Intrinsic value of LG Display ADR - LPL

Previous Close

$7.96

  Intrinsic Value

$5,173

stock screener

  Rating & Target

str. buy

+999%

Previous close

$7.96

 
Intrinsic value

$5,173

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of LPL 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 0.2

 

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, %
  18.70
  17.33
  16.10
  14.99
  13.99
  13.09
  12.28
  11.55
  10.90
  10.31
  9.78
  9.30
  8.87
  8.48
  8.13
  7.82
  7.54
  7.28
  7.06
  6.85
  6.67
  6.50
  6.35
  6.21
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
Revenue, $m
  30,948
  36,311
  42,156
  48,474
  55,254
  62,487
  70,161
  78,266
  86,795
  95,742
  105,103
  114,876
  125,065
  135,674
  146,709
  158,183
  170,108
  182,500
  195,378
  208,762
  222,678
  237,150
  252,207
  267,879
  284,201
  301,206
  318,932
  337,420
  356,710
  376,847
Variable operating expenses, $m
  21,709
  25,457
  29,540
  33,955
  38,693
  43,746
  49,108
  54,772
  60,731
  66,982
  73,437
  80,266
  87,385
  94,797
  102,508
  110,525
  118,857
  127,516
  136,513
  145,865
  155,588
  165,700
  176,221
  187,171
  198,575
  210,457
  222,843
  235,760
  249,239
  263,309
Fixed operating expenses, $m
  5,706
  5,831
  5,960
  6,091
  6,225
  6,362
  6,502
  6,645
  6,791
  6,940
  7,093
  7,249
  7,408
  7,571
  7,738
  7,908
  8,082
  8,260
  8,442
  8,628
  8,817
  9,011
  9,210
  9,412
  9,619
  9,831
  10,047
  10,268
  10,494
  10,725
Total operating expenses, $m
  27,415
  31,288
  35,500
  40,046
  44,918
  50,108
  55,610
  61,417
  67,522
  73,922
  80,530
  87,515
  94,793
  102,368
  110,246
  118,433
  126,939
  135,776
  144,955
  154,493
  164,405
  174,711
  185,431
  196,583
  208,194
  220,288
  232,890
  246,028
  259,733
  274,034
Operating income, $m
  3,533
  5,023
  6,656
  8,428
  10,337
  12,379
  14,551
  16,850
  19,274
  21,820
  24,573
  27,361
  30,272
  33,305
  36,463
  39,750
  43,169
  46,724
  50,423
  54,269
  58,272
  62,438
  66,776
  71,296
  76,006
  80,918
  86,042
  91,391
  96,977
  102,813
EBITDA, $m
  6,701
  8,725
  10,940
  13,342
  15,926
  18,688
  21,625
  24,731
  28,004
  31,441
  35,041
  38,803
  42,728
  46,818
  51,076
  55,505
  60,111
  64,901
  69,882
  75,062
  80,451
  86,058
  91,896
  97,977
  104,312
  110,918
  117,808
  124,998
  132,505
  140,347
Interest expense (income), $m
  108
  289
  432
  589
  760
  945
  1,143
  1,355
  1,579
  1,816
  2,066
  2,328
  2,601
  2,887
  3,186
  3,496
  3,819
  4,155
  4,504
  4,866
  5,243
  5,635
  6,042
  6,465
  6,906
  7,364
  7,842
  8,340
  8,858
  9,399
  9,964
Earnings before tax, $m
  3,243
  4,591
  6,067
  7,668
  9,392
  11,236
  13,197
  15,271
  17,457
  19,754
  22,245
  24,760
  27,384
  30,119
  32,967
  35,931
  39,014
  42,221
  45,556
  49,026
  52,637
  56,396
  60,311
  64,390
  68,642
  73,076
  77,703
  82,533
  87,578
  92,850
Tax expense, $m
  876
  1,240
  1,638
  2,070
  2,536
  3,034
  3,563
  4,123
  4,713
  5,334
  6,006
  6,685
  7,394
  8,132
  8,901
  9,701
  10,534
  11,400
  12,300
  13,237
  14,212
  15,227
  16,284
  17,385
  18,533
  19,730
  20,980
  22,284
  23,646
  25,069
Net income, $m
  2,368
  3,352
  4,429
  5,598
  6,856
  8,202
  9,634
  11,148
  12,744
  14,420
  16,239
  18,075
  19,991
  21,987
  24,066
  26,230
  28,480
  30,821
  33,256
  35,789
  38,425
  41,169
  44,027
  47,005
  50,108
  53,345
  56,723
  60,249
  63,932
  67,780

