Intrinsic value of Qualcomm - QCOM

Previous Close

$73.58

  Intrinsic Value

$76.35

stock screener

  Rating & Target

hold

+4%

Previous close

$73.58

 
Intrinsic value

$76.35

 
Up/down potential

+4%

 
Rating

hold

We calculate the intrinsic value of QCOM 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 109.1

 

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, %
  4.20
  4.28
  4.35
  4.42
  4.48
  4.53
  4.57
  4.62
  4.66
  4.69
  4.72
  4.75
  4.77
  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
Revenue, $m
  23,227
  24,221
  25,275
  26,392
  27,573
  28,821
  30,140
  31,531
  32,999
  34,547
  36,178
  37,896
  39,705
  41,610
  43,614
  45,723
  47,942
  50,275
  52,728
  55,307
  58,019
  60,869
  63,865
  67,013
  70,321
  73,796
  77,448
  81,284
  85,314
  89,548
Variable operating expenses, $m
  16,773
  17,447
  18,161
  18,917
  19,717
  20,563
  21,456
  22,399
  23,394
  24,443
  24,512
  25,676
  26,901
  28,192
  29,550
  30,979
  32,482
  34,062
  35,725
  37,472
  39,309
  41,240
  43,270
  45,403
  47,644
  49,999
  52,473
  55,072
  57,803
  60,671
Fixed operating expenses, $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 operating expenses, $m
  16,773
  17,447
  18,161
  18,917
  19,717
  20,563
  21,456
  22,399
  23,394
  24,443
  24,512
  25,676
  26,901
  28,192
  29,550
  30,979
  32,482
  34,062
  35,725
  37,472
  39,309
  41,240
  43,270
  45,403
  47,644
  49,999
  52,473
  55,072
  57,803
  60,671
Operating income, $m
  6,454
  6,775
  7,115
  7,475
  7,856
  8,258
  8,683
  9,132
  9,606
  10,105
  11,667
  12,221
  12,804
  13,418
  14,065
  14,745
  15,460
  16,212
  17,004
  17,835
  18,710
  19,629
  20,595
  21,610
  22,677
  23,798
  24,975
  26,212
  27,512
  28,877
EBITDA, $m
  8,417
  8,777
  9,159
  9,563
  9,991
  10,444
  10,921
  11,426
  11,958
  12,519
  13,110
  13,732
  14,388
  15,078
  15,804
  16,568
  17,372
  18,218
  19,107
  20,041
  21,024
  22,057
  23,142
  24,283
  25,481
  26,741
  28,064
  29,454
  30,915
  32,449
Interest expense (income), $m
  0
  1,182
  1,255
  1,333
  1,415
  1,503
  1,595
  1,692
  1,795
  1,904
  2,019
  2,140
  2,267
  2,401
  2,543
  2,691
  2,848
  3,013
  3,186
  3,368
  3,560
  3,762
  3,973
  4,196
  4,430
  4,676
  4,934
  5,206
  5,491
  5,791
  6,106
Earnings before tax, $m
  5,272
  5,519
  5,782
  6,059
  6,353
  6,663
  6,991
  7,337
  7,701
  8,086
  9,527
  9,953
  10,403
  10,876
  11,373
  11,897
  12,447
  13,026
  13,635
  14,275
  14,948
  15,656
  16,399
  17,180
  18,001
  18,863
  19,769
  20,721
  21,721
  22,771
Tax expense, $m
  1,423
  1,490
  1,561
  1,636
  1,715
  1,799
  1,888
  1,981
  2,079
  2,183
  2,572
  2,687
  2,809
  2,936
  3,071
  3,212
  3,361
  3,517
  3,681
  3,854
  4,036
  4,227
  4,428
  4,639
  4,860
  5,093
  5,338
  5,595
  5,865
  6,148
Net income, $m
  3,849
  4,029
  4,221
  4,423
  4,638
  4,864
  5,103
  5,356
  5,622
  5,903
  6,955
  7,266
  7,594
  7,939
  8,302
  8,684
  9,086
  9,509
  9,954
  10,421
  10,912
  11,429
  11,971
  12,541
  13,141
  13,770
  14,432
  15,126
  15,856
  16,623

