Intrinsic value of Monsanto - MON

Previous Close

$117.35

  Intrinsic Value

$115.74

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  Rating & Target

hold

-1%

Previous close

$117.35

 
Intrinsic value

$115.74

 
Up/down potential

-1%

 
Rating

hold

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

We calculate the intrinsic value of MON 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 51.6

 

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, %
  8.43
  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
  14,640
  15,343
  16,082
  16,860
  17,679
  18,539
  19,445
  20,396
  21,396
  22,448
  23,553
  24,714
  25,934
  27,216
  28,563
  29,978
  31,465
  33,026
  34,667
  36,390
  38,199
  40,100
  42,096
  44,193
  46,395
  48,707
  51,135
  53,685
  56,364
  59,176
  62,129
Variable operating expenses, $m
 
  4,031
  4,205
  4,389
  4,582
  4,786
  4,999
  5,224
  5,460
  5,708
  5,969
  5,834
  6,122
  6,425
  6,743
  7,077
  7,428
  7,797
  8,184
  8,591
  9,018
  9,467
  9,938
  10,433
  10,953
  11,499
  12,072
  12,674
  13,306
  13,970
  14,667
Fixed operating expenses, $m
 
  7,939
  8,137
  8,341
  8,549
  8,763
  8,982
  9,206
  9,437
  9,672
  9,914
  10,162
  10,416
  10,677
  10,943
  11,217
  11,497
  11,785
  12,080
  12,382
  12,691
  13,008
  13,334
  13,667
  14,009
  14,359
  14,718
  15,086
  15,463
  15,849
  16,246
Total operating expenses, $m
  11,428
  11,970
  12,342
  12,730
  13,131
  13,549
  13,981
  14,430
  14,897
  15,380
  15,883
  15,996
  16,538
  17,102
  17,686
  18,294
  18,925
  19,582
  20,264
  20,973
  21,709
  22,475
  23,272
  24,100
  24,962
  25,858
  26,790
  27,760
  28,769
  29,819
  30,913
Operating income, $m
  3,212
  3,373
  3,740
  4,131
  4,547
  4,991
  5,464
  5,966
  6,500
  7,067
  7,669
  8,718
  9,396
  10,115
  10,877
  11,684
  12,539
  13,445
  14,403
  15,417
  16,490
  17,625
  18,825
  20,093
  21,433
  22,850
  24,346
  25,926
  27,595
  29,356
  31,216
EBITDA, $m
  3,960
  4,154
  4,538
  4,948
  5,385
  5,849
  6,343
  6,869
  7,427
  8,020
  8,649
  9,316
  10,024
  10,774
  11,569
  12,410
  13,302
  14,245
  15,243
  16,299
  17,416
  18,597
  19,845
  21,164
  22,558
  24,030
  25,585
  27,227
  28,960
  30,790
  32,722
Interest expense (income), $m
  0
  254
  278
  302
  329
  356
  385
  415
  447
  481
  516
  553
  592
  633
  676
  721
  768
  818
  870
  925
  983
  1,044
  1,107
  1,174
  1,245
  1,318
  1,396
  1,477
  1,563
  1,653
  1,747
Earnings before tax, $m
  2,886
  3,119
  3,462
  3,828
  4,219
  4,635
  5,079
  5,551
  6,053
  6,587
  7,154
  8,165
  8,804
  9,482
  10,201
  10,963
  11,771
  12,627
  13,533
  14,492
  15,507
  16,581
  17,717
  18,919
  20,189
  21,531
  22,950
  24,449
  26,032
  27,704
  29,469
Tax expense, $m
  626
  842
  935
  1,034
  1,139
  1,252
  1,371
  1,499
  1,634
  1,778
  1,931
  2,204
  2,377
  2,560
  2,754
  2,960
  3,178
  3,409
  3,654
  3,913
  4,187
  4,477
  4,784
  5,108
  5,451
  5,813
  6,196
  6,601
  7,029
  7,480
  7,957
Net income, $m
  2,260
  2,277
  2,527
  2,795
  3,080
  3,384
  3,707
  4,052
  4,419
  4,808
  5,222
  5,960
  6,427
  6,922
  7,447
  8,003
  8,593
  9,218
  9,879
  10,579
  11,320
  12,104
  12,934
  13,811
  14,738
  15,718
  16,753
  17,847
  19,003
  20,224
  21,513

