Intrinsic value of Grifols, S.A. - GRFS

Previous Close

$20.01

  Intrinsic Value

$16.17

stock screener

  Rating & Target

hold

-19%

Previous close

$20.01

 
Intrinsic value

$16.17

 
Up/down potential

-19%

 
Rating

hold

We calculate the intrinsic value of GRFS 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 13.7

 

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, %
  21.60
  19.94
  18.45
  17.10
  15.89
  14.80
  13.82
  12.94
  12.15
  11.43
  10.79
  10.21
  9.69
  9.22
  8.80
  8.42
  8.08
  7.77
  7.49
  7.24
  7.02
  6.82
  6.63
  6.47
  6.32
  6.19
  6.07
  5.97
  5.87
  5.78
Revenue, $m
  6,304
  7,561
  8,955
  10,487
  12,153
  13,952
  15,881
  17,936
  20,114
  22,413
  24,831
  27,366
  30,018
  32,785
  35,670
  38,672
  41,795
  45,042
  48,417
  51,923
  55,567
  59,355
  63,293
  67,389
  71,650
  76,087
  80,707
  85,522
  90,541
  95,776
Variable operating expenses, $m
  4,783
  5,695
  6,706
  7,817
  9,025
  10,330
  11,729
  13,219
  14,799
  16,466
  18,009
  19,847
  21,770
  23,777
  25,869
  28,047
  30,312
  32,666
  35,114
  37,657
  40,300
  43,047
  45,903
  48,873
  51,964
  55,181
  58,532
  62,024
  65,664
  69,460
Fixed operating expenses, $m
  10
  10
  11
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  14
  14
  14
  14
  15
  15
  15
  16
  16
  16
  17
  17
  18
  18
  18
  19
  19
Total operating expenses, $m
  4,793
  5,705
  6,717
  7,828
  9,036
  10,341
  11,741
  13,231
  14,811
  16,478
  18,022
  19,860
  21,783
  23,791
  25,883
  28,061
  30,326
  32,681
  35,129
  37,672
  40,316
  43,063
  45,919
  48,890
  51,981
  55,199
  58,550
  62,042
  65,683
  69,479
Operating income, $m
  1,510
  1,856
  2,239
  2,659
  3,117
  3,611
  4,140
  4,705
  5,303
  5,935
  6,810
  7,506
  8,234
  8,995
  9,787
  10,611
  11,469
  12,361
  13,288
  14,251
  15,252
  16,292
  17,374
  18,499
  19,669
  20,888
  22,157
  23,480
  24,858
  26,296
EBITDA, $m
  1,926
  2,312
  2,740
  3,210
  3,722
  4,274
  4,866
  5,497
  6,166
  6,872
  7,615
  8,393
  9,207
  10,057
  10,942
  11,864
  12,823
  13,820
  14,857
  15,933
  17,052
  18,215
  19,425
  20,682
  21,991
  23,353
  24,772
  26,250
  27,792
  29,399
Interest expense (income), $m
  0
  393
  494
  607
  733
  871
  1,022
  1,184
  1,358
  1,543
  1,740
  1,947
  2,166
  2,394
  2,634
  2,883
  3,143
  3,414
  3,696
  3,989
  4,294
  4,610
  4,939
  5,280
  5,636
  6,005
  6,390
  6,790
  7,207
  7,641
  8,094
Earnings before tax, $m
  1,118
  1,362
  1,631
  1,926
  2,245
  2,589
  2,956
  3,347
  3,760
  4,195
  4,863
  5,341
  5,840
  6,361
  6,904
  7,468
  8,055
  8,665
  9,299
  9,957
  10,642
  11,353
  12,093
  12,863
  13,664
  14,498
  15,367
  16,273
  17,217
  18,202
Tax expense, $m
  302
  368
  440
  520
  606
  699
  798
  904
  1,015
  1,133
  1,313
  1,442
  1,577
  1,717
  1,864
  2,016
  2,175
  2,340
  2,511
  2,688
  2,873
  3,065
  3,265
  3,473
  3,689
  3,915
  4,149
  4,394
  4,649
  4,915
Net income, $m
  816
  994
  1,191
  1,406
  1,639
  1,890
  2,158
  2,443
  2,745
  3,062
  3,550
  3,899
  4,263
  4,644
  5,040
  5,452
  5,880
  6,325
  6,788
  7,269
  7,769
  8,288
  8,828
  9,390
  9,975
  10,584
  11,218
  11,879
  12,568
  13,287

