Intrinsic value of McKesson - MCK

Previous Close

$149.59

  Intrinsic Value

$1,205

stock screener

  Rating & Target

str. buy

+706%

Previous close

$149.59

 
Intrinsic value

$1,205

 
Up/down potential

+706%

 
Rating

str. buy

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

We calculate the intrinsic value of MCK 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of McKesson (MCK) stock.

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
2017(a)
   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, %
  4.01
  4.20
  4.28
  4.35
  4.42
  4.48
  4.53
  4.57
  4.62
  4.66
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
Revenue, $m
  198,533
  206,871
  215,725
  225,114
  235,057
  245,576
  256,694
  268,438
  280,833
  293,907
  307,692
  322,218
  337,520
  353,633
  370,596
  388,447
  407,230
  426,988
  447,767
  469,618
  492,591
  516,742
  542,127
  568,806
  596,843
  626,304
  657,260
  689,783
  723,951
  759,846
  797,552
Variable operating expenses, $m
 
  110,632
  115,321
  120,294
  125,561
  131,132
  137,021
  143,242
  149,807
  156,732
  164,033
  170,668
  178,773
  187,308
  196,293
  205,748
  215,697
  226,162
  237,168
  248,742
  260,910
  273,702
  287,147
  301,278
  316,129
  331,733
  348,129
  365,356
  383,454
  402,466
  422,437
Fixed operating expenses, $m
 
  89,458
  91,694
  93,987
  96,336
  98,745
  101,213
  103,744
  106,337
  108,996
  111,721
  114,514
  117,377
  120,311
  123,319
  126,402
  129,562
  132,801
  136,121
  139,524
  143,012
  146,587
  150,252
  154,008
  157,858
  161,805
  165,850
  169,996
  174,246
  178,602
  183,067
Total operating expenses, $m
  191,434
  200,090
  207,015
  214,281
  221,897
  229,877
  238,234
  246,986
  256,144
  265,728
  275,754
  285,182
  296,150
  307,619
  319,612
  332,150
  345,259
  358,963
  373,289
  388,266
  403,922
  420,289
  437,399
  455,286
  473,987
  493,538
  513,979
  535,352
  557,700
  581,068
  605,504
Operating income, $m
  7,099
  6,782
  8,710
  10,833
  13,160
  15,699
  18,460
  21,453
  24,689
  28,180
  31,938
  37,036
  41,370
  46,014
  50,984
  56,298
  61,972
  68,025
  74,479
  81,353
  88,670
  96,453
  104,728
  113,520
  122,856
  132,766
  143,280
  154,431
  166,251
  178,778
  192,047
EBITDA, $m
  8,009
  8,173
  10,115
  12,254
  14,597
  17,153
  19,931
  22,943
  26,199
  29,711
  33,492
  37,554
  41,913
  46,583
  51,581
  56,923
  62,627
  68,712
  75,199
  82,108
  89,462
  97,285
  105,600
  114,435
  123,816
  133,774
  144,338
  155,541
  167,416
  180,000
  193,330
Interest expense (income), $m
  315
  278
  356
  438
  525
  618
  716
  819
  929
  1,044
  1,166
  1,294
  1,430
  1,572
  1,722
  1,880
  2,046
  2,221
  2,405
  2,599
  2,802
  3,016
  3,241
  3,477
  3,725
  3,987
  4,261
  4,549
  4,852
  5,170
  5,504
Earnings before tax, $m
  6,891
  6,504
  8,354
  10,395
  12,634
  15,081
  17,744
  20,633
  23,760
  27,135
  30,772
  35,741
  39,940
  44,442
  49,262
  54,418
  59,925
  65,804
  72,074
  78,754
  85,868
  93,437
  101,487
  110,042
  119,131
  128,780
  139,020
  149,882
  161,400
  173,608
  186,543
Tax expense, $m
  1,614
  1,756
  2,256
  2,807
  3,411
  4,072
  4,791
  5,571
  6,415
  7,327
  8,308
  9,650
  10,784
  11,999
  13,301
  14,693
  16,180
  17,767
  19,460
  21,264
  23,184
  25,228
  27,401
  29,711
  32,165
  34,771
  37,535
  40,468
  43,578
  46,874
  50,367
Net income, $m
  5,070
  4,748
  6,098
  7,588
  9,223
  11,009
  12,953
  15,062
  17,345
  19,809
  22,464
  26,091
  29,156
  32,443
  35,961
  39,725
  43,746
  48,037
  52,614
  57,491
  62,683
  68,209
  74,086
  80,331
  86,965
  94,009
  101,484
  109,414
  117,822
  126,734
  136,176

