Intrinsic value of International Flavors & Fragrances, Inc. - IFF

Previous Close

$136.00

  Intrinsic Value

$204.00

stock screener

  Rating & Target

buy

+50%

Previous close

$136.00

 
Intrinsic value

$204.00

 
Up/down potential

+50%

 
Rating

buy

We calculate the intrinsic value of IFF 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 14.5

 

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, %
  42.60
  38.84
  35.46
  32.41
  29.67
  27.20
  24.98
  22.98
  21.19
  19.57
  18.11
  16.80
  15.62
  14.56
  13.60
  12.74
  11.97
  11.27
  10.64
  10.08
  9.57
  9.11
  8.70
  8.33
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
Revenue, $m
  5,673
  7,876
  10,668
  14,126
  18,317
  23,300
  29,121
  35,814
  43,401
  51,893
  61,291
  71,588
  82,769
  94,818
  107,715
  121,440
  135,973
  151,298
  167,401
  184,274
  201,912
  220,314
  239,487
  259,443
  280,196
  301,769
  324,189
  347,486
  371,698
  396,866
Variable operating expenses, $m
  4,389
  5,767
  7,514
  9,676
  12,297
  15,413
  19,053
  23,239
  27,984
  33,295
  38,331
  44,770
  51,763
  59,298
  67,364
  75,947
  85,036
  94,620
  104,691
  115,243
  126,273
  137,781
  149,772
  162,252
  175,231
  188,722
  202,743
  217,313
  232,455
  248,195
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
  4,389
  5,767
  7,514
  9,676
  12,297
  15,413
  19,053
  23,239
  27,984
  33,295
  38,331
  44,770
  51,763
  59,298
  67,364
  75,947
  85,036
  94,620
  104,691
  115,243
  126,273
  137,781
  149,772
  162,252
  175,231
  188,722
  202,743
  217,313
  232,455
  248,195
Operating income, $m
  1,283
  2,109
  3,155
  4,450
  6,020
  7,887
  10,067
  12,574
  15,417
  18,598
  22,961
  26,818
  31,007
  35,520
  40,352
  45,493
  50,937
  56,678
  62,711
  69,032
  75,639
  82,533
  89,715
  97,191
  104,965
  113,047
  121,446
  130,173
  139,243
  148,672
EBITDA, $m
  2,294
  3,185
  4,314
  5,713
  7,408
  9,423
  11,777
  14,484
  17,552
  20,986
  24,787
  28,951
  33,473
  38,346
  43,562
  49,112
  54,989
  61,187
  67,699
  74,523
  81,656
  89,098
  96,852
  104,922
  113,315
  122,040
  131,106
  140,528
  150,320
  160,498
Interest expense (income), $m
  51
  246
  403
  608
  867
  1,189
  1,579
  2,042
  2,583
  3,205
  3,911
  4,700
  5,574
  6,531
  7,571
  8,691
  9,890
  11,166
  12,517
  13,942
  15,439
  17,008
  18,648
  20,358
  22,141
  23,996
  25,926
  27,931
  30,016
  32,182
  34,433
Earnings before tax, $m
  1,037
  1,706
  2,547
  3,583
  4,831
  6,308
  8,025
  9,992
  12,212
  14,687
  18,260
  21,244
  24,475
  27,950
  31,661
  35,603
  39,771
  44,161
  48,769
  53,593
  58,631
  63,885
  69,357
  75,050
  80,969
  87,121
  93,514
  100,157
  107,062
  114,239
Tax expense, $m
  280
  461
  688
  967
  1,304
  1,703
  2,167
  2,698
  3,297
  3,966
  4,930
  5,736
  6,608
  7,546
  8,548
  9,613
  10,738
  11,924
  13,168
  14,470
  15,830
  17,249
  18,726
  20,263
  21,862
  23,523
  25,249
  27,043
  28,907
  30,844
Net income, $m
  757
  1,245
  1,859
  2,615
  3,527
  4,605
  5,859
  7,294
  8,914
  10,722
  13,330
  15,508
  17,867
  20,403
  23,112
  25,990
  29,033
  32,238
  35,601
  39,123
  42,801
  46,636
  50,631
  54,786
  59,107
  63,599
  68,265
  73,115
  78,155
  83,394

