Intrinsic value of Kraft Heinz - KHC

Previous Close

$60.69

  Intrinsic Value

$69.53

stock screener

  Rating & Target

hold

+15%

Previous close

$60.69

 
Intrinsic value

$69.53

 
Up/down potential

+15%

 
Rating

hold

We calculate the intrinsic value of KHC 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 2017), $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 73.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  26,757
  27,372
  28,076
  28,865
  29,740
  30,701
  31,746
  32,878
  34,097
  35,406
  36,806
  38,299
  39,890
  41,580
  43,374
  45,275
  47,287
  49,415
  51,663
  54,036
  56,541
  59,183
  61,967
  64,901
  67,990
  71,243
  74,667
  78,271
  82,061
  86,048
Variable operating expenses, $m
  20,341
  20,569
  20,829
  21,122
  21,446
  21,802
  22,189
  22,608
  23,060
  23,545
  13,636
  14,190
  14,779
  15,405
  16,070
  16,774
  17,520
  18,308
  19,141
  20,020
  20,948
  21,927
  22,959
  24,045
  25,190
  26,395
  27,664
  28,999
  30,403
  31,881
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
  20,341
  20,569
  20,829
  21,122
  21,446
  21,802
  22,189
  22,608
  23,060
  23,545
  13,636
  14,190
  14,779
  15,405
  16,070
  16,774
  17,520
  18,308
  19,141
  20,020
  20,948
  21,927
  22,959
  24,045
  25,190
  26,395
  27,664
  28,999
  30,403
  31,881
Operating income, $m
  6,416
  6,803
  7,246
  7,743
  8,294
  8,899
  9,557
  10,269
  11,037
  11,861
  23,169
  24,110
  25,111
  26,175
  27,304
  28,501
  29,767
  31,107
  32,522
  34,016
  35,593
  37,256
  39,008
  40,855
  42,800
  44,848
  47,003
  49,272
  51,658
  54,168
EBITDA, $m
  28,140
  28,787
  29,527
  30,358
  31,278
  32,288
  33,387
  34,578
  35,860
  37,236
  38,709
  40,280
  41,952
  43,730
  45,616
  47,616
  49,732
  51,969
  54,334
  56,830
  59,465
  62,243
  65,171
  68,256
  71,506
  74,927
  78,528
  82,317
  86,304
  90,497
Interest expense (income), $m
  1,176
  1,703
  1,765
  1,834
  1,913
  2,001
  2,099
  2,206
  2,323
  2,449
  2,585
  2,732
  2,888
  3,055
  3,233
  3,421
  3,622
  3,834
  4,059
  4,297
  4,548
  4,813
  5,093
  5,388
  5,699
  6,027
  6,372
  6,735
  7,118
  7,520
  7,944
Earnings before tax, $m
  4,713
  5,038
  5,412
  5,831
  6,293
  6,800
  7,351
  7,947
  8,588
  9,275
  20,438
  21,222
  22,056
  22,942
  23,883
  24,879
  25,933
  27,048
  28,225
  29,468
  30,780
  32,163
  33,621
  35,156
  36,773
  38,476
  40,268
  42,154
  44,137
  46,224
Tax expense, $m
  1,273
  1,360
  1,461
  1,574
  1,699
  1,836
  1,985
  2,146
  2,319
  2,504
  5,518
  5,730
  5,955
  6,194
  6,448
  6,717
  7,002
  7,303
  7,621
  7,956
  8,311
  8,684
  9,078
  9,492
  9,929
  10,389
  10,872
  11,382
  11,917
  12,480
Net income, $m
  3,441
  3,678
  3,951
  4,256
  4,594
  4,964
  5,366
  5,801
  6,269
  6,771
  14,920
  15,492
  16,101
  16,748
  17,434
  18,161
  18,931
  19,745
  20,604
  21,512
  22,469
  23,479
  24,543
  25,664
  26,845
  28,088
  29,396
  30,772
  32,220
  33,743

