Intrinsic value of Golar LNG Limited - GLNG

Previous Close

$22.15

  Intrinsic Value

$10.13

stock screener

  Rating & Target

str. sell

-54%

Previous close

$22.15

 
Intrinsic value

$10.13

 
Up/down potential

-54%

 
Rating

str. sell

We calculate the intrinsic value of GLNG 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 2.2

 

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, %
  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
  230
  356
  532
  772
  1,090
  1,498
  2,011
  2,641
  3,398
  4,292
  5,329
  6,516
  7,853
  9,344
  10,987
  12,780
  14,722
  16,808
  19,036
  21,402
  23,904
  26,537
  29,302
  32,195
  35,217
  38,369
  41,651
  45,065
  48,616
  52,306
Variable operating expenses, $m
  -69
  -284
  -586
  -996
  -1,540
  -2,238
  -3,116
  -4,194
  -5,489
  -7,019
  -9,121
  -11,151
  -13,440
  -15,991
  -18,803
  -21,872
  -25,195
  -28,766
  -32,579
  -36,629
  -40,909
  -45,417
  -50,147
  -55,099
  -60,271
  -65,665
  -71,281
  -77,125
  -83,201
  -89,517
Fixed operating expenses, $m
  185
  189
  193
  197
  202
  206
  211
  215
  220
  225
  230
  235
  240
  245
  251
  256
  262
  268
  274
  280
  286
  292
  299
  305
  312
  319
  326
  333
  340
  348
Total operating expenses, $m
  116
  -95
  -393
  -799
  -1,338
  -2,032
  -2,905
  -3,979
  -5,269
  -6,794
  -8,891
  -10,916
  -13,200
  -15,746
  -18,552
  -21,616
  -24,933
  -28,498
  -32,305
  -36,349
  -40,623
  -45,125
  -49,848
  -54,794
  -59,959
  -65,346
  -70,955
  -76,792
  -82,861
  -89,169
Operating income, $m
  114
  451
  925
  1,571
  2,427
  3,530
  4,916
  6,619
  8,667
  11,086
  14,220
  17,431
  21,054
  25,090
  29,539
  34,396
  39,655
  45,307
  51,342
  57,751
  64,527
  71,662
  79,150
  86,989
  95,177
  103,715
  112,606
  121,857
  131,477
  141,475
EBITDA, $m
  603
  1,029
  1,629
  2,446
  3,527
  4,921
  6,671
  8,821
  11,407
  14,461
  18,007
  22,062
  26,635
  31,731
  37,347
  43,479
  50,118
  57,252
  64,871
  72,962
  81,515
  90,522
  99,975
  109,870
  120,206
  130,983
  142,207
  153,885
  166,028
  178,649
Interest expense (income), $m
  25
  130
  215
  341
  517
  756
  1,073
  1,481
  1,993
  2,621
  3,377
  4,269
  5,305
  6,489
  7,824
  9,312
  10,952
  12,742
  14,680
  16,763
  18,987
  21,349
  23,846
  26,474
  29,234
  32,122
  35,138
  38,284
  41,560
  44,968
  48,512
Earnings before tax, $m
  -16
  235
  584
  1,055
  1,671
  2,457
  3,436
  4,626
  6,046
  7,709
  9,951
  12,126
  14,565
  17,266
  20,227
  23,444
  26,913
  30,626
  34,579
  38,764
  43,178
  47,816
  52,676
  57,755
  63,055
  68,576
  74,322
  80,297
  86,508
  92,963
Tax expense, $m
  0
  64
  158
  285
  451
  663
  928
  1,249
  1,632
  2,081
  2,687
  3,274
  3,932
  4,662
  5,461
  6,330
  7,266
  8,269
  9,336
  10,466
  11,658
  12,910
  14,222
  15,594
  17,025
  18,516
  20,067
  21,680
  23,357
  25,100
Net income, $m
  -16
  172
  426
  770
  1,220
  1,794
  2,508
  3,377
  4,414
  5,628
  7,264
  8,852
  10,632
  12,604
  14,766
  17,114
  19,646
  22,357
  25,242
  28,298
  31,520
  34,906
  38,453
  42,161
  46,030
  50,061
  54,255
  58,617
  63,151
  67,863

