Intrinsic value of Keurig Dr Pepper Inc. - KDP

Previous Close

$28.63

  Intrinsic Value

$103.84

stock screener

  Rating & Target

str. buy

+263%

Previous close

$28.63

 
Intrinsic value

$103.84

 
Up/down potential

+263%

 
Rating

str. buy

We calculate the intrinsic value of KDP 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 40.3

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  11,907
  18,397
  27,512
  39,919
  56,320
  77,426
  103,929
  136,465
  175,598
  221,794
  275,418
  336,725
  405,867
  482,901
  567,806
  660,495
  760,834
  868,663
  983,806
  1,106,090
  1,235,356
  1,371,468
  1,514,324
  1,663,857
  1,820,046
  1,982,912
  2,152,522
  2,328,991
  2,512,478
  2,703,190
Variable operating expenses, $m
  6,804
  8,115
  9,957
  12,464
  15,778
  20,042
  25,397
  31,972
  39,878
  49,213
  55,650
  68,038
  82,008
  97,573
  114,729
  133,457
  153,732
  175,519
  198,785
  223,493
  249,612
  277,114
  305,979
  336,194
  367,753
  400,661
  434,932
  470,588
  507,663
  546,198
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
  6,804
  8,115
  9,957
  12,464
  15,778
  20,042
  25,397
  31,972
  39,878
  49,213
  55,650
  68,038
  82,008
  97,573
  114,729
  133,457
  153,732
  175,519
  198,785
  223,493
  249,612
  277,114
  305,979
  336,194
  367,753
  400,661
  434,932
  470,588
  507,663
  546,198
Operating income, $m
  5,103
  10,282
  17,555
  27,455
  40,542
  57,384
  78,532
  104,494
  135,719
  172,581
  219,768
  268,687
  323,859
  385,328
  453,077
  527,037
  607,103
  693,144
  785,022
  882,597
  985,744
  1,094,354
  1,208,344
  1,327,664
  1,452,294
  1,582,251
  1,717,591
  1,858,403
  2,004,815
  2,156,992
EBITDA, $m
  10,352
  15,994
  23,919
  34,706
  48,965
  67,315
  90,357
  118,644
  152,666
  192,830
  239,451
  292,752
  352,864
  419,839
  493,656
  574,241
  661,477
  755,225
  855,331
  961,646
  1,074,031
  1,192,368
  1,316,568
  1,446,574
  1,582,366
  1,723,963
  1,871,424
  2,024,848
  2,184,374
  2,350,180
Interest expense (income), $m
  0
  892
  1,747
  2,990
  4,735
  7,111
  10,252
  14,293
  19,368
  25,598
  33,092
  41,938
  52,206
  63,945
  77,185
  91,936
  108,194
  125,943
  145,157
  165,805
  187,853
  211,269
  236,022
  262,085
  289,440
  318,074
  347,982
  379,169
  411,647
  445,438
  480,574
Earnings before tax, $m
  4,212
  8,535
  14,566
  22,720
  33,431
  47,133
  64,238
  85,126
  110,121
  139,490
  177,830
  216,481
  259,913
  308,143
  361,141
  418,843
  481,160
  547,987
  619,217
  694,744
  774,475
  858,332
  946,259
  1,038,224
  1,134,220
  1,234,269
  1,338,422
  1,446,756
  1,559,377
  1,676,419
Tax expense, $m
  1,137
  2,304
  3,933
  6,134
  9,026
  12,726
  17,344
  22,984
  29,733
  37,662
  48,014
  58,450
  70,177
  83,198
  97,508
  113,088
  129,913
  147,957
  167,189
  187,581
  209,108
  231,750
  255,490
  280,320
  306,239
  333,253
  361,374
  390,624
  421,032
  452,633
Net income, $m
  3,074
  6,230
  10,633
  16,585
  24,405
  34,407
  46,894
  62,142
  80,388
  101,827
  129,816
  158,031
  189,737
  224,944
  263,633
  305,755
  351,247
  400,031
  452,028
  507,163
  565,367
  626,583
  690,769
  757,903
  827,980
  901,017
  977,048
  1,056,132
  1,138,345
  1,223,786

