Intrinsic value of Star Bulk Carriers Corp. - SBLK

Previous Close

$6.58

  Intrinsic Value

$2.92

stock screener

  Rating & Target

str. sell

-56%

Previous close

$6.58

 
Intrinsic value

$2.92

 
Up/down potential

-56%

 
Rating

str. sell

We calculate the intrinsic value of SBLK 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 0.6

 

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, %
  49.50
  45.05
  41.05
  37.44
  34.20
  31.28
  28.65
  26.28
  24.16
  22.24
  20.52
  18.96
  17.57
  16.31
  15.18
  14.16
  13.25
  12.42
  11.68
  11.01
  10.41
  9.87
  9.38
  8.94
  8.55
  8.19
  7.88
  7.59
  7.33
  7.10
Revenue, $m
  496
  720
  1,015
  1,396
  1,873
  2,459
  3,163
  3,994
  4,959
  6,062
  7,306
  8,692
  10,219
  11,885
  13,690
  15,628
  17,698
  19,897
  22,220
  24,667
  27,235
  29,923
  32,730
  35,658
  38,706
  41,878
  45,176
  48,604
  52,166
  55,868
Variable operating expenses, $m
  740
  1,073
  1,514
  2,081
  2,792
  3,666
  4,716
  5,956
  7,394
  9,039
  10,893
  12,959
  15,236
  17,721
  20,411
  23,302
  26,388
  29,666
  33,131
  36,779
  40,608
  44,615
  48,801
  53,166
  57,711
  62,441
  67,358
  72,469
  77,780
  83,299
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
  740
  1,073
  1,514
  2,081
  2,792
  3,666
  4,716
  5,956
  7,394
  9,039
  10,893
  12,959
  15,236
  17,721
  20,411
  23,302
  26,388
  29,666
  33,131
  36,779
  40,608
  44,615
  48,801
  53,166
  57,711
  62,441
  67,358
  72,469
  77,780
  83,299
Operating income, $m
  -244
  -353
  -499
  -685
  -920
  -1,207
  -1,553
  -1,961
  -2,435
  -2,977
  -3,587
  -4,268
  -5,017
  -5,836
  -6,722
  -7,673
  -8,690
  -9,769
  -10,910
  -12,112
  -13,372
  -14,692
  -16,071
  -17,508
  -19,005
  -20,562
  -22,182
  -23,865
  -25,614
  -27,431
EBITDA, $m
  -120
  -175
  -246
  -339
  -454
  -596
  -767
  -969
  -1,203
  -1,471
  -1,772
  -2,109
  -2,479
  -2,883
  -3,321
  -3,791
  -4,294
  -4,827
  -5,391
  -5,984
  -6,607
  -7,259
  -7,941
  -8,651
  -9,390
  -10,160
  -10,960
  -11,792
  -12,656
  -13,554
Interest expense (income), $m
  48
  55
  79
  110
  152
  206
  273
  356
  455
  573
  709
  865
  1,040
  1,236
  1,451
  1,687
  1,942
  2,215
  2,508
  2,818
  3,146
  3,492
  3,854
  4,234
  4,630
  5,044
  5,474
  5,922
  6,388
  6,872
  7,375
Earnings before tax, $m
  -299
  -432
  -609
  -837
  -1,125
  -1,480
  -1,909
  -2,416
  -3,008
  -3,685
  -4,452
  -5,308
  -6,253
  -7,287
  -8,408
  -9,615
  -10,905
  -12,277
  -13,728
  -15,258
  -16,864
  -18,547
  -20,305
  -22,138
  -24,049
  -26,036
  -28,104
  -30,252
  -32,485
  -34,806
Tax expense, $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
Net income, $m
  -299
  -432
  -609
  -837
  -1,125
  -1,480
  -1,909
  -2,416
  -3,008
  -3,685
  -4,452
  -5,308
  -6,253
  -7,287
  -8,408
  -9,615
  -10,905
  -12,277
  -13,728
  -15,258
  -16,864
  -18,547
  -20,305
  -22,138
  -24,049
  -26,036
  -28,104
  -30,252
  -32,485
  -34,806