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
  6,982
  10,787
  16,132
  23,406
  33,023
  45,399
  60,939
  80,017
  102,962
  130,050
  161,492
  197,439
  237,981
  283,150
  332,935
  387,283
  446,117
  509,343
  576,858
  648,559
  724,354
  804,164
  887,928
  975,607
  1,067,189
  1,162,686
  1,262,137
  1,365,610
  1,473,198
  1,585,023
Adjusted assets (=assets-cash), $m
  6,982
  10,787
  16,132
  23,406
  33,023
  45,399
  60,939
  80,017
  102,962
  130,050
  161,492
  197,439
  237,981
  283,150
  332,935
  387,283
  446,117
  509,343
  576,858
  648,559
  724,354
  804,164
  887,928
  975,607
  1,067,189
  1,162,686
  1,262,137
  1,365,610
  1,473,198
  1,585,023
Revenue / Adjusted assets
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
  0.033
Average production assets, $m
  4,912
  7,590
  11,350
  16,469
  23,235
  31,943
  42,876
  56,299
  72,443
  91,502
  113,625
  138,917
  167,442
  199,223
  234,250
  272,489
  313,885
  358,370
  405,873
  456,322
  509,651
  565,804
  624,740
  686,430
  750,867
  818,057
  888,031
  960,834
  1,036,532
  1,115,211
Working capital, $m
  -618
  -955
  -1,429
  -2,073
  -2,925
  -4,021
  -5,397
  -7,087
  -9,120
  -11,519
  -14,304
  -17,488
  -21,078
  -25,079
  -29,489
  -34,302
  -39,514
  -45,114
  -51,093
  -57,444
  -64,158
  -71,226
  -78,646
  -86,411
  -94,523
  -102,981
  -111,790
  -120,955
  -130,484
  -140,389
Total debt, $m
  3,986
  6,307
  9,568
  14,005
  19,871
  27,421
  36,900
  48,537
  62,534
  79,057
  98,237
  120,165
  144,896
  172,449
  202,817
  235,970
  271,859
  310,426
  351,610
  395,348
  441,583
  490,267
  541,363
  594,848
  650,712
  708,965
  769,631
  832,749
  898,378
  966,591
Total liabilities, $m
  4,259
  6,580
  9,840
  14,278
  20,144
  27,694
  37,173
  48,810
  62,807
  79,330
  98,510
  120,438
  145,168
  172,722
  203,090
  236,243
  272,132
  310,699
  351,883
  395,621
  441,856
  490,540
  541,636
  595,120
  650,985
  709,238
  769,904
  833,022
  898,651
  966,864
Total equity, $m
  2,723
  4,207
  6,291
  9,129
  12,879
  17,706
  23,766
  31,207
  40,155
  50,719
  62,982
  77,001
  92,813
  110,429
  129,844
  151,040
  173,986
  198,644
  224,974
  252,938
  282,498
  313,624
  346,292
  380,487
  416,204
  453,447
  492,233
  532,588
  574,547
  618,159
Total liabilities and equity, $m
  6,982
  10,787
  16,131
  23,407
  33,023
  45,400
  60,939
  80,017
  102,962
  130,049
  161,492
  197,439
  237,981
  283,151
  332,934
  387,283
  446,118
  509,343
  576,857
  648,559
  724,354
  804,164
  887,928
  975,607
  1,067,189
  1,162,685
  1,262,137
  1,365,610
  1,473,198
  1,585,023
Debt-to-equity ratio
  1.460
  1.500
  1.520
  1.530
  1.540
  1.550
  1.550
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
Adjusted equity ratio
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -16
  172
  426
  770
  1,220
  1,794
  2,508
  3,377
  4,414
  5,628
  7,264
  8,852
  10,632
  12,604
  14,766
  17,114
  19,646
  22,357
  25,242
  28,298
  31,520
  34,906
  38,453
  42,161
  46,030
  50,061
  54,255
  58,617
  63,151
  67,863
Depreciation, amort., depletion, $m
  489
  578
  704
  874
  1,100
  1,390
  1,755
  2,202
  2,740
  3,376
  3,787
  4,631
  5,581
  6,641
  7,808
  9,083
  10,463
  11,946
  13,529
  15,211
  16,988
  18,860
  20,825
  22,881
  25,029
  27,269
  29,601
  32,028
  34,551
  37,174
Funds from operations, $m
  473
  750
  1,130
  1,644
  2,320
  3,184
  4,263
  5,579
  7,154
  9,003
  11,052
  13,483
  16,214
  19,245
  22,574
  26,197
  30,109
  34,303
  38,771
  43,509
  48,508
  53,766
  59,278
  65,042
  71,059
  77,329
  83,856
  90,645
  97,702
  105,036
Change in working capital, $m
  -232
  -337
  -473
  -644
  -852
  -1,096
  -1,376
  -1,690
  -2,032
  -2,399
  -2,785
  -3,184
  -3,591