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
  78,337
  121,030
  181,001
  262,623
  370,524
  509,384
  683,743
  897,798
  1,155,248
  1,459,172
  1,811,960
  2,215,295
  2,670,175
  3,176,981
  3,735,566
  4,345,360
  5,005,490
  5,714,890
  6,472,411
  7,276,911
  8,127,343
  9,022,817
  9,962,656
  10,946,430
  11,973,988
  13,045,473
  14,161,330
  15,322,309
  16,529,464
  17,784,144
Adjusted assets (=assets-cash), $m
  78,337
  121,030
  181,001
  262,623
  370,524
  509,384
  683,743
  897,798
  1,155,248
  1,459,172
  1,811,960
  2,215,295
  2,670,175
  3,176,981
  3,735,566
  4,345,360
  5,005,490
  5,714,890
  6,472,411
  7,276,911
  8,127,343
  9,022,817
  9,962,656
  10,946,430
  11,973,988
  13,045,473
  14,161,330
  15,322,309
  16,529,464
  17,784,144
Revenue / Adjusted assets
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
Average production assets, $m
  25,529
  39,442
  58,986
  85,586
  120,749
  166,002
  222,824
  292,582
  376,481
  475,526
  590,496
  721,938
  870,178
  1,035,340
  1,217,376
  1,416,101
  1,631,229
  1,862,414
  2,109,281
  2,371,458
  2,648,604
  2,940,428
  3,246,710
  3,567,310
  3,902,179
  4,251,363
  4,615,007
  4,993,357
  5,386,754
  5,795,639
Working capital, $m
  -2,655
  -4,102
  -6,135
  -8,902
  -12,559
  -17,266
  -23,176
  -30,432
  -39,158
  -49,460
  -61,418
  -75,090
  -90,508
  -107,687
  -126,621
  -147,290
  -169,666
  -193,712
  -219,389
  -246,658
  -275,484
  -305,837
  -337,694
  -371,040
  -405,870
  -442,189
  -480,012
  -519,365
  -560,283
  -602,811
Total debt, $m
  32,355
  55,366
  87,691
  131,685
  189,843
  264,689
  358,668
  474,044
  612,809
  776,624
  966,777
  1,184,175
  1,429,355
  1,702,524
  2,003,601
  2,332,280
  2,688,090
  3,070,457
  3,478,760
  3,912,386
  4,370,769
  4,853,430
  5,360,002
  5,890,257
  6,444,111
  7,021,641
  7,623,088
  8,248,856
  8,899,512
  9,575,785
Total liabilities, $m
  42,224
  65,235
  97,560
  141,554
  199,712
  274,558
  368,537
  483,913
  622,678
  786,493
  976,646
  1,194,044
  1,439,224
  1,712,393
  2,013,470
  2,342,149
  2,697,959
  3,080,326
  3,488,629
  3,922,255
  4,380,638
  4,863,299
  5,369,871
  5,900,126
  6,453,980
  7,031,510
  7,632,957
  8,258,725
  8,909,381
  9,585,654
Total equity, $m
  36,113
  55,795
  83,441
  121,069
  170,811
  234,826
  315,205
  413,885
  532,569
  672,678
  835,314
  1,021,251
  1,230,951
  1,464,588
  1,722,096
  2,003,211
  2,307,531
  2,634,565
  2,983,781
  3,354,656
  3,746,705
  4,159,519
  4,592,784
  5,046,304
  5,520,008
  6,013,963
  6,528,373
  7,063,584
  7,620,083
  8,198,491
Total liabilities and equity, $m
  78,337
  121,030
  181,001
  262,623
  370,523
  509,384
  683,742
  897,798
  1,155,247
  1,459,171
  1,811,960
  2,215,295
  2,670,175
  3,176,981
  3,735,566
  4,345,360
  5,005,490
  5,714,891
  6,472,410
  7,276,911
  8,127,343
  9,022,818
  9,962,655
  10,946,430
  11,973,988
  13,045,473
  14,161,330
  15,322,309
  16,529,464
  17,784,145
Debt-to-equity ratio
  0.900
  0.990
  1.050
  1.090
  1.110
  1.130
  1.140
  1.150
  1.150
  1.150
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
Adjusted equity ratio
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,074
  6,230
  10,633
  16,585
  24,405
  34,407
  46,894
  62,142
  80,388
  101,827
  129,816
  158,031
  189,737
  224,944
  263,633
  305,755
  351,247
  400,031
  452,028
  507,163
  565,367
  626,583
  690,769
  757,903
