Intrinsic value of Mastercard - MA

Previous Close

$164.32

  Intrinsic Value

$178.66

stock screener

  Rating & Target

hold

+9%

Previous close

$164.32

 
Intrinsic value

$178.66

 
Up/down potential

+9%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.47
  18.00
  16.70
  15.53
  14.48
  13.53
  12.68
  11.91
  11.22
  10.60
  10.04
  9.53
  9.08
  8.67
  8.30
  7.97
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.76
  5.68
  5.61
Revenue, $m
  10,776
  12,716
  14,839
  17,144
  19,626
  22,281
  25,105
  28,095
  31,247
  34,558
  38,026
  41,651
  45,433
  49,372
  53,472
  57,736
  62,168
  66,774
  71,561
  76,535
  81,706
  87,083
  92,675
  98,496
  104,555
  110,867
  117,445
  124,304
  131,459
  138,926
  146,723
Variable operating expenses, $m
 
  4,851
  5,632
  6,479
  7,392
  8,368
  9,407
  10,506
  11,665
  12,883
  14,158
  15,315
  16,706
  18,154
  19,662
  21,230
  22,860
  24,553
  26,313
  28,142
  30,044
  32,021
  34,077
  36,217
  38,445
  40,766
  43,185
  45,707
  48,338
  51,084
  53,951
Fixed operating expenses, $m
 
  920
  943
  967
  991
  1,016
  1,041
  1,067
  1,094
  1,121
  1,150
  1,178
  1,208
  1,238
  1,269
  1,301
  1,333
  1,366
  1,401
  1,436
  1,471
  1,508
  1,546
  1,585
  1,624
  1,665
  1,706
  1,749
  1,793
  1,838
  1,884
Total operating expenses, $m
  5,015
  5,771
  6,575
  7,446
  8,383
  9,384
  10,448
  11,573
  12,759
  14,004
  15,308
  16,493
  17,914
  19,392
  20,931
  22,531
  24,193
  25,919
  27,714
  29,578
  31,515
  33,529
  35,623
  37,802
  40,069
  42,431
  44,891
  47,456
  50,131
  52,922
  55,835
Operating income, $m
  5,761
  6,944
  8,264
  9,697
  11,242
  12,896
  14,657
  16,521
  18,487
  20,553
  22,718
  25,157
  27,519
  29,980
  32,541
  35,206
  37,976
  40,855
  43,847
  46,957
  50,191
  53,554
  57,052
  60,694
  64,486
  68,436
  72,554
  76,848
  81,328
  86,005
  90,889
EBITDA, $m
  6,134
  7,316
  8,669
  10,138
  11,721
  13,416
  15,221
  17,131
  19,146
  21,263
  23,482
  25,801
  28,221
  30,743
  33,368
  36,098
  38,936
  41,887
  44,953
  48,140
  51,454
  54,899
  58,485
  62,216
  66,101
  70,149
  74,369
  78,769
  83,360
  88,152
  93,156
Interest expense (income), $m
  74
  181
  110
  174
  244
  319
  399
  485
  575
  670
  770
  875
  985
  1,099
  1,218
  1,342
  1,471
  1,605
  1,744
  1,889
  2,039
  2,196
  2,358
  2,527
  2,703
  2,886
  3,077
  3,276
  3,483
  3,700
  3,925
Earnings before tax, $m
  5,646
  6,763
  8,154
  9,523
  10,998
  12,578
  14,258
  16,037
  17,912
  19,883
  21,948
  24,282
  26,534
  28,881
  31,323
  33,864
  36,505
  39,250
  42,103
  45,068
  48,151
  51,358
  54,694
  58,166
  61,782
  65,550
  69,476
  73,572
  77,845
  82,305
  86,963
Tax expense, $m
  1,587
  1,826
  2,201
  2,571
  2,970
  3,396
  3,850
  4,330
  4,836
  5,368
  5,926
  6,556
  7,164
  7,798
  8,457
  9,143
  9,856
  10,597
  11,368
  12,168
  13,001
  13,867
  14,767
  15,705
  16,681
  17,698
  18,759
  19,864
  21,018
  22,222
  23,480
Net income, $m
  4,059
  4,937
  5,952
  6,952
  8,029
  9,182
  10,408
  11,707
  13,076
  14,515
  16,022
  17,726
  19,370
  21,083
  22,866
  24,720
  26,648
  28,652
  30,735
  32,900
  35,151
  37,491
  39,927
  42,462
  45,101
  47,851
  50,718
  53,707
  56,827
  60,083
  63,483

