Intrinsic value of Goldman Sachs Group - GS

Previous Close

$266.77

  Intrinsic Value

$615.40

stock screener

  Rating & Target

str. buy

+131%

Previous close

$266.77

 
Intrinsic value

$615.40

 
Up/down potential

+131%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as GS.

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

We calculate the intrinsic value of GS 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Goldman Sachs Group (GS) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -3.92
  11.70
  11.03
  10.43
  9.88
  9.40
  8.96
  8.56
  8.20
  7.88
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
Revenue, $m
  37,850
  42,278
  46,942
  51,836
  56,960
  62,312
  67,893
  73,705
  79,752
  86,040
  92,575
  99,367
  106,424
  113,759
  121,384
  129,314
  137,564
  146,150
  155,090
  164,405
  174,113
  184,237
  194,799
  205,824
  217,338
  229,366
  241,938
  255,082
  268,830
  283,214
  298,268
Variable operating expenses, $m
 
  32,807
  36,386
  40,141
  44,073
  48,179
  52,462
  56,921
  61,561
  66,386
  71,401
  76,245
  81,661
  87,289
  93,140
  99,225
  105,555
  112,143
  119,003
  126,150
  133,599
  141,367
  149,472
  157,932
  166,766
  175,996
  185,642
  195,728
  206,277
  217,314
  228,866
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
  27,546
  32,807
  36,386
  40,141
  44,073
  48,179
  52,462
  56,921
  61,561
  66,386
  71,401
  76,245
  81,661
  87,289
  93,140
  99,225
  105,555
  112,143
  119,003
  126,150
  133,599
  141,367
  149,472
  157,932
  166,766
  175,996
  185,642
  195,728
  206,277
  217,314
  228,866
Operating income, $m
  10,304
  9,471
  10,556
  11,695
  12,887
  14,132
  15,431
  16,783
  18,191
  19,654
  21,174
  23,121
  24,763
  26,470
  28,244
  30,090
  32,009
  34,007
  36,087
  38,255
  40,514
  42,869
  45,327
  47,892
  50,571
  53,370
  56,295
  59,354
  62,553
  65,900
  69,403
EBITDA, $m
  11,302
  10,680
  11,858
  13,095
  14,389
  15,741
  17,151
  18,619
  20,147
  21,735
  23,386
  25,102
  26,885
  28,738
  30,664
  32,667
  34,751
  36,920
  39,179
  41,532
  43,984
  46,542
  49,210
  51,995
  54,904
  57,942
  61,118
  64,439
  67,912
  71,545
  75,349
Interest expense (income), $m
  7,140
  13,780
  16,566
  19,389
  22,352
  25,453
  28,693
  32,071
  35,589
  39,249
  43,055
  47,011
  51,122
  55,393
  59,833
  64,449
  69,249
  74,242
  79,439
  84,851
  90,489
  96,365
  102,493
  108,886
  115,560
  122,529
  129,810
  137,419
  145,375
  153,697
  162,403
Earnings before tax, $m
  10,304
  -4,309
  -6,010
  -7,694
  -9,465
  -11,321
  -13,262
  -15,287
  -17,398
  -19,595
  -21,881
  -23,890
  -26,358
  -28,923
  -31,589
  -34,359
  -37,240
  -40,235
  -43,352
  -46,596
  -49,975
  -53,496
  -57,166
  -60,994
  -64,988
  -69,159
  -73,514
  -78,065
  -82,822
  -87,797
  -93,001
Tax expense, $m
  2,906
  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
  7,398
  -4,309
  -6,010
  -7,694
  -9,465
  -11,321
  -13,262
  -15,287
  -17,398
  -19,595
  -21,881
  -23,890
  -26,358
  -28,923
  -31,589
  -34,359
  -37,240
  -40,235
  -43,352
  -46,596
  -49,975
  -53,496
  -57,166
  -60,994
  -64,988
  -69,159
  -73,514
  -78,065
  -82,822
  -87,797
  -93,001

