Intrinsic value of ArcelorMittal - MT

Previous Close

$16.76

  Intrinsic Value

$10.40

stock screener

  Rating & Target

sell

-38%

Previous close

$16.76

 
Intrinsic value

$10.40

 
Up/down potential

-38%

 
Rating

sell

We calculate the intrinsic value of MT 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 16.9

 

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, %
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.45
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
  6.17
  6.06
  5.95
  5.86
  5.77
  5.69
  5.62
  5.56
  5.51
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
Revenue, $m
  84,169
  92,695
  101,609
  110,912
  120,605
  130,695
  141,189
  152,097
  163,434
  175,215
  187,458
  200,184
  213,416
  227,179
  241,500
  256,409
  271,938
  288,120
  304,991
  322,589
  340,954
  360,128
  380,156
  401,084
  422,962
  445,841
  469,775
  494,821
  521,038
  548,489
Variable operating expenses, $m
  71,482
  78,665
  86,175
  94,012
  102,179
  110,679
  119,520
  128,710
  138,261
  148,186
  157,927
  168,648
  179,796
  191,391
  203,456
  216,016
  229,099
  242,731
  256,945
  271,770
  287,242
  303,396
  320,269
  337,900
  356,331
  375,606
  395,770
  416,870
  438,957
  462,083
Fixed operating expenses, $m
  5,103
  5,215
  5,330
  5,447
  5,567
  5,689
  5,815
  5,942
  6,073
  6,207
  6,343
  6,483
  6,626
  6,771
  6,920
  7,073
  7,228
  7,387
  7,550
  7,716
  7,886
  8,059
  8,236
  8,417
  8,603
  8,792
  8,985
  9,183
  9,385
  9,592
Total operating expenses, $m
  76,585
  83,880
  91,505
  99,459
  107,746
  116,368
  125,335
  134,652
  144,334
  154,393
  164,270
  175,131
  186,422
  198,162
  210,376
  223,089
  236,327
  250,118
  264,495
  279,486
  295,128
  311,455
  328,505
  346,317
  364,934
  384,398
  404,755
  426,053
  448,342
  471,675
Operating income, $m
  7,584
  8,815
  10,104
  11,452
  12,860
  14,327
  15,855
  17,445
  19,100
  20,823
  23,188
  25,053
  26,995
  29,017
  31,124
  33,321
  35,611
  38,001
  40,497
  43,103
  45,826
  48,673
  51,651
  54,767
  58,028
  61,443
  65,020
  68,768
  72,696
  76,814
EBITDA, $m
  11,046
  12,570
  14,166
  15,833
  17,573
  19,387
  21,275
  23,240
  25,284
  27,411
  29,624
  31,926
  34,322
  36,817
  39,416
  42,124
  44,948
  47,894
  50,968
  54,178
  57,532
  61,038
  64,703
  68,537
  72,550
  76,750
  81,149
  85,757
  90,585
  95,645
Interest expense (income), $m
  1,354
  2,172
  3,094
  4,054
  5,058
  6,105
  7,196
  8,332
  9,514
  10,742
  12,018
  13,345
  14,723
  16,156
  17,646
  19,195
  20,808
  22,486
  24,235
  26,057
  27,956
  29,937
  32,005
  34,164
  36,419
  38,775
  41,238
  43,814
  46,509
  49,329
  52,280
Earnings before tax, $m
  5,412
  5,721
  6,050
  6,395
  6,755
  7,130
  7,522
  7,931
  8,358
  8,804
  9,843
  10,330
  10,839
  11,371
  11,929
  12,513
  13,125
  13,767
  14,440
  15,147
  15,889
  16,668
  17,487
  18,348
  19,253
  20,205
  21,206
  22,259
  23,367
  24,533
Tax expense, $m
  1,461
  1,545
  1,634
  1,727
  1,824
  1,925
  2,031
  2,141
  2,257
  2,377
  2,658
  2,789
  2,926
  3,070
  3,221
  3,378
  3,544
  3,717
  3,899
  4,090
  4,290
  4,500
  4,722
  4,954
  5,198
  5,455
  5,726
  6,010
  6,309
  6,624
Net income, $m
  3,951
  4,176
  4,417
  4,668
  4,931
  5,205
  5,491
  5,790
  6,102
  6,427
  7,185
  7,541
  7,912
  8,301
  8,708
  9,134
  9,581
  10,050
  10,541
  11,057
  11,599
  12,168
  12,766
  13,394
  14,055
  14,749
  15,480
  16,249
  17,058
  17,909

