Intrinsic value of Murphy Oil Corporation - MUR

Previous Close

$23.20

  Intrinsic Value

$77.79

stock screener

  Rating & Target

str. buy

+235%

Previous close

$23.20

 
Intrinsic value

$77.79

 
Up/down potential

+235%

 
Rating

str. buy

We calculate the intrinsic value of MUR 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 4.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  27.70
  25.43
  23.39
  21.55
  19.89
  18.40
  17.06
  15.86
  14.77
  13.79
  12.92
  12.12
  11.41
  10.77
  10.19
  9.67
  9.21
  8.79
  8.41
  8.07
  7.76
  7.48
  7.24
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
  6.07
Revenue, $m
  3,283
  4,118
  5,081
  6,176
  7,405
  8,767
  10,264
  11,891
  13,648
  15,530
  17,536
  19,662
  21,906
  24,265
  26,738
  29,325
  32,024
  34,838
  37,767
  40,813
  43,980
  47,272
  50,692
  54,246
  57,941
  61,782
  65,777
  69,935
  74,262
  78,769
Variable operating expenses, $m
  555
  696
  859
  1,044
  1,251
  1,482
  1,735
  2,010
  2,306
  2,625
  2,964
  3,323
  3,702
  4,101
  4,519
  4,956
  5,412
  5,888
  6,383
  6,897
  7,433
  7,989
  8,567
  9,168
  9,792
  10,441
  11,116
  11,819
  12,550
  13,312
Fixed operating expenses, $m
  1,574
  1,609
  1,644
  1,680
  1,717
  1,755
  1,793
  1,833
  1,873
  1,914
  1,957
  2,000
  2,044
  2,088
  2,134
  2,181
  2,229
  2,278
  2,329
  2,380
  2,432
  2,486
  2,540
  2,596
  2,653
  2,712
  2,771
  2,832
  2,895
  2,958
Total operating expenses, $m
  2,129
  2,305
  2,503
  2,724
  2,968
  3,237
  3,528
  3,843
  4,179
  4,539
  4,921
  5,323
  5,746
  6,189
  6,653
  7,137
  7,641
  8,166
  8,712
  9,277
  9,865
  10,475
  11,107
  11,764
  12,445
  13,153
  13,887
  14,651
  15,445
  16,270
Operating income, $m
  1,154
  1,814
  2,579
  3,452
  4,436
  5,531
  6,736
  8,049
  9,468
  10,991
  12,616
  14,339
  16,160
  18,076
  20,085
  22,187
  24,383
  26,672
  29,056
  31,536
  34,115
  36,797
  39,585
  42,483
  45,496
  48,629
  51,890
  55,283
  58,817
  62,499
EBITDA, $m
  2,402
  3,378
  4,509
  5,799
  7,250
  8,863
  10,636
  12,567
  14,654
  16,893
  19,279
  21,811
  24,484
  27,296
  30,245
  33,331
  36,552
  39,910
  43,407
  47,045
  50,828
  54,760
  58,848
  63,096
  67,513
  72,107
  76,885
  81,859
  87,037
  92,431
Interest expense (income), $m
  128
  191
  292
  411
  548
  704
  879
  1,074
  1,287
  1,519
  1,769
  2,038
  2,324
  2,627
  2,947
  3,283
  3,636
  4,004
  4,389
  4,790
  5,208
  5,642
  6,094
  6,563
  7,051
  7,557
  8,084
  8,632
  9,201
  9,794
  10,411
Earnings before tax, $m
  963
  1,522
  2,168
  2,904
  3,732
  4,652
  5,662
  6,762
  7,949
  9,222
  10,578
  12,016
  13,533
  15,129
  16,802
  18,552
  20,378
  22,283
  24,265
  26,328
  28,473
  30,703
  33,022
  35,432
  37,938
  40,545
  43,258
  46,082
  49,023
  52,088
Tax expense, $m
  260
  411
  585
  784
  1,008
  1,256
  1,529
  1,826
  2,146
  2,490
  2,856
  3,244
  3,654
  4,085
  4,536
  5,009
  5,502
  6,016
  6,552
  7,109
  7,688
  8,290
  8,916
  9,567
  10,243
  10,947
  11,680
  12,442
  13,236
  14,064
Net income, $m
  703
  1,111
  1,582
  2,120
  2,724
  3,396
  4,133
  4,936
  5,803
  6,732
  7,722
  8,771
  9,879
  11,044
  12,265
  13,543
  14,876
  16,266
  17,714
  19,219
  20,785
  22,413
  24,106
  25,865
  27,695
  29,598
  31,578
  33,640
  35,787
  38,024

