Intrinsic value of Mastercard Incorporated - MA

Previous Close

$240.89

  Intrinsic Value

$181.53

stock screener

  Rating & Target

sell

-25%

Previous close

$240.89

 
Intrinsic value

$181.53

 
Up/down potential

-25%

 
Rating

sell

We calculate the intrinsic value of MA 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 267.1

 

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, %
  14.90
  13.91
  13.02
  12.22
  11.50
  10.85
  10.26
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.26
  7.04
  6.83
  6.65
  6.49
  6.34
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
Revenue, $m
  17,178
  19,567
  22,114
  24,816
  27,669
  30,670
  33,817
  37,109
  40,546
  44,128
  47,858
  51,738
  55,771
  59,963
  64,319
  68,846
  73,552
  78,444
  83,531
  88,825
  94,335
  100,074
  106,053
  112,287
  118,788
  125,571
  132,653
  140,049
  147,778
  155,855
Variable operating expenses, $m
  8,015
  9,076
  10,207
  11,407
  12,673
  14,005
  15,402
  16,864
  18,390
  19,980
  21,246
  22,969
  24,759
  26,620
  28,554
  30,564
  32,653
  34,825
  37,083
  39,434
  41,880
  44,428
  47,082
  49,849
  52,735
  55,747
  58,891
  62,174
  65,605
  69,191
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
  8,015
  9,076
  10,207
  11,407
  12,673
  14,005
  15,402
  16,864
  18,390
  19,980
  21,246
  22,969
  24,759
  26,620
  28,554
  30,564
  32,653
  34,825
  37,083
  39,434
  41,880
  44,428
  47,082
  49,849
  52,735
  55,747
  58,891
  62,174
  65,605
  69,191
Operating income, $m
  9,162
  10,491
  11,907
  13,410
  14,996
  16,665
  18,414
  20,245
  22,156
  24,148
  26,612
  28,769
  31,012
  33,343
  35,765
  38,282
  40,899
  43,619
  46,448
  49,391
  52,456
  55,647
  58,971
  62,437
  66,052
  69,824
  73,762
  77,875
  82,172
  86,664
EBITDA, $m
  9,861
  11,233
  12,696
  14,247
  15,884
  17,607
  19,414
  21,304
  23,277
  25,334
  27,475
  29,702
  32,018
  34,424
  36,925
  39,524
  42,225
  45,034
  47,955
  50,994
  54,157
  57,452
  60,884
  64,463
  68,195
  72,089
  76,155
  80,401
  84,838
  89,475
Interest expense (income), $m
  74
  342
  499
  668
  847
  1,037
  1,238
  1,449
  1,670
  1,902
  2,143
  2,395
  2,658
  2,931
  3,215
  3,509
  3,816
  4,134
  4,465
  4,810
  5,168
  5,540
  5,928
  6,331
  6,752
  7,191
  7,648
  8,125
  8,623
  9,144
  9,687
Earnings before tax, $m
  8,820
  9,991
  11,240
  12,563
  13,959
  15,427
  16,966
  18,575
  20,255
  22,005
  24,216
  26,111
  28,081
  30,128
  32,256
  34,466
  36,764
  39,153
  41,638
  44,224
  46,916
  49,719
  52,640
  55,685
  58,862
  62,176
  65,637
  69,252
  73,028
  76,977
Tax expense, $m
  2,381
  2,698
  3,035
  3,392
  3,769
  4,165
  4,581
  5,015
  5,469
  5,941
  6,538
  7,050
  7,582
  8,135
  8,709
  9,306
  9,926
  10,571
  11,242
  11,940
  12,667
  13,424
  14,213
  15,035
  15,893
  16,788
  17,722
  18,698
  19,718
  20,784
Net income, $m
  6,439
  7,294
  8,205
  9,171
  10,190
  11,262
  12,385
  13,560
  14,786
  16,063
  17,678
  19,061
  20,499
  21,994
  23,547
  25,160
  26,838
  28,582
  30,396
  32,283
  34,248
  36,295
  38,427
  40,650
  42,969
  45,389
  47,915
  50,554
  53,311
  56,193