  -4,001
  -4,409
  -4,814
  -5,211
  -5,600
  -5,980
  -6,351
  -6,713
  -7,069
  -7,419
  -7,766
  -8,112
  -8,458
  -8,809
  -9,165
  -9,529
  -9,904
Cash from operations, $m
  705
  1,087
  1,604
  2,289
  3,172
  4,280
  5,639
  7,269
  9,186
  11,402
  13,836
  16,667
  19,804
  23,245
  26,983
  31,011
  35,320
  39,903
  44,751
  49,859
  55,222
  60,835
  66,697
  72,808
  79,171
  85,788
  92,665
  99,810
  107,231
  114,941
Maintenance CAPEX, $m
  -102
  -164
  -253
  -378
  -549
  -774
  -1,065
  -1,429
  -1,877
  -2,415
  -3,050
  -3,787
  -4,631
  -5,581
  -6,641
  -7,808
  -9,083
  -10,463
  -11,946
  -13,529
  -15,211
  -16,988
  -18,860
  -20,825
  -22,881
  -25,029
  -27,269
  -29,601
  -32,028
  -34,551
New CAPEX, $m
  -1,842
  -2,677
  -3,761
  -5,118
  -6,766
  -8,708
  -10,934
  -13,423
  -16,144
  -19,059
  -22,123
  -25,292
  -28,525
  -31,781
  -35,028
  -38,239
  -41,396
  -44,485
  -47,503
  -50,449
  -53,329
  -56,154
  -58,936
  -61,691
  -64,436
  -67,191
  -69,973
  -72,803
  -75,698
  -78,679
Cash from investing activities, $m
  -1,944
  -2,841
  -4,014
  -5,496
  -7,315
  -9,482
  -11,999
  -14,852
  -18,021
  -21,474
  -25,173
  -29,079
  -33,156
  -37,362
  -41,669
  -46,047
  -50,479
  -54,948
  -59,449
  -63,978
  -68,540
  -73,142
  -77,796
  -82,516
  -87,317
  -92,220
  -97,242
  -102,404
  -107,726
  -113,230
Free cash flow, $m
  -1,239
  -1,754
  -2,410
  -3,208
  -4,143
  -5,202
  -6,359
  -7,583
  -8,835
  -10,071
  -11,336
  -12,413
  -13,351
  -14,117
  -14,685
  -15,036
  -15,158
  -15,045
  -14,697
  -14,118
  -13,318
  -12,307
  -11,098
  -9,707
  -8,147
  -6,432
  -4,577
  -2,594
  -495
  1,711
Issuance/(repayment) of debt, $m
  1,575
  2,321
  3,260
  4,438
  5,866
  7,549
  9,479
  11,637
  13,997
  16,523
  19,180
  21,928
  24,730
  27,553
  30,368
  33,152
  35,889
  38,568
  41,184
  43,738
  46,235
  48,684
  51,096
  53,484
  55,865
  58,253
  60,665
  63,119
  65,629
  68,213
Issuance/(repurchase) of shares, $m
  1,024
  1,312
  1,658
  2,067
  2,531
  3,033
  3,553
  4,063
  4,535
  4,936
  4,999
  5,167
  5,179
  5,012
  4,650
  4,081
  3,299
  2,301
  1,088
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,599
  3,633
  4,918
  6,505
  8,397
  10,582
  13,032
  15,700
  18,532
  21,459
  24,179
  27,095
  29,909
  32,565
  35,018
  37,233
  39,188
  40,869
  42,272
  43,738
  46,235
  48,684
  51,096
  53,484
  55,865
  58,253
  60,665
  63,119
  65,629
  68,213
Total cash flow (excl. dividends), $m
  1,359
  1,880
  2,509
  3,297
  4,253
  5,380
  6,672
  8,117
  9,697
  11,389
  12,842
  14,682
  16,558
  18,449
  20,333
  22,198
  24,030
  25,823
  27,575
  29,620
  32,917
  36,377
  39,997
  43,778
  47,718
  51,821
  56,088
  60,524
  65,134
  69,924
Retained Cash Flow (-), $m
  -1,024
  -1,484
  -2,085
  -2,837
  -3,750
  -4,827
  -6,061
  -7,440
  -8,949
  -10,564
  -12,263
  -14,020
  -15,811
  -17,616
  -19,416
  -21,196
  -22,945
  -24,658
  -26,331
  -27,964
  -29,560
  -31,126
  -32,668
  -34,195
  -35,717
  -37,244
  -38,786
  -40,354
  -41,959
  -43,611
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
  336
  396
  424
  460
  503
  554
  612
  677
  748
  825
  580
  663
  747
  833
  918
  1,002
  1,084
  1,165
  1,244
  1,656
  3,357
  5,251
  7,330
  9,583
  12,001
  14,577
  17,302
  20,170
  23,175
  26,312
Discount rate, %
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
  309
  333
  323
  314
  306
  296
  285
  272
  255
  236
  137
  128
  116
  102
  87
  72
  58
  46
  35
  32
  45
  47
  42
  35
  26
  19
  13
  8
  5
  3
Current shareholders' claim on cash, %
  68.7
  50.2
  38.6
  30.8
  25.4
  21.6
  18.7
  16.5
  14.9
  13.6
  12.7
  11.9
  11.3
  10.9
  10.5
  10.3
  10.1
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0
  10.0

