Intrinsic value of Johnson Controls International plc - JCI

Previous Close

$36.75

  Intrinsic Value

$46.43

stock screener

  Rating & Target

buy

+26%

Previous close

$36.75

 
Intrinsic value

$46.43

 
Up/down potential

+26%

 
Rating

buy

We calculate the intrinsic value of JCI 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 33.4

 

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, %
  3.00
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
Revenue, $m
  32,342
  33,377
  34,505
  35,727
  37,045
  38,460
  39,974
  41,590
  43,311
  45,141
  47,084
  49,142
  51,322
  53,627
  56,063
  58,635
  61,350
  64,213
  67,231
  70,411
  73,760
  77,286
  80,999
  84,905
  89,015
  93,338
  97,884
  102,664
  107,690
  112,973
Variable operating expenses, $m
  24,539
  25,245
  26,015
  26,850
  27,749
  28,715
  29,749
  30,853
  32,028
  33,277
  32,147
  33,552
  35,040
  36,614
  38,278
  40,034
  41,887
  43,842
  45,902
  48,073
  50,360
  52,768
  55,302
  57,970
  60,776
  63,727
  66,831
  70,095
  73,526
  77,133
Fixed operating expenses, $m
  4,580
  4,680
  4,783
  4,889
  4,996
  5,106
  5,218
  5,333
  5,450
  5,570
  5,693
  5,818
  5,946
  6,077
  6,211
  6,347
  6,487
  6,630
  6,776
  6,925
  7,077
  7,233
  7,392
  7,554
  7,721
  7,890
  8,064
  8,241
  8,423
  8,608
Total operating expenses, $m
  29,119
  29,925
  30,798
  31,739
  32,745
  33,821
  34,967
  36,186
  37,478
  38,847
  37,840
  39,370
  40,986
  42,691
  44,489
  46,381
  48,374
  50,472
  52,678
  54,998
  57,437
  60,001
  62,694
  65,524
  68,497
  71,617
  74,895
  78,336
  81,949
  85,741
Operating income, $m
  3,224
  3,451
  3,706
  3,989
  4,299
  4,638
  5,006
  5,404
  5,833
  6,294
  9,244
  9,772
  10,335
  10,936
  11,575
  12,254
  12,976
  13,741
  14,553
  15,413
  16,323
  17,286
  18,304
  19,381
  20,519
  21,720
  22,989
  24,328
  25,741
  27,232
EBITDA, $m
  6,328
  6,576
  6,853
  7,160
  7,497
  7,864
  8,263
  8,693
  9,156
  9,653
  10,186
  10,755
  11,362
  12,008
  12,696
  13,427
  14,203
  15,026
  15,897
  16,821
  17,798
  18,832
  19,924
  21,079
  22,299
  23,587
  24,947
  26,381
  27,895
  29,491
Interest expense (income), $m
  0
  590
  635
  685
  738
  796
  859
  926
  998
  1,075
  1,157
  1,244
  1,336
  1,434
  1,538
  1,647
  1,763
  1,885
  2,014
  2,150
  2,294
  2,445
  2,604
  2,772
  2,948
  3,134
  3,329
  3,535
  3,751
  3,978
  4,217
Earnings before tax, $m
  2,634
  2,816
  3,022
  3,251
  3,503
  3,779
  4,080
  4,406
  4,758
  5,137
  8,000
  8,436
  8,901
  9,398
  9,928
  10,491
  11,091
  11,727
  12,403
  13,119
  13,878
  14,682
  15,533
  16,433
  17,385
  18,391
  19,454
  20,577
  21,763
  23,015
Tax expense, $m
  711
  760
  816
  878
  946
  1,020
  1,102
  1,190
  1,285
  1,387
  2,160
  2,278
  2,403
  2,538
  2,681
  2,833
  2,994
  3,166
  3,349
  3,542
  3,747
  3,964
  4,194
  4,437
  4,694
  4,966
  5,253
  5,556
  5,876
  6,214
Net income, $m
  1,923
  2,056
  2,206
  2,373
  2,557
  2,759
  2,978
  3,216
  3,473
  3,750
  5,840
  6,158
  6,498
  6,861
  7,247
  7,659
  8,096
  8,561
  9,054
  9,577
  10,131
  10,718
  11,339
  11,996
  12,691
  13,425
  14,202
  15,021
  15,887
  16,801