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
  14,091
  17,674
  21,808
  26,507
  31,780
  37,629
  44,050
  51,035
  58,573
  66,653
  75,261
  84,386
  94,015
  104,141
  114,756
  125,857
  137,444
  149,519
  162,089
  175,164
  188,756
  202,883
  217,562
  232,817
  248,674
  265,160
  282,307
  300,149
  318,722
  338,066
Adjusted assets (=assets-cash), $m
  14,091
  17,674
  21,808
  26,507
  31,780
  37,629
  44,050
  51,035
  58,573
  66,653
  75,261
  84,386
  94,015
  104,141
  114,756
  125,857
  137,444
  149,519
  162,089
  175,164
  188,756
  202,883
  217,562
  232,817
  248,674
  265,160
  282,307
  300,149
  318,722
  338,066
Revenue / Adjusted assets
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
Average production assets, $m
  11,478
  14,397
  17,764
  21,592
  25,887
  30,651
  35,881
  41,571
  47,712
  54,293
  61,306
  68,738
  76,582
  84,830
  93,476
  102,519
  111,957
  121,793
  132,033
  142,683
  153,755
  165,262
  177,219
  189,645
  202,562
  215,991
  229,958
  244,491
  259,621
  275,378
Working capital, $m
  -437
  -548
  -676
  -821
  -985
  -1,166
  -1,365
  -1,582
  -1,815
  -2,066
  -2,332
  -2,615
  -2,913
  -3,227
  -3,556
  -3,900
  -4,259
  -4,633
  -5,023
  -5,428
  -5,849
  -6,287
  -6,742
  -7,215
  -7,706
  -8,217
  -8,748
  -9,301
  -9,877
  -10,476
Total debt, $m
  4,948
  6,965
  9,292
  11,938
  14,907
  18,199
  21,814
  25,747
  29,991
  34,540
  39,387
  44,524
  49,945
  55,646
  61,622
  67,872
  74,395
  81,194
  88,271
  95,632
  103,284
  111,237
  119,502
  128,091
  137,018
  146,299
  155,953
  165,998
  176,455
  187,345
Total liabilities, $m
  7,933
  9,951
  12,278
  14,923
  17,892
  21,185
  24,800
  28,732
  32,977
  37,526
  42,372
  47,509
  52,930
  58,631
  64,607
  70,857
  77,381
  84,179
  91,256
  98,617
  106,270
  114,223
  122,487
  131,076
  140,003
  149,285
  158,939
  168,984
  179,440
  190,331
Total equity, $m
  6,158
  7,724
  9,530
  11,583
  13,888
  16,444
  19,250
  22,302
  25,597
  29,127
  32,889
  36,877
  41,085
  45,509
  50,148
  54,999
  60,063
  65,340
  70,833
  76,547
  82,487
  88,660
  95,075
  101,741
  108,670
  115,875
  123,368
  131,165
  139,281
  147,735
Total liabilities and equity, $m
  14,091
  17,675
  21,808
  26,506
  31,780
  37,629
  44,050
  51,034
  58,574
  66,653
  75,261
  84,386
  94,015
  104,140
  114,755
  125,856
  137,444
  149,519
  162,089
  175,164
  188,757
  202,883
  217,562
  232,817
  248,673
  265,160
  282,307
  300,149
  318,721
  338,066
Debt-to-equity ratio
  0.800
  0.900
  0.980
  1.030
  1.070
  1.110
  1.130
  1.150
  1.170
  1.190
  1.200
  1.210
  1.220
  1.220
  1.230
  1.230
  1.240
  1.240
  1.250
  1.250
  1.250
  1.250
  1.260
  1.260
  1.260
  1.260
  1.260
  1.270
  1.270
  1.270
Adjusted equity ratio
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  703
  1,111
  1,582
  2,120
  2,724
  3,396
  4,133
  4,936
  5,803
  6,732
  7,722
  8,771
  9,879
  11,044
  12,265
  13,543
  14,876
  16,266
  17,714
  19,219
  20,785
  22,413
  24,106
  25,865
  27,695
  29,598
  31,578
  33,640
  35,787
  38,024
Depreciation, amort., depletion, $m
  1,248
  1,565
  1,931
  2,347
  2,814
  3,332
  3,900
  4,519
  5,186
  5,901
  6,664
  7,472
  8,324
  9,221
  10,160
  11,143
  12,169
  13,238
  14,351
  15,509
  16,712
  17,963
  19,263
  20,614
  22,018
  23,477
  24,995
  26,575
  28,220
  29,932
Funds from operations, $m
  1,951
  2,676
  3,513
  4,467
  5,538
  6,727
  8,033
  9,455
  10,989
  12,633
  14,386
  16,243
  18,203
  20,265
  22,426
  24,686
  27,045
  29,505
  32,065
  34,728
  37,498
  40,377
  43,369
  46,479
  49,713
  53,075
  56,574
  60,215
  64,007
  67,957
Change in working capital, $m
  -95
  -111
  -128
  -146
