Intrinsic value of Mondelez International, Inc. - MDLZ

Previous Close

$54.69

  Intrinsic Value

$37.17

stock screener

  Rating & Target

sell

-32%

Previous close

$54.69

 
Intrinsic value

$37.17

 
Up/down potential

-32%

 
Rating

sell

We calculate the intrinsic value of MDLZ 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 79.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  26,457
  27,065
  27,761
  28,542
  29,407
  30,356
  31,390
  32,509
  33,715
  35,009
  36,393
  37,870
  39,443
  41,114
  42,888
  44,767
  46,757
  48,861
  51,084
  53,431
  55,908
  58,519
  61,272
  64,173
  67,228
  70,445
  73,831
  77,393
  81,141
  85,084
Variable operating expenses, $m
  4,552
  4,568
  4,586
  4,606
  4,628
  4,653
  4,679
  4,708
  4,739
  4,772
  935
  973
  1,013
  1,056
  1,102
  1,150
  1,201
  1,255
  1,313
  1,373
  1,436
  1,504
  1,574
  1,649
  1,727
  1,810
  1,897
  1,989
  2,085
  2,186
Fixed operating expenses, $m
  18,901
  19,317
  19,742
  20,176
  20,620
  21,073
  21,537
  22,011
  22,495
  22,990
  23,496
  24,013
  24,541
  25,081
  25,633
  26,197
  26,773
  27,362
  27,964
  28,579
  29,208
  29,850
  30,507
  31,178
  31,864
  32,565
  33,282
  34,014
  34,762
  35,527
Total operating expenses, $m
  23,453
  23,885
  24,328
  24,782
  25,248
  25,726
  26,216
  26,719
  27,234
  27,762
  24,431
  24,986
  25,554
  26,137
  26,735
  27,347
  27,974
  28,617
  29,277
  29,952
  30,644
  31,354
  32,081
  32,827
  33,591
  34,375
  35,179
  36,003
  36,847
  37,713
Operating income, $m
  3,003
  3,180
  3,433
  3,760
  4,159
  4,630
  5,174
  5,791
  6,481
  7,247
  11,962
  12,884
  13,888
  14,977
  16,153
  17,420
  18,782
  20,243
  21,807
  23,479
  25,263
  27,165
  29,191
  31,346
  33,637
  36,070
  38,652
  41,391
  44,294
  47,371
EBITDA, $m
  7,835
  8,034
  8,312
  8,667
  9,097
  9,603
  10,184
  10,841
  11,575
  12,388
  13,281
  14,257
  15,318
  16,467
  17,707
  19,042
  20,477
  22,014
  23,658
  25,415
  27,289
  29,286
  31,411
  33,671
  36,073
  38,622
  41,327
  44,195
  47,235
  50,454
Interest expense (income), $m
  630
  992
  1,034
  1,081
  1,134
  1,195
  1,262
  1,335
  1,415
  1,501
  1,594
  1,694
  1,801
  1,915
  2,037
  2,166
  2,303
  2,448
  2,602
  2,765
  2,937
  3,118
  3,309
  3,511
  3,724
  3,948
  4,184
  4,433
  4,694
  4,970
  5,259
Earnings before tax, $m
  2,011
  2,147
  2,353
  2,625
  2,964
  3,369
  3,839
  4,376
  4,980
  5,652
  10,268
  11,083
  11,973
  12,940
  13,987
  15,117
  16,334
  17,641
  19,042
  20,542
  22,145
  23,856
  25,680
  27,622
  29,689
  31,886
  34,219
  36,697
  39,325
  42,112
Tax expense, $m
  543
  580
  635
  709
  800
  910
  1,037
  1,181
  1,345
  1,526
  2,772
  2,992
  3,233
  3,494
  3,776
  4,082
  4,410
  4,763
  5,141
  5,546
  5,979
  6,441
  6,934
  7,458
  8,016
  8,609
  9,239
  9,908
  10,618
  11,370
Net income, $m
  1,468
  1,567
  1,717
  1,917
  2,164
  2,459
  2,803
  3,194
  3,635
  4,126
  7,496
  8,091
  8,740
  9,446
  10,210
  11,036
  11,924
  12,878
  13,901
  14,996
  16,166
  17,415
  18,746
  20,164
  21,673
  23,276
  24,980
  26,789
  28,707
  30,741

