Intrinsic value of Rayonier Advanced Materials - RYAM

Previous Close

$14.51

  Intrinsic Value

$46.96

stock screener

  Rating & Target

str. buy

+224%

Previous close

$14.51

 
Intrinsic value

$46.96

 
Up/down potential

+224%

 
Rating

str. buy

We calculate the intrinsic value of RYAM 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 0.7

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,538
  2,376
  3,554
  5,157
  7,275
  10,002
  13,425
  17,628
  22,683
  28,651
  35,578
  43,497
  52,429
  62,380
  73,347
  85,321
  98,282
  112,211
  127,085
  142,881
  159,579
  177,162
  195,615
  214,932
  235,108
  256,146
  278,056
  300,851
  324,554
  349,189
Variable operating expenses, $m
  1,292
  1,992
  2,976
  4,316
  6,086
  8,365
  11,226
  14,739
  18,964
  23,951
  29,735
  36,354
  43,818
  52,135
  61,302
  71,309
  82,141
  93,783
  106,214
  119,416
  133,372
  148,067
  163,490
  179,634
  196,496
  214,080
  232,391
  251,443
  271,253
  291,843
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
  1,292
  1,992
  2,976
  4,316
  6,086
  8,365
  11,226
  14,739
  18,964
  23,951
  29,735
  36,354
  43,818
  52,135
  61,302
  71,309
  82,141
  93,783
  106,214
  119,416
  133,372
  148,067
  163,490
  179,634
  196,496
  214,080
  232,391
  251,443
  271,253
  291,843
Operating income, $m
  247
  384
  578
  841
  1,189
  1,637
  2,199
  2,889
  3,719
  4,699
  5,843
  7,143
  8,610
  10,244
  12,046
  14,012
  16,141
  18,428
  20,871
  23,465
  26,207
  29,095
  32,125
  35,298
  38,611
  42,066
  45,664
  49,408
  53,301
  57,347
EBITDA, $m
  406
  627
  938
  1,360
  1,919
  2,638
  3,542
  4,650
  5,984
  7,558
  9,385
  11,475
  13,831
  16,456
  19,349
  22,508
  25,927
  29,601
  33,525
  37,692
  42,097
  46,735
  51,603
  56,699
  62,021
  67,571
  73,351
  79,365
  85,617
  92,116
Interest expense (income), $m
  35
  67
  130
  222
  350
  526
  757
  1,055
  1,430
  1,889
  2,442
  3,094
  3,852
  4,718
  5,694
  6,782
  7,981
  9,290
  10,707
  12,230
  13,857
  15,584
  17,409
  19,332
  21,349
  23,461
  25,667
  27,968
  30,363
  32,855
  35,447
Earnings before tax, $m
  180
  254
  356
  490
  663
  879
  1,143
  1,459
  1,830
  2,257
  2,748
  3,292
  3,893
  4,550
  5,264
  6,031
  6,850
  7,721
  8,640
  9,608
  10,624
  11,685
  12,794
  13,948
  15,150
  16,399
  17,697
  19,045
  20,445
  21,900
Tax expense, $m
  48
  69
  96
  132
  179
  237
  309
  394
  494
  609
  742
  889
  1,051
  1,229
  1,421
  1,628
  1,850
  2,085
  2,333
  2,594
  2,868
  3,155
  3,454
  3,766
  4,090
  4,428
  4,778
  5,142
  5,520
  5,913
Net income, $m
  131
  186
  260
  358
  484
  642
  835
  1,065
  1,336
  1,648
  2,006
  2,403
  2,842
  3,322
  3,842
  4,402
  5,001
  5,636
  6,308
  7,014
  7,755
  8,530
  9,339
  10,182
  11,059
  11,971
  12,919
  13,903
  14,925
  15,987