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
  38,140
  39,772
  41,503
  43,336
  45,276
  47,326
  49,491
  51,776
  54,186
  56,728
  59,406
  62,227
  65,198
  68,325
  71,616
  75,079
  78,722
  82,553
  86,581
  90,817
  95,269
  99,949
  104,868
  110,037
  115,469
  121,176
  127,172
  133,472
  140,089
  147,041
Adjusted assets (=assets-cash), $m
  38,140
  39,772
  41,503
  43,336
  45,276
  47,326
  49,491
  51,776
  54,186
  56,728
  59,406
  62,227
  65,198
  68,325
  71,616
  75,079
  78,722
  82,553
  86,581
  90,817
  95,269
  99,949
  104,868
  110,037
  115,469
  121,176
  127,172
  133,472
  140,089
  147,041
Revenue / Adjusted assets
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
  0.609
Average production assets, $m
  7,967
  8,308
  8,669
  9,052
  9,458
  9,886
  10,338
  10,815
  11,319
  11,850
  12,409
  12,998
  13,619
  14,272
  14,960
  15,683
  16,444
  17,244
  18,086
  18,970
  19,901
  20,878
  21,906
  22,985
  24,120
  25,312
  26,565
  27,880
  29,263
  30,715
Working capital, $m
  -2,207
  -2,301
  -2,401
  -2,507
  -2,619
  -2,738
  -2,863
  -2,995
  -3,135
  -3,282
  -3,437
  -3,600
  -3,772
  -3,953
  -4,143
  -4,344
  -4,554
  -4,776
  -5,009
  -5,254
  -5,512
  -5,783
  -6,067
  -6,366
  -6,680
  -7,011
  -7,358
  -7,722
  -8,105
  -8,507
Total debt, $m
  23,249
  24,687
  26,212
  27,827
  29,536
  31,342
  33,249
  35,263
  37,386
  39,625
  41,985
  44,470
  47,087
  49,842
  52,742
  55,793
  59,002
  62,377
  65,926
  69,658
  73,580
  77,703
  82,037
  86,591
  91,376
  96,404
  101,687
  107,236
  113,067
  119,191
Total liabilities, $m
  33,601
  35,039
  36,564
  38,179
  39,888
  41,694
  43,601
  45,615
  47,738
  49,977
  52,337
  54,822
  57,439
  60,194
  63,094
  66,145
  69,354
  72,729
  76,278
  80,010
  83,932
  88,055
  92,389
  96,943
  101,728
  106,756
  112,039
  117,588
  123,419
  129,543
Total equity, $m
  4,539
  4,733
  4,939
  5,157
  5,388
  5,632
  5,889
  6,161
  6,448
  6,751
  7,069
  7,405
  7,759
  8,131
  8,522
  8,934
  9,368
  9,824
  10,303
  10,807
  11,337
  11,894
  12,479
  13,094
  13,741
  14,420
  15,133
  15,883
  16,671
  17,498
Total liabilities and equity, $m
  38,140
  39,772
  41,503
  43,336
  45,276
  47,326
  49,490
  51,776
  54,186
  56,728
  59,406
  62,227
  65,198
  68,325
  71,616
  75,079
  78,722
  82,553
  86,581
  90,817
  95,269
  99,949
  104,868
  110,037
  115,469
  121,176
  127,172
  133,471
  140,090
  147,041
Debt-to-equity ratio
  5.120
  5.220
  5.310
  5.400
  5.480
  5.570
  5.650
  5.720
  5.800
  5.870
  5.940
  6.010
  6.070
  6.130
  6.190
  6.240
  6.300
  6.350
  6.400
  6.450
  6.490
  6.530
  6.570
  6.610
  6.650
  6.690
  6.720
  6.750
  6.780
  6.810
Adjusted equity ratio
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,849
  4,029
  4,221
  4,423
  4,638
  4,864
  5,103
  5,356
  5,622
  5,903
  6,955
  7,266
  7,594
  7,939
  8,302
  8,684
  9,086
  9,509
  9,954
  10,421
  10,912
  11,429
  11,971
  12,541
  13,141
  13,770
  14,432
  15,126
  15,856
  16,623
Depreciation, amort., depletion, $m
  1,962
  2,002
  2,044
  2,089
  2,136
  2,186
  2,238
  2,294
  2,352
  2,414
  1,443
  1,511
  1,584
  1,660
  1,740
  1,824
  1,912
  2,005
  2,103
  2,206
  2,314
  2,428
  2,547
  2,673
  2,805
  2,943
  3,089
  3,242
  3,403
  3,572
Funds from operations, $m
  5,811
  6,031
  6,265
  6,512
  6,773
  7,050
  7,341
  7,649
  7,974
  8,316
  8,398
  8,777
  9,178
  9,599
  10,042
  10,508
  10,999
  11,514