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  121,711
  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
  860,165
  828,989
  920,427
  1,016,400
  1,116,864
  1,221,803
  1,331,231
  1,445,193
  1,563,765
  1,687,054
  1,815,198
  1,948,364
  2,086,747
  2,230,571
  2,380,088
  2,535,573
  2,697,329
  2,865,683
  3,040,988
  3,223,618
  3,413,975
  3,612,483
  3,819,590
  4,035,771
  4,261,525
  4,497,376
  4,743,877
  5,001,607
  5,271,174
  5,553,215
  5,848,401
Adjusted assets (=assets-cash), $m
  738,454
  828,989
  920,427
  1,016,400
  1,116,864
  1,221,803
  1,331,231
  1,445,193
  1,563,765
  1,687,054
  1,815,198
  1,948,364
  2,086,747
  2,230,571
  2,380,088
  2,535,573
  2,697,329
  2,865,683
  3,040,988
  3,223,618
  3,413,975
  3,612,483
  3,819,590
  4,035,771
  4,261,525
  4,497,376
  4,743,877
  5,001,607
  5,271,174
  5,553,215
  5,848,401
Revenue / Adjusted assets
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
  0.051
Average production assets, $m
  11,473
  12,810
  14,223
  15,706
  17,259
  18,881
  20,572
  22,333
  24,165
  26,070
  28,050
  30,108
  32,246
  34,469
  36,779
  39,182
  41,682
  44,283
  46,992
  49,815
  52,756
  55,824
  59,024
  62,365
  65,853
  69,498
  73,307
  77,290
  81,455
  85,814
  90,375
Working capital, $m
  0
  21,139
  23,471
  25,918
  28,480
  31,156
  33,946
  36,852
  39,876
  43,020
  46,288
  49,683
  53,212
  56,880
  60,692
  64,657
  68,782
  73,075
  77,545
  82,202
  87,056
  92,118
  97,400
  102,912
  108,669
  114,683
  120,969
  127,541
  134,415
  141,607
  149,134
Total debt, $m
  515,432
  473,328
  553,976
  638,624
  727,234
  819,790
  916,306
  1,016,820
  1,121,401
  1,230,142
  1,343,165
  1,460,617
  1,582,671
  1,709,524
  1,841,397
  1,978,535
  2,121,204
  2,269,692
  2,424,311
  2,585,391
  2,753,286
  2,928,370
  3,111,039
  3,301,710
  3,500,825
  3,708,846
  3,926,260
  4,153,577
  4,391,335
  4,640,096
  4,900,450
Total liabilities, $m
  773,272
  731,168
  811,816
  896,464
  985,074
  1,077,630
  1,174,146
  1,274,660
  1,379,241
  1,487,982
  1,601,005
  1,718,457
  1,840,511
  1,967,364
  2,099,237
  2,236,375
  2,379,044
  2,527,532
  2,682,151
  2,843,231
  3,011,126
  3,186,210
  3,368,879
  3,559,550
  3,758,665
  3,966,686
  4,184,100
  4,411,417
  4,649,175
  4,897,936
  5,158,290
Total equity, $m
  86,893
  97,821
  108,610
  119,935
  131,790
  144,173
  157,085
  170,533
  184,524
  199,072
  214,193
  229,907
  246,236
  263,207
  280,850
  299,198
  318,285
  338,151
  358,837
  380,387
  402,849
  426,273
  450,712
  476,221
  502,860
  530,690
  559,778
  590,190
  621,998
  655,279
  690,111
Total liabilities and equity, $m
  860,165
  828,989
  920,426
  1,016,399
  1,116,864
  1,221,803
  1,331,231
  1,445,193
  1,563,765
  1,687,054
  1,815,198
  1,948,364
  2,086,747
  2,230,571
  2,380,087
  2,535,573
  2,697,329
  2,865,683
  3,040,988
  3,223,618
  3,413,975
  3,612,483
  3,819,591
  4,035,771
  4,261,525
  4,497,376
  4,743,878
  5,001,607
  5,271,173
  5,553,215
  5,848,401
Debt-to-equity ratio
  5.932
  4.840
  5.100
  5.320
  5.520
  5.690
  5.830
  5.960
  6.080
  6.180
  6.270
  6.350
  6.430
  6.490
  6.560
  6.610
  6.660
  6.710
  6.760
  6.800
  6.830
  6.870
  6.900
  6.930
  6.960
  6.990
  7.010
  7.040
  7.060
  7.080
  7.100
Adjusted equity ratio
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  7,398
  -4,309
  -6,010
  -7,694
  -9,465
  -11,321
  -13,262
  -15,287
  -17,398
  -19,595
  -21,881
  -23,890
  -26,358
  -28,923
  -31,589
  -34,359
  -37,240
  -40,235
  -43,352
  -46,596
  -49,975
  -53,496
  -57,166
  -60,994
  -64,988
  -69,159
  -73,514
  -78,065
  -82,822
  -87,797
  -93,001
Depreciation, amort., depletion, $m
  998
  1,209
  1,302
  1,400
  1,502
  1,609
  1,720
  1,836
  1,956
  2,082
  2,212
  1,981
  2,121
  2,268
  2,420
  2,578
  2,742
  2,913
  3,092
  3,277
  3,471
  3,673
  3,883
  4,103
  4,332
