Intrinsic value of Lockheed Martin Corporation - LMT

Previous Close

$350.14

  Intrinsic Value

$171.64

stock screener

  Rating & Target

str. sell

-51%

Previous close

$350.14

 
Intrinsic value

$171.64

 
Up/down potential

-51%

 
Rating

str. sell

We calculate the intrinsic value of LMT 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 98.9

 

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, %
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.69
  4.72
  4.75
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
Revenue, $m
  55,966
  58,311
  60,802
  63,443
  66,240
  69,200
  72,329
  75,635
  79,123
  82,804
  86,684
  90,773
  95,081
  99,618
  104,393
  109,420
  114,708
  120,271
  126,123
  132,275
  138,744
  145,545
  152,693
  160,206
  168,101
  176,398
  185,115
  194,274
  203,896
  214,005
Variable operating expenses, $m
  42,588
  44,312
  46,144
  48,087
  50,144
  52,321
  54,622
  57,053
  59,619
  62,326
  63,753
  66,761
  69,929
  73,266
  76,778
  80,475
  84,364
  88,456
  92,759
  97,285
  102,042
  107,044
  112,301
  117,827
  123,634
  129,735
  136,147
  142,883
  149,960
  157,394
Fixed operating expenses, $m
  5,740
  5,866
  5,995
  6,127
  6,262
  6,399
  6,540
  6,684
  6,831
  6,981
  7,135
  7,292
  7,452
  7,616
  7,784
  7,955
  8,130
  8,309
  8,492
  8,679
  8,869
  9,065
  9,264
  9,468
  9,676
  9,889
  10,107
  10,329
  10,556
  10,788
Total operating expenses, $m
  48,328
  50,178
  52,139
  54,214
  56,406
  58,720
  61,162
  63,737
  66,450
  69,307
  70,888
  74,053
  77,381
  80,882
  84,562
  88,430
  92,494
  96,765
  101,251
  105,964
  110,911
  116,109
  121,565
  127,295
  133,310
  139,624
  146,254
  153,212
  160,516
  168,182
Operating income, $m
  7,639
  8,133
  8,663
  9,229
  9,835
  10,480
  11,167
  11,897
  12,673
  13,496
  15,796
  16,720
  17,700
  18,736
  19,831
  20,990
  22,214
  23,506
  24,871
  26,312
  27,833
  29,436
  31,128
  32,911
  34,792
  36,774
  38,862
  41,062
  43,381
  45,822
EBITDA, $m
  9,844
  10,371
  10,935
  11,539
  12,183
  12,870
  13,600
  14,376
  15,201
  16,075
  17,002
  17,984
  19,023
  20,122
  21,285
  22,513
  23,811
  25,181
  26,627
  28,154
  29,764
  31,462
  33,253
  35,142
  37,132
  39,229
  41,439
  43,767
  46,219
  48,801
Interest expense (income), $m
  0
  762
  684
  779
  880
  987
  1,101
  1,221
  1,348
  1,482
  1,623
  1,773
  1,930
  2,096
  2,271
  2,455
  2,649
  2,852
  3,067
  3,293
  3,530
  3,780
  4,042
  4,318
  4,608
  4,913
  5,233
  5,570
  5,923
  6,295
  6,685
Earnings before tax, $m
  6,877
  7,449
  7,884
  8,349
  8,847
  9,379
  9,946
  10,550
  11,191
  11,873
  14,023
  14,790
  15,603
  16,465
  17,377
  18,341
  19,361
  20,439
  21,579
  22,782
  24,053
  25,394
  26,810
  28,304
  29,879
  31,540
  33,292
  35,139
  37,086
  39,137
Tax expense, $m
  1,857
  2,011
  2,129
  2,254
  2,389
  2,532
  2,685
  2,848
  3,022
  3,206
  3,786
  3,993
  4,213
  4,446
  4,692
  4,952
  5,228
  5,519
  5,826
  6,151
  6,494
  6,856
  7,239
  7,642
  8,067
  8,516
  8,989
  9,488
  10,013
  10,567
Net income, $m
  5,020
  5,438
  5,755
  6,095
  6,459
  6,847
  7,261
  7,701
  8,170
  8,667
  10,237
  10,797
  11,391
  12,019
  12,685
  13,389
  14,134
  14,921
  15,753
  16,631
  17,559
  18,538
  19,571
  20,662
  21,812
  23,025
  24,303
  25,652
  27,073
  28,570