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
  101,043
  111,278
  121,980
  133,148
  144,784
  156,897
  169,494
  182,590
  196,200
  210,342
  225,040
  240,317
  256,202
  272,724
  289,916
  307,814
  326,456
  345,882
  366,136
  387,262
  409,308
  432,327
  456,370
  481,494
  507,758
  535,223
  563,956
  594,023
  625,496
  658,450
Adjusted assets (=assets-cash), $m
  101,043
  111,278
  121,980
  133,148
  144,784
  156,897
  169,494
  182,590
  196,200
  210,342
  225,040
  240,317
  256,202
  272,724
  289,916
  307,814
  326,456
  345,882
  366,136
  387,262
  409,308
  432,327
  456,370
  481,494
  507,758
  535,223
  563,956
  594,023
  625,496
  658,450
Revenue / Adjusted assets
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
  0.833
Average production assets, $m
  43,347
  47,738
  52,329
  57,120
  62,112
  67,308
  72,712
  78,330
  84,169
  90,236
  96,541
  103,095
  109,909
  116,997
  124,373
  132,051
  140,048
  148,382
  157,070
  166,133
  175,591
  185,466
  195,780
  206,558
  217,825
  229,608
  241,934
  254,833
  268,335
  282,472
Working capital, $m
  10,858
  11,958
  13,108
  14,308
  15,558
  16,860
  18,213
  19,621
  21,083
  22,603
  24,182
  25,824
  27,531
  29,306
  31,154
  33,077
  35,080
  37,167
  39,344
  41,614
  43,983
  46,457
  49,040
  51,740
  54,562
  57,513
  60,601
  63,832
  67,214
  70,755
Total debt, $m
  17,782
  23,299
  29,067
  35,087
  41,359
  47,887
  54,677
  61,736
  69,072
  76,694
  84,616
  92,851
  101,413
  110,318
  119,585
  129,232
  139,280
  149,751
  160,667
  172,054
  183,937
  196,344
  209,303
  222,845
  237,001
  251,805
  267,292
  283,498
  300,462
  318,224
Total liabilities, $m
  54,462
  59,979
  65,747
  71,767
  78,039
  84,567
  91,357
  98,416
  105,752
  113,374
  121,296
  129,531
  138,093
  146,998
  156,265
  165,912
  175,960
  186,431
  197,347
  208,734
  220,617
  233,024
  245,983
  259,525
  273,681
  288,485
  303,972
  320,178
  337,142
  354,904
Total equity, $m
  46,581
  51,299
  56,233
  61,381
  66,746
  72,329
  78,137
  84,174
  90,448
  96,968
  103,743
  110,786
  118,109
  125,726
  133,651
  141,902
  150,496
  159,452
  168,789
  178,528
  188,691
  199,303
  210,386
  221,969
  234,076
  246,738
  259,984
  273,844
  288,354
  303,545
Total liabilities and equity, $m
  101,043
  111,278
  121,980
  133,148
  144,785
  156,896
  169,494
  182,590
  196,200
  210,342
  225,039
  240,317
  256,202
  272,724
  289,916
  307,814
  326,456
  345,883
  366,136
  387,262
  409,308
  432,327
  456,369
  481,494
  507,757
  535,223
  563,956
  594,022
  625,496
  658,449
Debt-to-equity ratio
  0.380
  0.450
  0.520
  0.570
  0.620
  0.660
  0.700
  0.730
  0.760
  0.790
  0.820
  0.840
  0.860
  0.880
  0.890
  0.910
  0.930
  0.940
  0.950
  0.960
  0.970
  0.990
  0.990
  1.000
  1.010
  1.020
  1.030
  1.040
  1.040
  1.050
Adjusted equity ratio
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,951
  4,176
  4,417
  4,668
  4,931
  5,205
  5,491
  5,790
  6,102
  6,427
  7,185
  7,541
  7,912
  8,301
  8,708
  9,134
  9,581
  10,050
  10,541
  11,057
  11,599
  12,168
  12,766
  13,394
  14,055
  14,749
  15,480
  16,249
  17,058
  17,909
Depreciation, amort., depletion, $m
  3,463
  3,755
  4,061
  4,381
  4,714
  5,060
  5,420
  5,795
  6,184
  6,589
  6,436
  6,873
  7,327
  7,800
  8,292
  8,803
  9,337
  9,892
  10,471
  11,076
  11,706
  12,364
  13,052
  13,771
  14,522
  15,307
  16,129
  16,989
  17,889
  18,831
Funds from operations, $m
  7,413
  7,931
  8,478
  9,049
  9,644
  10,265
  10,911
  11,585
  12,286
  13,016
  13,621
  14,414
  15,239
  16,101
  16,999
  17,938
  18,918
  19,942
  21,013
  22,133
  23,305
  24,532