  4,572
  4,823
  5,085
  5,359
  5,646
  5,946
Funds from operations, $m
  79
  -3,100
  -4,708
  -6,294
  -7,963
  -9,712
  -11,542
  -13,451
  -15,442
  -17,514
  -19,669
  -21,909
  -24,237
  -26,656
  -29,169
  -31,782
  -34,497
  -37,322
  -40,260
  -43,319
  -46,504
  -49,823
  -53,283
  -56,891
  -60,656
  -64,586
  -68,691
  -72,980
  -77,463
  -82,151
  -87,055
Change in working capital, $m
  -5,491
  2,214
  2,332
  2,447
  2,562
  2,676
  2,790
  2,906
  3,024
  3,144
  3,268
  3,396
  3,529
  3,668
  3,813
  3,965
  4,125
  4,293
  4,470
  4,657
  4,854
  5,062
  5,281
  5,513
  5,757
  6,014
  6,286
  6,572
  6,874
  7,192
  7,527
Cash from operations, $m
  5,570
  -5,314
  -7,040
  -8,742
  -10,524
  -12,388
  -14,332
  -16,357
  -18,465
  -20,658
  -22,936
  -25,305
  -27,766
  -30,323
  -32,982
  -35,746
  -38,622
  -41,615
  -44,731
  -47,976
  -51,358
  -54,885
  -58,564
  -62,404
  -66,413
  -70,601
  -74,977
  -79,552
  -84,337
  -89,343
  -94,582
Maintenance CAPEX, $m
  0
  -755
  -843
  -936
  -1,033
  -1,135
  -1,242
  -1,353
  -1,469
  -1,590
  -1,715
  -1,845
  -1,981
  -2,121
  -2,268
  -2,420
  -2,578
  -2,742
  -2,913
  -3,092
  -3,277
  -3,471
  -3,673
  -3,883
  -4,103
  -4,332
  -4,572
  -4,823
  -5,085
  -5,359
  -5,646
New CAPEX, $m
  -2,876
  -1,337
  -1,413
  -1,483
  -1,552
  -1,622
  -1,691
  -1,761
  -1,832
  -1,905
  -1,980
  -2,058
  -2,138
  -2,223
  -2,310
  -2,403
  -2,500
  -2,602
  -2,709
  -2,822
  -2,942
  -3,068
  -3,200
  -3,341
  -3,489
  -3,645
  -3,809
  -3,983
  -4,166
  -4,358
  -4,562
Cash from investing activities, $m
  9,270
  -2,092
  -2,256
  -2,419
  -2,585
  -2,757
  -2,933
  -3,114
  -3,301
  -3,495
  -3,695
  -3,903
  -4,119
  -4,344
  -4,578
  -4,823
  -5,078
  -5,344
  -5,622
  -5,914
  -6,219
  -6,539
  -6,873
  -7,224
  -7,592
  -7,977
  -8,381
  -8,806
  -9,251
  -9,717
  -10,208
Free cash flow, $m
  14,840
  -7,406
  -9,296
  -11,160
  -13,110
  -15,145
  -17,265
  -19,472
  -21,767
  -24,153
  -26,632
  -29,208
  -31,885
  -34,667
  -37,560
  -40,569
  -43,700
  -46,959
  -50,353
  -53,890
  -57,577
  -61,423
  -65,437
  -69,627
  -74,004
  -78,578
  -83,359
  -88,358
  -93,588
  -99,061
  -104,789
Issuance/(repayment) of debt, $m
  18,761
  79,607
  80,648
  84,648
  88,609
  92,556
  96,516
  100,515
  104,581
  108,741
  113,023
  117,452
  122,054
  126,853
  131,873
  137,138
  142,669
  148,489
  154,619
  161,080
  167,895
  175,084
  182,669
  190,672
  199,115
  208,021
  217,414
  227,318
  237,758
  248,761
  260,354
Issuance/(repurchase) of shares, $m
  -5,940
  15,237
  16,800
  19,019
  21,319
  23,703
  26,174
  28,735
  31,390
  34,144
  37,002
  39,603
  42,687
  45,895
  49,232
  52,707
  56,327
  60,101
  64,038
  68,147
  72,437
  76,920
  81,605
  86,503
  91,627
  96,989
  102,601
  108,477
  114,631
  121,078
  127,832
Cash from financing (excl. dividends), $m  
  15,138
  94,844
  97,448
  103,667
  109,928
  116,259
  122,690
  129,250
  135,971
  142,885
  150,025
  157,055
  164,741
  172,748
  181,105
  189,845
  198,996
  208,590
  218,657
  229,227
  240,332
  252,004
  264,274
  277,175
  290,742
  305,010
  320,015
  335,795
  352,389
  369,839
  388,186
Total cash flow (excl. dividends), $m
  29,978
  87,438
  88,152
  92,507
  96,818
  101,115
  105,425
  109,777
  114,203
  118,732
  123,393
  127,847
  132,857
  138,081
  143,545
  149,276
  155,296
  161,631
  168,303
  175,337
  182,755
  190,580
  198,836
  207,548
  216,738
  226,432
  236,656
  247,437
  258,801
  270,778
  283,397
Retained Cash Flow (-), $m
  -165
  -15,237
  -16,800
  -19,019
  -21,319
  -23,703
  -26,174
  -28,735
  -31,390
  -34,144
  -37,002
  -39,603
  -42,687
  -45,895
  -49,232
  -52,707
  -56,327
  -60,101
  -64,038
  -68,147
  -72,437
  -76,920
  -81,605
  -86,503
  -91,627
  -96,989
  -102,601
  -108,477
  -114,631
  -121,078
  -127,832
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
 
