Intrinsic value of International Paper Company - IP

Previous Close

$39.43

  Intrinsic Value

$59.26

stock screener

  Rating & Target

str. buy

+50%

Previous close

$39.43

 
Intrinsic value

$59.26

 
Up/down potential

+50%

 
Rating

str. buy

We calculate the intrinsic value of IP 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 15.8

 

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, %
  4.20
  4.28
  4.35
  4.42
  4.48
  4.53
  4.57
  4.62
  4.66
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
Revenue, $m
  24,285
  25,324
  26,426
  27,594
  28,828
  30,134
  31,512
  32,967
  34,502
  36,120
  37,825
  39,622
  41,513
  43,505
  45,600
  47,805
  50,125
  52,564
  55,129
  57,826
  60,661
  63,641
  66,773
  70,064
  73,523
  77,156
  80,974
  84,985
  89,199
  93,625
Variable operating expenses, $m
  9,044
  9,417
  9,812
  10,230
  10,673
  11,141
  11,635
  12,157
  12,707
  13,287
  13,561
  14,205
  14,884
  15,597
  16,349
  17,139
  17,971
  18,845
  19,765
  20,732
  21,748
  22,817
  23,940
  25,120
  26,360
  27,662
  29,031
  30,469
  31,980
  33,567
Fixed operating expenses, $m
  12,200
  12,468
  12,742
  13,023
  13,309
  13,602
  13,901
  14,207
  14,520
  14,839
  15,165
  15,499
  15,840
  16,189
  16,545
  16,909
  17,281
  17,661
  18,049
  18,446
  18,852
  19,267
  19,691
  20,124
  20,567
  21,019
  21,482
  21,954
  22,437
  22,931
Total operating expenses, $m
  21,244
  21,885
  22,554
  23,253
  23,982
  24,743
  25,536
  26,364
  27,227
  28,126
  28,726
  29,704
  30,724
  31,786
  32,894
  34,048
  35,252
  36,506
  37,814
  39,178
  40,600
  42,084
  43,631
  45,244
  46,927
  48,681
  50,513
  52,423
  54,417
  56,498
Operating income, $m
  3,041
  3,440
  3,872
  4,341
  4,846
  5,391
  5,976
  6,603
  7,275
  7,994
  9,099
  9,917
  10,790
  11,719
  12,707
  13,757
  14,873
  16,058
  17,315
  18,647
  20,060
  21,557
  23,142
  24,820
  26,596
  28,475
  30,461
  32,562
  34,782
  37,128
EBITDA, $m
  4,623
  5,075
  5,564
  6,092
  6,661
  7,272
  7,928
  8,630
  9,381
  10,182
  11,037
  11,948
  12,917
  13,948
  15,044
  16,207
  17,442
  18,752
  20,140
  21,611
  23,169
  24,819
  26,564
  28,411
  30,364
  32,429
  34,611
  36,917
  39,353
  41,926
Interest expense (income), $m
  682
  915
  976
  1,039
  1,106
  1,177
  1,252
  1,331
  1,415
  1,503
  1,597
  1,695
  1,798
  1,908
  2,023
  2,144
  2,271
  2,405
  2,546
  2,694
  2,850
  3,014
  3,186
  3,367
  3,558
  3,758
  3,968
  4,189
  4,421
  4,664
  4,920
Earnings before tax, $m
  2,126
  2,464
  2,833
  3,235
  3,670
  4,139
  4,645
  5,188
  5,772
  6,397
  7,404
  8,119
  8,882
  9,696
  10,563
  11,486
  12,468
  13,512
  14,620
  15,797
  17,046
  18,371
  19,775
  21,263
  22,839
  24,507
  26,273
  28,141
  30,117
  32,207
Tax expense, $m
  574
  665
  765
  873
  991
  1,118
  1,254
  1,401
  1,558
  1,727
  1,999
  2,192
  2,398
  2,618
  2,852
  3,101
  3,366
  3,648
  3,948
  4,265
  4,603
  4,960
  5,339
  5,741
  6,166
  6,617
  7,094
  7,598
  8,132
  8,696
Net income, $m
  1,552
  1,799
  2,068
  2,361
  2,679
  3,021
  3,391
  3,788
  4,214
  4,670
  5,405
  5,927
  6,484
  7,078
  7,711
  8,385
  9,102
  9,864
  10,673
  11,532
  12,444
  13,411
  14,436
  15,522
  16,672
  17,890
  19,179
  20,543
  21,986
  23,511

