Intrinsic value of McKesson Corporation - MCK

Previous Close

$144.60

  Intrinsic Value

$383.38

stock screener

  Rating & Target

str. buy

+165%

Previous close

$144.60

 
Intrinsic value

$383.38

 
Up/down potential

+165%

 
Rating

str. buy

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.

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 27.7

 

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, %
  4.80
  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
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
  4.98
  4.98
  4.99
  4.99
  4.99
  4.99
  4.99
Revenue, $m
  218,358
  228,883
  239,956
  251,604
  263,854
  276,735
  290,278
  304,514
  319,478
  335,204
  351,731
  369,096
  387,343
  406,513
  426,653
  447,810
  470,034
  493,379
  517,900
  543,655
  570,706
  599,116
  628,954
  660,290
  693,199
  727,760
  764,054
  802,167
  842,192
  884,222
Variable operating expenses, $m
  214,792
  225,073
  235,889
  247,267
  259,232
  271,815
  285,043
  298,949
  313,565
  328,926
  343,566
  360,529
  378,352
  397,077
  416,749
  437,415
  459,124
  481,927
  505,879
  531,036
  557,459
  585,210
  614,355
  644,964
  677,109
  710,867
  746,319
  783,548
  822,643
  863,698
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
  214,792
  225,073
  235,889
  247,267
  259,232
  271,815
  285,043
  298,949
  313,565
  328,926
  343,566
  360,529
  378,352
  397,077
  416,749
  437,415
  459,124
  481,927
  505,879
  531,036
  557,459
  585,210
  614,355
  644,964
  677,109
  710,867
  746,319
  783,548
  822,643
  863,698
Operating income, $m
  3,566
  3,810
  4,067
  4,338
  4,622
  4,921
  5,235
  5,566
  5,913
  6,278
  8,164
  8,567
  8,991
  9,436
  9,903
  10,394
  10,910
  11,452
  12,021
  12,619
  13,247
  13,906
  14,599
  15,326
  16,090
  16,893
  17,735
  18,620
  19,549
  20,524
EBITDA, $m
  5,642
  5,914
  6,200
  6,501
  6,817
  7,150
  7,500
  7,868
  8,254
  8,661
  9,088
  9,536
  10,008
  10,503
  11,024
  11,570
  12,144
  12,748
  13,381
  14,047
  14,746
  15,480
  16,251
  17,060
  17,910
  18,803
  19,741
  20,726
  21,760
  22,846
Interest expense (income), $m
  315
  426
  558
  696
  841
  994
  1,154
  1,323
  1,501
  1,687
  1,884
  2,090
  2,307
  2,534
  2,773
  3,025
  3,289
  3,566
  3,858
  4,164
  4,485
  4,823
  5,178
  5,550
  5,942
  6,353
  6,784
  7,237
  7,713
  8,213
  8,738
Earnings before tax, $m
  3,140
  3,253
  3,372
  3,497
  3,628
  3,767
  3,912
  4,065
  4,226
  4,394
  6,074
  6,261
  6,457
  6,662
  6,878
  7,105
  7,344
  7,594
  7,857
  8,134
  8,424
  8,729
  9,049
  9,385
  9,738
  10,108
  10,498
  10,906
  11,336
  11,786
Tax expense, $m
  848
  878
  910
  944
  980
  1,017
  1,056
  1,098
  1,141
  1,187
  1,640
  1,690
  1,743
  1,799
  1,857
  1,918
  1,983
  2,050
  2,122
  2,196
  2,274
  2,357
  2,443
  2,534
  2,629
  2,729
  2,834
  2,945
  3,061
  3,182
Net income, $m
  2,292
  2,374
  2,461
  2,553
  2,649
  2,750
  2,856
  2,967
  3,085
  3,208
  4,434
  4,570
  4,713
  4,864
  5,021
  5,187
  5,361
  5,544
  5,736
  5,938
  6,149
  6,372
  6,606
  6,851
  7,109
  7,379
  7,663
  7,962
  8,275
  8,604