Golar LNG Limited is a midstream liquefied natural gas (LNG) company engaged primarily in the transportation, regasification, liquefaction and trading of LNG. The Company is engaged in the acquisition, ownership, operation and chartering of LNG carriers and Floating Storage Regasification Unit (FSRUs) through its subsidiaries and affiliates, and the development of LNG projects, such as floating LNGs (FLNGs). The Company's segments include Vessel operations, LNG trading and FLNG. Under the Vessel operations segment, the Company operates and charters out LNG carriers and FSRUs on fixed terms to customers. Through the LNG trading segment, the Company provides physical and financial risk management in LNG and gas markets for customers around the world. The FLNG segment includes the costs associated with the conversion of its LNG carrier, the Hilli, to a FLNG. The Company, along with its affiliate, Golar LNG Partners LP, has a combined fleet of approximately 30 vessels.

FINANCIAL RATIOS  of  Golar LNG Limited (GLNG)

Valuation Ratios
P/E Ratio -12
Price to Sales 28
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow -57.4
Price to Free Cash Flow -8.2
Growth Rates
Sales Growth Rate -22.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -66.3%
Cap. Spend. - 3 Yr. Gr. Rate -20.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.3
LT Debt to Equity 81.9%
Total Debt to Equity 106.1%
Interest Coverage -7
Management Effectiveness
Return On Assets -3.8%
Ret/ On Assets - 3 Yr. Avg. -2.7%
Return On Total Capital -4.9%
Ret/ On T. Cap. - 3 Yr. Avg. -3.7%
Return On Equity -10%
Return On Equity - 3 Yr. Avg. -6.9%
Asset Turnover 0
Profitability Ratios
Gross Margin -25%
Gross Margin - 3 Yr. Avg. -6.7%
EBITDA Margin -138.8%
EBITDA Margin - 3 Yr. Avg. -87.4%
Operating Margin -186.3%
Oper. Margin - 3 Yr. Avg. -79.2%
Pre-Tax Margin -261.3%
Pre-Tax Margin - 3 Yr. Avg. -183.7%
Net Profit Margin -233.8%
Net Profit Margin - 3 Yr. Avg. -148.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0.8%
Payout Ratio -28.9%

GLNG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GLNG stock intrinsic value calculation we used $144 million for the last fiscal year's total revenue generated by Golar LNG Limited. The default revenue input number comes from 0001 income statement of Golar LNG Limited. 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 GLNG 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 8.6%, whose default value for GLNG is calculated based on our internal credit rating of Golar LNG Limited, 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 Golar LNG Limited.
    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 GLNG stock the variable cost ratio is equal to 54.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $181 million in the base year in the intrinsic value calculation for GLNG 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 Golar LNG Limited.

Corporate tax rate of 27% is the nominal tax rate for Golar LNG Limited. 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 GLNG 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 GLNG are equal to 2132.1%.

Life of production assets of 40.1 years is the average useful life of capital assets used in Golar LNG Limited 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 GLNG is equal to -268.4%. 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 - $1715.316 million for Golar LNG Limited - 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 101.330 million for Golar LNG Limited 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 Golar LNG Limited at the current share price and the inputted number of shares is $2.2 billion.

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