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
  50,299
  51,908
  53,663
  55,563
  57,612
  59,813
  62,168
  64,681
  67,358
  70,204
  73,225
  76,427
  79,816
  83,401
  87,190
  91,190
  95,412
  99,864
  104,558
  109,503
  114,712
  120,197
  125,970
  132,045
  138,437
  145,160
  152,230
  159,664
  167,481
  175,697
Adjusted assets (=assets-cash), $m
  50,299
  51,908
  53,663
  55,563
  57,612
  59,813
  62,168
  64,681
  67,358
  70,204
  73,225
  76,427
  79,816
  83,401
  87,190
  91,190
  95,412
  99,864
  104,558
  109,503
  114,712
  120,197
  125,970
  132,045
  138,437
  145,160
  152,230
  159,664
  167,481
  175,697
Revenue / Adjusted assets
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
Average production assets, $m
  17,982
  18,558
  19,185
  19,864
  20,597
  21,384
  22,225
  23,124
  24,081
  25,099
  26,179
  27,323
  28,535
  29,817
  31,171
  32,601
  34,111
  35,702
  37,380
  39,148
  41,010
  42,971
  45,035
  47,207
  49,492
  51,896
  54,423
  57,081
  59,876
  62,813
Working capital, $m
  1,746
  1,802
  1,863
  1,929
  2,000
  2,077
  2,159
  2,246
  2,339
  2,438
  2,543
  2,654
  2,771
  2,896
  3,027
  3,166
  3,313
  3,467
  3,630
  3,802
  3,983
  4,173
  4,374
  4,585
  4,807
  5,040
  5,286
  5,544
  5,815
  6,101
Total debt, $m
  11,766
  12,677
  13,670
  14,746
  15,906
  17,151
  18,484
  19,907
  21,422
  23,033
  24,742
  26,555
  28,473
  30,502
  32,647
  34,911
  37,300
  39,820
  42,477
  45,276
  48,224
  51,328
  54,596
  58,034
  61,652
  65,457
  69,459
  73,667
  78,091
  82,741
Total liabilities, $m
  28,469
  29,380
  30,373
  31,449
  32,609
  33,854
  35,187
  36,610
  38,125
  39,736
  41,445
  43,258
  45,176
  47,205
  49,350
  51,614
  54,003
  56,523
  59,180
  61,979
  64,927
  68,031
  71,299
  74,737
  78,355
  82,160
  86,162
  90,370
  94,794
  99,444
Total equity, $m
  21,830
  22,528
  23,290
  24,115
  25,004
  25,959
  26,981
  28,072
  29,234
  30,469
  31,780
  33,169
  34,640
  36,196
  37,840
  39,577
  41,409
  43,341
  45,378
  47,524
  49,785
  52,165
  54,671
  57,308
  60,081
  62,999
  66,068
  69,294
  72,687
  76,252
Total liabilities and equity, $m
  50,299
  51,908
  53,663
  55,564
  57,613
  59,813
  62,168
  64,682
  67,359
  70,205
  73,225
  76,427
  79,816
  83,401
  87,190
  91,191
  95,412
  99,864
  104,558
  109,503
  114,712
  120,196
  125,970
  132,045
  138,436
  145,159
  152,230
  159,664
  167,481
  175,696
Debt-to-equity ratio
  0.540
  0.560
  0.590
  0.610
  0.640
  0.660
  0.690
  0.710
  0.730
  0.760
  0.780
  0.800
  0.820
  0.840
  0.860
  0.880
  0.900
  0.920
  0.940
  0.950
  0.970
  0.980
  1.000
  1.010
  1.030
  1.040
  1.050
  1.060
  1.070
  1.090
Adjusted equity ratio
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434
  0.434