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
  34,993
  36,490
  38,078
  39,760
  41,539
  43,420
  45,407
  47,503
  49,715
  52,046
  54,504
  57,092
  59,818
  62,687
  65,706
  68,883
  72,226
  75,740
  79,437
  83,323
  87,408
  91,701
  96,214
  100,957
  105,940
  111,176
  116,678
  122,457
  128,529
  134,907
Adjusted assets (=assets-cash), $m
  34,993
  36,490
  38,078
  39,760
  41,539
  43,420
  45,407
  47,503
  49,715
  52,046
  54,504
  57,092
  59,818
  62,687
  65,706
  68,883
  72,226
  75,740
  79,437
  83,323
  87,408
  91,701
  96,214
  100,957
  105,940
  111,176
  116,678
  122,457
  128,529
  134,907
Revenue / Adjusted assets
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
Average production assets, $m
  15,931
  16,613
  17,336
  18,101
  18,911
  19,768
  20,672
  21,627
  22,633
  23,695
  24,814
  25,992
  27,233
  28,539
  29,914
  31,360
  32,882
  34,482
  36,165
  37,934
  39,794
  41,748
  43,803
  45,962
  48,231
  50,615
  53,119
  55,750
  58,515
  61,418
Working capital, $m
  2,453
  2,558
  2,669
  2,787
  2,912
  3,043
  3,183
  3,330
  3,485
  3,648
  3,820
  4,002
  4,193
  4,394
  4,606
  4,828
  5,063
  5,309
  5,568
  5,840
  6,127
  6,428
  6,744
  7,076
  7,426
  7,793
  8,178
  8,584
  9,009
  9,456
Total debt, $m
  18,067
  19,237
  20,477
  21,791
  23,180
  24,649
  26,201
  27,838
  29,565
  31,386
  33,305
  35,327
  37,456
  39,696
  42,055
  44,536
  47,146
  49,891
  52,778
  55,813
  59,003
  62,357
  65,881
  69,585
  73,477
  77,567
  81,863
  86,377
  91,119
  96,100
Total liabilities, $m
  27,329
  28,499
  29,739
  31,053
  32,442
  33,911
  35,463
  37,100
  38,827
  40,648
  42,567
  44,589
  46,718
  48,958
  51,317
  53,798
  56,408
  59,153
  62,040
  65,075
  68,265
  71,619
  75,143
  78,847
  82,739
  86,829
  91,125
  95,639
  100,381
  105,362
Total equity, $m
  7,663
  7,991
  8,339
  8,707
  9,097
  9,509
  9,944
  10,403
  10,888
  11,398
  11,936
  12,503
  13,100
  13,728
  14,390
  15,085
  15,817
  16,587
  17,397
  18,248
  19,142
  20,083
  21,071
  22,110
  23,201
  24,348
  25,552
  26,818
  28,148
  29,545
Total liabilities and equity, $m
  34,992
  36,490
  38,078
  39,760
  41,539
  43,420
  45,407
  47,503
  49,715
  52,046
  54,503
  57,092
  59,818
  62,686
  65,707
  68,883
  72,225
  75,740
  79,437
  83,323
  87,407
  91,702
  96,214
  100,957
  105,940
  111,177
  116,677
  122,457
  128,529
  134,907
Debt-to-equity ratio
  2.360
  2.410
  2.460
  2.500
  2.550
  2.590
  2.630
  2.680
  2.720
  2.750
  2.790
  2.830
  2.860
  2.890
  2.920
  2.950
  2.980
  3.010
  3.030
  3.060
  3.080
  3.110
  3.130
  3.150
  3.170
  3.190
  3.200
  3.220
  3.240
  3.250
Adjusted equity ratio
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,552
  1,799
  2,068
  2,361
  2,679
  3,021
  3,391
  3,788
  4,214
  4,670
  5,405
  5,927
  6,484
  7,078
  7,711
  8,385
  9,102
  9,864
  10,673
  11,532
  12,444
  13,411
  14,436
  15,522
  16,672
  17,890
  19,179
  20,543
  21,986
  23,511
Depreciation, amort., depletion, $m
  1,582
  1,635
  1,692
  1,752
  1,815
  1,882
  1,952
  2,027
  2,106
  2,189
  1,939
  2,031
  2,128
  2,230
  2,337
  2,450
  2,569
  2,694
  2,825
  2,964
  3,109
  3,262
  3,422
  3,591
  3,768
  3,954
  4,150
  4,356
  4,571
  4,798
Funds from operations, $m
  3,134
  3,434
  3,760
  4,113
  4,494
  4,903
  5,343
  5,815
  6,319
  6,859
  7,343
  7,957
  8,612
  9,308
  10,048
  10,835
  11,671
  12,558
  13,498
  14,496
  15,553
  16,672
  17,858
  19,113
  20,440
  21,844
  23,329
  24,899
  26,557
