Intrinsic value of Simmons First National Cl A - SFNC

Previous Close

$30.85

  Intrinsic Value

$14.42

stock screener

  Rating & Target

str. sell

-53%

Previous close

$30.85

 
Intrinsic value

$14.42

 
Up/down potential

-53%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as SFNC.

We calculate the intrinsic value of SFNC 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 2017), $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 2.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.30
  16.07
  14.96
  13.97
  13.07
  12.26
  11.54
  10.88
  10.29
  9.77
  9.29
  8.86
  8.47
  8.13
  7.81
  7.53
  7.28
  7.05
  6.85
  6.66
  6.50
  6.35
  6.21
  6.09
  5.98
  5.88
  5.79
  5.72
  5.64
  5.58
Revenue, $m
  548
  636
  731
  833
  942
  1,057
  1,179
  1,308
  1,442
  1,583
  1,730
  1,884
  2,043
  2,209
  2,382
  2,561
  2,748
  2,942
  3,143
  3,352
  3,570
  3,797
  4,032
  4,278
  4,534
  4,801
  5,079
  5,369
  5,672
  5,989
Variable operating expenses, $m
  351
  407
  468
  533
  603
  677
  755
  837
  923
  1,013
  1,107
  1,206
  1,308
  1,414
  1,524
  1,639
  1,759
  1,883
  2,011
  2,145
  2,285
  2,430
  2,581
  2,738
  2,902
  3,072
  3,250
  3,436
  3,630
  3,833
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
  351
  407
  468
  533
  603
  677
  755
  837
  923
  1,013
  1,107
  1,206
  1,308
  1,414
  1,524
  1,639
  1,759
  1,883
  2,011
  2,145
  2,285
  2,430
  2,581
  2,738
  2,902
  3,072
  3,250
  3,436
  3,630
  3,833
Operating income, $m
  197
  229
  263
  300
  339
  381
  425
  471
  519
  570
  623
  678
  736
  795
  858
  922
  989
  1,059
  1,131
  1,207
  1,285
  1,367
  1,452
  1,540
  1,632
  1,728
  1,828
  1,933
  2,042
  2,156
EBITDA, $m
  1,572
  1,825
  2,098
  2,391
  2,703
  3,035
  3,385
  3,753
  4,139
  4,544
  4,966
  5,406
  5,864
  6,340
  6,835
  7,350
  7,885
  8,441
  9,019
  9,620
  10,245
  10,895
  11,572
  12,277
  13,011
  13,776
  14,575
  15,408
  16,277
  17,185
Interest expense (income), $m
  22
  688
  722
  824
  934
  1,052
  1,178
  1,312
  1,453
  1,601
  1,757
  1,920
  2,090
  2,268
  2,452
  2,645
  2,844
  3,052
  3,268
  3,492
  3,725
  3,967
  4,219
  4,481
  4,754
  5,038
  5,334
  5,643
  5,965
  6,301
  6,651
Earnings before tax, $m
  -491
  -493
  -561
  -634
  -713
  -797
  -887
  -982
  -1,082
  -1,187
  -1,297
  -1,412
  -1,532
  -1,657
  -1,787
  -1,922
  -2,063
  -2,209
  -2,360
  -2,518
  -2,682
  -2,852
  -3,030
  -3,214
  -3,406
  -3,606
  -3,815
  -4,032
  -4,259
  -4,496
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
  -491
  -493
  -561
  -634
  -713
  -797
  -887
  -982
  -1,082
  -1,187
  -1,297
  -1,412
  -1,532
  -1,657
  -1,787
  -1,922
  -2,063
  -2,209
  -2,360
  -2,518
  -2,682
  -2,852
  -3,030
  -3,214
  -3,406
  -3,606
  -3,815
  -4,032
  -4,259
  -4,496