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,923
  2,056
  2,206
  2,373
  2,557
  2,759
  2,978
  3,216
  3,473
  3,750
  5,840
  6,158
  6,498
  6,861
  7,247
  7,659
  8,096
  8,561
  9,054
  9,577
  10,131
  10,718
  11,339
  11,996
  12,691
  13,425
  14,202
  15,021
  15,887
  16,801
Depreciation, amort., depletion, $m
  3,104
  3,124
  3,147
  3,171
  3,198
  3,226
  3,256
  3,289
  3,323
  3,360
  942
  983
  1,026
  1,073
  1,121
  1,173
  1,227
  1,284
  1,345
  1,408
  1,475
  1,546
  1,620
  1,698
  1,780
  1,867
  1,958
  2,053
  2,154
  2,259
Funds from operations, $m
  5,026
  5,180
  5,353
  5,544
  5,755
  5,985
  6,235
  6,505
  6,796
  7,110
  6,782
  7,141
  7,524
  7,933
  8,369
  8,831
  9,323
  9,845
  10,399
  10,985
  11,606
  12,263
  12,959
  13,694
  14,471
  15,292
  16,159
  17,075
  18,041
  19,060
Change in working capital, $m
  51
  56
  61
  66
  71
  76
  82
  87
  93
  99
  105
  111
  118
  124
  132
  139
  147
  155
  163
  172
  181
  190
  200
  211
  222
  233
  245
  258
  271
  285
Cash from operations, $m
  4,975
  5,124
  5,292
  5,478
  5,684
  5,908
  6,153
  6,418
  6,703
  7,011
  6,677
  7,030
  7,407
  7,809
  8,237
  8,693
  9,177
  9,690
  10,236
  10,813
  11,425
  12,073
  12,758
  13,483
  14,249
  15,059
  15,914
  16,817
  17,769
  18,775
Maintenance CAPEX, $m
  -628
  -647
  -668
  -690
  -715
  -741
  -769
  -799
  -832
  -866
  -903
  -942
  -983
  -1,026
  -1,073
  -1,121
  -1,173
  -1,227
  -1,284
  -1,345
  -1,408
  -1,475
  -1,546
  -1,620
  -1,698
  -1,780
  -1,867
  -1,958
  -2,053
  -2,154
New CAPEX, $m
  -522
  -575
  -627
  -680
  -733
  -787
  -842
  -899
  -957
  -1,017
  -1,080
  -1,145
  -1,212
  -1,282
  -1,354
  -1,430
  -1,509
  -1,592
  -1,678
  -1,768
  -1,862
  -1,961
  -2,064
  -2,172
  -2,285
  -2,404
  -2,528
  -2,658
  -2,794
  -2,937
Cash from investing activities, $m
  -1,150
  -1,222
  -1,295
  -1,370
  -1,448
  -1,528
  -1,611
  -1,698
  -1,789
  -1,883
  -1,983
  -2,087
  -2,195
  -2,308
  -2,427
  -2,551
  -2,682
  -2,819
  -2,962
  -3,113
  -3,270
  -3,436
  -3,610
  -3,792
  -3,983
  -4,184
  -4,395
  -4,616
  -4,847
  -5,091
Free cash flow, $m
  3,825
  3,902
  3,997
  4,109
  4,237
  4,381
  4,542
  4,720
  4,914
  5,127
  4,694
  4,944
  5,212
  5,501
  5,810
  6,141
  6,495
  6,872
  7,273
  7,701
  8,155
  8,637
  9,149
  9,691
  10,266
  10,875
  11,519
  12,201
  12,922
  13,684
Issuance/(repayment) of debt, $m
  836
  911
  993
  1,076
  1,160
  1,245
  1,333
  1,423
  1,515
  1,611
  1,710
  1,812
  1,919
  2,029
  2,144
  2,264
  2,389
  2,520
  2,656
  2,799
  2,948
  3,104
  3,268
  3,439
  3,618
  3,805
  4,002
  4,208
  4,424
  4,650
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  
  836
  911
  993
  1,076
  1,160
  1,245
  1,333
  1,423
  1,515
  1,611
  1,710
  1,812
  1,919
  2,029
  2,144
  2,264
  2,389
  2,520
  2,656
  2,799
  2,948
  3,104
  3,268
  3,439
  3,618
  3,805
  4,002
  4,208
  4,424
  4,650
Total cash flow (excl. dividends), $m
  4,661
  4,813
  4,990
  5,185
  5,396
  5,626
  5,875
  6,142
  6,430
  6,738
  6,404
  6,756
  7,131
  7,530
  7,954
  8,405
  8,884
  9,392
  9,930
  10,500
  11,103
  11,741
  12,416
  13,130
  13,884
  14,680
  15,521
  16,409
  17,346
  18,334
Retained Cash Flow (-), $m
  -666
  -699
  -761
  -825
  -889
  -955
  -1,022
  -1,091
  -1,162
  -1,235
  -1,311
  -1,390
  -1,471
  -1,556
  -1,644
  -1,736
  -1,832
  -1,932
  -2,037
  -2,146
  -2,261
  -2,380
  -2,506
  -2,637
  -2,774
  -2,918
  -3,069
  -3,227
  -3,392
  -3,566
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
  3,995
  4,114
  4,229
  4,360
  4,507
  4,671
  4,853
  5,051
  5,268
  5,503
  5,093
  5,366
  5,660
  5,974
  6,310
  6,669
  7,052
  7,459
  7,893
  8,353
  8,842
  9,361
  9,911
  10,493
  11,110
  11,762
  12,453
  13,182
  13,954
  14,768
Discount rate, %
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
  3,762
  3,627
  3,468
  3,304
  3,134
  2,958
  2,776
  2,587
  2,394
  2,197
  1,767
  1,601
  1,435
  1,271
  1,111
  959
  815
  682
  562
  455
  361
  281
  214
  160
  117
  83
  57
  39
  25
  16
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