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  8,335
  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
  18,675
  12,203
  14,241
  16,453
  18,835
  21,383
  24,093
  26,963
  29,987
  33,165
  36,493
  39,972
  43,601
  47,382
  51,317
  55,409
  59,663
  64,083
  68,676
  73,450
  78,413
  83,573
  88,940
  94,526
  100,341
  106,398
  112,711
  119,294
  126,160
  133,326
  140,809
Adjusted assets (=assets-cash), $m
  10,340
  12,203
  14,241
  16,453
  18,835
  21,383
  24,093
  26,963
  29,987
  33,165
  36,493
  39,972
  43,601
  47,382
  51,317
  55,409
  59,663
  64,083
  68,676
  73,450
  78,413
  83,573
  88,940
  94,526
  100,341
  106,398
  112,711
  119,294
  126,160
  133,326
  140,809
Revenue / Adjusted assets
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
  1.042
Average production assets, $m
  1,467
  1,729
  2,018
  2,332
  2,669
  3,030
  3,414
  3,821
  4,250
  4,700
  5,172
  5,665
  6,179
  6,715
  7,272
  7,852
  8,455
  9,081
  9,732
  10,409
  11,112
  11,843
  12,604
  13,395
  14,220
  15,078
  15,973
  16,905
  17,878
  18,894
  19,954
Working capital, $m
  6,022
  -2,734
  -3,190
  -3,686
  -4,220
  -4,790
  -5,398
  -6,040
  -6,718
  -7,430
  -8,176
  -8,955
  -9,768
  -10,615
  -11,497
  -12,413
  -13,366
  -14,356
  -15,386
  -16,455
  -17,567
  -18,723
  -19,925
  -21,177
  -22,479
  -23,836
  -25,251
  -26,725
  -28,264
  -29,869
  -31,545
Total debt, $m
  5,180
  3,144
  4,978
  6,968
  9,112
  11,405
  13,845
  16,427
  19,149
  22,009
  25,005
  28,136
  31,402
  34,805
  38,346
  42,029
  45,857
  49,836
  53,970
  58,266
  62,732
  67,376
  72,207
  77,234
  82,468
  87,920
  93,601
  99,525
  105,705
  112,155
  118,889
Total liabilities, $m
  13,019
  10,983
  12,817
  14,807
  16,951
  19,244
  21,684
  24,266
  26,988
  29,848
  32,844
  35,975
  39,241
  42,644
  46,185
  49,868
  53,696
  57,675
  61,809
  66,105
  70,571
  75,215
  80,046
  85,073
  90,307
  95,759
  101,440
  107,364
  113,544
  119,994
  126,728
Total equity, $m
  5,656
  1,220
  1,424
  1,645
  1,883
  2,138
  2,409
  2,696
  2,999
  3,316
  3,649
  3,997
  4,360
  4,738
  5,132
  5,541
  5,966
  6,408
  6,868
  7,345
  7,841
  8,357
  8,894
  9,453
  10,034
  10,640
  11,271
  11,929
  12,616
  13,333
  14,081
Total liabilities and equity, $m
  18,675
  12,203
  14,241
  16,452
  18,834
  21,382
  24,093
  26,962
  29,987
  33,164
  36,493
  39,972
  43,601
  47,382
  51,317
  55,409
  59,662
  64,083
  68,677
  73,450
  78,412
  83,572
  88,940
  94,526
  100,341
  106,399
  112,711
  119,293
  126,160
  133,327
  140,809
Debt-to-equity ratio
  0.916
  2.580
  3.500
  4.240
  4.840
  5.330
  5.750
  6.090
  6.390
  6.640
  6.850
  7.040
  7.200
  7.350
  7.470
  7.590
  7.690
  7.780
  7.860
  7.930
  8.000
  8.060
  8.120
  8.170
  8.220
  8.260
  8.300
  8.340
  8.380
  8.410
  8.440
Adjusted equity ratio
  -0.259
  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
  4,059
  4,937
  5,952
  6,952
  8,029
  9,182
  10,408
  11,707
  13,076
  14,515
  16,022
  17,726
  19,370
  21,083
  22,866
  24,720
  26,648
  28,652
  30,735
  32,900
  35,151
  37,491
  39,927
  42,462
  45,101
  47,851
  50,718
  53,707
  56,827
  60,083
  63,483
Depreciation, amort., depletion, $m
  373
  372
  405
  441
  479
  520
  564
  610
  659
  710
  763
  644
  702
  763
  826
  892
  961
  1,032
  1,106
  1,183
  1,263
  1,346
  1,432
  1,522
  1,616
  1,713
  1,815
  1,921
  2,032
  2,147
  2,268
Funds from operations, $m
  3,600
  5,309
  6,357
  7,392
  8,508
  9,702
  10,972
  12,317
  13,735
  15,224
  16,785
  18,370
  20,072
  21,846
  23,692
  25,613
  27,609
  29,684
  31,841
  34,083
  36,413
  38,837
  41,359
  43,984
  46,717
  49,565
  52,533
  55,628
  58,858
  62,230
  65,751
Change in working capital, $m
  -884
  -417
  -457
  -495
  -534
  -571
  -607
  -643
  -678
  -712
  -746
  -779
  -813
  -847
  -882
  -917
  -953
  -990
  -1,029
  -1,069
  -1,112
  -1,156
  -1,202
  -1,251
  -1,303
  -1,357
  -1,414
  -1,475
  -1,538
  -1,605
  -1,676
Cash from operations, $m
  4,484
  5,726
  6,814
  7,888
  9,041
  10,272
  11,579
  12,959
  14,412
  15,936
  17,531
  19,149
  20,885
  22,693
  24,574
  26,529
  28,562
  30,675
  32,870
  35,152
  37,525
  39,993
  42,561
  45,235
  48,020
  50,922
  53,947
  57,103
  60,396
  63,835
  67,427
Maintenance CAPEX, $m
  0
  -167
  -197
  -229
  -265
  -303
  -344
  -388
  -434
  -483
  -534
  -588
  -644
  -702
  -763
  -826
  -892
  -961
  -1,032
  -1,106
  -1,183
  -1,263
  -1,346
  -1,432
  -1,522
  -1,616
  -1,713
  -1,815
  -1,921
  -2,032
  -2,147
New CAPEX, $m
  -382
  -263
  -289
  -313
  -338
  -361
  -384
  -407
  -429
  -450
  -472
  -493
  -514
  -536
  -558
  -580
  -603
  -626
  -651
  -677
  -703
  -731
  -761
  -792
  -824
  -858
  -895
  -933
  -973
  -1,016
  -1,060
Cash from investing activities, $m
  -1,167
  -430
  -486
  -542
  -603
  -664
  -728
  -795
  -863
  -933
  -1,006
  -1,081
  -1,158
  -1,238
  -1,321
  -1,406
  -1,495
  -1,587
  -1,683
  -1,783
  -1,886
  -1,994
  -2,107
  -2,224
  -2,346
  -2,474
  -2,608
  -2,748
  -2,894
  -3,048
  -3,207
Free cash flow, $m
  3,317
  5,296
  6,328
  7,345
  8,439
  9,608
  10,851
  12,165
  13,549
  15,003
  16,525
  18,068
  19,727
  21,455
  23,253
  25,123
  27,067
  29,087
  31,187
  33,370
  35,639
  37,999
  40,455
  43,011
  45,673
  48,447
  51,339
  54,355
  57,502
  60,788
  64,220
Issuance/(repayment) of debt, $m
  1,972
  -2,036
  1,834
  1,990
  2,144
  2,293
  2,440
  2,582
  2,722
  2,860
  2,996
  3,131
  3,266
  3,403
  3,541
  3,683
  3,828
  3,978
  4,134
  4,296
  4,466
  4,644
  4,831
  5,027
  5,234
  5,452
  5,682
  5,924
  6,180
  6,450
  6,734
Issuance/(repurchase) of shares, $m
  -3,474
  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  
  -1,456
  -2,036
  1,834
  1,990
  2,144
  2,293
  2,440
  2,582
  2,722
  2,860
  2,996
  3,131
  3,266
  3,403
  3,541
  3,683
  3,828
  3,978
  4,134
  4,296
  4,466
  4,644
  4,831
  5,027
  5,234
  5,452
  5,682
  5,924
  6,180
  6,450
  6,734
Total cash flow (excl. dividends), $m
  1,811
  3,260
  8,162
  9,336
  10,583
  11,901
  13,290
  14,747
  16,271
  17,863
  19,521
  21,199
  22,994
  24,858
  26,795
  28,806
  30,895
  33,066
  35,321
  37,666
  40,105
  42,643
  45,286
  48,038
  50,907
  53,899
  57,021
  60,279
  63,682
  67,238
  70,954
Retained Cash Flow (-), $m
  372
  -3,899
  -204
  -221
  -238
  -255
  -271
  -287
  -302
  -318
  -333
  -348
  -363
  -378
  -393
  -409
  -425
  -442
  -459
  -477
  -496
  -516
  -537
  -559
  -582
  -606
  -631
  -658
  -687
  -717
  -748
Prev. year cash balance distribution, $m
 