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,783
  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
  60,969
  60,631
  63,226
  65,977
  68,891
  71,974
  75,233
  78,675
  82,307
  86,139
  90,179
  94,437
  98,921
  103,644
  108,615
  113,847
  119,352
  125,143
  131,233
  137,637
  144,370
  151,448
  158,888
  166,707
  174,925
  183,559
  192,632
  202,164
  212,178
  222,698
  233,749
Adjusted assets (=assets-cash), $m
  58,186
  60,631
  63,226
  65,977
  68,891
  71,974
  75,233
  78,675
  82,307
  86,139
  90,179
  94,437
  98,921
  103,644
  108,615
  113,847
  119,352
  125,143
  131,233
  137,637
  144,370
  151,448
  158,888
  166,707
  174,925
  183,559
  192,632
  202,164
  212,178
  222,698
  233,749
Revenue / Adjusted assets
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
  3.412
Average production assets, $m
  5,628
  5,792
  6,040
  6,303
  6,582
  6,876
  7,187
  7,516
  7,863
  8,229
  8,615
  9,022
  9,451
  9,902
  10,377
  10,877
  11,402
  11,956
  12,537
  13,149
  13,793
  14,469
  15,180
  15,927
  16,712
  17,537
  18,403
  19,314
  20,271
  21,276
  22,331
Working capital, $m
  1,336
  -207
  -216
  -225
  -235
  -246
  -257
  -268
  -281
  -294
  -308
  -322
  -338
  -354
  -371
  -388
  -407
  -427
  -448
  -470
  -493
  -517
  -542
  -569
  -597
  -626
  -657
  -690
  -724
  -760
  -798
Total debt, $m
  8,545
  9,358
  11,528
  13,828
  16,264
  18,841
  21,566
  24,443
  27,480
  30,683
  34,061
  37,620
  41,369
  45,317
  49,473
  53,847
  58,449
  63,290
  68,382
  73,736
  79,365
  85,282
  91,502
  98,038
  104,908
  112,127
  119,711
  127,680
  136,052
  144,847
  154,085
Total liabilities, $m
  49,874
  50,687
  52,857
  55,157
  57,593
  60,170
  62,895
  65,772
  68,809
  72,012
  75,390
  78,949
  82,698
  86,646
  90,802
  95,176
  99,778
  104,619
  109,711
  115,065
  120,694
  126,611
  132,831
  139,367
  146,237
  153,456
  161,040
  169,009
  177,381
  186,176
  195,414
Total equity, $m
  11,095
  9,943
  10,369
  10,820
  11,298
  11,804
  12,338
  12,903
  13,498
  14,127
  14,789
  15,488
  16,223
  16,998
  17,813
  18,671
  19,574
  20,523
  21,522
  22,572
  23,677
  24,838
  26,058
  27,340
  28,688
  30,104
  31,592
  33,155
  34,797
  36,522
  38,335
Total liabilities and equity, $m
  60,969
  60,630
  63,226
  65,977
  68,891
  71,974
  75,233
  78,675
  82,307
  86,139
  90,179
  94,437
  98,921
  103,644
  108,615
  113,847
  119,352
  125,142
  131,233
  137,637
  144,371
  151,449
  158,889
  166,707
  174,925
  183,560
  192,632
  202,164
  212,178
  222,698
  233,749
Debt-to-equity ratio
  0.770
  0.940
  1.110
  1.280
  1.440
  1.600
  1.750
  1.890
  2.040
  2.170
  2.300
  2.430
  2.550
  2.670
  2.780
  2.880
  2.990
  3.080
  3.180
  3.270
  3.350
  3.430
  3.510
  3.590
  3.660
  3.720
  3.790
  3.850
  3.910
  3.970
  4.020
Adjusted equity ratio
  0.146
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  5,070
  4,748
  6,098
  7,588
  9,223
  11,009
  12,953
  15,062
  17,345
  19,809
  22,464
  26,091
  29,156
  32,443
  35,961
  39,725
  43,746
  48,037
  52,614
  57,491
  62,683
  68,209
  74,086
  80,331
  86,965
  94,009
  101,484
  109,414
  117,822
  126,734
  136,176
Depreciation, amort., depletion, $m