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
  13,043
  15,139
  17,404
  19,835
  22,427
  25,177
  28,082
  31,138
  34,343
  37,697
  41,199
  44,849
  48,649
  52,603
  56,713
  60,985
  65,424
  70,038
  74,832
  79,817
  85,002
  90,396
  96,011
  101,858
  107,950
  114,301
  120,924
  127,835
  135,050
  142,585
Adjusted assets (=assets-cash), $m
  13,043
  15,139
  17,404
  19,835
  22,427
  25,177
  28,082
  31,138
  34,343
  37,697
  41,199
  44,849
  48,649
  52,603
  56,713
  60,985
  65,424
  70,038
  74,832
  79,817
  85,002
  90,396
  96,011
  101,858
  107,950
  114,301
  120,924
  127,835
  135,050
  142,585
Revenue / Adjusted assets
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
  0.042
Average production assets, $m
  13,748
  15,957
  18,345
  20,907
  23,640
  26,539
  29,600
  32,822
  36,201
  39,736
  43,427
  47,274
  51,280
  55,447
  59,780
  64,283
  68,962
  73,825
  78,879
  84,133
  89,598
  95,284
  101,202
  107,366
  113,787
  120,482
  127,463
  134,748
  142,353
  150,295
Working capital, $m
  -14,094
  -16,358
  -18,806
  -21,433
  -24,234
  -27,206
  -30,344
  -33,647
  -37,111
  -40,735
  -44,518
  -48,463
  -52,569
  -56,841
  -61,283
  -65,899
  -70,696
  -75,681
  -80,862
  -86,249
  -91,851
  -97,680
  -103,747
  -110,065
  -116,648
  -123,511
  -130,668
  -138,136
  -145,932
  -154,074
Total debt, $m
  13,368
  15,255
  17,293
  19,481
  21,814
  24,289
  26,904
  29,654
  32,539
  35,558
  38,709
  41,994
  45,414
  48,973
  52,672
  56,517
  60,512
  64,664
  68,979
  73,466
  78,132
  82,986
  88,040
  93,302
  98,785
  104,501
  110,462
  116,682
  123,175
  129,957
Total liabilities, $m
  11,738
  13,625
  15,663
  17,851
  20,184
  22,659
  25,274
  28,024
  30,909
  33,927
  37,079
  40,364
  43,784
  47,343
  51,042
  54,887
  58,882
  63,034
  67,349
  71,836
  76,502
  81,356
  86,410
  91,672
  97,155
  102,871
  108,832
  115,052
  121,545
  128,326
Total equity, $m
  1,304
  1,514
  1,740
  1,983
  2,243
  2,518
  2,808
  3,114
  3,434
  3,770
  4,120
  4,485
  4,865
  5,260
  5,671
  6,099
  6,542
  7,004
  7,483
  7,982
  8,500
  9,040
  9,601
  10,186
  10,795
  11,430
  12,092
  12,784
  13,505
  14,258
Total liabilities and equity, $m
  13,042
  15,139
  17,403
  19,834
  22,427
  25,177
  28,082
  31,138
  34,343
  37,697
  41,199
  44,849
  48,649
  52,603
  56,713
  60,986
  65,424
  70,038
  74,832
  79,818
  85,002
  90,396
  96,011
  101,858
  107,950
  114,301
  120,924
  127,836
  135,050
  142,584
Debt-to-equity ratio
  10.250
  10.080
  9.940
  9.820
  9.730
  9.650
  9.580
  9.520
  9.470
  9.430
  9.400
  9.360
  9.340
  9.310
  9.290
  9.270
  9.250
  9.230
  9.220
  9.200
  9.190
  9.180
  9.170
  9.160
  9.150
  9.140
  9.130
  9.130
  9.120
  9.110
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -491
  -493
  -561
  -634
  -713
  -797
  -887
  -982
  -1,082
  -1,187
  -1,297
  -1,412
  -1,532
  -1,657
  -1,787
  -1,922
  -2,063
  -2,209
  -2,360
  -2,518
  -2,682
  -2,852
  -3,030
  -3,214
  -3,406
  -3,606
  -3,815
  -4,032
  -4,259
  -4,496
Depreciation, amort., depletion, $m
  1,375
  1,596
  1,834
  2,091
  2,364
  2,654
  2,960
  3,282
  3,620
  3,974
  4,343
  4,727
  5,128
  5,545
  5,978
  6,428
  6,896
  7,382
  7,888
  8,413
  8,960
  9,528
  10,120
  10,737
  11,379
  12,048
  12,746
  13,475
  14,235
  15,030
Funds from operations, $m
  884
  1,103
  1,274
  1,457
  1,651
  1,857
  2,073
  2,300
  2,538
  2,786
  3,045
  3,315
  3,596
  3,888
  4,191
  4,506
  4,834
  5,174
  5,528
  5,895
  6,278
  6,676
  7,091
  7,523
  7,973
  8,442
  8,932
  9,443
  9,976
  10,534
Change in working capital, $m
  -2,079
  -2,265
  -2,448
  -2,627
  -2,801
  -2,972
  -3,139
  -3,302
  -3,464
  -3,624
  -3,784
  -3,944
  -4,107
  -4,272
  -4,441
  -4,616
  -4,797
  -4,985
  -5,181
  -5,387
  -5,602
  -5,829
  -6,067
  -6,318
  -6,583
  -6,862
  -7,157
  -7,468
  -7,796
  -8,142
Cash from operations, $m