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
  46,716
  48,674
  50,753
  52,957
  55,292
  57,763
  60,375
  63,134
  66,046
  69,118
  72,357
  75,771
  79,367
  83,153
  87,140
  91,335
  95,750
  100,394
  105,278
  110,413
  115,813
  121,490
  127,457
  133,728
  140,318
  147,244
  154,520
  162,165
  170,197
  178,635
Adjusted assets (=assets-cash), $m
  46,716
  48,674
  50,753
  52,957
  55,292
  57,763
  60,375
  63,134
  66,046
  69,118
  72,357
  75,771
  79,367
  83,153
  87,140
  91,335
  95,750
  100,394
  105,278
  110,413
  115,813
  121,490
  127,457
  133,728
  140,318
  147,244
  154,520
  162,165
  170,197
  178,635
Revenue / Adjusted assets
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
Average production assets, $m
  13,712
  14,286
  14,896
  15,544
  16,229
  16,954
  17,721
  18,530
  19,385
  20,287
  21,238
  22,239
  23,295
  24,406
  25,576
  26,808
  28,104
  29,466
  30,900
  32,407
  33,992
  35,659
  37,410
  39,250
  41,185
  43,217
  45,353
  47,597
  49,955
  52,431
Working capital, $m
  2,518
  2,624
  2,736
  2,855
  2,981
  3,114
  3,255
  3,404
  3,561
  3,726
  3,901
  4,085
  4,279
  4,483
  4,698
  4,924
  5,162
  5,412
  5,676
  5,952
  6,243
  6,550
  6,871
  7,209
  7,565
  7,938
  8,330
  8,742
  9,175
  9,630
Total debt, $m
  12,667
  14,428
  16,299
  18,284
  20,385
  22,609
  24,960
  27,443
  30,063
  32,828
  35,743
  38,816
  42,052
  45,460
  49,048
  52,824
  56,797
  60,976
  65,372
  69,994
  74,854
  79,963
  85,333
  90,977
  96,908
  103,141
  109,690
  116,571
  123,799
  131,393
Total liabilities, $m
  42,045
  43,806
  45,677
  47,662
  49,763
  51,987
  54,338
  56,821
  59,441
  62,206
  65,121
  68,194
  71,430
  74,838
  78,426
  82,202
  86,175
  90,354
  94,750
  99,372
  104,232
  109,341
  114,711
  120,355
  126,286
  132,519
  139,068
  145,949
  153,177
  160,771
Total equity, $m
  4,672
  4,867
  5,075
  5,296
  5,529
  5,776
  6,038
  6,313
  6,605
  6,912
  7,236
  7,577
  7,937
  8,315
  8,714
  9,134
  9,575
  10,039
  10,528
  11,041
  11,581
  12,149
  12,746
  13,373
  14,032
  14,724
  15,452
  16,217
  17,020
  17,863
Total liabilities and equity, $m
  46,717
  48,673
  50,752
  52,958
  55,292
  57,763
  60,376
  63,134
  66,046
  69,118
  72,357
  75,771
  79,367
  83,153
  87,140
  91,336
  95,750
  100,393
  105,278
  110,413
  115,813
  121,490
  127,457
  133,728
  140,318
  147,243
  154,520
  162,166
  170,197
  178,634
Debt-to-equity ratio
  2.710
  2.960
  3.210
  3.450
  3.690
  3.910
  4.130
  4.350
  4.550
  4.750
  4.940
  5.120
  5.300
  5.470
  5.630
  5.780
  5.930
  6.070
  6.210
  6.340
  6.460
  6.580
  6.700
  6.800
  6.910
  7.000
  7.100
  7.190
  7.270
  7.360
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  5,020
  5,438
  5,755
  6,095
  6,459
  6,847
  7,261
  7,701
  8,170
  8,667
  10,237
  10,797
  11,391
  12,019
  12,685
  13,389
  14,134
  14,921
  15,753
  16,631
  17,559
  18,538
  19,571
  20,662
  21,812
  23,025
  24,303
  25,652
  27,073
  28,570
Depreciation, amort., depletion, $m
  2,205
  2,238
  2,273
  2,309
  2,348
  2,390
  2,433
  2,479
  2,528
  2,579
  1,207
  1,264
  1,324
  1,387
  1,453
  1,523
  1,597
  1,674
  1,756
  1,841
  1,931
  2,026
  2,126
  2,230
  2,340
  2,456
  2,577
  2,704
  2,838
  2,979
Funds from operations, $m
  7,226
  7,676
  8,028
  8,404
  8,807
  9,236
  9,694
  10,180
  10,697
  11,246
  11,443
  12,060
  12,714
  13,406
  14,138
  14,912
  15,730
  16,595
  17,508
  18,472
  19,490
  20,564
  21,697
  22,892
  24,152
  25,480
  26,880
  28,356