  910
  1,391
  1,406
  1,421
  1,437
  1,454
  1,472
  1,491
  1,511
  1,532
  1,554
  519
  543
  569
  596
  625
  655
  687
  721
  756
  793
  832
  872
  915
  960
  1,008
  1,058
  1,110
  1,165
  1,223
  1,283
Funds from operations, $m
  6,066
  6,140
  7,504
  9,009
  10,660
  12,463
  14,425
  16,553
  18,855
  21,340
  24,017
  26,610
  29,700
  33,012
  36,558
  40,350
  44,401
  48,724
  53,334
  58,246
  63,476
  69,041
  74,958
  81,246
  87,926
  95,017
  102,542
  110,524
  118,987
  127,956
  137,460
Change in working capital, $m
  1,322
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -33
  -34
  -36
  -38
Cash from operations, $m
  4,744
  6,148
  7,513
  9,019
  10,670
  12,473
  14,436
  16,564
  18,868
  21,353
  24,031
  26,624
  29,715
  33,028
  36,575
  40,368
  44,420
  48,744
  53,355
  58,268
  63,499
  69,065
  74,983
  81,273
  87,954
  95,046
  102,573
  110,556
  119,021
  127,992
  137,497
Maintenance CAPEX, $m
  0
  -323
  -333
  -347
  -362
  -378
  -395
  -413
  -432
  -452
  -473
  -495
  -519
  -543
  -569
  -596
  -625
  -655
  -687
  -721
  -756
  -793
  -832
  -872
  -915
  -960
  -1,008
  -1,058
  -1,110
  -1,165
  -1,223
New CAPEX, $m
  -562
  -164
  -248
  -263
  -278
  -295
  -311
  -329
  -347
  -366
  -386
  -407
  -428
  -451
  -475
  -500
  -526
  -553
  -582
  -612
  -643
  -676
  -711
  -747
  -785
  -825
  -867
  -911
  -957
  -1,005
  -1,056
Cash from investing activities, $m
  -3,796
  -487
  -581
  -610
  -640
  -673
  -706
  -742
  -779
  -818
  -859
  -902
  -947
  -994
  -1,044
  -1,096
  -1,151
  -1,208
  -1,269
  -1,333
  -1,399
  -1,469
  -1,543
  -1,619
  -1,700
  -1,785
  -1,875
  -1,969
  -2,067
  -2,170
  -2,279
Free cash flow, $m
  948
  5,660
  6,932
  8,409
  10,029
  11,800
  13,729
  15,823
  18,089
  20,535
  23,172
  25,722
  28,768
  32,034
  35,531
  39,272
  43,269
  47,535
  52,086
  56,936
  62,100
  67,596
  73,441
  79,654
  86,253
  93,261
  100,698
  108,588
  116,954
  125,822
  135,219
Issuance/(repayment) of debt, $m
  393
  2,053
  2,169
  2,300
  2,436
  2,577
  2,724
  2,877
  3,037
  3,203
  3,377
  3,559
  3,749
  3,948
  4,156
  4,374
  4,602
  4,841
  5,091
  5,354
  5,629
  5,917
  6,220
  6,537
  6,870
  7,219
  7,585
  7,969
  8,372
  8,795
  9,239
Issuance/(repurchase) of shares, $m
  -2,191
  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  
  -1,816
  2,053
  2,169
  2,300
  2,436
  2,577
  2,724
  2,877
  3,037
  3,203
  3,377
  3,559
  3,749
  3,948
  4,156
  4,374
  4,602
  4,841
  5,091
  5,354
  5,629
  5,917
  6,220
  6,537
  6,870
  7,219
  7,585
  7,969
  8,372
  8,795
  9,239
Total cash flow (excl. dividends), $m
  -1,012
  7,713
  9,102
  10,709
  12,465
  14,378
  16,453
  18,700
  21,125
  23,739
  26,550
  29,282
  32,517
  35,982
  39,687
  43,645
  47,871
  52,376
  57,177
  62,290
  67,729
  73,513
  79,661
  86,190
  93,123
  100,480
  108,283
  116,557
  125,326
  134,617
  144,457
Retained Cash Flow (-), $m
  -2,171
  -391
  -426
  -451
  -478
  -506
  -534
  -564
  -596
  -628
  -663
  -698
  -735
  -775
  -815
  -858
  -903
  -950
  -999
  -1,050
  -1,104
  -1,161
  -1,220
  -1,282
  -1,348
  -1,416
  -1,488
  -1,563
  -1,642
  -1,725
  -1,812
Prev. year cash balance distribution, $m
 