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
  63,274
  66,324
  69,532
  72,908
  76,457
  80,190
  84,114
  88,239
  92,575
  97,133
  101,921
  106,953
  112,241
  117,796
  123,632
  129,762
  136,202
  142,967
  150,072
  157,536
  165,374
  173,606
  182,253
  191,333
  200,869
  210,884
  221,401
  232,445
  244,043
  256,222
Adjusted assets (=assets-cash), $m
  63,274
  66,324
  69,532
  72,908
  76,457
  80,190
  84,114
  88,239
  92,575
  97,133
  101,921
  106,953
  112,241
  117,796
  123,632
  129,762
  136,202
  142,967
  150,072
  157,536
  165,374
  173,606
  182,253
  191,333
  200,869
  210,884
  221,401
  232,445
  244,043
  256,222
Revenue / Adjusted assets
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
  3.451
Average production assets, $m
  10,263
  10,758
  11,278
  11,825
  12,401
  13,007
  13,643
  14,312
  15,015
  15,755
  16,531
  17,348
  18,205
  19,106
  20,053
  21,047
  22,092
  23,189
  24,341
  25,552
  26,823
  28,158
  29,561
  31,034
  32,580
  34,205
  35,911
  37,702
  39,583
  41,558
Working capital, $m
  -1,092
  -1,144
  -1,200
  -1,258
  -1,319
  -1,384
  -1,451
  -1,523
  -1,597
  -1,676
  -1,759
  -1,845
  -1,937
  -2,033
  -2,133
  -2,239
  -2,350
  -2,467
  -2,589
  -2,718
  -2,854
  -2,996
  -3,145
  -3,301
  -3,466
  -3,639
  -3,820
  -4,011
  -4,211
  -4,421
Total debt, $m
  10,327
  12,882
  15,571
  18,400
  21,374
  24,502
  27,791
  31,248
  34,881
  38,700
  42,713
  46,930
  51,361
  56,016
  60,906
  66,044
  71,441
  77,109
  83,064
  89,318
  95,886
  102,785
  110,031
  117,640
  125,631
  134,024
  142,837
  152,092
  161,811
  172,017
Total liabilities, $m
  53,024
  55,579
  58,268
  61,097
  64,071
  67,199
  70,488
  73,945
  77,578
  81,397
  85,410
  89,627
  94,058
  98,713
  103,603
  108,741
  114,138
  119,806
  125,761
  132,015
  138,583
  145,482
  152,728
  160,337
  168,328
  176,721
  185,534
  194,789
  204,508
  214,714
Total equity, $m
  10,250
  10,744
  11,264
  11,811
  12,386
  12,991
  13,627
  14,295
  14,997
  15,735
  16,511
  17,326
  18,183
  19,083
  20,028
  21,021
  22,065
  23,161
  24,312
  25,521
  26,791
  28,124
  29,525
  30,996
  32,541
  34,163
  35,867
  37,656
  39,535
  41,508
Total liabilities and equity, $m
  63,274
  66,323
  69,532
  72,908
  76,457
  80,190
  84,115
  88,240
  92,575
  97,132
  101,921
  106,953
  112,241
  117,796
  123,631
  129,762
  136,203
  142,967
  150,073
  157,536
  165,374
  173,606
  182,253
  191,333
  200,869
  210,884
  221,401
  232,445
  244,043
  256,222
Debt-to-equity ratio
  1.010
  1.200
  1.380
  1.560
  1.730
  1.890
  2.040
  2.190
  2.330
  2.460
  2.590
  2.710
  2.820
  2.940
  3.040
  3.140
  3.240
  3.330
  3.420
  3.500
  3.580
  3.650
  3.730
  3.800
  3.860
  3.920
  3.980
  4.040
  4.090
  4.140
Adjusted equity ratio
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,292
  2,374
  2,461
  2,553
  2,649
  2,750
  2,856
  2,967
  3,085
  3,208
  4,434
  4,570
  4,713
  4,864
  5,021
  5,187
  5,361
  5,544
  5,736
  5,938
  6,149
  6,372
  6,606
  6,851
  7,109
  7,379
  7,663
  7,962
  8,275
  8,604
Depreciation, amort., depletion, $m
  2,076
  2,104
  2,133
  2,163
  2,195
  2,229
  2,265
  2,302
  2,341
  2,383
  924
  969
  1,017
  1,067
  1,120
  1,176
  1,234
  1,295
  1,360
  1,427
  1,499
  1,573
  1,651
  1,734
  1,820
  1,911
  2,006
  2,106
  2,211
  2,322
Funds from operations, $m
  4,368
  4,478
  4,594
  4,716
  4,844
  4,979
  5,121
  5,270
  5,426
  5,591
  5,358
  5,540
  5,730
  5,931
  6,142
  6,363
  6,595
  6,839
  7,096
  7,365
  7,648
  7,945
  8,257
  8,585
  8,929
  9,290
  9,669
  10,068
  10,486
  10,926
Change in working capital, $m
  -50
  -53
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
  -123
  -129
  -135
  -142
  -149
  -157
  -165
  -173
  -181
  -191
  -200
  -210
Cash from operations, $m
  4,418
  4,531
  4,649
  4,774
  4,905
  5,043
  5,188
  5,341
  5,501
  5,669
  5,441
  5,626
  5,822
  6,027
  6,242
  6,469
  6,706
  6,956
  7,218
  7,494
  7,783
  8,087
  8,406
  8,741
  9,093
  9,463
  9,851
  10,259
  10,687
  11,136
Maintenance CAPEX, $m
  -542
  -573
  -601
  -630
  -661
  -693
  -727
  -762
  -800
  -839
  -880
  -924
  -969
  -1,017
  -1,067
  -1,120
  -1,176
  -1,234
  -1,295
  -1,360
  -1,427
  -1,499
  -1,573
  -1,651
  -1,734