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,958
  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
  21,322
  20,295
  21,273
  22,302
  23,385
  24,523
  25,720
  26,979
  28,302
  29,693
  31,154
  32,690
  34,305
  36,000
  37,782
  39,654
  41,620
  43,686
  45,856
  48,135
  50,528
  53,042
  55,683
  58,456
  61,369
  64,427
  67,639
  71,013
  74,555
  78,275
  82,181
Adjusted assets (=assets-cash), $m
  19,364
  20,295
  21,273
  22,302
  23,385
  24,523
  25,720
  26,979
  28,302
  29,693
  31,154
  32,690
  34,305
  36,000
  37,782
  39,654
  41,620
  43,686
  45,856
  48,135
  50,528
  53,042
  55,683
  58,456
  61,369
  64,427
  67,639
  71,013
  74,555
  78,275
  82,181
Revenue / Adjusted assets
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
  0.756
Average production assets, $m
  3,690
  3,866
  4,053
  4,249
  4,455
  4,672
  4,900
  5,140
  5,392
  5,657
  5,935
  6,228
  6,535
  6,858
  7,198
  7,555
  7,929
  8,323
  8,736
  9,170
  9,626
  10,105
  10,608
  11,137
  11,691
  12,274
  12,886
  13,529
  14,204
  14,912
  15,657
Working capital, $m
  2,238
  1,212
  1,270
  1,332
  1,397
  1,465
  1,536
  1,611
  1,690
  1,773
  1,861
  1,952
  2,049
  2,150
  2,256
  2,368
  2,486
  2,609
  2,739
  2,875
  3,018
  3,168
  3,326
  3,491
  3,665
  3,848
  4,040
  4,241
  4,453
  4,675
  4,908
Total debt, $m
  8,124
  7,933
  8,642
  9,387
  10,170
  10,995
  11,861
  12,773
  13,731
  14,738
  15,796
  16,908
  18,076
  19,304
  20,594
  21,949
  23,373
  24,869
  26,439
  28,089
  29,822
  31,643
  33,554
  35,562
  37,671
  39,885
  42,211
  44,653
  47,218
  49,911
  52,739
Total liabilities, $m
  14,884
  14,693
  15,402
  16,147
  16,930
  17,755
  18,621
  19,533
  20,491
  21,498
  22,556
  23,668
  24,836
  26,064
  27,354
  28,709
  30,133
  31,629
  33,199
  34,849
  36,582
  38,403
  40,314
  42,322
  44,431
  46,645
  48,971
  51,413
  53,978
  56,671
  59,499
Total equity, $m
  6,438
  5,601
  5,871
  6,155
  6,454
  6,768
  7,099
  7,446
  7,811
  8,195
  8,599
  9,023
  9,468
  9,936
  10,428
  10,944
  11,487
  12,057
  12,656
  13,285
  13,946
  14,640
  15,368
  16,134
  16,938
  17,782
  18,668
  19,599
  20,577
  21,604
  22,682
Total liabilities and equity, $m
  21,322
  20,294
  21,273
  22,302
  23,384
  24,523
  25,720
  26,979
  28,302
  29,693
  31,155
  32,691
  34,304
  36,000
  37,782
  39,653
  41,620
  43,686
  45,855
  48,134
  50,528
  53,043
  55,682
  58,456
  61,369
  64,427
  67,639
  71,012
  74,555
  78,275
  82,181
Debt-to-equity ratio
  1.262
  1.420
  1.470
  1.520
  1.580
  1.620
  1.670
  1.720
  1.760
  1.800
  1.840
  1.870
  1.910
  1.940
  1.970
  2.010
  2.030
  2.060
  2.090
  2.110
  2.140
  2.160
  2.180
  2.200
  2.220
  2.240
  2.260
  2.280
  2.290
  2.310
  2.330
Adjusted equity ratio
  0.231
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,260
  2,277
  2,527
  2,795
  3,080
  3,384
  3,707
  4,052
  4,419
  4,808
  5,222
  5,960
  6,427
  6,922
  7,447
  8,003
  8,593
  9,218
  9,879
  10,579
  11,320
  12,104
  12,934
  13,811
  14,738
  15,718
  16,753
  17,847
  19,003
  20,224
  21,513
Depreciation, amort., depletion, $m
  748
  781
  798
  817
  837
  858
  880
  903
  927
  953
  980
  599
  628
  659
  692
  726
  762
  800
  840
  882
  926
  972
  1,020
  1,071
  1,124
  1,180
  1,239
  1,301
  1,366
  1,434
  1,505
Funds from operations, $m
  3,137
  3,058
  3,326
  3,612
  3,917
  4,242
  4,587
  4,955
  5,346
  5,761
  6,202
  6,559
  7,055
  7,581
  8,139
  8,730
  9,355
  10,018
  10,719
  11,461
  12,246
  13,076
  13,954
  14,881
  15,862
  16,898
  17,992
  19,148
  20,369
  21,658
  23,018
Change in working capital, $m
  -89
  56
  58
  61
  65
  68
  72
  75
  79
  83
  87
  92
  96
  101
  106
  112
  117
  123
  130
  136
  143
  150
  158
  166
  174
  183
  192
  201
  212
  222
  233
Cash from operations, $m
  3,226
  3,002
  3,267
  3,550
  3,852
  4,174
  4,516
  4,880
  5,267
  5,678
  6,114
  6,467
  6,959
  7,480
  8,032
  8,618
  9,238
  9,894
  10,589
  11,325
  12,103
  12,926
  13,796
  14,716
  15,688
  16,715
  17,801
  18,947
  20,157
  21,435
  22,785
Maintenance CAPEX, $m
  0
  -355
  -372
  -390
  -409
  -428
  -449
  -471
  -494
  -518
  -544
  -571
  -599
  -628
  -659
  -692
  -726
  -762
  -800
  -840
  -882
  -926
  -972
  -1,020
  -1,071
  -1,124
  -1,180
  -1,239
  -1,301
  -1,366
  -1,434
New CAPEX, $m
  -1,311
  -176
  -186
  -196
  -206
  -217
  -228
  -240
  -252
  -265
  -278
  -293
  -307
  -323
  -339
  -357
  -375
  -394
  -413
  -434
  -456
  -479
  -503
  -528
  -555
  -583
  -612
  -643
  -675
  -709
  -744
Cash from investing activities, $m
  -1,107
  -531
  -558
  -586
  -615
  -645
  -677
  -711
  -746
  -783
  -822
  -864
  -906
  -951
  -998
  -1,049
  -1,101
  -1,156
  -1,213
  -1,274
  -1,338
  -1,405
  -1,475
  -1,548
  -1,626
  -1,707
  -1,792
  -1,882
  -1,976
  -2,075
  -2,178
Free cash flow, $m
  2,119
  2,471
  2,709
  2,965
  3,237
  3,528
  3,839
  4,169
  4,521
  4,894
  5,292
  5,604
  6,052
  6,528
  7,034
  7,569
  8,137
  8,738
  9,376
  10,051
  10,765
  11,521
  12,321
  13,167
  14,062
  15,008
  16,008
  17,065
  18,182
  19,361
  20,607
Issuance/(repayment) of debt, $m
  -1,095
  679
  708
  745
  784
  824
  867
  911
  958
  1,007
  1,058
  1,112
  1,169
  1,228
  1,290
  1,355
  1,424
  1,495
  1,571
  1,650
  1,733
  1,820
  1,912
  2,008
  2,109
  2,214
  2,326
  2,442
  2,565
  2,693
  2,828
Issuance/(repurchase) of shares, $m
  103
  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  
  -1,018
  679
  708
  745
  784
  824
  867
  911
  958
  1,007
  1,058
  1,112
  1,169
  1,228
  1,290
  1,355
  1,424
  1,495
  1,571
  1,650
  1,733
  1,820
  1,912
  2,008
  2,109
  2,214
  2,326
  2,442
  2,565
  2,693
  2,828
Total cash flow (excl. dividends), $m
  1,128
  3,150
  3,417
  3,710
  4,021
  4,353
  4,705
  5,080
  5,478
  5,901
  6,350
  6,716
  7,221
  7,756
  8,323
  8,924
  9,560
  10,234
  10,947
  11,701
  12,498
  13,341
  14,233
  15,175
  16,171
  17,223
  18,334
  19,507
  20,746
  22,054
  23,435
Retained Cash Flow (-), $m
  -1,904
  -251
  -270
  -284
  -299
  -314
  -330
  -347
  -365
  -384
  -403
  -424
  -445
  -468
  -492
  -517
  -543
  -570
  -599
  -629
  -661
  -694
  -729
  -765
  -804
  -844
  -887
  -931
  -978
  -1,027
  -1,078
Prev. year cash balance distribution, $m
 