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
  4,226
  6,529
  9,764
  14,166
  19,987
  27,477
  36,882
  48,429
  62,316
  78,711
  97,741
  119,497
  144,034
  171,372
  201,504
  234,397
  270,006
  308,272
  349,134
  392,531
  438,404
  486,708
  537,405
  590,471
  645,900
  703,698
  763,889
  826,515
  891,631
  959,311
Adjusted assets (=assets-cash), $m
  4,226
  6,529
  9,764
  14,166
  19,987
  27,477
  36,882
  48,429
  62,316
  78,711
  97,741
  119,497
  144,034
  171,372
  201,504
  234,397
  270,006
  308,272
  349,134
  392,531
  438,404
  486,708
  537,405
  590,471
  645,900
  703,698
  763,889
  826,515
  891,631
  959,311
Revenue / Adjusted assets
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
Average production assets, $m
  1,792
  2,769
  4,140
  6,007
  8,476
  11,652
  15,640
  20,537
  26,426
  33,378
  41,448
  50,674
  61,079
  72,672
  85,450
  99,398
  114,499
  130,726
  148,054
  166,457
  185,910
  206,393
  227,892
  250,395
  273,900
  298,410
  323,935
  350,492
  378,105
  406,805
Working capital, $m
  403
  623
  931
  1,351
  1,906
  2,620
  3,517
  4,619
  5,943
  7,506
  9,321
  11,396
  13,736
  16,343
  19,217
  22,354
  25,750
  29,399
  33,296
  37,435
  41,810
  46,416
  51,251
  56,312
  61,598
  67,110
  72,851
  78,823
  85,033
  91,488
Total debt, $m
  2,407
  4,104
  6,488
  9,733
  14,023
  19,543
  26,475
  34,985
  45,220
  57,302
  71,328
  87,362
  105,446
  125,594
  147,801
  172,043
  198,287
  226,489
  256,605
  288,588
  322,397
  357,997
  395,360
  434,470
  475,321
  517,918
  562,279
  608,434
  656,425
  706,305
Total liabilities, $m
  3,114
  4,812
  7,196
  10,441
  14,730
  20,251
  27,182
  35,692
  45,927
  58,010
  72,035
  88,069
  106,153
  126,302
  148,508
  172,751
  198,994
  227,197
  257,312
  289,295
  323,104
  358,704
  396,067
  435,177
  476,028
  518,625
  562,986
  609,141
  657,132
  707,012
Total equity, $m
  1,111
  1,717
  2,568
  3,726
  5,257
  7,226
  9,700
  12,737
  16,389
  20,701
  25,706
  31,428
  37,881
  45,071
  52,995
  61,646
  71,012
  81,076
  91,822
  103,236
  115,300
  128,004
  141,337
  155,294
  169,872
  185,073
  200,903
  217,373
  234,499
  252,299
Total liabilities and equity, $m
  4,225
  6,529
  9,764
  14,167
  19,987
  27,477
  36,882
  48,429
  62,316
  78,711
  97,741
  119,497
  144,034
  171,373
  201,503
  234,397
  270,006
  308,273
  349,134
  392,531
  438,404
  486,708
  537,404
  590,471
  645,900
  703,698
  763,889
  826,514
  891,631
  959,311
Debt-to-equity ratio
  2.170
  2.390
  2.530
  2.610
  2.670
  2.700
  2.730
  2.750
  2.760
  2.770
  2.770
  2.780
  2.780
  2.790
  2.790
  2.790
  2.790
  2.790
  2.790
  2.800
  2.800
  2.800
  2.800
  2.800
  2.800
  2.800
  2.800
  2.800
  2.800
  2.800
Adjusted equity ratio
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  131
  186
  260
  358
  484
  642
  835
  1,065
  1,336
  1,648
  2,006
  2,403
  2,842
  3,322
  3,842
  4,402
  5,001
  5,636
  6,308
  7,014
  7,755
  8,530
  9,339
  10,182
  11,059
  11,971
  12,919
  13,903
  14,925
  15,987
Depreciation, amort., depletion, $m
  159
  243
  360
  519
  730
  1,002
  1,343
  1,761
  2,265
  2,859
  3,543
  4,331
  5,220
  6,211
  7,303
  8,496
  9,786
  11,173
  12,654
  14,227
  15,890
  17,640
  19,478
  21,401
  23,410
  25,505
  27,687
  29,957
  32,317
  34,770
Funds from operations, $m
  290
  428
  620
  877
  1,215
  1,644
  2,177
  2,827
  3,601
  4,507
  5,549
  6,734
  8,062
  9,533
  11,146
  12,898
  14,787
  16,809
  18,962
  21,241
  23,645
  26,171
  28,817
  31,584
  34,470
  37,476
  40,605
  43,859
  47,242
  50,756
Change in working capital, $m
  151
  220
  309
  420
  555
  714
  897
  1,101
  1,324
  1,563
  1,815
  2,075
  2,340
  2,607
  2,874
  3,137
  3,396
  3,649
  3,897
  4,139
  4,375
  4,607
  4,835
  5,061
  5,286
  5,512
  5,740
  5,972
  6,210
  6,454