  28,310
Change in working capital, $m
  99
  105
  111
  118
  125
  132
  139
  147
  155
  163
  172
  181
  191
  201
  212
  223
  234
  246
  259
  272
  286
  301
  316
  332
  349
  367
  386
  405
  426
  447
Cash from operations, $m
  3,035
  3,329
  3,649
  3,995
  4,369
  4,771
  5,204
  5,668
  6,164
  6,695
  7,171
  7,776
  8,420
  9,107
  9,836
  10,612
  11,436
  12,311
  13,239
  14,223
  15,266
  16,371
  17,542
  18,780
  20,091
  21,477
  22,943
  24,493
  26,132
  27,862
Maintenance CAPEX, $m
  -1,194
  -1,245
  -1,298
  -1,354
  -1,414
  -1,477
  -1,544
  -1,615
  -1,690
  -1,768
  -1,851
  -1,939
  -2,031
  -2,128
  -2,230
  -2,337
  -2,450
  -2,569
  -2,694
  -2,825
  -2,964
  -3,109
  -3,262
  -3,422
  -3,591
  -3,768
  -3,954
  -4,150
  -4,356
  -4,571
New CAPEX, $m
  -644
  -682
  -723
  -766
  -810
  -856
  -904
  -955
  -1,007
  -1,062
  -1,119
  -1,178
  -1,241
  -1,306
  -1,375
  -1,446
  -1,522
  -1,600
  -1,683
  -1,769
  -1,860
  -1,955
  -2,055
  -2,159
  -2,269
  -2,384
  -2,505
  -2,631
  -2,764
  -2,904
Cash from investing activities, $m
  -1,838
  -1,927
  -2,021
  -2,120
  -2,224
  -2,333
  -2,448
  -2,570
  -2,697
  -2,830
  -2,970
  -3,117
  -3,272
  -3,434
  -3,605
  -3,783
  -3,972
  -4,169
  -4,377
  -4,594
  -4,824
  -5,064
  -5,317
  -5,581
  -5,860
  -6,152
  -6,459
  -6,781
  -7,120
  -7,475
Free cash flow, $m
  1,197
  1,402
  1,628
  1,875
  2,145
  2,438
  2,755
  3,098
  3,468
  3,865
  4,201
  4,659
  5,149
  5,673
  6,232
  6,829
  7,465
  8,142
  8,863
  9,629
  10,443
  11,308
  12,225
  13,199
  14,231
  15,325
  16,485
  17,712
  19,012
  20,387
Issuance/(repayment) of debt, $m
  1,115
  1,170
  1,240
  1,314
  1,390
  1,469
  1,551
  1,637
  1,727
  1,821
  1,919
  2,022
  2,129
  2,241
  2,358
  2,481
  2,610
  2,745
  2,887
  3,035
  3,190
  3,354
  3,525
  3,704
  3,892
  4,089
  4,297
  4,514
  4,742
  4,981
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  1,115
  1,170
  1,240
  1,314
  1,390
  1,469
  1,551
  1,637
  1,727
  1,821
  1,919
  2,022
  2,129
  2,241
  2,358
  2,481
  2,610
  2,745
  2,887
  3,035
  3,190
  3,354
  3,525
  3,704
  3,892
  4,089
  4,297
  4,514
  4,742
  4,981
Total cash flow (excl. dividends), $m
  2,312
  2,572
  2,868
  3,189
  3,534
  3,907
  4,307
  4,736
  5,195
  5,686
  6,120
  6,681
  7,278
  7,914
  8,590
  9,310
  10,075
  10,887
  11,749
  12,664
  13,633
  14,661
  15,750
  16,903
  18,123
  19,415
  20,781
  22,226
  23,754
  25,369
Retained Cash Flow (-), $m
  -301
  -328
  -348
  -368
  -390
  -412
  -435
  -459
  -484
  -511
  -538
  -567
  -597
  -628
  -661
  -696
  -732
  -770
  -809
  -851
  -895
  -940
  -988
  -1,039
  -1,091
  -1,147
  -1,205
  -1,266
  -1,330
  -1,397
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  2,011
  2,244
  2,520
  2,820
  3,145
  3,495
  3,871
  4,276
  4,711
  5,176
  5,582
  6,114
  6,681
  7,285
  7,929
  8,614
  9,343
  10,117
  10,940
  11,813
  12,739
  13,721
  14,762
  15,864
  17,032
  18,268
  19,576
  20,960
  22,424
  23,972
Discount rate, %
  9.30
  9.77
  10.25
  10.77
  11.30
  11.87
  12.46
  13.09
  13.74
  14.43
  15.15
  15.91
  16.70
  17.54
  18.41
  19.33
  20.30
  21.32
  22.38
  23.50
  24.68
  25.91
  27.20
  28.57
  29.99
  31.49
  33.07
  34.72
  36.46
  38.28
PV of cash for distribution, $m
  1,840
  1,863
  1,881
  1,874
  1,841
  1,783
  1,701
  1,599
  1,479
  1,345
  1,183
  1,040
  897
  759
  628
  509
  404
  312
  236
  173
  124
  86
  58
  38
  24
  15
  9
  5
  3
  1
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

