Intrinsic value of Marathon Petroleum - MPC

Previous Close

$78.82

  Intrinsic Value

$463.34

stock screener

  Rating & Target

str. buy

+488%

Previous close

$78.82

 
Intrinsic value

$463.34

 
Up/down potential

+488%

 
Rating

str. buy

We calculate the intrinsic value of MPC 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 35.5

 

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, %
  22.30
  20.57
  19.01
  17.61
  16.35
  15.22
  14.19
  13.27
  12.45
  11.70
  11.03
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.81
Revenue, $m
  92,176
  111,137
  132,267
  155,562
  180,997
  208,537
  238,136
  269,748
  303,324
  338,820
  376,199
  415,432
  456,502
  499,401
  544,136
  590,725
  639,198
  689,599
  741,986
  796,425
  852,997
  911,794
  972,918
  1,036,481
  1,102,608
  1,171,433
  1,243,098
  1,317,758
  1,395,577
  1,476,728
Variable operating expenses, $m
  79,837
  96,186
  114,405
  134,491
  156,422
  180,168
  205,690
  232,946
  261,897
  292,503
  324,374
  358,203
  393,615
  430,605
  469,177
  509,348
  551,143
  594,602
  639,771
  686,711
  735,490
  786,187
  838,891
  893,698
  950,715
  1,010,058
  1,071,852
  1,136,227
  1,203,325
  1,273,297
Fixed operating expenses, $m
  6,287
  6,426
  6,567
  6,712
  6,859
  7,010
  7,164
  7,322
  7,483
  7,648
  7,816
  7,988
  8,164
  8,343
  8,527
  8,714
  8,906
  9,102
  9,302
  9,507
  9,716
  9,930
  10,148
  10,371
  10,600
  10,833
  11,071
  11,315
  11,564
  11,818
Total operating expenses, $m
  86,124
  102,612
  120,972
  141,203
  163,281
  187,178
  212,854
  240,268
  269,380
  300,151
  332,190
  366,191
  401,779
  438,948
  477,704
  518,062
  560,049
  603,704
  649,073
  696,218
  745,206
  796,117
  849,039
  904,069
  961,315
  1,020,891
  1,082,923
  1,147,542
  1,214,889
  1,285,115
Operating income, $m
  6,052
  8,526
  11,295
  14,360
  17,716
  21,359
  25,282
  29,479
  33,944
  38,669
  44,008
  49,241
  54,723
  60,453
  66,432
  72,663
  79,149
  85,896
  92,912
  100,207
  107,791
  115,677
  123,879
  132,412
  141,293
  150,541
  160,176
  170,217
  180,688
  191,613
EBITDA, $m
  8,847
  11,822
  15,149
  18,830
  22,858
  27,229
  31,934
  36,967
  42,319
  47,982
  53,951
  60,221
  66,788
  73,652
  80,813
  88,275
  96,042
  104,121
  112,522
  121,255
  130,335
  139,775
  149,592
  159,805
  170,434
  181,501
  193,029
  205,043
  217,571
  230,641
Interest expense (income), $m
  478
  699
  1,121
  1,596
  2,126
  2,711
  3,349
  4,040
  4,782
  5,575
  6,417
  7,308
  8,245
  9,230
  10,260
  11,336
  12,458
  13,627
  14,843
  16,107
  17,421
  18,787
  20,206
  21,681
  23,214
  24,809
  26,468
  28,194
  29,992
  31,865
  33,817
Earnings before tax, $m
  5,353
  7,405
  9,699
  12,234
  15,005
  18,010
  21,243
  24,697
  28,369
  32,252
  36,701
  40,996
  45,494
  50,194
  55,096
  60,205
  65,522
  71,053
  76,805
  82,786
  89,004
  95,471
  102,198
  109,198
  116,485
  124,074
  131,982
  140,225
  148,824
  157,796
Tax expense, $m
  1,445
  1,999
  2,619
  3,303
  4,051
  4,863
  5,736
  6,668
  7,660
  8,708
  9,909
  11,069
  12,283
  13,552
  14,876
  16,255
  17,691
  19,184
  20,737
  22,352
  24,031
  25,777
  27,593
  29,483
  31,451
  33,500
  35,635
  37,861
  40,182
  42,605
Net income, $m
  3,908
  5,406
  7,080
  8,930
  10,954
  13,147
  15,507
  18,029
  20,709
  23,544
  26,792
  29,927
  33,210
  36,641
  40,220
  43,949
  47,831
  51,869
  56,068
  60,434
  64,973
  69,694
  74,605
  79,714
  85,034
  90,574
  96,347
  102,364
  108,641
  115,191