  827,980
  901,017
  977,048
  1,056,132
  1,138,345
  1,223,786
Depreciation, amort., depletion, $m
  5,249
  5,713
  6,364
  7,251
  8,423
  9,931
  11,825
  14,151
  16,947
  20,249
  19,683
  24,065
  29,006
  34,511
  40,579
  47,203
  54,374
  62,080
  70,309
  79,049
  88,287
  98,014
  108,224
  118,910
  130,073
  141,712
  153,834
  166,445
  179,558
  193,188
Funds from operations, $m
  8,323
  11,943
  16,997
  23,836
  32,827
  44,338
  58,719
  76,292
  97,335
  122,076
  149,499
  182,096
  218,742
  259,455
  304,212
  352,959
  405,621
  462,111
  522,338
  586,212
  653,654
  724,597
  798,993
  876,814
  958,053
  1,042,729
  1,130,882
  1,222,577
  1,317,904
  1,416,974
Change in working capital, $m
  -996
  -1,447
  -2,033
  -2,767
  -3,657
  -4,707
  -5,910
  -7,256
  -8,727
  -10,302
  -11,958
  -13,671
  -15,419
  -17,179
  -18,934
  -20,670
  -22,376
  -24,046
  -25,677
  -27,269
  -28,826
  -30,353
  -31,857
  -33,346
  -34,830
  -36,319
  -37,823
  -39,353
  -40,918
  -42,529
Cash from operations, $m
  9,319
  13,390
  19,030
  26,603
  36,485
  49,045
  64,629
  83,548
  106,062
  132,378
  161,457
  195,767
  234,161
  276,634
  323,146
  373,628
  427,997
  486,157
  548,015
  613,481
  682,480
  754,950
  830,850
  910,160
  992,883
  1,079,048
  1,168,705
  1,261,930
  1,358,821
  1,459,502
Maintenance CAPEX, $m
  -532
  -851
  -1,315
  -1,966
  -2,853
  -4,025
  -5,533
  -7,427
  -9,753
  -12,549
  -15,851
  -19,683
  -24,065
  -29,006
  -34,511
  -40,579
  -47,203
  -54,374
  -62,080
  -70,309
  -79,049
  -88,287
  -98,014
  -108,224
  -118,910
  -130,073
  -141,712
  -153,834
  -166,445
  -179,558
New CAPEX, $m
  -9,571
  -13,913
  -19,544
  -26,600
  -35,163
  -45,253
  -56,821
  -69,758
  -83,900
  -99,045
  -114,970
  -131,442
  -148,240
  -165,162
  -182,036
  -198,725
  -215,128
  -231,185
  -246,867
  -262,177
  -277,146
  -291,824
  -306,282
  -320,600
  -334,869
  -349,184
  -363,644
  -378,349
  -393,397
  -408,885
Cash from investing activities, $m
  -10,103
  -14,764
  -20,859
  -28,566
  -38,016
  -49,278
  -62,354
  -77,185
  -93,653
  -111,594
  -130,821
  -151,125
  -172,305
  -194,168
  -216,547
  -239,304
  -262,331
  -285,559
  -308,947
  -332,486
  -356,195
  -380,111
  -404,296
  -428,824
  -453,779
  -479,257
  -505,356
  -532,183
  -559,842
  -588,443
Free cash flow, $m
  -784
  -1,374
  -1,829
  -1,963
  -1,531
  -233
  2,275
  6,362
  12,409
  20,783
  30,637
  44,642
  61,856
  82,466
  106,598
  134,324
  165,665
  200,598
  239,067
  280,995
  326,286
  374,839
  426,553
  481,336
  539,104
  599,791
  663,348
  729,747
  798,979
  871,058
Issuance/(repayment) of debt, $m
  15,839
  23,012
  32,324
  43,994
  58,158
  74,846
  93,979
  115,376
  138,765
  163,815
  190,153
  217,397
  245,180
  273,169
  301,077
  328,679
  355,810
  382,367
  408,304
  433,626
  458,383
  482,661
  506,573
  530,254
  553,854
  577,530
  601,447
  625,768
  650,656
  676,273
Issuance/(repurchase) of shares, $m
  10,506
  13,452
  17,014
  21,042
  25,337
  29,608
  33,485
  36,538
  38,296
  38,282
  32,819
  27,906
  19,963
  8,694
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  26,345
  36,464
  49,338
  65,036
  83,495
  104,454
  127,464
  151,914
  177,061
  202,097
  222,972
  245,303
  265,143
  281,863
  301,077
  328,679
  355,810
  382,367
  408,304
  433,626
  458,383
  482,661
  506,573
  530,254
  553,854
  577,530
  601,447
  625,768
  650,656