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
  64,060
  65,533
  67,218
  69,108
  71,204
  73,502
  76,006
  78,715
  81,635
  84,767
  88,119
  91,695
  95,503
  99,550
  103,845
  108,395
  113,213
  118,307
  123,689
  129,373
  135,369
  141,693
  148,360
  155,383
  162,780
  170,569
  178,767
  187,393
  196,468
  206,014
Adjusted assets (=assets-cash), $m
  64,060
  65,533
  67,218
  69,108
  71,204
  73,502
  76,006
  78,715
  81,635
  84,767
  88,119
  91,695
  95,503
  99,550
  103,845
  108,395
  113,213
  118,307
  123,689
  129,373
  135,369
  141,693
  148,360
  155,383
  162,780
  170,569
  178,767
  187,393
  196,468
  206,014
Revenue / Adjusted assets
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
Average production assets, $m
  28,758
  29,420
  30,176
  31,025
  31,965
  32,997
  34,121
  35,338
  36,648
  38,055
  39,559
  41,165
  42,874
  44,691
  46,619
  48,662
  50,825
  53,112
  55,528
  58,079
  60,771
  63,611
  66,603
  69,756
  73,077
  76,574
  80,254
  84,127
  88,201
  92,486
Working capital, $m
  -4,471
  -4,574
  -4,692
  -4,824
  -4,970
  -5,130
  -5,305
  -5,494
  -5,698
  -5,917
  -6,150
  -6,400
  -6,666
  -6,948
  -7,248
  -7,566
  -7,902
  -8,257
  -8,633
  -9,030
  -9,448
  -9,890
  -10,355
  -10,845
  -11,362
  -11,905
  -12,477
  -13,079
  -13,713
  -14,379
Total debt, $m
  19,139
  20,010
  21,006
  22,123
  23,361
  24,720
  26,199
  27,801
  29,526
  31,378
  33,358
  35,472
  37,722
  40,114
  42,652
  45,342
  48,189
  51,199
  54,380
  57,739
  61,283
  65,021
  68,960
  73,111
  77,483
  82,086
  86,931
  92,029
  97,393
  103,034
Total liabilities, $m
  37,859
  38,730
  39,726
  40,843
  42,081
  43,440
  44,919
  46,521
  48,246
  50,098
  52,078
  54,192
  56,442
  58,834
  61,372
  64,062
  66,909
  69,919
  73,100
  76,459
  80,003
  83,741
  87,680
  91,831
  96,203
  100,806
  105,651
  110,749
  116,113
  121,754
Total equity, $m
  26,201
  26,803
  27,492
  28,265
  29,122
  30,062
  31,086
  32,195
  33,389
  34,670
  36,041
  37,503
  39,061
  40,716
  42,472
  44,334
  46,304
  48,387
  50,589
  52,913
  55,366
  57,953
  60,679
  63,552
  66,577
  69,763
  73,116
  76,644
  80,356
  84,260
Total liabilities and equity, $m
  64,060
  65,533
  67,218
  69,108
  71,203
  73,502
  76,005
  78,716
  81,635
  84,768
  88,119
  91,695
  95,503
  99,550
  103,844
  108,396
  113,213
  118,306
  123,689
  129,372
  135,369
  141,694
  148,359
  155,383
  162,780
  170,569
  178,767
  187,393
  196,469
  206,014
Debt-to-equity ratio
  0.730
  0.750
  0.760
  0.780
  0.800
  0.820
  0.840
  0.860
  0.880
  0.910
  0.930
  0.950
  0.970
  0.990
  1.000
  1.020
  1.040
  1.060
  1.070
  1.090
  1.110
  1.120
  1.140
  1.150
  1.160
  1.180
  1.190
  1.200
  1.210
  1.220
Adjusted equity ratio
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,468
  1,567
  1,717
  1,917
  2,164
  2,459
  2,803
  3,194
  3,635
  4,126
  7,496
  8,091
  8,740
  9,446
  10,210
  11,036
  11,924
  12,878
  13,901
  14,996
  16,166
  17,415
  18,746
  20,164
  21,673
  23,276
  24,980
  26,789
  28,707
  30,741
Depreciation, amort., depletion, $m
  4,831
  4,853
  4,879
  4,907
  4,938
  4,973
  5,010
  5,051
  5,094
  5,141
  1,319
  1,372
  1,429
  1,490
  1,554
  1,622
  1,694
  1,770
  1,851
  1,936
  2,026
  2,120
  2,220
  2,325
  2,436
  2,552
  2,675
  2,804
  2,940
  3,083
Funds from operations, $m
  6,300
  6,421
  6,596
  6,823
  7,102
  7,432
  7,813
  8,245
  8,729
  9,267
  8,814
  9,463
  10,169
  10,936
  11,764
  12,658
  13,618