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
  59,972
  72,308
  86,056
  101,211
  117,760
  135,678
  154,936
  175,503
  197,348
  220,442
  244,762
  270,288
  297,008
  324,919
  354,025
  384,336
  415,874
  448,666
  482,749
  518,169
  554,976
  593,230
  632,998
  674,353
  717,377
  762,155
  808,782
  857,358
  907,988
  960,786
Adjusted assets (=assets-cash), $m
  59,972
  72,308
  86,056
  101,211
  117,760
  135,678
  154,936
  175,503
  197,348
  220,442
  244,762
  270,288
  297,008
  324,919
  354,025
  384,336
  415,874
  448,666
  482,749
  518,169
  554,976
  593,230
  632,998
  674,353
  717,377
  762,155
  808,782
  857,358
  907,988
  960,786
Revenue / Adjusted assets
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
Average production assets, $m
  34,105
  41,121
  48,939
  57,558
  66,969
  77,159
  88,110
  99,807
  112,230
  125,363
  139,193
  153,710
  168,906
  184,778
  201,330
  218,568
  236,503
  255,152
  274,535
  294,677
  315,609
  337,364
  359,980
  383,498
  407,965
  433,430
  459,946
  487,571
  516,364
  546,389
Working capital, $m
  645
  778
  926
  1,089
  1,267
  1,460
  1,667
  1,888
  2,123
  2,372
  2,633
  2,908
  3,196
  3,496
  3,809
  4,135
  4,474
  4,827
  5,194
  5,575
  5,971
  6,383
  6,810
  7,255
  7,718
  8,200
  8,702
  9,224
  9,769
  10,337
Total debt, $m
  20,752
  29,560
  39,376
  50,197
  62,013
  74,806
  88,556
  103,241
  118,838
  135,328
  152,692
  170,917
  189,996
  209,925
  230,706
  252,348
  274,866
  298,279
  322,615
  347,904
  374,185
  401,498
  429,892
  459,420
  490,139
  522,111
  555,402
  590,085
  626,235
  663,933
Total liabilities, $m
  42,820
  51,628
  61,444
  72,265
  84,081
  96,874
  110,624
  125,309
  140,906
  157,396
  174,760
  192,985
  212,064
  231,993
  252,774
  274,416
  296,934
  320,347
  344,683
  369,972
  396,253
  423,566
  451,960
  481,488
  512,207
  544,179
  577,470
  612,153
  648,303
  686,001
Total equity, $m
  17,152
  20,680
  24,612
  28,946
  33,679
  38,804
  44,312
  50,194
  56,441
  63,046
  70,002
  77,302
  84,944
  92,927
  101,251
  109,920
  118,940
  128,318
  138,066
  148,196
  158,723
  169,664
  181,037
  192,865
  205,170
  217,976
  231,312
  245,204
  259,685
  274,785
Total liabilities and equity, $m
  59,972
  72,308
  86,056
  101,211
  117,760
  135,678
  154,936
  175,503
  197,347
  220,442
  244,762
  270,287
  297,008
  324,920
  354,025
  384,336
  415,874
  448,665
  482,749
  518,168
  554,976
  593,230
  632,997
  674,353
  717,377
  762,155
  808,782
  857,357
  907,988
  960,786
Debt-to-equity ratio
  1.210
  1.430
  1.600
  1.730
  1.840
  1.930
  2.000
  2.060
  2.110
  2.150
  2.180
  2.210
  2.240
  2.260
  2.280
  2.300
  2.310
  2.320
  2.340
  2.350
  2.360
  2.370
  2.370
  2.380
  2.390
  2.400
  2.400
  2.410
  2.410
  2.420
Adjusted equity ratio
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,908
  5,406
  7,080
  8,930
  10,954
  13,147
  15,507
  18,029
  20,709
  23,544
  26,792
  29,927
  33,210
  36,641
  40,220
  43,949
  47,831
  51,869
  56,068
  60,434
  64,973
  69,694
  74,605
  79,714
  85,034
  90,574
  96,347
  102,364
  108,641
  115,191
Depreciation, amort., depletion, $m
  2,795
  3,296
  3,854
  4,470
  5,142
  5,870
  6,652
  7,488
  8,375
  9,313
  9,942
  10,979
  12,065
  13,198
  14,381
  15,612
  16,893
  18,225
  19,610
  21,048
  22,544
  24,097
  25,713
  27,393
  29,140
  30,959
  32,853
  34,826
  36,883
  39,028
Funds from operations, $m
  6,702
  8,702
  10,935
  13,400
  16,096
  19,017
  22,159
  25,517
  29,084
  32,857
  36,734
  40,906
  45,275
  49,840
  54,601
  59,561
  64,724
  70,094
  75,677
  81,482
  87,517
  93,791
  100,317