  676,273
Total cash flow (excl. dividends), $m
  25,560
  35,089
  47,509
  63,074
  81,964
  104,221
  129,739
  158,276
  189,471
  222,880
  253,609
  289,946
  327,000
  364,328
  407,675
  463,003
  521,475
  582,964
  647,371
  714,621
  784,669
  857,499
  933,126
  1,011,590
  1,092,958
  1,177,321
  1,264,795
  1,355,515
  1,449,635
  1,547,331
Retained Cash Flow (-), $m
  -13,580
  -19,682
  -27,646
  -37,628
  -49,742
  -64,015
  -80,379
  -98,679
  -118,684
  -140,109
  -162,635
  -185,937
  -209,700
  -233,638
  -257,507
  -281,115
  -304,320
  -327,034
  -349,217
  -370,875
  -392,049
  -412,814
  -433,265
  -453,520
  -473,704
  -493,955
  -514,410
  -535,211
  -556,498
  -578,408
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
  11,980
  15,407
  19,862
  25,446
  32,222
  40,206
  49,360
  59,596
  70,787
  82,771
  90,974
  104,008
  117,300
  130,691
  150,168
  181,888
  217,155
  255,931
  298,154
  343,746
  392,620
  444,686
  499,861
  558,070
  619,253
  683,367
  750,385
  820,303
  893,137
  968,924
Discount rate, %
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.42
  17.24
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
  28.09
  29.49
  30.97
  32.52
PV of cash for distribution, $m
  11,103
  13,137
  15,461
  17,931
  20,373
  22,593
  24,403
  25,645
  26,209
  26,050
  24,023
  22,729
  20,906
  18,704
  16,978
  15,964
  14,527
  12,799
  10,919
  9,022
  7,218
  5,590
  4,189
  3,036
  2,126
  1,438
  938
  590
  357
  208
Current shareholders' claim on cash, %
  79.3
  65.6
  56.1
  49.1
  44.0
  40.1
  37.1
  34.9
  33.1
  31.9
  31.0
  30.4
  30.1
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0
  30.0

FINANCIAL RATIOS  of  Keurig Dr Pepper Inc. (KDP)

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%

KDP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KDP stock intrinsic value calculation we used $7442 million for the last fiscal year's total revenue generated by Keurig Dr Pepper Inc.. The default revenue input number comes from 0001 income statement of Keurig Dr Pepper 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 KDP stock valuation model: a) initial revenue growth rate of 60% 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 7.9%, whose default value for KDP is calculated based on our internal credit rating of Keurig Dr Pepper 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 Keurig Dr Pepper 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 KDP stock the variable cost ratio is equal to 79.3%.

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 KDP 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 Keurig Dr Pepper Inc..

Corporate tax rate of 27% is the nominal tax rate for Keurig Dr Pepper 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 KDP 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 KDP are equal to 214.4%.

Life of production assets of 65.7 years is the average useful life of capital assets used in Keurig Dr Pepper 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 KDP is equal to -22.3%. 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 - $22533 million for Keurig Dr Pepper 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 1406.069 million for Keurig Dr Pepper 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 Keurig Dr Pepper Inc. at the current share price and the inputted number of shares is $40.3 billion.

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