Intrinsic value of Marsh&McLennan - MMC

Previous Close

$86.76

  Intrinsic Value

$83.30

stock screener

  Rating & Target

hold

-4%

Previous close

$86.76

 
Intrinsic value

$83.30

 
Up/down potential

-4%

 
Rating

hold

Our model is not good at valuating stocks of financial companies, such as MMC.

We calculate the intrinsic value of MMC 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 2017), $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 44.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  6.20
  6.08
  5.97
  5.87
  5.79
  5.71
  5.64
  5.57
  5.52
  5.46
  5.42
  5.38
  5.34
  5.31
  5.27
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
Revenue, $m
  14,893
  15,799
  16,743
  17,726
  18,752
  19,822
  20,940
  22,107
  23,327
  24,602
  25,935
  27,329
  28,788
  30,315
  31,914
  33,589
  35,343
  37,181
  39,107
  41,125
  43,242
  45,461
  47,787
  50,228
  52,787
  55,472
  58,288
  61,244
  64,344
  67,598
Variable operating expenses, $m
  11,314
  11,939
  12,590
  13,269
  13,977
  14,716
  15,487
  16,293
  17,134
  18,014
  17,898
  18,860
  19,867
  20,921
  22,024
  23,180
  24,390
  25,659
  26,988
  28,381
  29,841
  31,373
  32,978
  34,662
  36,429
  38,281
  40,225
  42,264
  44,404
  46,650
Fixed operating expenses, $m
  469
  479
  490
  501
  512
  523
  535
  546
  558
  571
  583
  596
  609
  622
  636
  650
  664
  679
  694
  709
  725
  741
  757
  774
  791
  808
  826
  844
  863
  882
Total operating expenses, $m
  11,783
  12,418
  13,080
  13,770
  14,489
  15,239
  16,022
  16,839
  17,692
  18,585
  18,481
  19,456
  20,476
  21,543
  22,660
  23,830
  25,054
  26,338
  27,682
  29,090
  30,566
  32,114
  33,735
  35,436
  37,220
  39,089
  41,051
  43,108
  45,267
  47,532
Operating income, $m
  3,110
  3,380
  3,662
  3,956
  4,263
  4,584
  4,918
  5,268
  5,634
  6,017
  7,454
  7,873
  8,312
  8,772
  9,254
  9,759
  10,288
  10,843
  11,425
  12,035
  12,675
  13,347
  14,052
  14,791
  15,568
  16,382
  17,237
  18,135
  19,077
  20,066
EBITDA, $m
  5,277
  5,616
  5,969
  6,338
  6,723
  7,124
  7,544
  7,983
  8,441
  8,921
  9,422
  9,947
  10,497
  11,073
  11,676
  12,308
  12,971
  13,665
  14,393
  15,157
  15,958
  16,798
  17,679
  18,604
  19,574
  20,593
  21,661
  22,783
  23,961
  25,197
Interest expense (income), $m
  178
  296
  341
  386
  434
  484
  535
  589
  645
  704
  766
  830
  897
  967
  1,041
  1,118
  1,198
  1,283
  1,371
  1,464
  1,561
  1,662
  1,769
  1,881
  1,998
  2,121
  2,250
  2,385
  2,527
  2,676
  2,832
Earnings before tax, $m
  2,814
  3,039
  3,276
  3,522
  3,780
  4,048
  4,329
  4,623
  4,930
  5,251
  6,624
  6,976
  7,345
  7,731
  8,136
  8,560
  9,005
  9,472
  9,961
  10,475
  11,013
  11,578
  12,171
  12,793
  13,447
  14,132
  14,852
  15,608
  16,401
  17,234
Tax expense, $m
  760
  821
  884
  951
  1,020
  1,093
  1,169
  1,248
  1,331
  1,418
  1,788
  1,884
  1,983
  2,087
  2,197
  2,311
  2,431
  2,557
  2,690
  2,828
  2,974
  3,126
  3,286
  3,454
  3,631
  3,816
  4,010
  4,214
  4,428
  4,653
Net income, $m
  2,054
  2,219
  2,391
  2,571
  2,759
  2,955
  3,160
  3,375
  3,599
  3,833
  4,835
  5,093
  5,362
  5,644
  5,939
  6,249
  6,574
  6,915
  7,272
  7,646
  8,040
  8,452
  8,885
  9,339
  9,816
  10,317
  10,842
  11,394
  11,973
  12,581