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
  2,853
  4,138
  5,836
  8,021
  10,764
  14,130
  18,178
  22,956
  28,502
  34,841
  41,989
  49,952
  58,727
  68,306
  78,675
  89,817
  101,715
  114,349
  127,704
  141,766
  156,524
  171,971
  188,106
  204,930
  222,451
  240,680
  259,634
  279,334
  299,807
  321,081
Adjusted assets (=assets-cash), $m
  2,853
  4,138
  5,836
  8,021
  10,764
  14,130
  18,178
  22,956
  28,502
  34,841
  41,989
  49,952
  58,727
  68,306
  78,675
  89,817
  101,715
  114,349
  127,704
  141,766
  156,524
  171,971
  188,106
  204,930
  222,451
  240,680
  259,634
  279,334
  299,807
  321,081
Revenue / Adjusted assets
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
Average production assets, $m
  2,688
  3,898
  5,499
  7,557
  10,142
  13,314
  17,128
  21,630
  26,855
  32,827
  39,562
  47,065
  55,333
  64,359
  74,129
  84,627
  95,836
  107,741
  120,324
  133,573
  147,478
  162,033
  177,236
  193,087
  209,596
  226,771
  244,630
  263,192
  282,481
  302,526
Working capital, $m
  26
  38
  54
  74
  99
  130
  168
  212
  263
  321
  387
  461
  542
  630
  726
  828
  938
  1,055
  1,178
  1,307
  1,443
  1,586
  1,735
  1,890
  2,051
  2,220
  2,394
  2,576
  2,765
  2,961
Total debt, $m
  1,457
  2,041
  2,814
  3,808
  5,056
  6,588
  8,430
  10,604
  13,127
  16,011
  19,264
  22,887
  26,880
  31,238
  35,956
  41,026
  46,439
  52,188
  58,264
  64,662
  71,377
  78,406
  85,747
  93,402
  101,374
  109,668
  118,292
  127,256
  136,571
  146,251
Total liabilities, $m
  1,298
  1,883
  2,655
  3,649
  4,897
  6,429
  8,271
  10,445
  12,968
  15,852
  19,105
  22,728
  26,721
  31,079
  35,797
  40,867
  46,280
  52,029
  58,105
  64,503
  71,218
  78,247
  85,588
  93,243
  101,215
  109,510
  118,134
  127,097
  136,412
  146,092
Total equity, $m
  1,555
  2,255
  3,181
  4,371
  5,866
  7,701
  9,907
  12,511
  15,533
  18,988
  22,884
  27,224
  32,006
  37,227
  42,878
  48,950
  55,434
  62,320
  69,599
  77,262
  85,305
  93,724
  102,518
  111,687
  121,236
  131,171
  141,501
  152,237
  163,395
  174,989
Total liabilities and equity, $m
  2,853
  4,138
  5,836
  8,020
  10,763
  14,130
  18,178
  22,956
  28,501
  34,840
  41,989
  49,952
  58,727
  68,306
  78,675
  89,817
  101,714
  114,349
  127,704
  141,765
  156,523
  171,971
  188,106
  204,930
  222,451
  240,681
  259,635
  279,334
  299,807
  321,081
Debt-to-equity ratio
  0.940
  0.910
  0.880
  0.870
  0.860
  0.860
  0.850
  0.850
  0.850
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
Adjusted equity ratio
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -299
  -432
  -609
  -837
  -1,125
  -1,480
  -1,909
  -2,416
  -3,008
  -3,685
  -4,452
  -5,308
  -6,253
  -7,287
  -8,408
  -9,615
  -10,905
  -12,277
  -13,728
  -15,258
  -16,864
  -18,547
  -20,305
  -22,138
  -24,049
  -26,036
  -28,104
  -30,252
  -32,485
  -34,806
Depreciation, amort., depletion, $m
  123
  179
  252
  347
  465
  611
  786
  992
  1,232
  1,506
  1,815
  2,159
  2,538
  2,952
  3,400
  3,882
  4,396
  4,942
  5,519
  6,127
  6,765
  7,433
  8,130
  8,857
  9,614
  10,402
  11,222
  12,073
  12,958
  13,877
Funds from operations, $m
  -176
  -253
  -357
  -491
  -660
  -870
  -1,123
  -1,424
  -1,776
  -2,180
  -2,637
  -3,149
  -3,715
  -4,335
  -5,008
  -5,733
  -6,509
  -7,335
  -8,209
  -9,131
  -10,099
  -11,114
  -12,175
  -13,281
  -14,434
  -15,634
  -16,882
  -18,179
  -19,528
  -20,929
Change in working capital, $m
  9
  12
  16
  20
  25
  31
  37
  44
  51
  58
  66
  73
  81
  88
  96
  103
  110
  117
  123
  130
  136
  142
  149
  155
  162
  168
  175
  182
  189
  196
Cash from operations, $m
  -185
  -265
  -372
  -511
  -685