  -1,820
  -1,911
  -2,006
  -2,106
  -2,211
New CAPEX, $m
  -566
  -495
  -520
  -547
  -576
  -605
  -637
  -669
  -703
  -739
  -777
  -816
  -858
  -901
  -947
  -994
  -1,045
  -1,097
  -1,152
  -1,210
  -1,271
  -1,335
  -1,402
  -1,473
  -1,547
  -1,624
  -1,706
  -1,791
  -1,881
  -1,975
Cash from investing activities, $m
  -1,108
  -1,068
  -1,121
  -1,177
  -1,237
  -1,298
  -1,364
  -1,431
  -1,503
  -1,578
  -1,657
  -1,740
  -1,827
  -1,918
  -2,014
  -2,114
  -2,221
  -2,331
  -2,447
  -2,570
  -2,698
  -2,834
  -2,975
  -3,124
  -3,281
  -3,444
  -3,617
  -3,797
  -3,987
  -4,186
Free cash flow, $m
  3,311
  3,463
  3,528
  3,597
  3,669
  3,745
  3,825
  3,909
  3,998
  4,091
  3,784
  3,887
  3,995
  4,109
  4,228
  4,354
  4,486
  4,625
  4,770
  4,924
  5,084
  5,253
  5,431
  5,617
  5,813
  6,018
  6,234
  6,461
  6,699
  6,949
Issuance/(repayment) of debt, $m
  2,447
  2,556
  2,689
  2,828
  2,975
  3,128
  3,289
  3,457
  3,634
  3,819
  4,013
  4,217
  4,431
  4,655
  4,890
  5,138
  5,397
  5,669
  5,954
  6,254
  6,569
  6,899
  7,245
  7,609
  7,991
  8,392
  8,813
  9,255
  9,719
  10,206
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  
  2,447
  2,556
  2,689
  2,828
  2,975
  3,128
  3,289
  3,457
  3,634
  3,819
  4,013
  4,217
  4,431
  4,655
  4,890
  5,138
  5,397
  5,669
  5,954
  6,254
  6,569
  6,899
  7,245
  7,609
  7,991
  8,392
  8,813
  9,255
  9,719
  10,206
Total cash flow (excl. dividends), $m
  5,758
  6,018
  6,217
  6,425
  6,644
  6,873
  7,114
  7,366
  7,632
  7,910
  7,797
  8,104
  8,426
  8,764
  9,119
  9,491
  9,883
  10,293
  10,725
  11,178
  11,653
  12,152
  12,676
  13,226
  13,804
  14,411
  15,047
  15,716
  16,418
  17,155
Retained Cash Flow (-), $m
  -446
  -494
  -520
  -547
  -575
  -605
  -636
  -668
  -702
  -738
  -776
  -815
  -857
  -900
  -945
  -993
  -1,043
  -1,096
  -1,151
  -1,209
  -1,270
  -1,334
  -1,401
  -1,471
  -1,545
  -1,622
  -1,704
  -1,789
  -1,879
  -1,973
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
  5,311
  5,524
  5,697
  5,878
  6,069
  6,268
  6,478
  6,698
  6,929
  7,172
  7,021
  7,288
  7,569
  7,864
  8,173
  8,498
  8,839
  9,198
  9,574
  9,969
  10,383
  10,818
  11,275
  11,755
  12,259
  12,788
  13,344
  13,927
  14,539
  15,182
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
  5,092
  5,057
  4,958
  4,840
  4,704
  4,549
  4,376
  4,187
  3,981
  3,760
  3,334
  3,110
  2,878
  2,640
  2,400
  2,160
  1,923
  1,694
  1,474
  1,267
  1,074
  898
  739
  599
  477
  373
  286
  215
  159
  114
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

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 Corporation (MCK)

Valuation Ratios
P/E Ratio 6
Price to Sales 0.2
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 6.4
Price to Free Cash Flow 7.3
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 $208357 million for the last fiscal year's total revenue generated by McKesson Corporation. The default revenue input number comes from 0001 income statement of McKesson 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 MCK stock valuation model: a) initial revenue growth rate of 4.8% 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 MCK is calculated based on our internal credit rating of McKesson 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 McKesson 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 MCK stock the variable cost ratio is equal to 98.4%.

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 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 5.4% for McKesson Corporation.

Corporate tax rate of 27% is the nominal tax rate for McKesson 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 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 4.7%.

Life of production assets of 17.9 years is the average useful life of capital assets used in McKesson 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 MCK is equal to -0.5%. 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 - $9804 million for McKesson 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 191.850 million for McKesson 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 McKesson Corporation at the current share price and the inputted number of shares is $27.7 billion.

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