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
  15,839
  18,997
  22,501
  26,349
  30,536
  35,056
  39,901
  45,065
  50,538
  56,315
  62,390
  68,760
  75,422
  82,375
  89,622
  97,166
  105,014
  113,171
  121,650
  130,460
  139,616
  149,133
  159,027
  169,318
  180,026
  191,173
  202,782
  214,879
  227,489
  240,643
Adjusted assets (=assets-cash), $m
  15,839
  18,997
  22,501
  26,349
  30,536
  35,056
  39,901
  45,065
  50,538
  56,315
  62,390
  68,760
  75,422
  82,375
  89,622
  97,166
  105,014
  113,171
  121,650
  130,460
  139,616
  149,133
  159,027
  169,318
  180,026
  191,173
  202,782
  214,879
  227,489
  240,643
Revenue / Adjusted assets
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
Average production assets, $m
  6,127
  7,349
  8,705
  10,193
  11,813
  13,562
  15,436
  17,434
  19,551
  21,786
  24,136
  26,600
  29,177
  31,867
  34,671
  37,589
  40,625
  43,781
  47,061
  50,469
  54,011
  57,693
  61,521
  65,502
  69,644
  73,956
  78,447
  83,127
  88,006
  93,094
Working capital, $m
  1,790
  2,147
  2,543
  2,978
  3,452
  3,962
  4,510
  5,094
  5,712
  6,365
  7,052
  7,772
  8,525
  9,311
  10,130
  10,983
  11,870
  12,792
  13,750
  14,746
  15,781
  16,857
  17,975
  19,138
  20,349
  21,609
  22,921
  24,288
  25,714
  27,200
Total debt, $m
  9,146
  11,246
  13,577
  16,135
  18,920
  21,926
  25,148
  28,581
  32,221
  36,063
  40,103
  44,339
  48,769
  53,393
  58,212
  63,229
  68,447
  73,872
  79,511
  85,369
  91,458
  97,787
  104,367
  111,210
  118,331
  125,743
  133,464
  141,508
  149,894
  158,641
Total liabilities, $m
  10,533
  12,633
  14,963
  17,522
  20,306
  23,312
  26,534
  29,968
  33,608
  37,450
  41,490
  45,725
  50,155
  54,780
  59,599
  64,616
  69,834
  75,259
  80,897
  86,756
  92,845
  99,173
  105,753
  112,597
  119,718
  127,130
  134,850
  142,894
  151,280
  160,027
Total equity, $m
  5,306
  6,364
  7,538
  8,827
  10,230
  11,744
  13,367
  15,097
  16,930
  18,866
  20,901
  23,035
  25,266
  27,596
  30,023
  32,551
  35,180
  37,912
  40,753
  43,704
  46,771
  49,959
  53,274
  56,722
  60,309
  64,043
  67,932
  71,984
  76,209
  80,615
Total liabilities and equity, $m
  15,839
  18,997
  22,501
  26,349
  30,536
  35,056
  39,901
  45,065
  50,538
  56,316
  62,391
  68,760
  75,421
  82,376
  89,622
  97,167
  105,014
  113,171
  121,650
  130,460
  139,616
  149,132
  159,027
  169,319
  180,027
  191,173
  202,782
  214,878
  227,489
  240,642
Debt-to-equity ratio
  1.720
  1.770
  1.800
  1.830
  1.850
  1.870
  1.880
  1.890
  1.900
  1.910
  1.920
  1.920
  1.930
  1.930
  1.940
  1.940
  1.950
  1.950
  1.950
  1.950
  1.960
  1.960
  1.960
  1.960
  1.960
  1.960
  1.960
  1.970
  1.970
  1.970
Adjusted equity ratio
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335
  0.335