  12,057
  12,627
  13,226
  13,856
  14,518
  15,214
  15,945
  16,713
  17,520
  18,368
  19,259
  20,195
Change in working capital, $m
  -89
  -94
  -100
  -106
  -112
  -119
  -125
  -132
  -139
  -147
  -155
  -163
  -172
  -181
  -190
  -200
  -211
  -222
  -233
  -245
  -258
  -271
  -285
  -299
  -314
  -330
  -347
  -364
  -383
  -402
Cash from operations, $m
  5,900
  6,126
  6,365
  6,618
  6,886
  7,168
  7,467
  7,782
  8,114
  8,464
  8,552
  8,941
  9,349
  9,780
  10,232
  10,708
  11,209
  11,736
  12,290
  12,872
  13,484
  14,127
  14,803
  15,513
  16,259
  17,044
  17,867
  18,733
  19,642
  20,597
Maintenance CAPEX, $m
  -889
  -926
  -966
  -1,008
  -1,053
  -1,100
  -1,150
  -1,202
  -1,258
  -1,316
  -1,378
  -1,443
  -1,511
  -1,584
  -1,660
  -1,740
  -1,824
  -1,912
  -2,005
  -2,103
  -2,206
  -2,314
  -2,428
  -2,547
  -2,673
  -2,805
  -2,943
  -3,089
  -3,242
  -3,403
New CAPEX, $m
  -321
  -341
  -362
  -383
  -405
  -428
  -452
  -477
  -504
  -531
  -559
  -589
  -621
  -653
  -687
  -723
  -761
  -800
  -842
  -885
  -930
  -978
  -1,027
  -1,080
  -1,135
  -1,192
  -1,253
  -1,316
  -1,382
  -1,452
Cash from investing activities, $m
  -1,210
  -1,267
  -1,328
  -1,391
  -1,458
  -1,528
  -1,602
  -1,679
  -1,762
  -1,847
  -1,937
  -2,032
  -2,132
  -2,237
  -2,347
  -2,463
  -2,585
  -2,712
  -2,847
  -2,988
  -3,136
  -3,292
  -3,455
  -3,627
  -3,808
  -3,997
  -4,196
  -4,405
  -4,624
  -4,855
Free cash flow, $m
  4,690
  4,858
  5,037
  5,227
  5,428
  5,640
  5,865
  6,102
  6,352
  6,617
  6,615
  6,908
  7,217
  7,543
  7,885
  8,246
  8,625
  9,024
  9,443
  9,884
  10,348
  10,835
  11,348
  11,886
  12,452
  13,047
  13,672
  14,328
  15,018
  15,742
Issuance/(repayment) of debt, $m
  1,356
  1,438
  1,525
  1,615
  1,709
  1,806
  1,907
  2,013
  2,124
  2,239
  2,359
  2,485
  2,617
  2,755
  2,900
  3,051
  3,209
  3,375
  3,549
  3,731
  3,923
  4,123
  4,333
  4,554
  4,785
  5,028
  5,283
  5,550
  5,830
  6,124
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  
  1,356
  1,438
  1,525
  1,615
  1,709
  1,806
  1,907
  2,013
  2,124
  2,239
  2,359
  2,485
  2,617
  2,755
  2,900
  3,051
  3,209
  3,375
  3,549
  3,731
  3,923
  4,123
  4,333
  4,554
  4,785
  5,028
  5,283
  5,550
  5,830
  6,124
Total cash flow (excl. dividends), $m
  6,046
  6,296
  6,562
  6,842
  7,136
  7,446
  7,772
  8,115
  8,476
  8,855
  8,975
  9,394
  9,835
  10,298
  10,785
  11,296
  11,834
  12,399
  12,992
  13,616
  14,271
  14,959
  15,681
  16,440
  17,237
  18,075
  18,954
  19,878
  20,848
  21,867
Retained Cash Flow (-), $m
  -194
  -194
  -206
  -218
  -231
  -244
  -258
  -272
  -287
  -302
  -319
  -336
  -354
  -372
  -392
  -412
  -433
  -456
  -479
  -504
  -530
  -557
  -585
  -615
  -646
  -679
  -714
  -750
  -788
  -827
Prev. year cash balance distribution, $m
  26,401
  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
  32,253
  6,102
  6,356
  6,624
  6,906
  7,202
  7,515
  7,843
  8,189
  8,553
  8,656
  9,058
  9,481
  9,926
  10,393
  10,884
  11,400
  11,943
  12,513
  13,112
  13,741
  14,402
  15,096
  15,825
  16,591
  17,396
  18,241
  19,128
  20,060
  21,039
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
  30,924
  5,586
  5,532
  5,454
  5,353
  5,227
  5,077
  4,902
  4,704
  4,484
  4,111
  3,865
  3,605
  3,332
  3,051
  2,766
  2,481
  2,199
  1,927
  1,666
  1,421
  1,195
  989
  806
  645
  508
  391
  296
  219
  158
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