  1,543
  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
 
  8,865
  8,676
  10,258
  11,987
  13,872
  15,919
  18,135
  20,530
  23,110
  25,887
  28,583
  31,782
  35,207
  38,872
  42,787
  46,968
  51,427
  56,179
  61,239
  66,625
  72,352
  78,441
  84,908
  91,775
  99,064
  106,795
  114,993
  123,684
  132,892
  142,645
Discount rate, %
 
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
 
  8,483
  7,911
  8,871
  9,784
  10,629
  11,387
  12,037
  12,562
  12,948
  13,183
  13,127
  13,054
  12,819
  12,429
  11,894
  11,230
  10,457
  9,599
  8,681
  7,730
  6,773
  5,835
  4,940
  4,105
  3,346
  2,673
  2,091
  1,599
  1,195
  871
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

McKesson Corporation is a healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information technology company. The Company provides medicines, medical products and healthcare services by partnering with pharmaceutical manufacturers, providers, pharmacies, governments and other organizations in healthcare. It operates through two segments: McKesson Distribution Solutions and McKesson Technology Solutions. The distribution solutions segment distributes branded and generic pharmaceutical drugs and other healthcare-related products internationally and provides practice management, technology, clinical support and business solutions to community-based oncology and other specialty practices. Technology Solutions segment provides software and analytics, network solutions and technology-enabled services.

FINANCIAL RATIOS  of  McKesson (MCK)

Valuation Ratios
P/E Ratio 6.2
Price to Sales 0.2
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 6.7
Price to Free Cash Flow 7.5
Growth Rates
Sales Growth Rate 4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -17%
Cap. Spend. - 3 Yr. Gr. Rate 6.3%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 65.8%
Total Debt to Equity 77%
Interest Coverage 23
Management Effectiveness
Return On Assets 9%
Ret/ On Assets - 3 Yr. Avg. 5.6%
Return On Total Capital 27.6%
Ret/ On T. Cap. - 3 Yr. Avg. 16.2%
Return On Equity 50.7%
Return On Equity - 3 Yr. Avg. 31.7%
Asset Turnover 3.4
Profitability Ratios
Gross Margin 5.7%
Gross Margin - 3 Yr. Avg. 6%
EBITDA Margin 4.1%
EBITDA Margin - 3 Yr. Avg. 2.9%
Operating Margin 3.6%
Oper. Margin - 3 Yr. Avg. 2.4%
Pre-Tax Margin 3.5%
Pre-Tax Margin - 3 Yr. Avg. 2.2%
Net Profit Margin 2.6%
Net Profit Margin - 3 Yr. Avg. 1.5%
Effective Tax Rate 23.4%
Eff/ Tax Rate - 3 Yr. Avg. 27.3%
Payout Ratio 5%