  107,107
  114,174
  121,533
  129,200
  137,191
  145,524
  154,219
Change in working capital, $m
  118
  133
  148
  163
  178
  193
  207
  221
  235
  248
  262
  275
  287
  300
  313
  326
  339
  353
  367
  381
  396
  412
  428
  445
  463
  482
  502
  523
  545
  568
Cash from operations, $m
  6,585
  8,569
  10,787
  13,237
  15,918
  18,825
  21,952
  25,295
  28,849
  32,608
  36,472
  40,632
  44,988
  49,539
  54,288
  59,235
  64,385
  69,741
  75,311
  81,101
  87,121
  93,380
  99,890
  106,662
  113,711
  121,051
  128,698
  136,668
  144,980
  153,651
Maintenance CAPEX, $m
  -1,993
  -2,436
  -2,937
  -3,496
  -4,111
  -4,783
  -5,511
  -6,294
  -7,129
  -8,016
  -8,955
  -9,942
  -10,979
  -12,065
  -13,198
  -14,381
  -15,612
  -16,893
  -18,225
  -19,610
  -21,048
  -22,544
  -24,097
  -25,713
  -27,393
  -29,140
  -30,959
  -32,853
  -34,826
  -36,883
New CAPEX, $m
  -6,208
  -7,015
  -7,818
  -8,619
  -9,411
  -10,190
  -10,952
  -11,696
  -12,423
  -13,134
  -13,830
  -14,516
  -15,196
  -15,873
  -16,552
  -17,238
  -17,935
  -18,649
  -19,383
  -20,143
  -20,932
  -21,755
  -22,616
  -23,518
  -24,467
  -25,465
  -26,516
  -27,624
  -28,793
  -30,026
Cash from investing activities, $m
  -8,201
  -9,451
  -10,755
  -12,115
  -13,522
  -14,973
  -16,463
  -17,990
  -19,552
  -21,150
  -22,785
  -24,458
  -26,175
  -27,938
  -29,750
  -31,619
  -33,547
  -35,542
  -37,608
  -39,753
  -41,980
  -44,299
  -46,713
  -49,231
  -51,860
  -54,605
  -57,475
  -60,477
  -63,619
  -66,909
Free cash flow, $m
  -1,616
  -883
  31
  1,123
  2,396
  3,851
  5,489
  7,306
  9,297
  11,458
  13,688
  16,173
  18,813
  21,602
  24,538
  27,617
  30,838
  34,199
  37,703
  41,349
  45,141
  49,082
  53,176
  57,431
  61,852
  66,446
  71,223
  76,191
  81,360
  86,742
Issuance/(repayment) of debt, $m
  7,806
  8,808
  9,816
  10,821
  11,816
  12,793
  13,750
  14,685
  15,597
  16,489
  17,364
  18,226
  19,079
  19,929
  20,781
  21,642
  22,518
  23,414
  24,336
  25,289
  26,280
  27,313
  28,394
  29,528
  30,719
  31,972
  33,292
  34,683
  36,150
  37,698
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  
  7,806
  8,808
  9,816
  10,821
  11,816
  12,793
  13,750
  14,685
  15,597
  16,489
  17,364
  18,226
  19,079
  19,929
  20,781
  21,642
  22,518
  23,414
  24,336
  25,289
  26,280
  27,313
  28,394
  29,528
  30,719
  31,972
  33,292
  34,683
  36,150
  37,698
Total cash flow (excl. dividends), $m
  6,190
  7,925
  9,847
  11,944
  14,211
  16,645
  19,239
  21,990
  24,894
  27,948
  31,052
  34,398
  37,891
  41,531
  45,319
  49,259
  53,355
  57,613
  62,038
  66,638
  71,421
  76,395
  81,571
  86,959
  92,570
  98,418
  104,514
  110,873
  117,510
  124,440
Retained Cash Flow (-), $m
  -3,119
  -3,528
  -3,932
  -4,335
  -4,733
  -5,124
  -5,508
  -5,882
  -6,248
  -6,605
  -6,955
  -7,300
  -7,642
  -7,983
  -8,324
  -8,669
  -9,020
  -9,379
  -9,748
  -10,130
  -10,527
  -10,941
  -11,374
  -11,828
  -12,305
  -12,807
  -13,335
  -13,893
  -14,480
  -15,100
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
  3,071
  4,397
  5,915
  7,609
  9,478
  11,520
  13,731
  16,108
  18,647
  21,343
  24,096
  27,098
  30,249
  33,548
  36,995
  40,590
  44,336
  48,234
  52,290
  56,508
  60,894
  65,454
  70,197
  75,131
  80,266
  85,611
  91,179
  96,981
  103,030
  109,340
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
  2,944
  4,025
  5,148
  6,266
  7,347
  8,361
  9,277
  10,068
  10,712
  11,189
  11,443
  11,564
  11,501
  11,263
  10,861
  10,315
  9,647
  8,883
  8,051
  7,180
  6,298
  5,431
  4,601
  3,827
  3,122
  2,498
  1,957
  1,500
  1,125
  823
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