  14,648
  15,752
  16,932
  18,192
  19,535
  20,966
  22,489
  24,109
  25,829
  27,655
  29,593
  31,647
  33,824
Change in working capital, $m
  -88
  -103
  -118
  -132
  -146
  -160
  -175
  -189
  -204
  -219
  -234
  -250
  -266
  -282
  -300
  -318
  -336
  -356
  -376
  -397
  -419
  -441
  -465
  -490
  -516
  -544
  -572
  -602
  -633
  -666
Cash from operations, $m
  6,387
  6,523
  6,714
  6,955
  7,248
  7,592
  7,987
  8,434
  8,933
  9,486
  9,048
  9,712
  10,435
  11,218
  12,064
  12,975
  13,954
  15,004
  16,128
  17,329
  18,610
  19,977
  21,432
  22,980
  24,625
  26,373
  28,227
  30,195
  32,281
  34,491
Maintenance CAPEX, $m
  -940
  -959
  -981
  -1,006
  -1,034
  -1,066
  -1,100
  -1,137
  -1,178
  -1,222
  -1,268
  -1,319
  -1,372
  -1,429
  -1,490
  -1,554
  -1,622
  -1,694
  -1,770
  -1,851
  -1,936
  -2,026
  -2,120
  -2,220
  -2,325
  -2,436
  -2,552
  -2,675
  -2,804
  -2,940
New CAPEX, $m
  -566
  -661
  -756
  -849
  -941
  -1,032
  -1,124
  -1,216
  -1,311
  -1,406
  -1,505
  -1,606
  -1,709
  -1,817
  -1,928
  -2,043
  -2,163
  -2,287
  -2,416
  -2,551
  -2,692
  -2,839
  -2,993
  -3,153
  -3,321
  -3,496
  -3,680
  -3,873
  -4,074
  -4,285
Cash from investing activities, $m
  -1,506
  -1,620
  -1,737
  -1,855
  -1,975
  -2,098
  -2,224
  -2,353
  -2,489
  -2,628
  -2,773
  -2,925
  -3,081
  -3,246
  -3,418
  -3,597
  -3,785
  -3,981
  -4,186
  -4,402
  -4,628
  -4,865
  -5,113
  -5,373
  -5,646
  -5,932
  -6,232
  -6,548
  -6,878
  -7,225
Free cash flow, $m
  4,881
  4,903
  4,977
  5,101
  5,274
  5,495
  5,764
  6,080
  6,445
  6,858
  6,275
  6,788
  7,354
  7,972
  8,647
  9,378
  10,170
  11,023
  11,941
  12,926
  13,982
  15,112
  16,319
  17,606
  18,979
  20,440
  21,995
  23,647
  25,402
  27,265
Issuance/(repayment) of debt, $m
  767
  871
  995
  1,117
  1,238
  1,359
  1,479
  1,601
  1,725
  1,852
  1,981
  2,114
  2,250
  2,392
  2,538
  2,690
  2,847
  3,011
  3,181
  3,359
  3,544
  3,738
  3,940
  4,151
  4,372
  4,603
  4,845
  5,098
  5,364
  5,642
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  
  767
  871
  995
  1,117
  1,238
  1,359
  1,479
  1,601
  1,725
  1,852
  1,981
  2,114
  2,250
  2,392
  2,538
  2,690
  2,847
  3,011
  3,181
  3,359
  3,544
  3,738
  3,940
  4,151
  4,372
  4,603
  4,845
  5,098
  5,364
  5,642
Total cash flow (excl. dividends), $m
  5,649
  5,774
  5,972
  6,218
  6,512
  6,853
  7,243
  7,682
  8,170
  8,710
  8,256
  8,902
  9,604
  10,364
  11,185
  12,068
  13,017
  14,034
  15,122
  16,285
  17,526
  18,849
  20,258
  21,757
  23,351
  25,043
  26,840
  28,745
  30,766
  32,907
Retained Cash Flow (-), $m
  -564
  -603
  -689
  -773
  -857
  -940
  -1,024
  -1,108
  -1,194
  -1,281
  -1,371
  -1,463
  -1,557
  -1,655
  -1,756
  -1,861
  -1,970
  -2,084
  -2,201
  -2,324
  -2,453
  -2,587
  -2,726
  -2,873
  -3,026
  -3,185
  -3,353
  -3,528
  -3,712
  -3,904
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
  5,085
  5,172
  5,283
  5,445
  5,655
  5,913
  6,219
  6,573
  6,976
  7,428
  6,885
  7,439
  8,047
  8,709
  9,428
  10,207
  11,046
  11,950
  12,920
  13,961
  15,074
  16,263
  17,532
  18,885
  20,325
  21,858
  23,487
  25,217
  27,054
  29,003
Discount rate, %
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
  4,770
  4,523
  4,280
  4,056
  3,845
  3,640
  3,436
  3,230
  3,019
  2,802
  2,239
  2,061
  1,876
  1,686
  1,494
  1,304
  1,121
  947
  785
  638
  509
  397
  302
  225
  163
  115
  79
  53
  34
  21
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