  72,201
  71,352
  73,488
  75,499
  77,411
  79,250
  81,043
  82,814
  84,589
  86,391
  88,244
  90,169
  92,186
  94,313
  96,569
  98,969
  101,530
  104,266
  107,190
  110,317
  113,660
  117,232
  121,044
  125,110
  129,443
  134,055
  138,960
  144,170
  149,700
  155,564
Discount rate, %
 
  11.20
  11.76
  12.35
  12.97
  13.61
  14.29
  15.01
  15.76
  16.55
  17.37
  18.24
  19.16
  20.11
  21.12
  22.18
  23.28
  24.45
  25.67
  26.95
  28.30
  29.72
  31.20
  32.76
  34.40
  36.12
  37.93
  39.82
  41.81
  43.91
  46.10
PV of cash for distribution, $m
 
  64,929
  57,126
  51,823
  46,362
  40,893
  35,551
  30,450
  25,683
  21,320
  17,407
  13,968
  11,007
  8,511
  6,450
  4,787
  3,475
  2,465
  1,706
  1,150
  755
  482
  298
  179
  104
  58
  31
  16
  8
  4
  2
Current shareholders' claim on cash, %
  100
  86.9
  75.8
  65.9
  57.2
  49.5
  42.8
  37.0
  32.0
  27.6
  23.8
  20.6
  17.7
  15.3
  13.2
  11.3
  9.8
  8.4
  7.2
  6.2
  5.3
  4.6
  3.9
  3.4
  2.9
  2.5
  2.1
  1.8
  1.6
  1.3
  1.2

The Goldman Sachs Group, Inc. is an investment banking, securities and investment management company that provides a range of financial services to corporations, financial institutions, governments and individuals. The Company operates in four business segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment consists of financial advisory and underwriting. The Institutional Client Services segment makes markets and facilitates client transactions in fixed income, equity, currency and commodity products. The investing and lending activities, which are typically longer-term, include its investing and relationship lending activities across various asset classes, primarily debt securities and loans, public and private equity securities, infrastructure and real estate. The Investment Management segment provides investment and wealth advisory services. As of December 2016, it had offices in over 30 countries.

FINANCIAL RATIOS  of  Goldman Sachs Group (GS)

Valuation Ratios
P/E Ratio 14.2
Price to Sales 2.8
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 18.8
Price to Free Cash Flow 38.9
Growth Rates
Sales Growth Rate -3.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 56.9%
Cap. Spend. - 3 Yr. Gr. Rate 32.4%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 307.4%
Total Debt to Equity 593.2%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.5%
Ret/ On Assets - 3 Yr. Avg. 1.3%
Return On Total Capital 1.2%
Ret/ On T. Cap. - 3 Yr. Avg. 1.3%
Return On Equity 8.5%
Return On Equity - 3 Yr. Avg. 8.7%
Asset Turnover 0
Profitability Ratios
Gross Margin 72.2%
Gross Margin - 3 Yr. Avg. 75.7%
EBITDA Margin 48.7%
EBITDA Margin - 3 Yr. Avg. 45.3%
Operating Margin 27.2%
Oper. Margin - 3 Yr. Avg. 26.8%
Pre-Tax Margin 27.2%
Pre-Tax Margin - 3 Yr. Avg. 26.8%
Net Profit Margin 19.5%
Net Profit Margin - 3 Yr. Avg. 18.7%
Effective Tax Rate 28.2%
Eff/ Tax Rate - 3 Yr. Avg. 30.1%
Payout Ratio 23.1%