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
  28,582
  32,557
  36,796
  41,291
  46,038
  51,031
  56,268
  61,745
  67,464
  73,425
  79,631
  86,086
  92,797
  99,772
  107,021
  114,553
  122,382
  130,522
  138,987
  147,795
  156,964
  166,513
  176,462
  186,833
  197,650
  208,937
  220,721
  233,027
  245,886
  259,327
Adjusted assets (=assets-cash), $m
  28,582
  32,557
  36,796
  41,291
  46,038
  51,031
  56,268
  61,745
  67,464
  73,425
  79,631
  86,086
  92,797
  99,772
  107,021
  114,553
  122,382
  130,522
  138,987
  147,795
  156,964
  166,513
  176,462
  186,833
  197,650
  208,937
  220,721
  233,027
  245,886
  259,327
Revenue / Adjusted assets
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
Average production assets, $m
  3,315
  3,776
  4,268
  4,790
  5,340
  5,919
  6,527
  7,162
  7,825
  8,517
  9,237
  9,985
  10,764
  11,573
  12,414
  13,287
  14,195
  15,140
  16,122
  17,143
  18,207
  19,314
  20,468
  21,671
  22,926
  24,235
  25,602
  27,030
  28,521
  30,080
Working capital, $m
  -5,033
  -5,733
  -6,480
  -7,271
  -8,107
  -8,986
  -9,908
  -10,873
  -11,880
  -12,930
  -14,022
  -15,159
  -16,341
  -17,569
  -18,846
  -20,172
  -21,551
  -22,984
  -24,475
  -26,026
  -27,640
  -29,322
  -31,074
  -32,900
  -34,805
  -36,792
  -38,867
  -41,034
  -43,299
  -45,666
Total debt, $m
  9,248
  12,361
  15,680
  19,200
  22,917
  26,826
  30,927
  35,216
  39,693
  44,361
  49,220
  54,274
  59,529
  64,991
  70,666
  76,564
  82,694
  89,068
  95,696
  102,593
  109,772
  117,248
  125,038
  133,159
  141,629
  150,467
  159,693
  169,329
  179,398
  189,922
Total liabilities, $m
  22,379
  25,492
  28,811
  32,331
  36,048
  39,957
  44,058
  48,347
  52,824
  57,492
  62,351
  67,405
  72,660
  78,122
  83,797
  89,695
  95,825
  102,199
  108,827
  115,724
  122,903
  130,379
  138,169
  146,290
  154,760
  163,598
  172,824
  182,460
  192,529
  203,053
Total equity, $m
  6,202
  7,065
  7,985
  8,960
  9,990
  11,074
  12,210
  13,399
  14,640
  15,933
  17,280
  18,681
  20,137
  21,651
  23,223
  24,858
  26,557
  28,323
  30,160
  32,072
  34,061
  36,133
  38,292
  40,543
  42,890
  45,339
  47,896
  50,567
  53,357
  56,274
Total liabilities and equity, $m
  28,581
  32,557
  36,796
  41,291
  46,038
  51,031
  56,268
  61,746
  67,464
  73,425
  79,631
  86,086
  92,797
  99,773
  107,020
  114,553
  122,382
  130,522
  138,987
  147,796
  156,964
  166,512
  176,461
  186,833
  197,650
  208,937
  220,720
  233,027
  245,886
  259,327
Debt-to-equity ratio
  1.490
  1.750
  1.960
  2.140
  2.290
  2.420
  2.530
  2.630
  2.710
  2.780
  2.850
  2.910
  2.960
  3.000
  3.040
  3.080
  3.110
  3.140
  3.170
  3.200
  3.220
  3.240
  3.270
  3.280
  3.300
  3.320
  3.330
  3.350
  3.360
  3.370
Adjusted equity ratio
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6,439
  7,294
  8,205
  9,171
  10,190
  11,262
  12,385
  13,560
  14,786
  16,063
  17,678
  19,061
  20,499
  21,994
  23,547
  25,160
  26,838
  28,582
  30,396
  32,283
  34,248
  36,295
  38,427
  40,650
  42,969
  45,389
  47,915
  50,554
  53,311
  56,193
Depreciation, amort., depletion, $m
  699
  742
  788
  837
  889
  943
  999
  1,059
  1,121
  1,185
  863
  933
  1,006
  1,082
  1,160
  1,242
  1,327
  1,415
  1,507
  1,602
  1,702
  1,805
  1,913
  2,025
  2,143
  2,265
  2,393
  2,526
  2,666
  2,811
Funds from operations, $m
  7,138
  8,036
  8,993
  10,008
  11,079
  12,204
  13,385
  14,619
  15,907
  17,249
  18,541
  19,994
  21,505
  23,075
  24,707
  26,402
  28,165
  29,997
  31,903
  33,886