QUALCOMM Incorporated is engaged in the development and commercialization of a digital communication technology called code division multiple access (CDMA). The Company is engaged in the development and commercialization of the orthogonal frequency division multiple access (OFDMA) family of technologies, including long-term evolution (LTE), which is an Orthogonal Frequency Division Multiplexing (OFDM)-based standard that uses OFDMA and single-carrier Frequency Division Multiple Access (FDMA), for cellular wireless communication applications. The Company's segments include QCT (Qualcomm CDMA Technologies), QTL (Qualcomm Technology Licensing) and QSI (Qualcomm Strategic Initiatives). The Company also develops and commercializes a range of other technologies used in handsets and tablets that contribute to end user demand. The Company's products principally consist of integrated circuits (chips or chipsets) and system software used in mobile devices and in wireless networks.

FINANCIAL RATIOS  of  Qualcomm (QCOM)

Valuation Ratios
P/E Ratio 44
Price to Sales 4.9
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 23.1
Price to Free Cash Flow 27.1
Growth Rates
Sales Growth Rate -5.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 28%
Cap. Spend. - 3 Yr. Gr. Rate -10.3%
Financial Strength
Quick Ratio 15
Current Ratio 0.1
LT Debt to Equity 63.1%
Total Debt to Equity 71.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 4.2%
Ret/ On Assets - 3 Yr. Avg. 8.6%
Return On Total Capital 5.1%
Ret/ On T. Cap. - 3 Yr. Avg. 10.4%
Return On Equity 7.9%
Return On Equity - 3 Yr. Avg. 13.6%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 58%
Gross Margin - 3 Yr. Avg. 59.5%
EBITDA Margin 20.1%
EBITDA Margin - 3 Yr. Avg. 28.5%
Operating Margin 11.1%
Oper. Margin - 3 Yr. Avg. 20%
Pre-Tax Margin 13.5%
Pre-Tax Margin - 3 Yr. Avg. 22.7%
Net Profit Margin 11.1%
Net Profit Margin - 3 Yr. Avg. 18.7%
Effective Tax Rate 18.4%
Eff/ Tax Rate - 3 Yr. Avg. 17.9%
Payout Ratio 131.9%

QCOM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QCOM stock intrinsic value calculation we used $22291 million for the last fiscal year's total revenue generated by Qualcomm. The default revenue input number comes from 0001 income statement of Qualcomm. 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 QCOM stock valuation model: a) initial revenue growth rate of 4.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for QCOM is calculated based on our internal credit rating of Qualcomm, 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 Qualcomm.
    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 QCOM stock the variable cost ratio is equal to 72.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for QCOM 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 Qualcomm.

Corporate tax rate of 27% is the nominal tax rate for Qualcomm. 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 QCOM 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 QCOM are equal to 34.3%.

Life of production assets of 8.6 years is the average useful life of capital assets used in Qualcomm 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 QCOM is equal to -9.5%. 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 - $30746 million for Qualcomm - 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 1482.62 million for Qualcomm 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 Qualcomm at the current share price and the inputted number of shares is $109.1 billion.

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