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
  32,474
  38,102
  44,235
  50,864
  57,980
  65,569
  73,621
  82,126
  91,076
  100,464
  110,286
  120,542
  131,233
  142,365
  153,945
  165,984
  178,497
  191,500
  205,013
  219,058
  233,660
  248,845
  264,645
  281,090
  298,217
  316,061
  334,661
  354,060
  374,302
  395,432
Adjusted assets (=assets-cash), $m
  32,474
  38,102
  44,235
  50,864
  57,980
  65,569
  73,621
  82,126
  91,076
  100,464
  110,286
  120,542
  131,233
  142,365
  153,945
  165,984
  178,497
  191,500
  205,013
  219,058
  233,660
  248,845
  264,645
  281,090
  298,217
  316,061
  334,661
  354,060
  374,302
  395,432
Revenue / Adjusted assets
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
Average production assets, $m
  15,412
  18,083
  20,994
  24,140
  27,517
  31,119
  34,940
  38,977
  43,224
  47,680
  52,341
  57,208
  62,282
  67,565
  73,061
  78,775
  84,714
  90,885
  97,298
  103,964
  110,893
  118,100
  125,599
  133,404
  141,532
  150,000
  158,828
  168,035
  177,641
  187,670
Working capital, $m
  -495
  -581
  -674
  -776
  -884
  -1,000
  -1,123
  -1,252
  -1,389
  -1,532
  -1,682
  -1,838
  -2,001
  -2,171
  -2,347
  -2,531
  -2,722
  -2,920
  -3,126
  -3,340
  -3,563
  -3,794
  -4,035
  -4,286
  -4,547
  -4,819
  -5,103
  -5,399
  -5,707
  -6,030
Total debt, $m
  7,849
  10,702
  13,812
  17,173
  20,780
  24,628
  28,711
  33,023
  37,560
  42,320
  47,300
  52,499
  57,920
  63,564
  69,435
  75,539
  81,883
  88,475
  95,326
  102,447
  109,850
  117,549
  125,560
  133,898
  142,581
  151,627
  161,058
  170,893
  181,156
  191,869
Total liabilities, $m
  16,464
  19,317
  22,427
  25,788
  29,396
  33,243
  37,326
  41,638
  46,176
  50,935
  55,915
  61,115
  66,535
  72,179
  78,050
  84,154
  90,498
  97,091
  103,942
  111,062
  118,465
  126,165
  134,175
  142,513
  151,196
  160,243
  169,673
  179,509
  189,771
  200,484
Total equity, $m
  16,010
  18,784
  21,808
  25,076
  28,584
  32,325
  36,295
  40,488
  44,900
  49,529
  54,371
  59,427
  64,698
  70,186
  75,895
  81,830
  87,999
  94,410
  101,072
  107,996
  115,194
  122,681
  130,470
  138,578
  147,021
  155,818
  164,988
  174,552
  184,531
  194,948
Total liabilities and equity, $m
  32,474
  38,101
  44,235
  50,864
  57,980
  65,568
  73,621
  82,126
  91,076
  100,464
  110,286
  120,542
  131,233
  142,365
  153,945
  165,984
  178,497
  191,501
  205,014
  219,058
  233,659
  248,846
  264,645
  281,091
  298,217
  316,061
  334,661
  354,061
  374,302
  395,432
Debt-to-equity ratio
  0.490
  0.570
  0.630
  0.680
  0.730
  0.760
  0.790
  0.820
  0.840
  0.850
  0.870
  0.880
  0.900
  0.910
  0.910
  0.920
  0.930
  0.940
  0.940
  0.950
  0.950
  0.960
  0.960
  0.970
  0.970
  0.970
  0.980
  0.980
  0.980
  0.980
Adjusted equity ratio
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,368
  3,352
  4,429
  5,598
  6,856
  8,202
  9,634
  11,148
  12,744
  14,420
  16,239
  18,075
  19,991
  21,987
  24,066
  26,230
  28,480
  30,821
  33,256
  35,789
  38,425
  41,169
  44,027
  47,005
  50,108
  53,345
  56,723
  60,249
  63,932
  67,780
Depreciation, amort., depletion, $m
  3,168
  3,702
  4,284
  4,914
  5,589
  6,309
  7,074
  7,881
  8,730
  9,622
  10,468
  11,442
  12,456
  13,513
  14,612
  15,755
  16,943
  18,177
  19,460
  20,793
  22,179
  23,620
  25,120
  26,681
  28,306
  30,000
  31,766
  33,607
  35,528
  37,534
Funds from operations, $m
  5,536
  7,054
  8,713
  10,512
  12,445
  14,512
  16,707
  19,029
  21,474
  24,042
  26,707
  29,516
  32,447
  35,500
  38,678
  41,985
  45,423
  48,998
  52,716
  56,582
  60,604
  64,790
  69,147
  73,685
  78,415