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
  21,711
  23,031
  24,406
  25,840
  27,335
  28,896
  30,525
  32,226
  34,004
  35,862
  37,805
  39,838
  41,965
  44,191
  46,522
  48,963
  51,520
  54,199
  57,007
  59,950
  63,035
  66,269
  69,661
  73,218
  76,949
  80,863
  84,969
  89,276
  93,796
  98,539
Adjusted assets (=assets-cash), $m
  21,711
  23,031
  24,406
  25,840
  27,335
  28,896
  30,525
  32,226
  34,004
  35,862
  37,805
  39,838
  41,965
  44,191
  46,522
  48,963
  51,520
  54,199
  57,007
  59,950
  63,035
  66,269
  69,661
  73,218
  76,949
  80,863
  84,969
  89,276
  93,796
  98,539
Revenue / Adjusted assets
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
Average production assets, $m
  11,304
  11,991
  12,708
  13,454
  14,233
  15,045
  15,893
  16,779
  17,705
  18,673
  19,684
  20,743
  21,850
  23,009
  24,223
  25,494
  26,825
  28,220
  29,682
  31,214
  32,820
  34,505
  36,271
  38,123
  40,065
  42,103
  44,241
  46,484
  48,837
  51,307
Working capital, $m
  -2,219
  -2,354
  -2,495
  -2,641
  -2,794
  -2,954
  -3,120
  -3,294
  -3,476
  -3,666
  -3,864
  -4,072
  -4,289
  -4,517
  -4,755
  -5,005
  -5,266
  -5,540
  -5,827
  -6,128
  -6,443
  -6,774
  -7,120
  -7,484
  -7,865
  -8,265
  -8,685
  -9,125
  -9,587
  -10,072
Total debt, $m
  6,312
  7,157
  8,037
  8,954
  9,912
  10,910
  11,953
  13,042
  14,180
  15,369
  16,612
  17,913
  19,275
  20,699
  22,191
  23,753
  25,390
  27,105
  28,901
  30,785
  32,759
  34,829
  37,000
  39,277
  41,664
  44,169
  46,797
  49,554
  52,447
  55,482
Total liabilities, $m
  13,895
  14,740
  15,620
  16,537
  17,495
  18,493
  19,536
  20,625
  21,763
  22,952
  24,195
  25,496
  26,858
  28,282
  29,774
  31,336
  32,973
  34,688
  36,484
  38,368
  40,342
  42,412
  44,583
  46,860
  49,247
  51,752
  54,380
  57,137
  60,030
  63,065
Total equity, $m
  7,816
  8,291
  8,786
  9,302
  9,841
  10,402
  10,989
  11,601
  12,241
  12,910
  13,610
  14,342
  15,107
  15,909
  16,748
  17,627
  18,547
  19,512
  20,522
  21,582
  22,692
  23,857
  25,078
  26,358
  27,702
  29,111
  30,589
  32,139
  33,767
  35,474
Total liabilities and equity, $m
  21,711
  23,031
  24,406
  25,839
  27,336
  28,895
  30,525
  32,226
  34,004
  35,862
  37,805
  39,838
  41,965
  44,191
  46,522
  48,963
  51,520
  54,200
  57,006
  59,950
  63,034
  66,269
  69,661
  73,218
  76,949
  80,863