Mondelez International, Inc. is a snack company. The Company manufactures and markets snack food and beverage products for consumers. It operates through four segments: Latin America, Asia, Middle East, and Africa (AMEA), Europe and North America. As of December 31, 2016, its brands spanned five product categories: Biscuits (including cookies, crackers and salted snacks); Chocolate; Gum and candy; Beverages (including coffee and powdered beverages), and Cheese and grocery. Itsportfolio includes various snack brands, including Nabisco, Oreo, LU and belVita biscuits; Cadbury, Milka, Cadbury Dairy Milk and Toblerone chocolate; Trident gum; Halls candy, and Tang powdered beverages. The Company sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and retail food outlets. As of December 31, 2016, it sold its products to consumers in approximately 165 countries.

FINANCIAL RATIOS  of  Mondelez International, Inc. (MDLZ)

Valuation Ratios
P/E Ratio 50.4
Price to Sales 3.2
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 29.5
Price to Free Cash Flow 51.8
Growth Rates
Sales Growth Rate -12.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -19.2%
Cap. Spend. - 3 Yr. Gr. Rate -5.5%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 52.5%
Total Debt to Equity 68.4%
Interest Coverage 3
Management Effectiveness
Return On Assets 3.6%
Ret/ On Assets - 3 Yr. Avg. 6.7%
Return On Total Capital 3.9%
Ret/ On T. Cap. - 3 Yr. Avg. 8.4%
Return On Equity 6.2%
Return On Equity - 3 Yr. Avg. 13.2%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 39.1%
Gross Margin - 3 Yr. Avg. 38.2%
EBITDA Margin 11.2%
EBITDA Margin - 3 Yr. Avg. 18.8%
Operating Margin 8.3%
Oper. Margin - 3 Yr. Avg. 15.4%
Pre-Tax Margin 5.6%
Pre-Tax Margin - 3 Yr. Avg. 13.2%
Net Profit Margin 6.4%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 8.9%
Eff/ Tax Rate - 3 Yr. Avg. 10.1%
Payout Ratio 65.9%

MDLZ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MDLZ stock intrinsic value calculation we used $25938 million for the last fiscal year's total revenue generated by Mondelez International, Inc.. The default revenue input number comes from 0001 income statement of Mondelez International, Inc.. 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 MDLZ stock valuation model: a) initial revenue growth rate of 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 6.6%, whose default value for MDLZ is calculated based on our internal credit rating of Mondelez International, Inc., 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 Mondelez International, Inc..
    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 MDLZ stock the variable cost ratio is equal to 17.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $18494 million in the base year in the intrinsic value calculation for MDLZ 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 Mondelez International, Inc..

Corporate tax rate of 27% is the nominal tax rate for Mondelez International, Inc.. 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 MDLZ 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 MDLZ are equal to 108.7%.

Life of production assets of 58.9 years is the average useful life of capital assets used in Mondelez International, Inc. 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 MDLZ is equal to -16.9%. 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 - $25637 million for Mondelez International, Inc. - 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 1444.142 million for Mondelez International, Inc. 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 Mondelez International, Inc. at the current share price and the inputted number of shares is $79.0 billion.

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