  1,088
  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
 
  3,987
  3,147
  3,426
  3,722
  4,039
  4,375
  4,733
  5,113
  5,518
  5,947
  6,292
  6,776
  7,288
  7,832
  8,408
  9,018
  9,664
  10,348
  11,072
  11,837
  12,648
  13,504
  14,410
  15,367
  16,379
  17,447
  18,576
  19,769
  21,028
  22,357
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  3,786
  2,824
  2,889
  2,934
  2,956
  2,954
  2,928
  2,876
  2,799
  2,699
  2,531
  2,392
  2,235
  2,064
  1,882
  1,693
  1,503
  1,314
  1,131
  958
  798
  653
  524
  412
  317
  239
  176
  126
  88
  60
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

Monsanto Company (Monsanto), along with its subsidiaries, is a provider of agricultural products for farmers. The Company provides seeds, biotechnology trait products, herbicides and digital agriculture tools to farmers. The Company operates through two segments: Seeds and Genomics, and Agricultural Productivity. Through its Seeds and Genomics segment, the Company produces seed brands, including DEKALB, Asgrow, Deltapine, Seminis and De Ruiter, and it develops biotechnology traits that assist farmers in controlling insects and weeds and digital agriculture to assist farmers in decision-making. The Seeds and Genomics segment offers products, such as Germplasm and Biotechnology traits. Through its Agricultural Productivity segment, the Company manufactures Roundup brand herbicides and other herbicides and provides lawn-and-garden herbicide products for the residential market.