  -901
  -1,160
  -1,468
  -1,827
  -2,238
  -2,703
  -3,222
  -3,796
  -4,423
  -5,104
  -5,836
  -6,619
  -7,451
  -8,332
  -9,260
  -10,235
  -11,256
  -12,323
  -13,436
  -14,596
  -15,802
  -17,057
  -18,361
  -19,716
  -21,125
Maintenance CAPEX, $m
  -82
  -123
  -179
  -252
  -347
  -465
  -611
  -786
  -992
  -1,232
  -1,506
  -1,815
  -2,159
  -2,538
  -2,952
  -3,400
  -3,882
  -4,396
  -4,942
  -5,519
  -6,127
  -6,765
  -7,433
  -8,130
  -8,857
  -9,614
  -10,402
  -11,222
  -12,073
  -12,958
New CAPEX, $m
  -890
  -1,211
  -1,600
  -2,059
  -2,584
  -3,172
  -3,814
  -4,502
  -5,225
  -5,973
  -6,735
  -7,503
  -8,268
  -9,026
  -9,770
  -10,498
  -11,210
  -11,904
  -12,583
  -13,249
  -13,905
  -14,555
  -15,202
  -15,852
  -16,508
  -17,176
  -17,859
  -18,562
  -19,289
  -20,045
Cash from investing activities, $m
  -972
  -1,334
  -1,779
  -2,311
  -2,931
  -3,637
  -4,425
  -5,288
  -6,217
  -7,205
  -8,241
  -9,318
  -10,427
  -11,564
  -12,722
  -13,898
  -15,092
  -16,300
  -17,525
  -18,768
  -20,032
  -21,320
  -22,635
  -23,982
  -25,365
  -26,790
  -28,261
  -29,784
  -31,362
  -33,003
Free cash flow, $m
  -1,157
  -1,599
  -2,151
  -2,822
  -3,616
  -4,538
  -5,585
  -6,756
  -8,044
  -9,442
  -10,944
  -12,540
  -14,223
  -15,987
  -17,826
  -19,734
  -21,710
  -23,752
  -25,858
  -28,029
  -30,268
  -32,576
  -34,958
  -37,418
  -39,961
  -42,592
  -45,318
  -48,144
  -51,079
  -54,128
Issuance/(repayment) of debt, $m
  429
  585
  773
  994
  1,248
  1,532
  1,842
  2,174
  2,523
  2,884
  3,252
  3,623
  3,993
  4,359
  4,718
  5,070
  5,413
  5,749
  6,077
  6,398
  6,715
  7,029
  7,341
  7,655
  7,972
  8,294
  8,624
  8,964
  9,315
  9,680
Issuance/(repurchase) of shares, $m
  812
  1,133
  1,534
  2,028
  2,620
  3,315
  4,115
  5,021
  6,030
  7,140
  8,348
  9,648
  11,036
  12,508
  14,060
  15,688
  17,389
  19,163
  21,007
  22,922
  24,907
  26,965
  29,098
  31,308
  33,597
  35,971
  38,434
  40,989
  43,643
  46,401
Cash from financing (excl. dividends), $m  
  1,241
  1,718
  2,307
  3,022
  3,868
  4,847
  5,957
  7,195
  8,553
  10,024
  11,600
  13,271
  15,029
  16,867
  18,778
  20,758
  22,802
  24,912
  27,084
  29,320
  31,622
  33,994
  36,439
  38,963
  41,569
  44,265
  47,058
  49,953
  52,958
  56,081
Total cash flow (excl. dividends), $m
  84
  118
  156
  201
  252
  309
  372
  439
  509
  582
  656
  731
  805
  879
  952
  1,023
  1,092
  1,160
  1,226
  1,291
  1,355
  1,418
  1,481
  1,544
  1,608
  1,673
  1,740
  1,808
  1,879
  1,953
Retained Cash Flow (-), $m
  -812
  -1,133
  -1,534
  -2,028
  -2,620
  -3,315
  -4,115
  -5,021
  -6,030
  -7,140
  -8,348
  -9,648
  -11,036
  -12,508
  -14,060
  -15,688
  -17,389
  -19,163
  -21,007
  -22,922
  -24,907
  -26,965
  -29,098
  -31,308
  -33,597
  -35,971
  -38,434
  -40,989
  -43,643
  -46,401
Prev. year cash balance distribution, $m
  46
  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
  -682
  -1,015
  -1,378
  -1,827
  -2,368
  -3,006
  -3,743
  -4,582
  -5,521
  -6,558
  -7,691
  -8,917
  -10,230
  -11,629
  -13,108
  -14,665
  -16,297
  -18,003
  -19,781
  -21,631
  -23,553
  -25,548
  -27,617
  -29,763
  -31,989
  -34,298
  -36,694
  -39,181
  -41,764
  -44,448
Discount rate, %
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
  -635
  -875
  -1,093
  -1,321
  -1,548
  -1,761
  -1,948
  -2,096
  -2,196
  -2,243
  -2,235
  -2,173
  -2,062
  -1,912
  -1,730
  -1,529
  -1,320
  -1,112
  -914
  -732
  -572
  -435
  -322
  -232
  -162
  -110
  -72
  -46
  -28
  -17
Current shareholders' claim on cash, %
  47.3
  23.2
  11.8
  6.2
  3.3
  1.8
  1.0
  0.6
  0.4
  0.2
  0.1
  0.1
  0.1
  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
  0.0
  0.0