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
  18,358
  25,488
  34,525
  45,715
  59,279
  75,404
  94,241
  115,902
  140,456
  167,939
  198,354
  231,676
  267,862
  306,856
  348,593
  393,009
  440,042
  489,637
  541,752
  596,357
  653,436
  712,991
  775,040
  839,620
  906,783
  976,599
  1,049,154
  1,124,551
  1,202,908
  1,284,357
Adjusted assets (=assets-cash), $m
  18,358
  25,488
  34,525
  45,715
  59,279
  75,404
  94,241
  115,902
  140,456
  167,939
  198,354
  231,676
  267,862
  306,856
  348,593
  393,009
  440,042
  489,637
  541,752
  596,357
  653,436
  712,991
  775,040
  839,620
  906,783
  976,599
  1,049,154
  1,124,551
  1,202,908
  1,284,357
Revenue / Adjusted assets
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
  0.309
Average production assets, $m
  5,071
  7,041
  9,538
  12,629
  16,375
  20,830
  26,034
  32,017
  38,800
  46,393
  54,794
  63,999
  73,996
  84,768
  96,297
  108,567
  121,560
  135,260
  149,657
  164,741
  180,509
  196,961
  214,102
  231,942
  250,495
  269,782
  289,825
  310,653
  332,298
  354,798
Working capital, $m
  1,730
  2,402
  3,254
  4,308
  5,587
  7,106
  8,882
  10,923
  13,237
  15,827
  18,694
  21,834
  25,245
  28,920
  32,853
  37,039
  41,472
  46,146
  51,057
  56,204
  61,583
  67,196
  73,044
  79,130
  85,460
  92,040
  98,878
  105,983
  113,368
  121,044
Total debt, $m
  7,463
  11,256
  16,064
  22,017
  29,233
  37,811
  47,833
  59,356
  72,419
  87,040
  103,221
  120,948
  140,199
  160,944
  183,148
  206,777
  231,799
  258,184
  285,909
  314,958
  345,324
  377,008
  410,018
  444,375
  480,105
  517,247
  555,847
  595,958
  637,643
  680,974
Total liabilities, $m
  9,766
  13,560
  18,368
  24,320
  31,536
  40,115
  50,136
  61,660
  74,723
  89,344
  105,524
  123,251
  142,503
  163,247
  185,452
  209,081
  234,102
  260,487
  288,212
  317,262
  347,628
  379,311
  412,321
  446,678
  482,409
  519,551
  558,150
  598,261
  639,947
  683,278
Total equity, $m
  8,592
  11,929
  16,158
  21,395
  27,742
  35,289
  44,105
  54,242
  65,734
  78,596
  92,830
  108,424
  125,359
  143,608
  163,142
  183,928
  205,940
  229,150
  253,540
  279,095
  305,808
  333,680
  362,719
  392,942
  424,375
  457,048
  491,004
  526,290
  562,961
  601,079
Total liabilities and equity, $m
  18,358
  25,489
  34,526
  45,715
  59,278
  75,404
  94,241
  115,902
  140,457
  167,940
  198,354
  231,675
  267,862
  306,855
  348,594
  393,009
  440,042
  489,637
  541,752
  596,357
  653,436
  712,991
  775,040
  839,620
  906,784
  976,599
  1,049,154
  1,124,551
  1,202,908
  1,284,357
Debt-to-equity ratio
  0.870
  0.940
  0.990
  1.030
  1.050
  1.070
  1.080
  1.090
  1.100
  1.110
  1.110
  1.120
  1.120
  1.120
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
Adjusted equity ratio
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468
  0.468