  84,969
  89,276
  93,797
  98,539
Debt-to-equity ratio
  0.810
  0.860
  0.910
  0.960
  1.010
  1.050
  1.090
  1.120
  1.160
  1.190
  1.220
  1.250
  1.280
  1.300
  1.330
  1.350
  1.370
  1.390
  1.410
  1.430
  1.440
  1.460
  1.480
  1.490
  1.500
  1.520
  1.530
  1.540
  1.550
  1.560
Adjusted equity ratio
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,054
  2,219
  2,391
  2,571
  2,759
  2,955
  3,160
  3,375
  3,599
  3,833
  4,835
  5,093
  5,362
  5,644
  5,939
  6,249
  6,574
  6,915
  7,272
  7,646
  8,040
  8,452
  8,885
  9,339
  9,816
  10,317
  10,842
  11,394
  11,973
  12,581
Depreciation, amort., depletion, $m
  2,167
  2,235
  2,307
  2,382
  2,460
  2,541
  2,626
  2,714
  2,807
  2,904
  1,968
  2,074
  2,185
  2,301
  2,422
  2,549
  2,683
  2,822
  2,968
  3,121
  3,282
  3,450
  3,627
  3,812
  4,007
  4,210
  4,424
  4,648
  4,884
  5,131
Funds from operations, $m
  4,221
  4,454
  4,698
  4,953
  5,219
  5,496
  5,786
  6,089
  6,406
  6,737
  6,804
  7,167
  7,547
  7,945
  8,362
  8,799
  9,256
  9,737
  10,240
  10,768
  11,322
  11,903
  12,512
  13,151
  13,823
  14,527
  15,266
  16,042
  16,857
  17,712
Change in working capital, $m
  -130
  -135
  -141
  -147
  -153
  -160
  -167
  -174
  -182
  -190
  -199
  -208
  -217
  -228
  -238
  -250
  -261
  -274
  -287
  -301
  -315
  -331
  -347
  -364
  -381
  -400
  -420
  -440
  -462
  -485
Cash from operations, $m
  4,350
  4,589
  4,839
  5,099
  5,371
  5,656
  5,952
  6,263
  6,587
  6,927
  7,003
  7,375
  7,764
  8,172
  8,600
  9,048
  9,518
  10,010
  10,527
  11,069
  11,637
  12,233
  12,859
  13,515
  14,204
  14,927
  15,686
  16,482
  17,319
  18,197
Maintenance CAPEX, $m
  -1,065
  -1,130
  -1,199
  -1,271
  -1,345
  -1,423
  -1,505
  -1,589
  -1,678
  -1,770
  -1,867
  -1,968
  -2,074
  -2,185
  -2,301
  -2,422
  -2,549
  -2,683
  -2,822
  -2,968
  -3,121
  -3,282
  -3,450
  -3,627
  -3,812
  -4,007
  -4,210
  -4,424
  -4,648
  -4,884
New CAPEX, $m
  -657
  -687
  -716
  -747
  -779
  -812
  -848
  -886
  -926
  -968
  -1,012
  -1,058
  -1,107
  -1,159
  -1,214
  -1,271
  -1,331
  -1,395
  -1,462
  -1,532
  -1,606
  -1,684
  -1,766
  -1,852
  -1,943
  -2,038
  -2,138
  -2,243
  -2,353
  -2,469
Cash from investing activities, $m
  -1,722
  -1,817
  -1,915
  -2,018
  -2,124
  -2,235
  -2,353
  -2,475
  -2,604
  -2,738
  -2,879
  -3,026
  -3,181
  -3,344
  -3,515