  2,963
  3,368
  3,722
  4,083
  4,452
  4,828
  5,212
  5,603
  6,002
  6,410
  6,829
  7,260
  7,703
  8,160
  8,632
  9,122
  9,630
  10,159
  10,709
  11,282
  11,880
  12,505
  13,158
  13,841
  14,556
  15,304
  16,089
  16,911
  17,772
  18,676
Maintenance CAPEX, $m
  -1,173
  -1,375
  -1,596
  -1,834
  -2,091
  -2,364
  -2,654
  -2,960
  -3,282
  -3,620
  -3,974
  -4,343
  -4,727
  -5,128
  -5,545
  -5,978
  -6,428
  -6,896
  -7,382
  -7,888
  -8,413
  -8,960
  -9,528
  -10,120
  -10,737
  -11,379
  -12,048
  -12,746
  -13,475
  -14,235
New CAPEX, $m
  -2,020
  -2,209
  -2,388
  -2,562
  -2,733
  -2,899
  -3,062
  -3,221
  -3,379
  -3,535
  -3,691
  -3,848
  -4,006
  -4,167
  -4,333
  -4,503
  -4,679
  -4,863
  -5,054
  -5,255
  -5,465
  -5,686
  -5,918
  -6,163
  -6,422
  -6,694
  -6,982
  -7,285
  -7,605
  -7,942
Cash from investing activities, $m
  -3,193
  -3,584
  -3,984
  -4,396
  -4,824
  -5,263
  -5,716
  -6,181
  -6,661
  -7,155
  -7,665
  -8,191
  -8,733
  -9,295
  -9,878
  -10,481
  -11,107
  -11,759
  -12,436
  -13,143
  -13,878
  -14,646
  -15,446
  -16,283
  -17,159
  -18,073
  -19,030
  -20,031
  -21,080
  -22,177
Free cash flow, $m
  -230
  -217
  -262
  -313
  -371
  -435
  -504
  -579
  -659
  -745
  -835
  -931
  -1,031
  -1,136
  -1,245
  -1,359
  -1,477
  -1,600
  -1,728
  -1,860
  -1,998
  -2,141
  -2,289
  -2,443
  -2,602
  -2,768
  -2,941
  -3,120
  -3,307
  -3,502
Issuance/(repayment) of debt, $m
  628
  1,886
  2,039
  2,188
  2,333
  2,475
  2,614
  2,751
  2,885
  3,018
  3,151
  3,285
  3,420
  3,558
  3,699
  3,845
  3,995
  4,152
  4,315
  4,486
  4,666
  4,855
  5,053
  5,262
  5,483
  5,716
  5,961
  6,220
  6,493
  6,781
Issuance/(repurchase) of shares, $m
  1,812
  703
  787
  877
  972
  1,072
  1,177
  1,288
  1,403
  1,523
  1,647
  1,777
  1,912
  2,052
  2,198
  2,349
  2,507
  2,670
  2,840
  3,017
  3,200
  3,392
  3,591
  3,799
  4,015
  4,241
  4,477
  4,723
  4,980
  5,249
Cash from financing (excl. dividends), $m  
  2,440
  2,589
  2,826
  3,065
  3,305
  3,547
  3,791
  4,039
  4,288
  4,541
  4,798
  5,062
  5,332
  5,610
  5,897
  6,194
  6,502
  6,822
  7,155
  7,503
  7,866
  8,247
  8,644
  9,061
  9,498
  9,957
  10,438
  10,943
  11,473
  12,030
Total cash flow (excl. dividends), $m
  2,211
  2,372
  2,564
  2,751
  2,934
  3,113
  3,288
  3,459
  3,628
  3,796
  3,963
  4,132
  4,302
  4,475
  4,652
  4,835
  5,025
  5,222
  5,427
  5,643
  5,868
  6,106
  6,355
  6,618
  6,896
  7,188
  7,497
  7,823
  8,166
  8,529
Retained Cash Flow (-), $m
  -1,812
  -703
  -787
  -877
  -972
  -1,072
  -1,177
  -1,288
  -1,403
  -1,523
  -1,647
  -1,777
  -1,912
  -2,052
  -2,198
  -2,349
  -2,507
  -2,670
  -2,840
  -3,017
  -3,200
  -3,392
  -3,591
  -3,799
  -4,015
  -4,241
  -4,477
  -4,723
  -4,980
  -5,249
Prev. year cash balance distribution, $m
  17
  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
  11
  13
  15
  17
  19
  22
  24
  27
  30
  33
  36
  40
  43
  47
  51
  55
  59
  63
  68
  72
  77
  82
  87
  93
  98
  104
  110
  117
  123
  130
Cash available for distribution, $m
  415
  1,670
  1,777
  1,874
  1,962
  2,041
  2,110
  2,172
  2,226
  2,274
  2,316
  2,354
  2,390
  2,423
  2,454
  2,486
  2,518
  2,552
  2,588
  2,626
  2,668
  2,714
  2,764
  2,820
  2,881
  2,947
  3,020
  3,100
  3,186
  3,280
Discount rate, %
  10.40
  10.92
  11.47
  12.04
  12.64
  13.27
  13.94
  14.63
  15.37
  16.13
  16.94
  17.79
  18.68
  19.61
  20.59
  21.62
  22.70
  23.84
  25.03
  26.28
  27.59
  28.97
  30.42
  31.94
  33.54
  35.22
  36.98
  38.83
  40.77
  42.81
PV of cash for distribution, $m
  376
  1,357
  1,283
  1,190
  1,082
  966
  847
  728
  615
  509
  414
  330
  258
  197
  148
  108
  78
  54
  37
  25
  16
  10
  6
  4
  2
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  32.5
  21.4
  14.2
  9.5
  6.5
  4.4
  3.0
  2.1
  1.4
  1.0
  0.7
  0.5
  0.3
  0.2
  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