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  757
  1,245
  1,859
  2,615
  3,527
  4,605
  5,859
  7,294
  8,914
  10,722
  13,330
  15,508
  17,867
  20,403
  23,112
  25,990
  29,033
  32,238
  35,601
  39,123
  42,801
  46,636
  50,631
  54,786
  59,107
  63,599
  68,265
  73,115
  78,155
  83,394
Depreciation, amort., depletion, $m
  1,011
  1,077
  1,160
  1,263
  1,388
  1,536
  1,710
  1,909
  2,135
  2,388
  1,826
  2,133
  2,467
  2,826
  3,210
  3,619
  4,052
  4,509
  4,989
  5,491
  6,017
  6,565
  7,137
  7,731
  8,350
  8,993
  9,661
  10,355
  11,077
  11,827
Funds from operations, $m
  1,768
  2,322
  3,019
  3,878
  4,914
  6,141
  7,568
  9,203
  11,050
  13,110
  15,157
  17,641
  20,334
  23,229
  26,322
  29,609
  33,085
  36,746
  40,590
  44,614
  48,818
  53,202
  57,767
  62,518
  67,457
  72,591
  77,926
  83,470
  89,232
  95,221
Change in working capital, $m
  517
  672
  852
  1,055
  1,278
  1,520
  1,775
  2,041
  2,314
  2,590
  2,866
  3,140
  3,410
  3,675
  3,934
  4,186
  4,433
  4,674
  4,912
  5,146
  5,379
  5,613
  5,848
  6,086
  6,330
  6,580
  6,838
  7,106
  7,385
  7,676
Cash from operations, $m
  1,251
  1,650
  2,167
  2,823
  3,636
  4,621
  5,793
  7,161
  8,735
  10,520
  12,290
  14,501
  16,923
  19,554
  22,389
  25,423
  28,652
  32,072
  35,678
  39,468
  43,438
  47,589
  51,919
  56,431
  61,128
  66,011
  71,088
  76,364
  81,847
  87,545
Maintenance CAPEX, $m
  -119
  -169
  -235
  -318
  -421
  -546
  -694
  -868
  -1,067
  -1,293
  -1,546
  -1,826
  -2,133
  -2,467
  -2,826
  -3,210
  -3,619
  -4,052
  -4,509
  -4,989
  -5,491
  -6,017
  -6,565
  -7,137
  -7,731
  -8,350
  -8,993
  -9,661
  -10,355
  -11,077
New CAPEX, $m
  -1,513
  -1,970
  -2,496
  -3,091
  -3,747
  -4,455
  -5,204
  -5,984
  -6,783
  -7,592
  -8,402
  -9,205
  -9,996
  -10,772
  -11,530
  -12,270
  -12,993
  -13,701
  -14,397
  -15,084
  -15,768
  -16,452
  -17,141
  -17,840
  -18,554
  -19,286
  -20,043
  -20,828
  -21,646
  -22,500
Cash from investing activities, $m
  -1,632
  -2,139
  -2,731
  -3,409
  -4,168
  -5,001
  -5,898
  -6,852
  -7,850
  -8,885
  -9,948
  -11,031
  -12,129
  -13,239
  -14,356
  -15,480
  -16,612
  -17,753
  -18,906
  -20,073
  -21,259
  -22,469
  -23,706
  -24,977
  -26,285
  -27,636
  -29,036
  -30,489
  -32,001
  -33,577
Free cash flow, $m
  -380
  -489
  -564
  -586
  -532
  -379
  -105
  310
  885
  1,634
  2,342
  3,469
  4,794
  6,315
  8,033
  9,943
  12,041
  14,320
  16,773
  19,395
  22,179
  25,120
  28,213
  31,455
  34,843
  38,375
  42,052
  45,875
  49,846
  53,968
Issuance/(repayment) of debt, $m
  2,910
  3,793
  4,808
  5,953
  7,216
  8,579
  10,022
  11,523
  13,063
  14,621
  16,180
  17,727
  19,251
  20,745
  22,204
  23,629
  25,021
  26,385
  27,725
  29,049
  30,366
  31,683
  33,010
  34,357
  35,731
  37,142
  38,599
  40,111
  41,686
  43,331
Issuance/(repurchase) of shares, $m
  1,801
  2,092
  2,370
  2,622
  2,821
  2,942
  2,957
  2,843
  2,577
  2,140
  904
  87
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  4,711
  5,885
  7,178
  8,575
  10,037
  11,521
  12,979
  14,366
  15,640
  16,761
  17,084
  17,814
  19,251
  20,745
  22,204
  23,629
  25,021
  26,385
  27,725
  29,049
  30,366
  31,683
  33,010
  34,357
  35,731
  37,142
  38,599
  40,111
  41,686
  43,331
Total cash flow (excl. dividends), $m
  4,331
  5,396
  6,614
  7,989
  9,505
  11,141
  12,874
  14,677
  16,525
  18,396
  19,426
  21,283
  24,045
  27,060
  30,238
  33,573
  37,062
  40,704
  44,498
  48,444
  52,545
  56,803
  61,224
  65,811
  70,573
  75,517
  80,652
  85,986
  91,532
  97,299
Retained Cash Flow (-), $m
  -2,559
  -3,337
  -4,229
  -5,237
  -6,348
  -7,547
  -8,816
  -10,137
  -11,491
  -12,862
  -14,234
  -15,595
  -16,935
  -18,249
  -19,533
  -20,787
  -22,011
  -23,211
  -24,390
  -25,555
  -26,713
  -27,872
  -29,039
  -30,223
  -31,432
  -32,674
  -33,956
  -35,286
  -36,671
  -38,118
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
  1,772
  2,059
  2,385
  2,752
  3,157
  3,595
  4,058
  4,540
  5,034
  5,534
  5,192
  5,689
  7,109
  8,811
  10,704
  12,786
  15,051
  17,494
  20,109
  22,890
  25,832
  28,931
  32,184
  35,588
  39,141
  42,843
  46,696
  50,701
  54,861
  59,181
Discount rate, %
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
  1,652
  1,776
  1,890
  1,989
  2,064
  2,106
  2,111
  2,076
  2,002
  1,893
  1,509
  1,386
  1,433
  1,448
  1,413
  1,333
  1,219
  1,080
  929
  775
  627
  493
  375
  277
  198
  137
  92
  59
  37
  22
Current shareholders' claim on cash, %
  89.0
  80.8
  74.6
  69.9
  66.3
  63.5
  61.3
  59.7
  58.6
  57.8
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5