Marathon Petroleum Corporation is engaged in refining, marketing, retail and transportation businesses in the United States and the largest east of the Mississippi. The Company operates through three segments: Refining & Marketing; Speedway; and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at the Company's seven refineries in the Gulf Coast and Midwest regions of the United States. Its Speedway segment sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast regions of the United States. The Company's Midstream is engaged in the operations of MPLX LP and certain other related operations. It gathers, processes and transports natural gas, natural gas liquids (NGLs), crude oil and refined products. MPLX is a limited partnership which owns, operates, develops and acquires midstream energy infrastructure assets.

FINANCIAL RATIOS  of  Marathon Petroleum (MPC)

Valuation Ratios
P/E Ratio 35.4
Price to Sales 0.7
Price to Book 3.1
Price to Tangible Book
Price to Cash Flow 10.4
Price to Free Cash Flow 38
Growth Rates
Sales Growth Rate -12.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 44.7%
Cap. Spend. - 3 Yr. Gr. Rate 19.1%
Financial Strength
Quick Ratio 32
Current Ratio 0
LT Debt to Equity 77.8%
Total Debt to Equity 78%
Interest Coverage 5
Management Effectiveness
Return On Assets 3.4%
Ret/ On Assets - 3 Yr. Avg. 6.9%
Return On Total Capital 4.8%
Ret/ On T. Cap. - 3 Yr. Avg. 11.4%
Return On Equity 8.8%
Return On Equity - 3 Yr. Avg. 18.6%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 10%
Gross Margin - 3 Yr. Avg. 9.5%
EBITDA Margin 6.8%
EBITDA Margin - 3 Yr. Avg. 6.9%
Operating Margin 3.8%
Oper. Margin - 3 Yr. Avg. 4.8%
Pre-Tax Margin 2.9%
Pre-Tax Margin - 3 Yr. Avg. 4.3%
Net Profit Margin 1.9%
Net Profit Margin - 3 Yr. Avg. 2.8%
Effective Tax Rate 33.4%
Eff/ Tax Rate - 3 Yr. Avg. 33.7%
Payout Ratio 61.2%

MPC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MPC stock intrinsic value calculation we used $75369 million for the last fiscal year's total revenue generated by Marathon Petroleum. The default revenue input number comes from 0001 income statement of Marathon Petroleum. 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 MPC stock valuation model: a) initial revenue growth rate of 22.3% 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 MPC is calculated based on our internal credit rating of Marathon Petroleum, 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 Marathon Petroleum.
    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 MPC stock the variable cost ratio is equal to 86.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6152 million in the base year in the intrinsic value calculation for MPC 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 Marathon Petroleum.