FINANCIAL RATIOS  of  Monsanto (MON)

Valuation Ratios
P/E Ratio 22.8
Price to Sales 3.5
Price to Book 8
Price to Tangible Book
Price to Cash Flow 16
Price to Free Cash Flow 26.9
Growth Rates
Sales Growth Rate 8.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 32.2%
Cap. Spend. - 3 Yr. Gr. Rate -1.4%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 112.7%
Total Debt to Equity 126.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 11%
Ret/ On Assets - 3 Yr. Avg. 10.1%
Return On Total Capital 16.1%
Ret/ On T. Cap. - 3 Yr. Avg. 13.2%
Return On Equity 41.2%
Return On Equity - 3 Yr. Avg. 31.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 54.2%
Gross Margin - 3 Yr. Avg. 53.6%
EBITDA Margin 24.8%
EBITDA Margin - 3 Yr. Avg. 25.3%
Operating Margin 21.9%
Oper. Margin - 3 Yr. Avg. 21%
Pre-Tax Margin 19.7%
Pre-Tax Margin - 3 Yr. Avg. 18.5%
Net Profit Margin 15.4%
Net Profit Margin - 3 Yr. Avg. 13.6%
Effective Tax Rate 21.7%
Eff/ Tax Rate - 3 Yr. Avg. 28%
Payout Ratio 41.9%

MON stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MON stock intrinsic value calculation we used $14640 million for the last fiscal year's total revenue generated by Monsanto. The default revenue input number comes from 2017 income statement of Monsanto. 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 MON 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 5.3%, whose default value for MON is calculated based on our internal credit rating of Monsanto, 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 Monsanto.
    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 MON stock the variable cost ratio is equal to 26.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $7745 million in the base year in the intrinsic value calculation for MON 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 Monsanto.

Corporate tax rate of 27% is the nominal tax rate for Monsanto. 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 MON 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 MON are equal to 25.2%.

Life of production assets of 10.4 years is the average useful life of capital assets used in Monsanto 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 MON is equal to 7.9%. 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 - $6438 million for Monsanto - 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 439.296 million for Monsanto 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 Monsanto at the current share price and the inputted number of shares is $51.6 billion.

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COMPANY NEWS

▶ Monsanto: Analyst Recommendations and Earnings Revision   [Dec-15-17 03:25PM  Market Realist]
▶ Minnesota announces restrictions on using herbicide dicamba   [Dec-12-17 10:47PM  Associated Press]
▶ The Bayer-Monsanto Merger Deal: An Update   [09:31AM  Market Realist]
▶ Glassdoor CEO: Here's how to get the highest salary possible   [Dec-06-17 04:23PM  Yahoo Finance Video]
▶ Monsanto moves to stop Arkansas from banning weed killer   [Dec-05-17 07:23PM  Associated Press]
▶ Monsanto Declares Quarterly Dividend   [11:22AM  GuruFocus.com]
▶ What Deere Purchase Means for AgTech Startup Industry   [Dec-02-17 12:48PM  TheStreet.com]
▶ Monsanto: Roundup"s License Extended 5 Years in EU   [Nov-28-17 10:55AM  GuruFocus.com]
▶ [$$] German Political Limbo Settles EU Dispute Over Monsanto Weedkiller   [Nov-27-17 05:40PM  The Wall Street Journal]
▶ Signs a stock's ready to explode   [06:43PM  CNBC Videos]
▶ Berkshire 13F: Warren Buffett Adds Apple, Sheds IBM   [Nov-16-17 01:26PM  Investopedia]
▶ Here are Warren Buffett's latest stock moves   [Nov-14-17 05:27PM  Yahoo Finance]
▶ Monsanto: An Update for November 2017   [01:25PM  Market Realist]
▶ [$$] Battle Over Weedkiller Heads to Court   [05:46PM  The Wall Street Journal]
▶ Monsanto Company (MON): Time For A Financial Health Check   [Nov-06-17 07:22PM  Simply Wall St.]
▶ 12 Largest Agricultural Companies by Revenue in the World   [Nov-05-17 09:30AM  Insider Monkey]
▶ EU mergers and takeovers (Nov 3)   [11:56AM  Reuters]
Financial statements of MON
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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