  8,335
  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
 
  7,696
  7,959
  9,114
  10,344
  11,647
  13,019
  14,460
  15,969
  17,545
  19,188
  20,851
  22,631
  24,480
  26,401
  28,397
  30,470
  32,624
  34,862
  37,189
  39,609
  42,127
  44,749
  47,480
  50,326
  53,293
  56,389
  59,621
  62,996
  66,521
  70,206
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
 
  7,379
  7,286
  7,932
  8,518
  9,028
  9,448
  9,769
  9,981
  10,079
  10,060
  9,902
  9,657
  9,308
  8,863
  8,337
  7,743
  7,098
  6,420
  5,726
  5,033
  4,357
  3,713
  3,112
  2,563
  2,073
  1,645
  1,280
  975
  726
  529
Current shareholders' claim on cash, %
  100
  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 (MA)

Valuation Ratios
P/E Ratio 43.8
Price to Sales 16.5
Price to Book 31.4
Price to Tangible Book
Price to Cash Flow 39.6
Price to Free Cash Flow 43.3
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 $10776 million for the last fiscal year's total revenue generated by Mastercard. The default revenue input number comes from 2016 income statement of Mastercard. 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 18% 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, 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.
    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 38.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $898 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 3.5% for Mastercard.

Corporate tax rate of 27% is the nominal tax rate for Mastercard. 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 13.6%.

Life of production assets of 8.8 years is the average useful life of capital assets used in Mastercard 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 -21.5%. 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 - $5656 million for Mastercard - 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 1061.51 million for Mastercard 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 at the current share price and the inputted number of shares is $174.4 billion.

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Financial statements of MA
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