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
  122,737
  125,560
  128,787
  132,409
  136,424
  140,828
  145,624
  150,816
  156,409
  162,412
  168,833
  175,686
  182,981
  190,735
  198,963
  207,682
  216,912
  226,672
  236,985
  247,874
  259,363
  271,480
  284,252
  297,709
  311,882
  326,804
  342,511
  359,039
  376,428
  394,717
Adjusted assets (=assets-cash), $m
  122,737
  125,560
  128,787
  132,409
  136,424
  140,828
  145,624
  150,816
  156,409
  162,412
  168,833
  175,686
  182,981
  190,735
  198,963
  207,682
  216,912
  226,672
  236,985
  247,874
  259,363
  271,480
  284,252
  297,709
  311,882
  326,804
  342,511
  359,039
  376,428
  394,717
Revenue / Adjusted assets
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
Average production assets, $m
  112,967
  115,565
  118,535
  121,869
  125,564
  129,618
  134,032
  138,810
  143,958
  149,483
  155,394
  161,700
  168,415
  175,552
  183,125
  191,150
  199,645
  208,628
  218,120
  228,142
  238,717
  249,869
  261,625
  274,010
  287,055
  300,790
  315,246
  330,458
  346,462
  363,296
Working capital, $m
  -1,659
  -1,697
  -1,741
  -1,790
  -1,844
  -1,903
  -1,968
  -2,038
  -2,114
  -2,195
  -2,282
  -2,375
  -2,473
  -2,578
  -2,689
  -2,807
  -2,932
  -3,064
  -3,203
  -3,350
  -3,506
  -3,669
  -3,842
  -4,024
  -4,215
  -4,417
  -4,629
  -4,853
  -5,088
  -5,335
Total debt, $m
  32,692
  33,965
  35,421
  37,055
  38,865
  40,852
  43,015
  45,356
  47,879
  50,586
  53,482
  56,572
  59,863
  63,360
  67,070
  71,003
  75,165
  79,567
  84,218
  89,129
  94,311
  99,776
  105,536
  111,605
  117,997
  124,727
  131,811
  139,265
  147,107
  155,355
Total liabilities, $m
  55,354
  56,627
  58,083
  59,717
  61,527
  63,514
  65,677
  68,018
  70,541
  73,248
  76,144
  79,234
  82,525
  86,022
  89,732
  93,665
  97,827
  102,229
  106,880
  111,791
  116,973
  122,438
  128,198
  134,267
  140,659
  147,389
  154,473
  161,927
  169,769
  178,017
Total equity, $m
  67,383
  68,932
  70,704
  72,693
  74,897
  77,315
  79,948
  82,798
  85,869
  89,164
  92,690
  96,451
  100,457
  104,714
  109,231
  114,017
  119,085
  124,443
  130,105
  136,083
  142,391
  149,043
  156,054
  163,442
  171,223
  179,416
  188,039
  197,113
  206,659
  216,700
Total liabilities and equity, $m
  122,737
  125,559
  128,787
  132,410
  136,424
  140,829
  145,625
  150,816
  156,410
  162,412
  168,834
  175,685
  182,982
  190,736
  198,963
  207,682
  216,912
  226,672
  236,985
  247,874
  259,364
  271,481
  284,252
  297,709
  311,882
  326,805
  342,512
  359,040
  376,428
  394,717
Debt-to-equity ratio
  0.490
  0.490
  0.500
  0.510
  0.520
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.590
  0.600
  0.610
  0.610
  0.620
  0.630
  0.640
  0.650
  0.650
  0.660
  0.670
  0.680
  0.680
  0.690
  0.700
  0.700
  0.710
  0.710
  0.720
Adjusted equity ratio
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,441
  3,678
  3,951
  4,256
  4,594
  4,964
  5,366
  5,801
  6,269
  6,771
  14,920
  15,492
  16,101
  16,748
  17,434
  18,161
  18,931
  19,745
  20,604
  21,512
  22,469
  23,479
  24,543
  25,664
  26,845
  28,088
  29,396
  30,772
  32,220
  33,743
Depreciation, amort., depletion, $m
  21,724
  21,984
  22,281
  22,614
  22,984
  23,389
  23,831
  24,308
  24,823
  25,376
  15,539
  16,170
  16,842
  17,555
  18,312
  19,115
  19,964
  20,863
  21,812
  22,814
  23,872
  24,987
  26,162
  27,401
  28,706
  30,079
  31,525
  33,046
  34,646
  36,330
Funds from operations, $m
  25,165
  25,662
  26,232
  26,871
  27,578
  28,353
  29,197
  30,109
  31,092
  32,147
  30,459
  31,662
  32,942
  34,303
  35,747
  37,276
  38,896
  40,608
  42,416
  44,326
  46,341
  48,466
  50,705
  53,065
  55,550
  58,167
  60,920
  63,818