Star Bulk Carriers Corp. is an international shipping company. The Company owns and operates a fleet of dry bulk carrier vessels. As of December 31, 2016, the Company's fleet included 73 vessels consisting primarily of Newcastlemax and Capesize, as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 52,055 and 209,537 deadweight tonnage (dwt). The Company's vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes across the world. The Company's fleet, which emphasizes Capesize vessels, primarily transports minerals from the Americas and Australia to East Asia, particularly China, as well as Japan, South Korea, Taiwan, Indonesia and Malaysia. The Company's Supramax vessels carry minerals, grain products and steel between the Americas, Europe, Africa, Australia and Indonesia, and from these areas to China, Japan, South Korea, Taiwan, the Philippines and Malaysia.

FINANCIAL RATIOS  of  Star Bulk Carriers Corp. (SBLK)

Valuation Ratios
P/E Ratio -2.4
Price to Sales 1.7
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow -11.3
Price to Free Cash Flow -0.9
Growth Rates
Sales Growth Rate -5.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.5%
Cap. Spend. - 3 Yr. Gr. Rate 25.3%
Financial Strength
Quick Ratio 30
Current Ratio 0.4
LT Debt to Equity 91.1%
Total Debt to Equity 91.7%
Interest Coverage -2
Management Effectiveness
Return On Assets -5.1%
Ret/ On Assets - 3 Yr. Avg. -8.6%
Return On Total Capital -7.5%
Ret/ On T. Cap. - 3 Yr. Avg. -10.3%
Return On Equity -14.2%
Return On Equity - 3 Yr. Avg. -18.6%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 26.1%
Gross Margin - 3 Yr. Avg. 27.1%
EBITDA Margin -10.8%
EBITDA Margin - 3 Yr. Avg. -45.9%
Operating Margin -50.5%
Oper. Margin - 3 Yr. Avg. -78.1%
Pre-Tax Margin -69.4%
Pre-Tax Margin - 3 Yr. Avg. -91.1%
Net Profit Margin -69.4%
Net Profit Margin - 3 Yr. Avg. -91.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

SBLK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SBLK stock intrinsic value calculation we used $332 million for the last fiscal year's total revenue generated by Star Bulk Carriers Corp.. The default revenue input number comes from 0001 income statement of Star Bulk Carriers Corp.. 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 SBLK stock valuation model: a) initial revenue growth rate of 49.5% 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 7.3%, whose default value for SBLK is calculated based on our internal credit rating of Star Bulk Carriers Corp., 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 Star Bulk Carriers Corp..
    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 SBLK stock the variable cost ratio is equal to 149.1%.

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 SBLK 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 Star Bulk Carriers Corp..

Corporate tax rate of 27% is the nominal tax rate for Star Bulk Carriers Corp.. 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 SBLK 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 SBLK are equal to 541.5%.

Life of production assets of 21.8 years is the average useful life of capital assets used in Star Bulk Carriers Corp. 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 SBLK is equal to 5.3%. 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 - $1088.052 million for Star Bulk Carriers Corp. - 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 93.090 million for Star Bulk Carriers Corp. 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 Star Bulk Carriers Corp. at the current share price and the inputted number of shares is $0.6 billion.

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