  29,911
  31,549
Change in working capital, $m
  99
  106
  112
  119
  126
  133
  141
  149
  157
  166
  175
  184
  194
  204
  215
  226
  238
  250
  263
  277
  291
  306
  322
  338
  355
  373
  392
  412
  433
  455
Cash from operations, $m
  7,127
  7,570
  7,916
  8,286
  8,681
  9,103
  9,553
  10,032
  10,540
  11,081
  11,269
  11,876
  12,520
  13,202
  13,923
  14,686
  15,493
  16,345
  17,245
  18,195
  19,199
  20,258
  21,375
  22,554
  23,796
  25,107
  26,488
  27,944
  29,478
  31,094
Maintenance CAPEX, $m
  -748
  -779
  -812
  -846
  -883
  -922
  -963
  -1,007
  -1,053
  -1,101
  -1,153
  -1,207
  -1,264
  -1,324
  -1,387
  -1,453
  -1,523
  -1,597
  -1,674
  -1,756
  -1,841
  -1,931
  -2,026
  -2,126
  -2,230
  -2,340
  -2,456
  -2,577
  -2,704
  -2,838
New CAPEX, $m
  -545
  -575
  -610
  -647
  -685
  -725
  -767
  -810
  -855
  -902
  -951
  -1,002
  -1,055
  -1,111
  -1,170
  -1,231
  -1,296
  -1,363
  -1,434
  -1,507
  -1,585
  -1,666
  -1,751
  -1,841
  -1,934
  -2,033
  -2,136
  -2,244
  -2,357
  -2,477
Cash from investing activities, $m
  -1,293
  -1,354
  -1,422
  -1,493
  -1,568
  -1,647
  -1,730
  -1,817
  -1,908
  -2,003
  -2,104
  -2,209
  -2,319
  -2,435
  -2,557
  -2,684
  -2,819
  -2,960
  -3,108
  -3,263
  -3,426
  -3,597
  -3,777
  -3,967
  -4,164
  -4,373
  -4,592
  -4,821
  -5,061
  -5,315
Free cash flow, $m
  5,833
  6,217
  6,494
  6,792
  7,113
  7,456
  7,823
  8,215
  8,633
  9,078
  9,165
  9,668
  10,201
  10,767
  11,366
  12,001
  12,674
  13,385
  14,137
  14,932
  15,773
  16,660
  17,598
  18,587
  19,632
  20,734
  21,897
  23,123
  24,416
  25,779
Issuance/(repayment) of debt, $m
  -1,437
  1,762
  1,871
  1,984
  2,102
  2,224
  2,351
  2,483
  2,621
  2,765
  2,915
  3,072
  3,236
  3,408
  3,588
  3,776
  3,973
  4,179
  4,396
  4,622
  4,860
  5,109
  5,370
  5,644
  5,931
  6,233
  6,549
  6,881
  7,229
  7,594
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  
  -1,437
  1,762
  1,871
  1,984
  2,102
  2,224
  2,351
  2,483
  2,621
  2,765
  2,915
  3,072
  3,236
  3,408
  3,588
  3,776
  3,973
  4,179
  4,396
  4,622
  4,860
  5,109
  5,370
  5,644
  5,931
  6,233
  6,549
  6,881
  7,229
  7,594
Total cash flow (excl. dividends), $m
  4,396
  7,978
  8,365
  8,776
  9,214
  9,680
  10,174
  10,698
  11,254
  11,842
  12,081
  12,740
  13,438
  14,175
  14,954
  15,777
  16,647
  17,564
  18,533
  19,555
  20,633
  21,769
  22,968
  24,231
  25,563
  26,967
  28,446
  30,004
  31,645
  33,373
Retained Cash Flow (-), $m
  -3,278
  -196
  -208
  -220
  -234
  -247
  -261
  -276
  -291
  -307
  -324
  -341
  -360
  -379
  -399
  -420
  -441
  -464
  -488
  -514
  -540
  -568
  -597
  -627
  -659
  -693
  -728
  -765
  -803
  -844
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
  1,118
  7,783
  8,157
  8,556
  8,981
  9,433
  9,913
  10,422
  10,962
  11,535
  11,757
  12,399
  13,078
  13,796
  14,556
  15,358
  16,205
  17,100
  18,044
  19,041
  20,093
  21,202
  22,371
  23,604
  24,904
  26,274
  27,718
  29,239
  30,842
  32,530
Discount rate, %
  10.90
  11.45
  12.02
  12.62
  13.25
  13.91
  14.61
  15.34
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.66
  23.79
  24.98
  26.23
  27.54
  28.92
  30.37
  31.89
  33.48
  35.15
  36.91
  38.76
  40.69
  42.73
  44.87
PV of cash for distribution, $m
  1,008
  6,266
  5,803
  5,319
  4,821
  4,317
  3,817
  3,328
  2,859
  2,418
  1,948
  1,594
  1,280
  1,007
  776
  585
  430
  309
  216
  147
  97
  62
  38
  23
  13
  7
  4
  2
  1
  0
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

