544
  -2,670
  -2,805
  -2,947
  -3,098
  -3,257
  -3,425
  -3,603
  -3,790
  -3,987
  -4,196
  -4,415
  -4,646
  -4,889
  -5,145
  -5,414
  -5,697
  -5,995
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
  -2,239
  -1,426
  -1,454
  -1,489
  -1,531
  -1,579
  -1,633
  -1,694
  -1,760
  -1,833
  -1,912
  -1,997
  -2,089
  -2,187
  -2,291
  -2,403
  -2,522
  -2,648
  -2,782
  -2,923
  -3,073
  -3,232
  -3,399
  -3,575
  -3,762
  -3,958
  -4,165
  -4,383
  -4,613
  -4,854
Discount rate, %
  12.80
  13.44
  14.11
  14.82
  15.56
  16.34
  17.15
  18.01
  18.91
  19.86
  20.85
  21.89
  22.99
  24.14
  25.34
  26.61
  27.94
  29.34
  30.80
  32.34
  33.96
  35.66
  37.44
  39.32
  41.28
  43.35
  45.51
  47.79
  50.18
  52.69
PV of cash for distribution, $m
  -1,985
  -1,108
  -978
  -857
  -743
  -637
  -539
  -450
  -370
  -300
  -238
  -186
  -142
  -106
  -77
  -55
  -38
  -26
  -17
  -11
  -7
  -4
  -2
  -1
  -1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  22.7
  8.2
  2.9
  1.1
  0.4
  0.1
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Frontier Communications Corporation (Frontier) is a provider of communications services in the United States. The Company offers a portfolio of communications services for residential and business customers. Its products and services include data and Internet services, video services, voice services, access services and customer premise equipment (CPE). The Company offers a range of broadband services. The principal residential service it provides is broadband Internet service. Its commercial services include Ethernet, Dedicated Internet, Multiprotocol Label Switching (MPLS), Time Division Multiplexing (TDM) data transport services and optical transport services. It also offers wireless broadband services (using unlicensed spectrum) in various markets utilizing networks that it owns or operates. In addition, the Company offers its Frontier Secure suite of products, including computer security, cloud backup and sharing, identity protection and equipment insurance.

FINANCIAL RATIOS  of  Frontier Communications Corporation (FTR)

Valuation Ratios
P/E Ratio -0.4
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0.1
Price to Free Cash Flow 0.6
Growth Rates
Sales Growth Rate 59.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 62.3%
Cap. Spend. - 3 Yr. Gr. Rate 17.1%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 391%
Total Debt to Equity 399.9%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.8%
Ret/ On Assets - 3 Yr. Avg. 2.1%
Return On Total Capital -1.7%
Ret/ On T. Cap. - 3 Yr. Avg. -0.6%
Return On Equity -7.4%
Return On Equity - 3 Yr. Avg. -2.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 62.3%
Gross Margin - 3 Yr. Avg. 64.8%
EBITDA Margin 32.3%
EBITDA Margin - 3 Yr. Avg. 34.5%
Operating Margin 10.1%
Oper. Margin - 3 Yr. Avg. 13.6%
Pre-Tax Margin -7%
Pre-Tax Margin - 3 Yr. Avg. -3.4%
Net Profit Margin -4.2%
Net Profit Margin - 3 Yr. Avg. -1.6%
Effective Tax Rate 40.1%
Eff/ Tax Rate - 3 Yr. Avg. 34.7%
Payout Ratio -189.5%

FTR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FTR stock intrinsic value calculation we used $8611 million for the last fiscal year's total revenue generated by Frontier Communications Corporation. The default revenue input number comes from 0001 income statement of Frontier Communications Corporation. 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 FTR 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 12.8%, whose default value for FTR is calculated based on our internal credit rating of Frontier Communications Corporation, 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 Frontier Communications Corporation.
    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 FTR stock the variable cost ratio is equal to 117.2%.

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 FTR 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 8.8% for Frontier Communications Corporation.

Corporate tax rate of 27% is the nominal tax rate for Frontier Communications Corporation. 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 FTR 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 FTR are equal to 215.1%.

Life of production assets of 11.6 years is the average useful life of capital assets used in Frontier Communications Corporation 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 FTR is equal to -9%. 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 - $1600 million for Frontier Communications Corporation - 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 105.302 million for Frontier Communications Corporation 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 Frontier Communications Corporation at the current share price and the inputted number of shares is $0.2 billion.

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