Johnson Controls International plc operates as a diversified technology and multi industrial company worldwide. The company operates through Buildings and Power Solutions segments. It designs, produces, markets, and installs heating, ventilating, and air conditioning (HVAC) systems, building management systems, controls, and security and mechanical equipment. The company also provides residential air conditioning and heating systems, and industrial refrigeration products, as well as technical and energy management consulting services. In addition, it designs, sells, installs, services, and monitors electronic security systems, and fire detection and suppression systems; and manufactures and sells intrusion security products, anti-theft devices, breathing apparatus, and access control and video management systems for commercial, industrial, retail, residential, small business, institutional, and governmental customers. Further, the company produces and supplies lead-acid automotive batteries for passenger cars, light trucks, and utility vehicles, as well as advanced battery technologies to power start-stop, hybrid, and electric vehicles. It offers its lead-acid automotive batteries to automotive original equipment manufacturers and the general vehicle battery aftermarket. The company was formerly known as Johnson Controls, Inc. and changed its name to Johnson Controls International plc in September 2016. Johnson Controls International plc was founded in 1885 and is headquartered in Cork, Ireland.

FINANCIAL RATIOS  of  Johnson Controls International plc (JCI)

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%

JCI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JCI stock intrinsic value calculation we used $31400 million for the last fiscal year's total revenue generated by Johnson Controls International plc. The default revenue input number comes from 0001 income statement of Johnson Controls International plc. 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 JCI stock valuation model: a) initial revenue growth rate of 3% 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 6.2%, whose default value for JCI is calculated based on our internal credit rating of Johnson Controls International plc, 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 Johnson Controls International plc.
    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 JCI stock the variable cost ratio is equal to 76.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4481 million in the base year in the intrinsic value calculation for JCI 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 Johnson Controls International plc.

Corporate tax rate of 27% is the nominal tax rate for Johnson Controls International plc. 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 JCI 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 JCI are equal to 55.6%.

Life of production assets of 27.8 years is the average useful life of capital assets used in Johnson Controls International plc 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 JCI is equal to 5.4%. 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 - $21164 million for Johnson Controls International plc - 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 909.852 million for Johnson Controls International plc 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 Johnson Controls International plc at the current share price and the inputted number of shares is $33.4 billion.

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