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  816
  994
  1,191
  1,406
  1,639
  1,890
  2,158
  2,443
  2,745
  3,062
  3,550
  3,899
  4,263
  4,644
  5,040
  5,452
  5,880
  6,325
  6,788
  7,269
  7,769
  8,288
  8,828
  9,390
  9,975
  10,584
  11,218
  11,879
  12,568
  13,287
Depreciation, amort., depletion, $m
  416
  456
  501
  551
  605
  663
  726
  792
  863
  937
  805
  887
  973
  1,062
  1,156
  1,253
  1,354
  1,459
  1,569
  1,682
  1,800
  1,923
  2,051
  2,183
  2,321
  2,465
  2,615
  2,771
  2,934
  3,103
Funds from operations, $m
  1,231
  1,450
  1,692
  1,957
  2,244
  2,553
  2,884
  3,236
  3,608
  4,000
  4,354
  4,785
  5,236
  5,706
  6,195
  6,705
  7,234
  7,785
  8,357
  8,951
  9,569
  10,211
  10,879
  11,573
  12,296
  13,049
  13,833
  14,650
  15,502
  16,390
Change in working capital, $m
  318
  357
  396
  435
  473
  511
  548
  584
  619
  653
  687
  720
  753
  786
  819
  853
  887
  922
  958
  996
  1,035
  1,076
  1,118
  1,163
  1,210
  1,260
  1,312
  1,367
  1,425
  1,487
Cash from operations, $m
  913
  1,093
  1,296
  1,522
  1,771
  2,043
  2,336
  2,652
  2,989
  3,347
  3,668
  4,065
  4,483
  4,920
  5,376
  5,852
  6,347
  6,863
  7,398
  7,955
  8,534
  9,135
  9,760
  10,410
  11,086
  11,789
  12,521
  13,283
  14,076
  14,904
Maintenance CAPEX, $m
  -168
  -204
  -245
  -290
  -340
  -394
  -452
  -515
  -581
  -652
  -726
  -805
  -887
  -973
  -1,062
  -1,156
  -1,253
  -1,354
  -1,459
  -1,569
  -1,682
  -1,800
  -1,923
  -2,051
  -2,183
  -2,321
  -2,465
  -2,615
  -2,771
  -2,934
New CAPEX, $m
  -1,086
  -1,222
  -1,356
  -1,489
  -1,620
  -1,749
  -1,874
  -1,997
  -2,117
  -2,235
  -2,350
  -2,464
  -2,577
  -2,690
  -2,804
  -2,919
  -3,036
  -3,156
  -3,280
  -3,408
  -3,542
  -3,682
  -3,828
  -3,981
  -4,142
  -4,312
  -4,491
  -4,680
  -4,879
  -5,088
Cash from investing activities, $m
  -1,254
  -1,426
  -1,601
  -1,779
  -1,960
  -2,143
  -2,326
  -2,512
  -2,698
  -2,887
  -3,076
  -3,269
  -3,464
  -3,663
  -3,866
  -4,075
  -4,289
  -4,510
  -4,739
  -4,977
  -5,224
  -5,482
  -5,751
  -6,032
  -6,325
  -6,633
  -6,956
  -7,295
  -7,650
  -8,022
Free cash flow, $m
  -341
  -333
  -304
  -257
  -189
  -100
  10
  140
  290
  460
  591
  797
  1,019
  1,257
  1,510
  1,778
  2,059
  2,353
  2,659
  2,978
  3,310
  3,653
  4,010
  4,378
  4,760
  5,155
  5,564
  5,988
  6,427
  6,882
Issuance/(repayment) of debt, $m
  1,869
  2,100
  2,330
  2,559
  2,784
  3,006
  3,222
  3,433
  3,640
  3,842
  4,040
  4,236
  4,430
  4,624
  4,819
  5,017
  5,218
  5,425
  5,638
  5,859
  6,089
  6,329
  6,580
  6,844
  7,121
  7,413
  7,720
  8,044
  8,386
  8,747
Issuance/(repurchase) of shares, $m
  133
  64
  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  
  2,002
  2,164
  2,330
  2,559
  2,784
  3,006
  3,222
  3,433
  3,640
  3,842
  4,040
  4,236
  4,430
  4,624
  4,819
  5,017
  5,218
  5,425
  5,638
  5,859
  6,089
  6,329
  6,580
  6,844
  7,121
  7,413
  7,720
  8,044
  8,386
  8,747
Total cash flow (excl. dividends), $m
  1,662
  1,831
  2,026
  2,302
  2,596
  2,906
  3,232
  3,574
  3,930
  4,302
  4,631
  5,033
  5,449
  5,881
  6,330
  6,795
  7,277
  7,778
  8,297
  8,837
  9,398
  9,982
  10,589
  11,222
  11,881
  12,568
  13,284
  14,032
  14,813
  15,629
Retained Cash Flow (-), $m
  -949
  -1,058
  -1,174
  -1,289
  -1,403
  -1,514
  -1,623
  -1,730
  -1,834
  -1,935
  -2,035
  -2,134
  -2,232
  -2,329
  -2,428
  -2,527
  -2,629
  -2,733
  -2,840
  -2,951
  -3,067
  -3,188
  -3,315
  -3,448
  -3,587
  -3,734
  -3,889
  -4,052
  -4,225
  -4,406
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
  712
  773
  852
  1,013
  1,193
  1,392
  1,609
  1,844
  2,097
  2,366
  2,596
  2,899
  3,217
  3,552
  3,902
  4,267
  4,648
  5,045
  5,457
  5,886
  6,331
  6,794
  7,275
  7,774
  8,294
  8,834
  9,395
  9,980
  10,588
  11,222
Discount rate, %
  8.30
  8.72
  9.15
  9.61
  10.09
  10.59
  11.12
  11.68
  12.26
  12.88
  13.52
  14.20
  14.91
  15.65
  16.43
  17.26
  18.12
  19.02
  19.97
  20.97
  22.02
  23.12
  24.28
  25.49
  26.77
  28.11
  29.51
  30.99
  32.54
  34.16
PV of cash for distribution, $m
  658
  654
  655
  702
  738
  761
  769
  762
  740
  705
  643
  589
  529
  464
  398
  334
  274
  219
  171
  131
  97
  70
  49
  33
  22
  14
  9
  5
  3
  2
Current shareholders' claim on cash, %
  99.0
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7