GS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GS stock intrinsic value calculation we used $37850 million for the last fiscal year's total revenue generated by Goldman Sachs Group. The default revenue input number comes from 2016 income statement of Goldman Sachs Group. 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 GS stock valuation model: a) initial revenue growth rate of 11.7% 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 11.2%, whose default value for GS is calculated based on our internal credit rating of Goldman Sachs Group, 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 Goldman Sachs Group.
    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 GS stock the variable cost ratio is equal to 77.7%.

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 GS 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 Goldman Sachs Group.

Corporate tax rate of 27% is the nominal tax rate for Goldman Sachs Group. 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 GS 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 GS are equal to 30.3%.

Life of production assets of 15.2 years is the average useful life of capital assets used in Goldman Sachs Group 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 GS is equal to 50%. 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 - $86893 million for Goldman Sachs Group - 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 379.769 million for Goldman Sachs Group 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 Goldman Sachs Group at the current share price and the inputted number of shares is $101.3 billion.

Articles on GS

Why Goldman Sachs stock is set to move much higher

Repatriation of money hoarded by American companies overseas will cause a wave of acquisitions. Goldman Sachs, as no other firm, is set to benefit from this.  [June 03, 2017]  read article

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COMPANY NEWS

▶ Former White House national security pro may return to Goldman Sachs   [Feb-23-18 10:10AM  American City Business Journals]
▶ Goldman Sachs BDC meets 4Q profit forecasts   [05:00AM  Associated Press]
▶ [$$] Dina Powell, ex-Trump Adviser, Weighs Return to Goldman   [Feb-22-18 04:53PM  The Wall Street Journal]
▶ Goldman Sachs sets aside billions to invest in private equity firms   [03:16PM  American City Business Journals]
▶ China Construction Bank a Top Pick   [Feb-21-18 10:02PM  Bloomberg]
▶ Has OPEC Been Too Successful?   [06:00PM  Oilprice.com]
▶ Three bold market calls on where to go from here   [Feb-20-18 01:03PM  CNBC Videos]
▶ Goldman Sachs CEO: 'Of course we lobby'   [Feb-19-18 08:43AM  Yahoo Finance]
▶ 3 Under-the-Radar Stories in the Stock Market Last Week   [Feb-18-18 09:46PM  Motley Fool]
▶ [$$] Wall Streets Five CEOs Get Biggest Payday Since 2006   [Feb-16-18 11:56PM  The Wall Street Journal]
▶ Amazon Partners With Bank Of America On Small-Business Loans   [04:03PM  Investor's Business Daily]
▶ [$$] Goldman Sachs Bolsters M&A Leadership   [12:41AM  The Wall Street Journal]
▶ Goldman Sachs deepens M&A bench   [05:00PM  American City Business Journals]
▶ The Big Power of Small Business   [04:22PM  Bloomberg Video]
▶ Top 4 Financial Stocks for 2018   [03:07PM  Investopedia]
▶ [$$] Goldman Sachs Bolsters M&A Leadership   [10:54AM  The Wall Street Journal]
▶ [$$] Is This a Market Made for Goldman Sachs?   [01:32AM  The Wall Street Journal]
▶ Why Abby Joseph Cohen Changed Her Bullish Tone   [12:22PM  Bloomberg Video]
▶ [$$] Is This a Market Made for Goldman Sachs?   [12:11PM  The Wall Street Journal]
▶ Is Under Armour Inc Stock Finally Irrelevant?   [Feb-12-18 01:42PM  InvestorPlace]
▶ "Fast Money" final trades: TWTR, SNAP and more   [Feb-09-18 05:25PM  CNBC Videos]
▶ Uber's Top Investors   [02:18PM  Investopedia]
▶ U.S. Oil Production Is Rising Much Faster Than Expected   [Feb-07-18 07:00PM  Oilprice.com]
▶ Bitcoin Rebounds on Wednesday   [06:31PM  GuruFocus.com]
▶ Rising From The Crypto: Bitcoin Rebounds Despite Dire Warnings   [04:59PM  Investor's Business Daily]
▶ Closing Bell: LIVE MARKETS BLOG   [04:05PM  TheStreet.com]
Financial statements of GS
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