  83,345
  88,489
  93,856
  99,460
  105,314
Change in working capital, $m
  -78
  -86
  -94
  -101
  -108
  -116
  -123
  -130
  -136
  -143
  -150
  -156
  -163
  -170
  -177
  -184
  -191
  -198
  -206
  -214
  -223
  -232
  -241
  -251
  -261
  -272
  -284
  -296
  -309
  -322
Cash from operations, $m
  5,614
  7,140
  8,807
  10,613
  12,554
  14,627
  16,830
  19,159
  21,611
  24,185
  26,857
  29,673
  32,610
  35,670
  38,855
  42,168
  45,614
  49,196
  52,922
  56,796
  60,827
  65,021
  69,388
  73,936
  78,676
  83,618
  88,772
  94,152
  99,769
  105,636
Maintenance CAPEX, $m
  -2,597
  -3,082
  -3,617
  -4,199
  -4,828
  -5,503
  -6,224
  -6,988
  -7,795
  -8,645
  -9,536
  -10,468
  -11,442
  -12,456
  -13,513
  -14,612
  -15,755
  -16,943
  -18,177
  -19,460
  -20,793
  -22,179
  -23,620
  -25,120
  -26,681
  -28,306
  -30,000
  -31,766
  -33,607
  -35,528
New CAPEX, $m
  -2,426
  -2,671
  -2,911
  -3,146
  -3,377
  -3,602
  -3,822
  -4,037
  -4,247
  -4,455
  -4,662
  -4,867
  -5,074
  -5,283
  -5,496
  -5,714
  -5,939
  -6,171
  -6,413
  -6,666
  -6,930
  -7,207
  -7,498
  -7,805
  -8,128
  -8,469
  -8,828
  -9,207
  -9,607
  -10,028
Cash from investing activities, $m
  -5,023
  -5,753
  -6,528
  -7,345
  -8,205
  -9,105
  -10,046
  -11,025
  -12,042
  -13,100
  -14,198
  -15,335
  -16,516
  -17,739
  -19,009
  -20,326
  -21,694
  -23,114
  -24,590
  -26,126
  -27,723
  -29,386
  -31,118
  -32,925
  -34,809
  -36,775
  -38,828
  -40,973
  -43,214
  -45,556
Free cash flow, $m
  591
  1,386
  2,279
  3,268
  4,349
  5,522
  6,785
  8,134
  9,568
  11,085
  12,660
  14,337
  16,094
  17,930
  19,846
  21,842
  23,920
  26,083
  28,332
  30,671
  33,104
  35,635
  38,269
  41,011
  43,867
  46,843
  49,944
  53,180
  56,555
  60,080
Issuance/(repayment) of debt, $m
  2,592
  2,853
  3,110
  3,361
  3,607
  3,848
  4,083
  4,312
  4,537
  4,760
  4,980
  5,200
  5,420
  5,644
  5,871
  6,104
  6,344
  6,593
  6,851
  7,121
  7,403
  7,699
  8,010
  8,338
  8,683
  9,047
  9,431
  9,835
  10,262
  10,713
Issuance/(repurchase) of shares, $m
  157
  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  
  2,749
  2,853
  3,110
  3,361
  3,607
  3,848
  4,083
  4,312
  4,537
  4,760
  4,980
  5,200
  5,420
  5,644
  5,871
  6,104
  6,344
  6,593
  6,851
  7,121
  7,403
  7,699
  8,010
  8,338
  8,683
  9,047
  9,431
  9,835
  10,262
  10,713
Total cash flow (excl. dividends), $m
  3,340
  4,240
  5,389
  6,629
  7,957
  9,370
  10,867
  12,446
  14,106
  15,844
  17,639
  19,537
  21,515
  23,574
  25,717
  27,946
  30,264
  32,675
  35,183
  37,792
  40,507
  43,334
  46,280
  49,349
  52,550
  55,889
  59,375
  63,015
  66,818
  70,793
Retained Cash Flow (-), $m
  -2,525
  -2,774
  -3,024
  -3,268
  -3,508
  -3,742
  -3,970
  -4,193
  -4,412
  -4,628
  -4,842
  -5,056
  -5,271
  -5,488
  -5,709
  -5,936
  -6,169
  -6,411
  -6,662
  -6,924
  -7,199
  -7,487
  -7,789
  -8,108
  -8,443
  -8,797
  -9,170
  -9,564
  -9,979
  -10,417
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
  815
  1,465
  2,365
  3,360
  4,449
  5,629
  6,897
  8,253
  9,693
  11,216
  12,797
  14,481
  16,244
  18,086
  20,008
  22,011
  24,095
  26,265
  28,521
  30,868
  33,309
  35,848
  38,491
  41,242
  44,107
  47,092
  50,205
  53,451
  56,839
  60,376
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  782
  1,341
  2,058
  2,767
  3,448
  4,085
  4,660
  5,158
  5,568
  5,880
  6,077
  6,180
  6,176
  6,072
  5,874
  5,593
  5,243
  4,837
  4,391
  3,922
  3,445
  2,974
  2,523
  2,101
  1,716
  1,374
  1,078
  827
  620
  455
Current shareholders' claim on cash, %
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4
  98.4