Corporate tax rate of 27% is the nominal tax rate for Marathon Petroleum. 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 MPC 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 MPC are equal to 37%.

Life of production assets of 14 years is the average useful life of capital assets used in Marathon Petroleum 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 MPC is equal to 0.7%. 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 - $14033 million for Marathon Petroleum - 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 451.005 million for Marathon Petroleum 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 Marathon Petroleum at the current share price and the inputted number of shares is $35.5 billion.

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COMPANY NEWS

▶ Eagle Ford Shale-sourced products find global market   [Oct-18-18 02:00PM  American City Business Journals]
▶ Refiners' Good Times Keep Rolling   [Oct-17-18 07:00AM  Morningstar]
▶ The Oil Market Is Entering a Danger Zone   [Oct-14-18 09:30AM  Motley Fool]
▶ Suvretta Capital Managements Return, AUM, and Holdings   [Oct-07-18 05:20AM  Insider Monkey]
▶ Energy ETF (FXN) Hits New 52-Week High   [Oct-05-18 04:40PM  Zacks]
▶ Here's a closer look at Dayton's billion-dollar businesses   [06:00AM  American City Business Journals]
▶ Deal Done: Andeavor no longer a publicly traded company   [02:30PM  American City Business Journals]
▶ My Top Dividend Growth Stock to Buy in October   [Sep-30-18 05:01PM  Motley Fool]
▶ Small Caps Lead Stock Indexes; Fed Meeting Begins   [11:59AM  Investor's Business Daily]
▶ EXCLUSIVE: Andeavor CEO on company's $23.3B sale to Marathon Petroleum   [07:40AM  American City Business Journals]
▶ Shareholders Approve MPC and Andeavor Merger   [Sep-24-18 08:00PM  Rigzone.com]
▶ Andeavor's $23.3B sale marks second-largest deal in San Antonio history   [03:59PM  American City Business Journals]
▶ 3 Energy Stocks Riding a Wave of Crude Oil   [Sep-20-18 03:27PM  InvestorPlace]
▶ Marathon makes credit deals worth $6B before vote on buying Andeavor   [07:51AM  American City Business Journals]
▶ Stocks - Twitter Jumps Midday; Energy Stocks Gain   [Aug-21-18 02:33PM  Investing.com]
▶ Stanley Druckenmiller Bets on Facebook and Oil   [Aug-17-18 04:35PM  GuruFocus.com]
▶ Speedway adds high-level exec as $23B acquisition nears completion   [Aug-15-18 05:00AM  American City Business Journals]
▶ 3 Oil Stocks Seen Plunging as Much as 14%   [Aug-13-18 11:30AM  Investopedia]
▶ Marathon releases leadership roster for post-Andeavor acquisition   [Aug-10-18 06:17PM  American City Business Journals]
▶ Speedway continues to expand reach   [Aug-09-18 09:12AM  American City Business Journals]
▶ [$$] Gasoline Makers Are Reaping Big Profits   [01:13AM  The Wall Street Journal]
▶ Energy ETFs to Capture the Strength in Oil Refiners   [Aug-07-18 04:47PM  ETF Trends]
▶ [$$] American Refiners Reap Big Profits as Production Soars   [06:05AM  The Wall Street Journal]
▶ [$$] 3 Cheap Value Stocks Worth Buying Right Now   [Aug-01-18 08:00AM  Barrons.com]
▶ 5 Best Stocks of the Top Performing ETF of July   [Jul-31-18 10:05AM  Zacks]
▶ MPLX Continues to Grow by Leaps and Bounds   [Jul-30-18 10:16AM  Motley Fool]
▶ Speedway stumbles as profit drops in second quarter   [07:47AM  American City Business Journals]
▶ Marathon Petroleum: 2Q Earnings Snapshot   [07:31AM  Associated Press]

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