  66,867
  70,073
Change in working capital, $m
  -33
  -38
  -44
  -49
  -54
  -60
  -65
  -70
  -76
  -81
  -87
  -93
  -99
  -105
  -111
  -118
  -125
  -132
  -139
  -147
  -155
  -164
  -173
  -182
  -192
  -202
  -212
  -223
  -235
  -247
Cash from operations, $m
  25,197
  25,700
  26,275
  26,920
  27,632
  28,413
  29,262
  30,180
  31,168
  32,228
  30,546
  31,754
  33,041
  34,408
  35,858
  37,394
  39,020
  40,740
  42,556
  44,473
  46,496
  48,630
  50,878
  53,247
  55,742
  58,368
  61,133
  64,041
  67,102
  70,320
Maintenance CAPEX, $m
  -11,075
  -11,297
  -11,556
  -11,853
  -12,187
  -12,556
  -12,962
  -13,403
  -13,881
  -14,396
  -14,948
  -15,539
  -16,170
  -16,842
  -17,555
  -18,312
  -19,115
  -19,964
  -20,863
  -21,812
  -22,814
  -23,872
  -24,987
  -26,162
  -27,401
  -28,706
  -30,079
  -31,525
  -33,046
  -34,646
New CAPEX, $m
  -2,215
  -2,598
  -2,970
  -3,334
  -3,695
  -4,054
  -4,414
  -4,778
  -5,148
  -5,525
  -5,911
  -6,307
  -6,715
  -7,137
  -7,573
  -8,025
  -8,495
  -8,983
  -9,492
  -10,022
  -10,575
  -11,152
  -11,755
  -12,386
  -13,045
  -13,735
  -14,456
  -15,212
  -16,004
  -16,834
Cash from investing activities, $m
  -13,290
  -13,895
  -14,526
  -15,187
  -15,882
  -16,610
  -17,376
  -18,181
  -19,029
  -19,921
  -20,859
  -21,846
  -22,885
  -23,979
  -25,128
  -26,337
  -27,610
  -28,947
  -30,355
  -31,834
  -33,389
  -35,024
  -36,742
  -38,548
  -40,446
  -42,441
  -44,535
  -46,737
  -49,050
  -51,480
Free cash flow, $m
  11,907
  11,805
  11,749
  11,732
  11,751
  11,802
  11,885
  11,998
  12,139
  12,307
  9,687
  9,908
  10,156
  10,430
  10,730
  11,057
  11,410
  11,792
  12,201
  12,639
  13,107
  13,606
  14,136
  14,699
  15,296
  15,928
  16,597
  17,305
  18,052
  18,840
Issuance/(repayment) of debt, $m
  1,156
  1,273
  1,455
  1,634
  1,810
  1,986
  2,163
  2,341
  2,523
  2,707
  2,896
  3,090
  3,290
  3,497
  3,711
  3,932
  4,163
  4,402
  4,651
  4,911
  5,182
  5,465
  5,760
  6,069
  6,392
  6,730
  7,084
  7,454
  7,842
  8,249
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  
  1,156
  1,273
  1,455
  1,634
  1,810
  1,986
  2,163
  2,341
  2,523
  2,707
  2,896
  3,090
  3,290
  3,497
  3,711
  3,932
  4,163
  4,402
  4,651
  4,911
  5,182
  5,465
  5,760
  6,069
  6,392
  6,730
  7,084
  7,454
  7,842
  8,249
Total cash flow (excl. dividends), $m
  13,063
  13,078
  13,204
  13,366
  13,561
  13,789
  14,048
  14,339
  14,661
  15,014
  12,583
  12,999
  13,446
  13,927
  14,441
  14,989
  15,573
  16,194
  16,852
  17,550
  18,289
  19,070
  19,896
  20,768
  21,688
  22,658
  23,681
  24,759
  25,894
  27,089
Retained Cash Flow (-), $m
  -1,349
  -1,550
  -1,772
  -1,989
  -2,204
  -2,418
  -2,633
  -2,850
  -3,071
  -3,295
  -3,526
  -3,762
  -4,005
  -4,257
  -4,517
  -4,787
  -5,067
  -5,358
  -5,662
  -5,978
  -6,308
  -6,652
  -7,012
  -7,388
  -7,781
  -8,192
  -8,623
  -9,074
  -9,546
  -10,041
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
  52
  54
  55
  56
  58
  59
  61
  63
  66
  68
  71
  74
  77
  80
  83
  87
  91
  95
  99
  103
  108
  113
  118
  124
  130
  136
  142
  149
  157
  164
Cash available for distribution, $m
  11,715
  11,528
  11,433
  11,377
  11,357
  11,371
  11,415
  11,489
  11,591
  11,719
  9,058
  9,237
  9,441
  9,670
  9,924
  10,202
  10,506
  10,835
  11,190
  11,572
  11,981
  12,418
  12,884
  13,380
  13,907
  14,466
  15,058
  15,685
  16,348
  17,048
Discount rate, %
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
  10,897
  9,907
  9,008
  8,154
  7,342
  6,570
  5,839
  5,149
  4,501
  3,898
  2,549
  2,170
  1,826
  1,518
  1,244
  1,004
  798
  623
  478
  360
  265
  191
  135
  92
  62
  40
  25
  16
  9
  5
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