Cash from operations, $m
  139
  209
  311
  458
  659
  929
  1,281
  1,725
  2,276
  2,943
  3,734
  4,659
  5,722
  6,926
  8,272
  9,761
  11,391
  13,160
  15,065
  17,103
  19,270
  21,564
  23,982
  26,523
  29,184
  31,964
  34,865
  37,887
  41,032
  44,302
Maintenance CAPEX, $m
  -96
  -153
  -237
  -354
  -513
  -724
  -996
  -1,337
  -1,755
  -2,259
  -2,853
  -3,543
  -4,331
  -5,220
  -6,211
  -7,303
  -8,496
  -9,786
  -11,173
  -12,654
  -14,227
  -15,890
  -17,640
  -19,478
  -21,401
  -23,410
  -25,505
  -27,687
  -29,957
  -32,317
New CAPEX, $m
  -673
  -977
  -1,372
  -1,867
  -2,468
  -3,176
  -3,988
  -4,896
  -5,889
  -6,952
  -8,070
  -9,226
  -10,405
  -11,593
  -12,777
  -13,949
  -15,100
  -16,227
  -17,328
  -18,403
  -19,453
  -20,484
  -21,498
  -22,503
  -23,505
  -24,510
  -25,525
  -26,557
  -27,613
  -28,700
Cash from investing activities, $m
  -769
  -1,130
  -1,609
  -2,221
  -2,981
  -3,900
  -4,984
  -6,233
  -7,644
  -9,211
  -10,923
  -12,769
  -14,736
  -16,813
  -18,988
  -21,252
  -23,596
  -26,013
  -28,501
  -31,057
  -33,680
  -36,374
  -39,138
  -41,981
  -44,906
  -47,920
  -51,030
  -54,244
  -57,570
  -61,017
Free cash flow, $m
  -629
  -921
  -1,297
  -1,763
  -2,322
  -2,971
  -3,704
  -4,508
  -5,368
  -6,268
  -7,189
  -8,109
  -9,014
  -9,888
  -10,716
  -11,491
  -12,205
  -12,854
  -13,436
  -13,954
  -14,410
  -14,809
  -15,156
  -15,459
  -15,723
  -15,956
  -16,165
  -16,357
  -16,538
  -16,715
Issuance/(repayment) of debt, $m
  1,165
  1,697
  2,384
  3,245
  4,290
  5,520
  6,932
  8,510
  10,235
  12,083
  14,025
  16,035
  18,084
  20,148
  22,207
  24,242
  26,244
  28,202
  30,115
  31,983
  33,809
  35,600
  37,363
  39,110
  40,851
  42,597
  44,361
  46,155
  47,991
  49,880
Issuance/(repurchase) of shares, $m
  287
  420
  591
  800
  1,047
  1,328
  1,639
  1,971
  2,316
  2,664
  2,999
  3,319
  3,612
  3,868
  4,082
  4,249
  4,364
  4,428
  4,439
  4,399
  4,310
  4,173
  3,994
  3,774
  3,518
  3,230
  2,912
  2,568
  2,201
  1,813
Cash from financing (excl. dividends), $m  
  1,452
  2,117
  2,975
  4,045
  5,337
  6,848
  8,571
  10,481
  12,551
  14,747
  17,024
  19,354
  21,696
  24,016
  26,289
  28,491
  30,608
  32,630
  34,554
  36,382
  38,119
  39,773
  41,357
  42,884
  44,369
  45,827
  47,273
  48,723
  50,192
  51,693
Total cash flow (excl. dividends), $m
  823
  1,196
  1,678
  2,281
  3,014
  3,877
  4,867
  5,973
  7,183
  8,479
  9,835
  11,244
  12,681
  14,129
  15,572
  17,000
  18,403
  19,777
  21,118
  22,428
  23,708
  24,964
  26,201
  27,426
  28,646
  29,871
  31,108
  32,366
  33,653
  34,978
Retained Cash Flow (-), $m
  -418
  -606
  -851
  -1,158
  -1,531
  -1,970
  -2,474
  -3,037
  -3,652
  -4,312
  -5,005
  -5,722
  -6,453
  -7,190
  -7,924
  -8,651
  -9,365
  -10,064
  -10,747
  -11,413
  -12,065
  -12,704
  -13,333
  -13,957
  -14,578
  -15,201
  -15,830
  -16,470
  -17,126
  -17,800
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
  405
  591
  827
  1,124
  1,483
  1,907
  2,393
  2,937
  3,531
  4,167
  4,830
  5,522
  6,228
  6,939
  7,648
  8,349
  9,038
  9,713
  10,371
  11,015
  11,644
  12,260
  12,868
  13,469
  14,069
  14,670
  15,278
  15,895
  16,528
  17,178
Discount rate, %
  9.30
  9.77
  10.25
  10.77
  11.30
  11.87
  12.46
  13.09
  13.74
  14.43
  15.15
  15.91
  16.70
  17.54
  18.41
  19.33
  20.30
  21.32
  22.38
  23.50
  24.68
  25.91
  27.20
  28.57
  29.99
  31.49
  33.07
  34.72
  36.46
  38.28
PV of cash for distribution, $m
  371
  490
  617
  746
  868
  973
  1,052
  1,098
  1,108
  1,083
  1,024
  939
  836
  723
  606
  494
  390
  300
  223
  162
  113
  77
  51
  32
  20
  12
  7
  4
  2
  1
Current shareholders' claim on cash, %
  72.2
  53.3
  40.4
  31.3
  24.8
  20.1
  16.5
  13.9
  11.9
  10.3
  9.1
  8.1
  7.3
  6.7
  6.2
  5.7
  5.4
  5.1
  4.8
  4.6
  4.5
  4.3
  4.2
  4.1
  4.0
  3.9
  3.9
  3.8
  3.8
  3.8

Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company's product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company's products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company's production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.

FINANCIAL RATIOS  of  Rayonier Advanced Materials (RYAM)

Valuation Ratios
P/E Ratio 8.6
Price to Sales 0.7
Price to Book 3
Price to Tangible Book
Price to Cash Flow 2.7
Price to Free Cash Flow 4.4
Growth Rates
Sales Growth Rate -7.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 15.6%
Cap. Spend. - 3 Yr. Gr. Rate -1.5%
Financial Strength
Quick Ratio 33
Current Ratio 0
LT Debt to Equity 364.6%
Total Debt to Equity 369.3%
Interest Coverage 4
Management Effectiveness
Return On Assets 7.1%
Ret/ On Assets - 3 Yr. Avg. 5.7%
Return On Total Capital 8%
Ret/ On T. Cap. - 3 Yr. Avg. 5.9%
Return On Equity 74.9%
Return On Equity - 3 Yr. Avg. -19.1%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 20.8%
Gross Margin - 3 Yr. Avg. 21.9%
EBITDA Margin 27.2%
EBITDA Margin - 3 Yr. Avg. 21.6%
Operating Margin 16.9%
Oper. Margin - 3 Yr. Avg. 12%
Pre-Tax Margin 13%
Pre-Tax Margin - 3 Yr. Avg. 8.7%
Net Profit Margin 8.4%
Net Profit Margin - 3 Yr. Avg. 5.9%
Effective Tax Rate 35.4%
Eff/ Tax Rate - 3 Yr. Avg. 29.7%
Payout Ratio 20.5%

RYAM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RYAM stock intrinsic value calculation we used $961.333 million for the last fiscal year's total revenue generated by Rayonier Advanced Materials. The default revenue input number comes from 0001 income statement of Rayonier Advanced Materials. 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 RYAM stock valuation model: a) initial revenue growth rate of 60% 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 9.3%, whose default value for RYAM is calculated based on our internal credit rating of Rayonier Advanced Materials, 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 Rayonier Advanced Materials.
    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 RYAM stock the variable cost ratio is equal to 84.2%.

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 RYAM 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 Rayonier Advanced Materials.

Corporate tax rate of 27% is the nominal tax rate for Rayonier Advanced Materials. 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 RYAM 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 RYAM are equal to 116.5%.

Life of production assets of 11.7 years is the average useful life of capital assets used in Rayonier Advanced Materials 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 RYAM is equal to 26.2%. 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 - $693.756 million for Rayonier Advanced Materials - 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 51.213 million for Rayonier Advanced Materials 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 Rayonier Advanced Materials at the current share price and the inputted number of shares is $0.7 billion.

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