  -163
  -181
  -199
  -216
  -234
  -250
  -267
  -283
  -298
  -314
  -329
  -344
  -359
  -374
  -390
  -405
  -421
  -438
  -455
  -473
  -491
  -511
  -531
  -553
  -576
  -599
Cash from operations, $m
  2,046
  2,787
  3,641
  4,612
  5,702
  6,908
  8,232
  9,671
  11,222
  12,884
  14,652
  16,526
  18,502
  20,578
  22,755
  25,030
  27,405
  29,879
  32,455
  35,134
  37,919
  40,814
  43,824
  46,952
  50,204
  53,586
  57,105
  60,768
  64,582
  68,556
Maintenance CAPEX, $m
  -977
  -1,248
  -1,565
  -1,931
  -2,347
  -2,814
  -3,332
  -3,900
  -4,519
  -5,186
  -5,901
  -6,664
  -7,472
  -8,324
  -9,221
  -10,160
  -11,143
  -12,169
  -13,238
  -14,351
  -15,509
  -16,712
  -17,963
  -19,263
  -20,614
  -22,018
  -23,477
  -24,995
  -26,575
  -28,220
New CAPEX, $m
  -2,489
  -2,919
  -3,367
  -3,828
  -4,295
  -4,764
  -5,230
  -5,690
  -6,141
  -6,582
  -7,012
  -7,432
  -7,844
  -8,248
  -8,647
  -9,043
  -9,438
  -9,836
  -10,239
  -10,650
  -11,072
  -11,507
  -11,957
  -12,426
  -12,916
  -13,429
  -13,967
  -14,533
  -15,129
  -15,757
Cash from investing activities, $m
  -3,466
  -4,167
  -4,932
  -5,759
  -6,642
  -7,578
  -8,562
  -9,590
  -10,660
  -11,768
  -12,913
  -14,096
  -15,316
  -16,572
  -17,868
  -19,203
  -20,581
  -22,005
  -23,477
  -25,001
  -26,581
  -28,219
  -29,920
  -31,689
  -33,530
  -35,447
  -37,444
  -39,528
  -41,704
  -43,977
Free cash flow, $m
  -1,421
  -1,380
  -1,291
  -1,146
  -941
  -670
  -330
  81
  563
  1,116
  1,739
  2,430
  3,186
  4,006
  4,887
  5,827
  6,823
  7,873
  8,977
  10,132
  11,338
  12,595
  13,903
  15,262
  16,674
  18,140
  19,661
  21,239
  22,878
  24,580
Issuance/(repayment) of debt, $m
  1,710
  2,017
  2,327
  2,646
  2,969
  3,293
  3,615
  3,933
  4,244
  4,549
  4,846
  5,137
  5,421
  5,701
  5,976
  6,250
  6,523
  6,798
  7,077
  7,361
  7,653
  7,953
  8,265
  8,589
  8,927
  9,282
  9,654
  10,045
  10,457
  10,891
Issuance/(repurchase) of shares, $m
  625
  455
  224
  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  
  2,335
  2,472
  2,551
  2,646
  2,969
  3,293
  3,615
  3,933
  4,244
  4,549
  4,846
  5,137
  5,421
  5,701
  5,976
  6,250
  6,523
  6,798
  7,077
  7,361
  7,653
  7,953
  8,265
  8,589
  8,927
  9,282
  9,654
  10,045
  10,457
  10,891
Total cash flow (excl. dividends), $m
  914
  1,093
  1,261
  1,499
  2,028
  2,623
  3,285
  4,014
  4,807
  5,665
  6,585
  7,567
  8,608
  9,707
  10,864
  12,077
  13,346
  14,672
  16,054
  17,493
  18,991
  20,548
  22,168
  23,851
  25,601
  27,421
  29,314
  31,284
  33,335
  35,470
Retained Cash Flow (-), $m
  -1,328
  -1,566
  -1,806
  -2,054
  -2,304
  -2,556
  -2,806
  -3,052
  -3,294
  -3,531
  -3,762
  -3,987
  -4,208
  -4,425
  -4,639
  -4,851
  -5,063
  -5,277
  -5,493
  -5,714
  -5,940
  -6,173
  -6,415
  -6,667
  -6,929
  -7,204
  -7,493
  -7,797
  -8,116
  -8,453
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
  -414
  -473
  -546
  -554
  -276
  67
  479
  961
  1,513
  2,134
  2,823
  3,579
  4,400
  5,282
  6,225
  7,226
  8,283
  9,395
  10,561
  11,779
  13,051
  14,375
  15,753
  17,185
  18,672
  20,217
  21,821
  23,487
  25,218
  27,017
Discount rate, %
  5.20
  5.46
  5.73
  6.02
  6.32
  6.64
  6.97
  7.32
  7.68
  8.07
  8.47
  8.89
  9.34
  9.81
  10.30
  10.81
  11.35
  11.92
  12.51
  13.14
  13.80
  14.49
  15.21
  15.97
  16.77
  17.61
  18.49
  19.41
  20.38
  21.40
PV of cash for distribution, $m
  -394
  -425
  -462
  -439
  -203
  46
  299
  546
  777
  982
  1,154
  1,288
  1,378
  1,426
  1,431
  1,398
  1,332
  1,238
  1,124
  997
  865
  733
  607
  491
  387
  298
  224
  163
  116
  80
Current shareholders' claim on cash, %
  86.5
  79.5
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8
  76.8