MCK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MCK stock intrinsic value calculation we used $198533 million for the last fiscal year's total revenue generated by McKesson. The default revenue input number comes from 2017 income statement of McKesson. 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 MCK stock valuation model: a) initial revenue growth rate of 4.2% 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 4.5%, whose default value for MCK is calculated based on our internal credit rating of McKesson, 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 McKesson.
    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 MCK stock the variable cost ratio is equal to 53.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $87276 million in the base year in the intrinsic value calculation for MCK 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 3.8% for McKesson.

Corporate tax rate of 27% is the nominal tax rate for McKesson. 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 MCK 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 MCK are equal to 2.8%.

Life of production assets of 17.4 years is the average useful life of capital assets used in McKesson 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 MCK is equal to -0.1%. 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 - $11095 million for McKesson - 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 210.837 million for McKesson 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 McKesson at the current share price and the inputted number of shares is $31.5 billion.

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COMPANY NEWS

▶ McKesson Corporation Announces Pricing of Tender Offer   [Feb-22-18 04:10PM  Business Wire]
▶ No-Brainer: McKesson Over Amazon   [Feb-15-18 02:37PM  GuruFocus.com]
▶ Fighting opioid lawsuits, McKesson offers new solution for old pills   [05:15PM  American City Business Journals]
▶ McKesson Continues Its Transformation   [09:23AM  Motley Fool]
▶ McKesson beats Street 3Q forecasts   [07:37AM  Associated Press]
▶ Colorado county sues drug companies over opioid crisis   [Jan-30-18 12:30PM  American City Business Journals]
▶ Value Screeners Identify Good Opportunities for 2018   [Jan-26-18 05:30PM  GuruFocus.com]
▶ [$$] Landmark Health Explores Possible Sale   [Jan-25-18 12:29PM  The Wall Street Journal]
▶ 7 Quality Stocks in Gurus' Portfolios   [03:22PM  GuruFocus.com]
▶ [$$] New York City Sues Companies Over Opioid Abuse   [12:06AM  The Wall Street Journal]
▶ [$$] New York City Sues Companies Over Opioid Abuse   [Jan-23-18 02:23PM  The Wall Street Journal]
▶ Selling Drugs Is Harder Than It Looks   [Jan-19-18 07:00AM  Morningstar]
▶ Mckesson Earns Relative Strength Rating Upgrade   [Jan-18-18 03:00AM  Investor's Business Daily]
▶ 10 Cheap Stocks With Growing Dividends   [Jan-16-18 06:00AM  Morningstar]
▶ McKesson CEO: Claims that company ignored opioid crisis are 'nonsense' (Video)   [Jan-09-18 04:40PM  American City Business Journals]
▶ McKesson CEO Hammergren Weighs in on Tech Giants Eyeing Pharma   [Jan-08-18 11:39PM  Bloomberg Video]
▶ A Controversial Pick of the Year for 2018   [Jan-06-18 12:00PM  TheStreet.com]
▶ Year in Review: CoverMyMeds $1.3B acquisition biggest tech and M&A story of 2017   [Dec-29-17 03:04PM  American City Business Journals]
▶ 12 Fabulous Fortune Reads From 2017   [Dec-27-17 09:00AM  Fortune]
▶ 10 Energizer Bunny Stocks   [Dec-11-17 12:10PM  Forbes]
▶ Top 10 Largest Pharmaceutical Companies By Revenue in 2017   [Nov-23-17 09:00AM  Insider Monkey]
▶ ETFs with exposure to McKesson Corp. : November 13, 2017   [Nov-13-17 12:44PM  Capital Cube]
Financial statements of MCK
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