International Flavors & Fragrances Inc. creates, manufactures and supplies flavors and fragrances (including cosmetic active ingredients) used to impart or improve flavor or fragrance in a range of consumer products. The Company operates in two segments: Flavors and Fragrances. The Flavors segment offers flavor compounds that are sold to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food and sweet products. The Fragrances segment offers fragrance compounds and fragrance ingredients. Its cosmetic active ingredients consist of active and functional ingredients, botanicals and delivery systems to support its customers' cosmetic and personal care product lines. Its products are sold to manufacturers of perfumes and cosmetics, hair and other personal care products, soaps and detergents, meat and other processed foods, beverages, snacks and savory foods, sweet and baked goods, and pharmaceutical and oral care products, among others.

FINANCIAL RATIOS  of  International Flavors & Fragrances, Inc. (IFF)

Valuation Ratios
P/E Ratio 26.6
Price to Sales 3.5
Price to Book 6.6
Price to Tangible Book
Price to Cash Flow 20.1
Price to Free Cash Flow 26.3
Growth Rates
Sales Growth Rate 3.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 24.8%
Cap. Spend. - 3 Yr. Gr. Rate -1.2%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 65.6%
Total Debt to Equity 81.5%
Interest Coverage 11
Management Effectiveness
Return On Assets 11.5%
Ret/ On Assets - 3 Yr. Avg. 12.5%
Return On Total Capital 14.4%
Ret/ On T. Cap. - 3 Yr. Avg. 16%
Return On Equity 25.2%
Return On Equity - 3 Yr. Avg. 26.7%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 44.9%
Gross Margin - 3 Yr. Avg. 44.6%
EBITDA Margin 21.7%
EBITDA Margin - 3 Yr. Avg. 22.1%
Operating Margin 18.2%
Oper. Margin - 3 Yr. Avg. 18.9%
Pre-Tax Margin 16.8%
Pre-Tax Margin - 3 Yr. Avg. 17.5%
Net Profit Margin 13%
Net Profit Margin - 3 Yr. Avg. 13.4%
Effective Tax Rate 22.7%
Eff/ Tax Rate - 3 Yr. Avg. 23.1%
Payout Ratio 45.7%

IFF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IFF stock intrinsic value calculation we used $3978 million for the last fiscal year's total revenue generated by International Flavors & Fragrances, Inc.. The default revenue input number comes from 0001 income statement of International Flavors & Fragrances, Inc.. 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 IFF stock valuation model: a) initial revenue growth rate of 42.6% 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 7.3%, whose default value for IFF is calculated based on our internal credit rating of International Flavors & Fragrances, Inc., 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 International Flavors & Fragrances, Inc..
    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 IFF stock the variable cost ratio is equal to 83.7%.

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 IFF 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 International Flavors & Fragrances, Inc..

Corporate tax rate of 27% is the nominal tax rate for International Flavors & Fragrances, Inc.. 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 IFF 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 IFF are equal to 89.4%.

Life of production assets of 34.8 years is the average useful life of capital assets used in International Flavors & Fragrances, Inc. 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 IFF is equal to 30.5%. 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 - $6032.951 million for International Flavors & Fragrances, Inc. - 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 106.670 million for International Flavors & Fragrances, Inc. 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 International Flavors & Fragrances, Inc. at the current share price and the inputted number of shares is $14.5 billion.

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