  -3,693
  -3,880
  -4,078
  -4,284
  -4,500
  -4,727
  -4,966
  -5,216
  -5,479
  -5,755
  -6,045
  -6,348
  -6,667
  -7,001
  -7,353
Free cash flow, $m
  2,629
  2,771
  2,924
  3,082
  3,247
  3,420
  3,600
  3,788
  3,984
  4,189
  4,123
  4,348
  4,582
  4,828
  5,085
  5,355
  5,637
  5,933
  6,243
  6,568
  6,909
  7,267
  7,642
  8,036
  8,449
  8,883
  9,338
  9,815
  10,317
  10,843
Issuance/(repayment) of debt, $m
  825
  845
  880
  918
  957
  999
  1,043
  1,089
  1,138
  1,189
  1,244
  1,301
  1,361
  1,425
  1,492
  1,562
  1,637
  1,715
  1,797
  1,883
  1,974
  2,070
  2,171
  2,277
  2,388
  2,505
  2,628
  2,757
  2,893
  3,035
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  
  825
  845
  880
  918
  957
  999
  1,043
  1,089
  1,138
  1,189
  1,244
  1,301
  1,361
  1,425
  1,492
  1,562
  1,637
  1,715
  1,797
  1,883
  1,974
  2,070
  2,171
  2,277
  2,388
  2,505
  2,628
  2,757
  2,893
  3,035
Total cash flow (excl. dividends), $m
  3,454
  3,616
  3,804
  4,000
  4,205
  4,419
  4,642
  4,877
  5,122
  5,378
  5,367
  5,649
  5,944
  6,253
  6,577
  6,917
  7,274
  7,648
  8,040
  8,452
  8,884
  9,337
  9,813
  10,312
  10,837
  11,387
  11,965
  12,572
  13,210
  13,879
Retained Cash Flow (-), $m
  -457
  -475
  -495
  -516
  -538
  -562
  -586
  -613
  -640
  -669
  -700
  -732
  -766
  -801
  -839
  -879
  -921
  -964
  -1,011
  -1,059
  -1,111
  -1,164
  -1,221
  -1,281
  -1,343
  -1,409
  -1,478
  -1,551
  -1,627
  -1,707
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
  154
  164
  174
  184
  195
  206
  218
  230
  243
  257
  271
  285
  301
  317
  333
  351
  369
  389
  409
  430
  452
  476
  500
  526
  553
  581
  610
  641
  674
  708
Cash available for distribution, $m
  2,997
  3,141
  3,309
  3,484
  3,666
  3,857
  4,056
  4,264
  4,482
  4,709
  4,668
  4,917
  5,178
  5,451
  5,738
  6,038
  6,353
  6,683
  7,029
  7,392
  7,773
  8,173
  8,592
  9,032
  9,494
  9,978
  10,487
  11,022
  11,582
  12,171
Discount rate, %
  4.90
  5.15
  5.40
  5.67
  5.96
  6.25
  6.57
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
PV of cash for distribution, $m
  2,857
  2,841
  2,826
  2,794
  2,745
  2,680
  2,599
  2,501
  2,389
  2,263
  2,006
  1,872
  1,730
  1,582
  1,431
  1,279
  1,129
  984
  845
  716
  597
  489
  395
  312
  242
  184
  137
  100
  71
  49
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