  35,950
  38,100
  40,340
  42,676
  45,112
  47,654
  50,308
  53,080
  55,976
  59,004
Change in working capital, $m
  -653
  -700
  -746
  -792
  -836
  -879
  -922
  -965
  -1,007
  -1,050
  -1,093
  -1,137
  -1,182
  -1,228
  -1,276
  -1,326
  -1,379
  -1,433
  -1,491
  -1,551
  -1,615
  -1,681
  -1,752
  -1,826
  -1,905
  -1,988
  -2,075
  -2,167
  -2,264
  -2,367
Cash from operations, $m
  7,791
  8,736
  9,740
  10,800
  11,915
  13,084
  14,307
  15,583
  16,914
  18,299
  19,634
  21,131
  22,687
  24,303
  25,983
  27,729
  29,543
  31,430
  33,393
  35,437
  37,564
  39,781
  42,092
  44,502
  47,016
  49,641
  52,383
  55,247
  58,241
  61,371
Maintenance CAPEX, $m
  -270
  -310
  -353
  -399
  -448
  -499
  -553
  -610
  -669
  -731
  -796
  -863
  -933
  -1,006
  -1,082
  -1,160
  -1,242
  -1,327
  -1,415
  -1,507
  -1,602
  -1,702
  -1,805
  -1,913
  -2,025
  -2,143
  -2,265
  -2,393
  -2,526
  -2,666
New CAPEX, $m
  -428
  -461
  -492
  -521
  -551
  -579
  -607
  -635
  -663
  -691
  -720
  -749
  -778
  -809
  -841
  -874
  -908
  -944
  -982
  -1,022
  -1,063
  -1,108
  -1,154
  -1,203
  -1,255
  -1,309
  -1,367
  -1,427
  -1,492
  -1,559
Cash from investing activities, $m
  -698
  -771
  -845
  -920
  -999
  -1,078
  -1,160
  -1,245
  -1,332
  -1,422
  -1,516
  -1,612
  -1,711
  -1,815
  -1,923
  -2,034
  -2,150
  -2,271
  -2,397
  -2,529
  -2,665
  -2,810
  -2,959
  -3,116
  -3,280
  -3,452
  -3,632
  -3,820
  -4,018
  -4,225
Free cash flow, $m
  7,093
  7,965
  8,895
  9,879
  10,916
  12,005
  13,146
  14,338
  15,581
  16,876
  18,118
  19,519
  20,975
  22,488
  24,061
  25,695
  27,393
  29,159
  30,996
  32,908
  34,899
  36,972
  39,133
  41,386
  43,736
  46,190
  48,751
  51,427
  54,223
  57,146
Issuance/(repayment) of debt, $m
  2,914
  3,113
  3,319
  3,520
  3,717
  3,910
  4,100
  4,289
  4,478
  4,667
  4,859
  5,055
  5,255
  5,461
  5,675
  5,898
  6,130
  6,373
  6,629
  6,897
  7,179
  7,476
  7,790
  8,121
  8,470
  8,838
  9,226
  9,636
  10,068
  10,524
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  
  2,914
  3,113
  3,319
  3,520
  3,717
  3,910
  4,100
  4,289
  4,478
  4,667
  4,859
  5,055
  5,255
  5,461
  5,675
  5,898
  6,130
  6,373
  6,629
  6,897
  7,179
  7,476
  7,790
  8,121
  8,470
  8,838
  9,226
  9,636
  10,068
  10,524
Total cash flow (excl. dividends), $m
  10,007
  11,078
  12,214
  13,399
  14,633
  15,915
  17,246
  18,627
  20,059
  21,543
  22,977
  24,574
  26,230
  27,950
  29,736
  31,593
  33,523
  35,533
  37,625
  39,805
  42,078
  44,449
  46,923
  49,507
  52,206
  55,027
  57,977
  61,063
  64,291
  67,671
Retained Cash Flow (-), $m
  -807
  -863
  -920
  -976
  -1,030
  -1,084
  -1,136
  -1,189
  -1,241
  -1,293
  -1,347
  -1,401
  -1,456
  -1,514
  -1,573
  -1,635
  -1,699
  -1,766
  -1,837
  -1,911
  -1,990
  -2,072
  -2,159
  -2,251
  -2,347
  -2,449
  -2,557
  -2,671
  -2,790
  -2,917
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
  9,200
  10,215
  11,294
  12,424
  13,603
  14,832
  16,110
  17,438
  18,818
  20,250
  21,630
  23,173
  24,774
  26,436
  28,163
  29,958
  31,825
  33,766
  35,788
  37,894
  40,088
  42,377
  44,764
  47,256
  49,859
  52,578
  55,420
  58,392
  61,501
  64,754
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
  8,821
  9,352
  9,829
  10,230
  10,544
  10,764
  10,884
  10,899
  10,810
  10,616
  10,272
  9,889
  9,419
  8,875
  8,268
  7,613
  6,924
  6,218
  5,510
  4,815
  4,146
  3,516
  2,934
  2,407
  1,940
  1,534
  1,189
  903
  671
  488
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