International Paper Company is a paper and packaging company with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia, Africa and the Middle East. The Company's segments include Industrial Packaging, Global Cellulose Fibers, Printing Papers and Consumer Packaging. The Company is a manufacturer of containerboard in the United States. Its products include linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft. The Company's cellulose fibers product portfolio includes fluff, market and specialty pulps. The Company is a producer of printing and writing papers. The products in Printing Papers segment include uncoated papers. The Company is a producer of solid bleached sulfate board. As of December 31, 2016, the Company operated 29 pulp, paper and packaging mills, 170 converting and packaging plants, 16 recycling plants and three bag facilities in the United States.

FINANCIAL RATIOS  of  International Paper Company (IP)

Valuation Ratios
P/E Ratio 19.6
Price to Sales 0.8
Price to Book 4.1
Price to Tangible Book
Price to Cash Flow 7.1
Price to Free Cash Flow 15.7
Growth Rates
Sales Growth Rate -5.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -20%
Cap. Spend. - 3 Yr. Gr. Rate 2.4%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 255.1%
Total Debt to Equity 260.6%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.4%
Ret/ On Assets - 3 Yr. Avg. 4.3%
Return On Total Capital 6.3%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity 22%
Return On Equity - 3 Yr. Avg. 17.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 28.1%
Gross Margin - 3 Yr. Avg. 30%
EBITDA Margin 13.6%
EBITDA Margin - 3 Yr. Avg. 13.6%
Operating Margin 7%
Oper. Margin - 3 Yr. Avg. 7.4%
Pre-Tax Margin 4.5%
Pre-Tax Margin - 3 Yr. Avg. 4.6%
Net Profit Margin 4.3%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 25.8%
Eff/ Tax Rate - 3 Yr. Avg. 25.6%
Payout Ratio 81.1%

IP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IP stock intrinsic value calculation we used $23306 million for the last fiscal year's total revenue generated by International Paper Company. The default revenue input number comes from 0001 income statement of International Paper Company. 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 IP stock valuation model: a) initial revenue growth rate of 4.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.3%, whose default value for IP is calculated based on our internal credit rating of International Paper Company, 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 Paper Company.
    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 IP stock the variable cost ratio is equal to 37.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $11937 million in the base year in the intrinsic value calculation for IP 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 Paper Company.

Corporate tax rate of 27% is the nominal tax rate for International Paper Company. 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 IP 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 IP are equal to 65.6%.

Life of production assets of 12.8 years is the average useful life of capital assets used in International Paper Company 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 IP is equal to 10.1%. 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 - $7362 million for International Paper Company - 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 400.132 million for International Paper Company 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 Paper Company at the current share price and the inputted number of shares is $15.8 billion.

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