  25,818
  27,165
  28,576
  30,057
  31,609
  33,238
  34,947
  36,741
Change in working capital, $m
  1,049
  1,100
  1,150
  1,200
  1,250
  1,302
  1,354
  1,407
  1,462
  1,520
  1,579
  1,642
  1,707
  1,775
  1,847
  1,923
  2,003
  2,087
  2,176
  2,270
  2,369
  2,473
  2,584
  2,700
  2,822
  2,951
  3,087
  3,231
  3,382
  3,541
Cash from operations, $m
  6,364
  6,831
  7,328
  7,849
  8,394
  8,963
  9,558
  10,177
  10,823
  11,496
  12,042
  12,772
  13,533
  14,325
  15,152
  16,014
  16,914
  17,854
  18,836
  19,863
  20,936
  22,059
  23,234
  24,465
  25,754
  27,105
  28,522
  30,007
  31,565
  33,200
Maintenance CAPEX, $m
  -2,611
  -2,890
  -3,183
  -3,489
  -3,808
  -4,141
  -4,487
  -4,847
  -5,222
  -5,611
  -6,016
  -6,436
  -6,873
  -7,327
  -7,800
  -8,292
  -8,803
  -9,337
  -9,892
  -10,471
  -11,076
  -11,706
  -12,364
  -13,052
  -13,771
  -14,522
  -15,307
  -16,129
  -16,989
  -17,889
New CAPEX, $m
  -4,176
  -4,391
  -4,591
  -4,791
  -4,992
  -5,196
  -5,404
  -5,618
  -5,838
  -6,067
  -6,305
  -6,554
  -6,814
  -7,088
  -7,375
  -7,678
  -7,997
  -8,334
  -8,689
  -9,063
  -9,458
  -9,875
  -10,314
  -10,778
  -11,267
  -11,783
  -12,326
  -12,899
  -13,502
  -14,137
Cash from investing activities, $m
  -6,787
  -7,281
  -7,774
  -8,280
  -8,800
  -9,337
  -9,891
  -10,465
  -11,060
  -11,678
  -12,321
  -12,990
  -13,687
  -14,415
  -15,175
  -15,970
  -16,800
  -17,671
  -18,581
  -19,534
  -20,534
  -21,581
  -22,678
  -23,830
  -25,038
  -26,305
  -27,633
  -29,028
  -30,491
  -32,026
Free cash flow, $m
  -424
  -449
  -445
  -431
  -406
  -373
  -334
  -288
  -237
  -183
  -279
  -218
  -155
  -90
  -23
  45
  114
  184
  256
  328
  402
  478
  555
  635
  717
  801
  888
  979
  1,074
  1,174
Issuance/(repayment) of debt, $m
  5,299
  5,517
  5,768
  6,019
  6,272
  6,529
  6,790
  7,059
  7,336
  7,623
  7,922
  8,234
  8,562
  8,905
  9,267
  9,647
  10,048
  10,471
  10,917
  11,387
  11,883
  12,407
  12,959
  13,542
  14,156
  14,804
  15,487
  16,206
  16,964
  17,762
Issuance/(repurchase) of shares, $m
  544
  543
  517
  480
  434
  379
  316
  247
  172
  93
  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  
  5,843
  6,060
  6,285
  6,499
  6,706
  6,908
  7,106
  7,306
  7,508
  7,716
  7,922
  8,234
  8,562
  8,905
  9,267
  9,647
  10,048
  10,471
  10,917
  11,387
  11,883
  12,407
  12,959
  13,542
  14,156
  14,804
  15,487
  16,206
  16,964
  17,762
Total cash flow (excl. dividends), $m
  5,419
  5,610
  5,840
  6,069
  6,300
  6,534
  6,773
  7,018
  7,271
  7,533
  7,643
  8,016
  8,407
  8,816
  9,243
  9,692
  10,162
  10,655
  11,172
  11,715
  12,286
  12,885
  13,515
  14,177
  14,873
  15,605
  16,375
  17,186
  18,038
  18,936
Retained Cash Flow (-), $m
  -4,495
  -4,719
  -4,933
  -5,148
  -5,365
  -5,584
  -5,807
  -6,037
  -6,274
  -6,520
  -6,776
  -7,043
  -7,323
  -7,617
  -7,926
  -8,251
  -8,594
  -8,955
  -9,337
  -9,739
  -10,164
  -10,611
  -11,084
  -11,582
  -12,108
  -12,662
  -13,246
  -13,861
  -14,509
  -15,192
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
  925
  892
  906
  921
  935
  950
  965
  981
  997
  1,013
  867
  974
  1,084
  1,199
  1,318
  1,441
  1,568
  1,699
  1,835
  1,976
  2,122
  2,273
  2,431
  2,594
  2,765
  2,943
  3,130
  3,325
  3,529
  3,744
Discount rate, %
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
  885
  813
  784
  751
  717
  680
  641
  600
  558
  516
  398
  400
  395
  383
  366
  344
  319
  290
  260
  229
  199
  169
  141
  116
  93
  74
  57
  43
  32
  23
Current shareholders' claim on cash, %
  98.2
  96.6
  95.2
  94.1
  93.1
  92.4
  91.8
  91.4
  91.1
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0