MasterCard Incorporated is a technology company that connects consumers, financial institutions, merchants, governments and businesses across the world, enabling them to use electronic forms of payment. The Company operates through Payment Solutions segment. The Company allows user to make payments by creating a range of payment solutions and services using its brands, which include MasterCard, Maestro and Cirrus. The Company provides a range of products and solutions that support payment products, which customers can offer to their cardholders. The Company's services facilitate transactions on its network among cardholders, merchants, financial institutions and governments. The Company's products include consumer credit and charge, commercial, debit, prepaid, commercial and digital. The Company's consumer credit and charge offers a range of programs that enables issuers to provide consumers with cards allowing users to defer payment.

FINANCIAL RATIOS  of  Mastercard Incorporated (MA)

Valuation Ratios
P/E Ratio 64.2
Price to Sales 24.2
Price to Book 46
Price to Tangible Book
Price to Cash Flow 58.1
Price to Free Cash Flow 63.5
Growth Rates
Sales Growth Rate 11.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 11.7%
Cap. Spend. - 3 Yr. Gr. Rate 5%
Financial Strength
Quick Ratio NaN
Current Ratio 0.3
LT Debt to Equity 91.6%
Total Debt to Equity 91.6%
Interest Coverage 77
Management Effectiveness
Return On Assets 23.5%
Ret/ On Assets - 3 Yr. Avg. 24.2%
Return On Total Capital 40.3%
Ret/ On T. Cap. - 3 Yr. Avg. 43.2%
Return On Equity 69.5%
Return On Equity - 3 Yr. Avg. 59.9%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 56.5%
EBITDA Margin - 3 Yr. Avg. 56.5%
Operating Margin 53.5%
Oper. Margin - 3 Yr. Avg. 53.4%
Pre-Tax Margin 52.4%
Pre-Tax Margin - 3 Yr. Avg. 52.5%
Net Profit Margin 37.7%
Net Profit Margin - 3 Yr. Avg. 38.5%
Effective Tax Rate 28.1%
Eff/ Tax Rate - 3 Yr. Avg. 26.7%
Payout Ratio 20.6%

MA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MA stock intrinsic value calculation we used $14950 million for the last fiscal year's total revenue generated by Mastercard Incorporated. The default revenue input number comes from 0001 income statement of Mastercard Incorporated. 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 MA stock valuation model: a) initial revenue growth rate of 14.9% 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 MA is calculated based on our internal credit rating of Mastercard Incorporated, 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 Mastercard Incorporated.
    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 MA stock the variable cost ratio is equal to 47%.

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 MA 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 Mastercard Incorporated.

Corporate tax rate of 27% is the nominal tax rate for Mastercard Incorporated. 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 MA 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 MA are equal to 19.3%.

Life of production assets of 10.7 years is the average useful life of capital assets used in Mastercard Incorporated 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 MA is equal to -29.3%. 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 - $5395 million for Mastercard Incorporated - 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 1108.881 million for Mastercard Incorporated 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 Mastercard Incorporated at the current share price and the inputted number of shares is $267.1 billion.

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