The Kraft Heinz Company is a food and beverage company. The Company is engaged in the manufacturing and marketing of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. The Company's segments include the United States, Canada and Europe. The Company's remaining businesses are combined as Rest of World. The Rest of World consists of Latin America and Asia, Middle East and Africa (AMEA). The Company provides products for various occasions whether at home, in restaurants or on the go. The Company's brands include Heinz, Kraft, Oscar Mayer, Philadelphia, Planters, Velveeta, Lunchables, Maxwell House, Capri Sun, and Ore-Ida. The Company's products are sold through its own sales organizations and through independent brokers, agents and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries and pharmacies.

FINANCIAL RATIOS  of  Kraft Heinz (KHC)

Valuation Ratios
P/E Ratio 20.3
Price to Sales 2.8
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 14.1
Price to Free Cash Flow 18.5
Growth Rates
Sales Growth Rate 44.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 92.4%
Cap. Spend. - 3 Yr. Gr. Rate 43.9%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 51.8%
Total Debt to Equity 56.5%
Interest Coverage 5
Management Effectiveness
Return On Assets 3.7%
Ret/ On Assets - 3 Yr. Avg. 2.5%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. 2.4%
Return On Equity 5.9%
Return On Equity - 3 Yr. Avg. 3.9%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 38.9%
Gross Margin - 3 Yr. Avg. 34.5%
EBITDA Margin 28.5%
EBITDA Margin - 3 Yr. Avg. 18.6%
Operating Margin 23.2%
Oper. Margin - 3 Yr. Avg. 17.3%
Pre-Tax Margin 19%
Pre-Tax Margin - 3 Yr. Avg. 10.6%
Net Profit Margin 13.7%
Net Profit Margin - 3 Yr. Avg. 7.7%
Effective Tax Rate 27.5%
Eff/ Tax Rate - 3 Yr. Avg. 26.6%
Payout Ratio 103.6%

KHC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KHC stock intrinsic value calculation we used $26232 million for the last fiscal year's total revenue generated by Kraft Heinz. The default revenue input number comes from 2017 income statement of Kraft Heinz. 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 KHC stock valuation model: a) initial revenue growth rate of 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 7.5%, whose default value for KHC is calculated based on our internal credit rating of Kraft Heinz, 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 Kraft Heinz.
    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 KHC stock the variable cost ratio is equal to 76.8%.

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 KHC 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 Kraft Heinz.

Corporate tax rate of 27% is the nominal tax rate for Kraft Heinz. 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 KHC stock is equal to 0.2%.

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 KHC are equal to 422.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Kraft Heinz 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 KHC is equal to -6.2%. 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 - $66034 million for Kraft Heinz - 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 1218 million for Kraft Heinz 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 Kraft Heinz at the current share price and the inputted number of shares is $73.9 billion.

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