Marsh & McLennan Companies, Inc. is a professional services firm offering clients advice and solutions in risk, strategy and people. The Company is the parent company of various risk advisors and specialty consultants, including Marsh, the insurance broker; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of human resource and investment related financial advice and services, and Oliver Wyman Group, the management and economic consultancy. It conducts business through two segments: Risk and Insurance Services, which includes risk management activities, as well as insurance and reinsurance broking and services, and Consulting includes health, retirement, talent and investments consulting services and products, and specialized management, economic and brand consulting services. It conducts business in the Risk and Insurance Services segment through Marsh and Guy Carpenter. It conducts business in the Consulting segment through Mercer and Oliver Wyman Group.

FINANCIAL RATIOS  of  Marsh&McLennan (MMC)

Valuation Ratios
P/E Ratio 25.2
Price to Sales 3.4
Price to Book 7.2
Price to Tangible Book
Price to Cash Flow 22.2
Price to Free Cash Flow 25.4
Growth Rates
Sales Growth Rate 2.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -22.2%
Cap. Spend. - 3 Yr. Gr. Rate -8.8%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 72.6%
Total Debt to Equity 77.6%
Interest Coverage 15
Management Effectiveness
Return On Assets 10.4%
Ret/ On Assets - 3 Yr. Avg. 9.7%
Return On Total Capital 16.1%
Ret/ On T. Cap. - 3 Yr. Avg. 15%
Return On Equity 27.8%
Return On Equity - 3 Yr. Avg. 23.7%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 23.4%
EBITDA Margin - 3 Yr. Avg. 22%
Operating Margin 20.2%
Oper. Margin - 3 Yr. Avg. 18.5%
Pre-Tax Margin 18.8%
Pre-Tax Margin - 3 Yr. Avg. 17.5%
Net Profit Margin 13.4%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 27.6%
Eff/ Tax Rate - 3 Yr. Avg. 28.4%
Payout Ratio 38.6%

MMC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MMC stock intrinsic value calculation we used $14024 million for the last fiscal year's total revenue generated by Marsh&McLennan. The default revenue input number comes from 2017 income statement of Marsh&McLennan. 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 MMC stock valuation model: a) initial revenue growth rate of 6.2% 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 4.9%, whose default value for MMC is calculated based on our internal credit rating of Marsh&McLennan, 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 Marsh&McLennan.
    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 MMC stock the variable cost ratio is equal to 76.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $459 million in the base year in the intrinsic value calculation for MMC 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 Marsh&McLennan.

Corporate tax rate of 27% is the nominal tax rate for Marsh&McLennan. 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 MMC stock is equal to 1.1%.

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 MMC are equal to 75.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Marsh&McLennan 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 MMC is equal to -14.9%. 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 - $7359 million for Marsh&McLennan - 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 513 million for Marsh&McLennan 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 Marsh&McLennan at the current share price and the inputted number of shares is $44.5 billion.

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COMPANY NEWS

▶ Marsh & McLennan Agency Acquires Klein Agency   [Jul-03-18 09:00AM  Business Wire]
▶ Marsh & McLennan Agency Acquires Insurance Associates   [Jul-02-18 09:00AM  Business Wire]
▶ Insurance giant Marsh & McLennan to grow in Austin with acquisition   [Jun-25-18 03:30PM  American City Business Journals]
▶ Century-old Houston insurance firm to be acquired by New York company   [01:02PM  American City Business Journals]
▶ Marsh to Acquire Wortham Insurance   [08:07AM  Business Wire]
▶ [$$] Willis Towers Watson chief prepared to do more deals   [Jun-24-18 05:37AM  Financial Times]
▶ [$$] AIG: The long struggle to repair its reputation   [Jun-17-18 03:00AM  Financial Times]
▶ Marsh & McLennan Companies Holds 2018 Stockholders Meeting   [May-17-18 11:15AM  Business Wire]
▶ Marsh & McLennan: 1Q Earnings Snapshot   [08:19AM  Associated Press]
▶ Should You Buy Marsh & McLennan Companies Inc (NYSE:MMC)?   [Apr-12-18 12:07PM  Simply Wall St.]
▶ Sunit Patel Joins Mercer as Chief Actuary, US Health   [Apr-10-18 09:00AM  Business Wire]
▶ Marsh & McLennan Companies Declares Quarterly Dividend   [Mar-21-18 11:23AM  Business Wire]
▶ Marsh Joins the Enterprise Ethereum Alliance   [Mar-14-18 09:00AM  Business Wire]
▶ Marsh & McLennan Agency Acquires Highsmith Insurance   [Feb-08-18 09:00AM  Business Wire]
▶ Marsh & McLennan beats Street 4Q forecasts   [07:55AM  Associated Press]
▶ Mercer Calls for New Imperatives for Financial Security   [Jan-29-18 09:39AM  Business Wire]
▶ American International Group Inc Is Plagued By Core Issues   [Jan-23-18 10:21AM  InvestorPlace]
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