LG Display Co., Ltd. manufactures thin-film transistor liquid crystal display, organic light emitting diode and other display panel technologies. The Company manufactures display panels in a range of sizes and specifications primarily for use in televisions, notebook computers, desktop monitors, tablet computers and various other applications, including mobile devices. The Company supplies ultra-high definition television panels. It also manufactures display panels for industrial and other applications, including entertainment systems, automotive displays, portable navigation devices and medical diagnostic equipment. It operates fabrication facilities, which include separately designated sets of fabrication production lines housed in certain facilities, located in its Display Clusters in Gumi and Paju, Korea and in Guangzhou China, and approximately four separately designated sets of fabrication production lines housed in certain facilities.

FINANCIAL RATIOS  of  LG Display ADR (LPL)

Valuation Ratios
P/E Ratio 3.6
Price to Sales 0.1
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow 0.9
Price to Free Cash Flow -6.6
Growth Rates
Sales Growth Rate -6.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 55.7%
Cap. Spend. - 3 Yr. Gr. Rate 2.5%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 31.7%
Total Debt to Equity 36.9%
Interest Coverage 12
Management Effectiveness
Return On Assets 4.2%
Ret/ On Assets - 3 Yr. Avg. 4.5%
Return On Total Capital 5.3%
Ret/ On T. Cap. - 3 Yr. Avg. 5.8%
Return On Equity 7.2%
Return On Equity - 3 Yr. Avg. 7.9%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 14.1%
Gross Margin - 3 Yr. Avg. 14.6%
EBITDA Margin 16.8%
EBITDA Margin - 3 Yr. Avg. 17.6%
Operating Margin 4.9%
Oper. Margin - 3 Yr. Avg. 4.9%
Pre-Tax Margin 5%
Pre-Tax Margin - 3 Yr. Avg. 4.9%
Net Profit Margin 3.4%
Net Profit Margin - 3 Yr. Avg. 3.4%
Effective Tax Rate 29.2%
Eff/ Tax Rate - 3 Yr. Avg. 28%
Payout Ratio 19.7%

LPL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LPL stock intrinsic value calculation we used $26072.066798 million for the last fiscal year's total revenue generated by LG Display ADR. The default revenue input number comes from 0001 income statement of LG Display ADR. 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 LPL stock valuation model: a) initial revenue growth rate of 18.7% 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 4.3%, whose default value for LPL is calculated based on our internal credit rating of LG Display ADR, 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 LG Display ADR.
    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 LPL stock the variable cost ratio is equal to 70.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5583 million in the base year in the intrinsic value calculation for LPL 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 5.5% for LG Display ADR.

Corporate tax rate of 27% is the nominal tax rate for LG Display ADR. 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 LPL 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 LPL are equal to 49.8%.

Life of production assets of 4.4 years is the average useful life of capital assets used in LG Display ADR 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 LPL is equal to -1.6%. 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 - $13484.8325359 million for LG Display ADR - 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 20.572 million for LG Display ADR 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 LG Display ADR at the current share price and the inputted number of shares is $0.2 billion.

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