Murphy Oil Corporation (Murphy) is an oil and gas exploration and production company. The Company's exploration and production business explores for and produces crude oil, natural gas and natural gas liquids across the world. Its exploration and production activities are subdivided into four geographic segments: the United States, Canada, Malaysia and all other countries. It explores for and produces crude oil, natural gas and natural gas liquids around the world. This business maintains upstream operating offices in several locations around the world, including Houston, Texas, Calgary, Alberta, and Kuala Lumpur, Malaysia. As of December 31, 2016, Murphy's principal exploration and production activities were conducted in the United States by Murphy Exploration & Production Company-USA (Murphy Expro USA), in Malaysia, Australia, Brunei, and Vietnam by Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries, and in Western Canada.

FINANCIAL RATIOS  of  Murphy Oil Corporation (MUR)

Valuation Ratios
P/E Ratio -14.5
Price to Sales 2.1
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 6.6
Price to Free Cash Flow -12.3
Growth Rates
Sales Growth Rate -30.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -63.6%
Cap. Spend. - 3 Yr. Gr. Rate -23.7%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 49.3%
Total Debt to Equity 60.9%
Interest Coverage -3
Management Effectiveness
Return On Assets -1.9%
Ret/ On Assets - 3 Yr. Avg. -3.9%
Return On Total Capital -3.4%
Ret/ On T. Cap. - 3 Yr. Avg. -6.1%
Return On Equity -5.4%
Return On Equity - 3 Yr. Avg. -9.2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 70.7%
Gross Margin - 3 Yr. Avg. 73.3%
EBITDA Margin 36.1%
EBITDA Margin - 3 Yr. Avg. 13.7%
Operating Margin -16.2%
Oper. Margin - 3 Yr. Avg. -39.6%
Pre-Tax Margin -25.8%
Pre-Tax Margin - 3 Yr. Avg. -40.5%
Net Profit Margin -14.5%
Net Profit Margin - 3 Yr. Avg. -26.7%
Effective Tax Rate 44.4%
Eff/ Tax Rate - 3 Yr. Avg. 31.3%
Payout Ratio -75%

MUR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MUR stock intrinsic value calculation we used $2571 million for the last fiscal year's total revenue generated by Murphy Oil Corporation. The default revenue input number comes from 0001 income statement of Murphy Oil Corporation. 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 MUR stock valuation model: a) initial revenue growth rate of 27.7% 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 5.2%, whose default value for MUR is calculated based on our internal credit rating of Murphy Oil Corporation, 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 Murphy Oil Corporation.
    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 MUR stock the variable cost ratio is equal to 16.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1540 million in the base year in the intrinsic value calculation for MUR 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 5.9% for Murphy Oil Corporation.

Corporate tax rate of 27% is the nominal tax rate for Murphy Oil Corporation. 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 MUR 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 MUR are equal to 349.6%.

Life of production assets of 9.2 years is the average useful life of capital assets used in Murphy Oil Corporation 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 MUR is equal to -13.3%. 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 - $4829.299 million for Murphy Oil Corporation - 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 173.109 million for Murphy Oil Corporation 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 Murphy Oil Corporation at the current share price and the inputted number of shares is $4.0 billion.

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