ArcelorMittal S.A. (ArcelorMittal) is a holding company. The Company, together with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia and Africa. ArcelorMittal operates through five segments, which include NAFTA; Europe; Brazil; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA segment produces flat, long and tubular products. The Brazil segment includes the flat operations of Brazil, and the long and tubular operations of Brazil and neighboring countries. The Europe segment is the flat steel producer in Europe. The ACIS segment produces a combination of flat, long products and tubular products. The Mining segment comprises all mines owned by ArcelorMittal in the Americas, Asia, Europe and Africa. It produces a range of finished and semi-finished steel products (semis).

FINANCIAL RATIOS  of  ArcelorMittal (MT)

Valuation Ratios
P/E Ratio 9.6
Price to Sales 0.3
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow 6.3
Price to Free Cash Flow 68.1
Growth Rates
Sales Growth Rate -10.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -9.7%
Cap. Spend. - 3 Yr. Gr. Rate -6.7%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 39.1%
Total Debt to Equity 45.4%
Interest Coverage 3
Management Effectiveness
Return On Assets 3.5%
Ret/ On Assets - 3 Yr. Avg. -0.5%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. -4.2%
Return On Equity 6.4%
Return On Equity - 3 Yr. Avg. -6.5%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 10.1%
Gross Margin - 3 Yr. Avg. 7.6%
EBITDA Margin 12%
EBITDA Margin - 3 Yr. Avg. 4.7%
Operating Margin 7.3%
Oper. Margin - 3 Yr. Avg. 1.5%
Pre-Tax Margin 4.8%
Pre-Tax Margin - 3 Yr. Avg. -2.6%
Net Profit Margin 3.1%
Net Profit Margin - 3 Yr. Avg. -3.6%
Effective Tax Rate 36.3%
Eff/ Tax Rate - 3 Yr. Avg. -21%
Payout Ratio 3.4%

MT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MT stock intrinsic value calculation we used $76033 million for the last fiscal year's total revenue generated by ArcelorMittal. The default revenue input number comes from 0001 income statement of ArcelorMittal. 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 MT stock valuation model: a) initial revenue growth rate of 10.7% 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 4.5%, whose default value for MT is calculated based on our internal credit rating of ArcelorMittal, 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 ArcelorMittal.
    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 MT stock the variable cost ratio is equal to 85%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4993 million in the base year in the intrinsic value calculation for MT 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 17.4% for ArcelorMittal.

Corporate tax rate of 27% is the nominal tax rate for ArcelorMittal. 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 MT 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 MT are equal to 51.5%.

Life of production assets of 15 years is the average useful life of capital assets used in ArcelorMittal 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 MT is equal to 12.9%. 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 - $42086 million for ArcelorMittal - 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 1009.268 million for ArcelorMittal 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 ArcelorMittal at the current share price and the inputted number of shares is $16.9 billion.

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