Lockheed Martin Corporation is a security and aerospace company. The Company operates through four segments. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Missiles and Fire Control segment provides air and missile defense systems; fire control systems; manned and unmanned ground vehicles, and energy management solutions. Rotary and Mission Systems segment provides design, manufacture, service and support for a range of military and civil helicopters; mission systems and sensors for rotary and fixed-wing aircraft; simulation and training services, and unmanned systems and technologies, among others. Space Systems segment is engaged in the research and development, design, engineering and production of satellites, strategic and defensive missile systems and space transportation systems.

FINANCIAL RATIOS  of  Lockheed Martin Corporation (LMT)

Valuation Ratios
P/E Ratio 19.1
Price to Sales 2.1
Price to Book 67
Price to Tangible Book
Price to Cash Flow 19.5
Price to Free Cash Flow 24.5
Growth Rates
Sales Growth Rate 16.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.2%
Cap. Spend. - 3 Yr. Gr. Rate 4.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 945.2%
Total Debt to Equity 945.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 10.9%
Ret/ On Assets - 3 Yr. Avg. 9.7%
Return On Total Capital 31.1%
Ret/ On T. Cap. - 3 Yr. Avg. 30.7%
Return On Equity 230.1%
Return On Equity - 3 Yr. Avg. 142.7%
Asset Turnover 1
Profitability Ratios
Gross Margin 10.7%
Gross Margin - 3 Yr. Avg. 11.2%
EBITDA Margin 12.9%
EBITDA Margin - 3 Yr. Avg. 13.4%
Operating Margin 11.7%
Oper. Margin - 3 Yr. Avg. 12%
Pre-Tax Margin 10.3%
Pre-Tax Margin - 3 Yr. Avg. 10.9%
Net Profit Margin 11.2%
Net Profit Margin - 3 Yr. Avg. 9.7%
Effective Tax Rate 23.2%
Eff/ Tax Rate - 3 Yr. Avg. 27%
Payout Ratio 38.6%

LMT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LMT stock intrinsic value calculation we used $53762 million for the last fiscal year's total revenue generated by Lockheed Martin Corporation. The default revenue input number comes from 0001 income statement of Lockheed Martin Corporation. 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 LMT stock valuation model: a) initial revenue growth rate of 4.1% 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 10.9%, whose default value for LMT is calculated based on our internal credit rating of Lockheed Martin Corporation, 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 Lockheed Martin Corporation.
    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 LMT stock the variable cost ratio is equal to 76.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5616 million in the base year in the intrinsic value calculation for LMT 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 Lockheed Martin Corporation.

Corporate tax rate of 27% is the nominal tax rate for Lockheed Martin Corporation. 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 LMT 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 LMT are equal to 24.5%.

Life of production assets of 17.6 years is the average useful life of capital assets used in Lockheed Martin Corporation 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 LMT is equal to 4.5%. 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 - $1394 million for Lockheed Martin Corporation - 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 282.560 million for Lockheed Martin Corporation 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 Lockheed Martin Corporation at the current share price and the inputted number of shares is $98.9 billion.

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