Grifols, S.A., a biopharmaceutical company, develops, manufactures, and distributes plasma derivative products in the United States, Canada, Spain, rest of the European Union, and internationally. It specializes in providing infusion solutions, nutrition products, medical devices, diagnostic instrumentation, and reagents for use in hospitals and clinics. The company operates through four segments: Bioscience, Diagnostic, Hospital, and Raw Materials and Others. The Bioscience segment manufactures plasma derivatives for therapeutic use, including the reception, analysis, quarantine, classification, fractionation, and purification of plasma; and sells and distributes end products. It offers plasma products, which include IVIG, Factor VIII, A1PI, and albumin; and intramuscular immunoglobulins, ATIII, Factor IX, and plasma thromboplastin components. The Diagnostic segment focuses on researching, developing, manufacturing, and marketing in vitro diagnostics products, including analytical instruments, reagents, software, and related products for use in clinical and blood bank laboratories. It serves blood donation centers, clinical analysis laboratories, and hospital immunohematology services. The Hospital segment manufactures and installs products used by and in hospitals, such as parenteral solutions, and enteral and parenteral nutritional fluids. The Raw Materials and Others segment sells intermediate biological products; and renders manufacturing services to third party companies. The company also offers engineering services. Its products and services are used by healthcare providers to diagnose and treat patients with hemophilia, immune deficiencies, infectious diseases, and other medical conditions. The company serves hospitals and clinics, group purchasing organizations, governments, and other distributors through sales representatives, marketing partners, and third-party distributors. Grifols, S.A. was founded in 1940 and is headquartered in Barcelona, Spain.

FINANCIAL RATIOS  of  Grifols, S.A. (GRFS)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

GRFS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GRFS stock intrinsic value calculation we used $5184 million for the last fiscal year's total revenue generated by Grifols, S.A.. The default revenue input number comes from 0001 income statement of Grifols, S.A.. 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 GRFS stock valuation model: a) initial revenue growth rate of 21.6% 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 8.3%, whose default value for GRFS is calculated based on our internal credit rating of Grifols, S.A., 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 Grifols, S.A..
    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 GRFS stock the variable cost ratio is equal to 76.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $10 million in the base year in the intrinsic value calculation for GRFS 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 Grifols, S.A..

Corporate tax rate of 27% is the nominal tax rate for Grifols, S.A.. 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 GRFS 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 GRFS are equal to 97.2%.

Life of production assets of 31.2 years is the average useful life of capital assets used in Grifols, S.A. 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 GRFS is equal to 28.4%. 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 - $4356.63745498 million for Grifols, S.A. - 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 683.854 million for Grifols, S.A. 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 Grifols, S.A. at the current share price and the inputted number of shares is $13.7 billion.

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