Simmons First National Corporation is a financial holding company. The Company, through its subsidiary bank, Simmons Bank, provides financial services to individuals and businesses throughout the market areas they serve. As of December 31, 2016, Simmons Bank conducted banking operations through 150 financial centers located in communities throughout Arkansas, Kansas, Missouri, Tennessee, Colorado, Oklahoma and Texas. Simmons Bank offers consumer, real estate and commercial loans, checking and savings deposits. Simmons Bank and its subsidiaries have also developed products and services, which include credit cards, investments, agricultural finance lending, equipment lending, insurance and small business administration lending. The securities within the portfolio are classified as either held-to-maturity, available-for-sale or trading. The Company offers deposits, including non-interest bearing transaction accounts; interest bearing transaction accounts, and time deposits.

FINANCIAL RATIOS  of  Simmons First National Cl A (SFNC)

Valuation Ratios
P/E Ratio 9.9
Price to Sales 0
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 10.6
Price to Free Cash Flow 13
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 88.9%
Cap. Spend. - 3 Yr. Gr. Rate 27.7%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 19.4%
Total Debt to Equity 19.4%
Interest Coverage 8
Management Effectiveness
Return On Assets 1.4%
Ret/ On Assets - 3 Yr. Avg. 1.3%
Return On Total Capital 7.3%
Ret/ On T. Cap. - 3 Yr. Avg. 6.9%
Return On Equity 8.7%
Return On Equity - 3 Yr. Avg. 8.7%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 32.2%
Eff/ Tax Rate - 3 Yr. Avg. 30.3%
Payout Ratio 29.9%

SFNC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SFNC stock intrinsic value calculation we used $467 million for the last fiscal year's total revenue generated by Simmons First National Cl A. The default revenue input number comes from 2017 income statement of Simmons First National Cl A. 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 SFNC stock valuation model: a) initial revenue growth rate of 17.3% 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 10.4%, whose default value for SFNC is calculated based on our internal credit rating of Simmons First National Cl A, 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 Simmons First National Cl A.
    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 SFNC stock the variable cost ratio is equal to 64%.

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 SFNC 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 Simmons First National Cl A.

Corporate tax rate of 27% is the nominal tax rate for Simmons First National Cl A. 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 SFNC stock is equal to 2.3%.

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 SFNC are equal to 2509.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Simmons First National Cl A 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 SFNC is equal to -2572.8%. 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 - $0 million for Simmons First National Cl A - 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 92 million for Simmons First National Cl A 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 Simmons First National Cl A at the current share price and the inputted number of shares is $2.8 billion.

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COMPANY NEWS

▶ Simmons First National: 2Q Earnings Snapshot   [Jul-23-18 05:12PM  Associated Press]
▶ Simmons completes Bank SNB merger   [Jun-01-18 06:05PM  American City Business Journals]
▶ Mortgage Lenders Targeting Doctors for New Home Loans   [May-07-18 05:45PM  Investopedia]
▶ Simmons First National: 1Q Earnings Snapshot   [Apr-23-18 06:09PM  Associated Press]
▶ Best-In-Class Growth Stocks   [Apr-04-18 12:02PM  Simply Wall St.]
▶ Best Growth Stock in March   [Mar-04-18 11:02AM  Simply Wall St.]
▶ What You Need To Own In Your Portfolio   [Feb-15-18 06:02AM  Simply Wall St.]
▶ CORRECTION: Simmons Reports Fourth Quarter 2017 Earnings   [Jan-22-18 07:14PM  GlobeNewswire]
▶ Simmons First National posts 4Q profit   [06:47PM  Associated Press]
▶ Simmons Reports Fourth Quarter 2017 Earnings   [05:57PM  GlobeNewswire]
▶ Simmons First National posts 3Q profit   [05:03AM  Associated Press]
▶ Simmons Reports Third Quarter 2017 Earnings   [Oct-22-17 06:00PM  GlobeNewswire]
▶ These 3 Stocks Just Raised Their Dividends   [Sep-11-17 07:13AM  Motley Fool]
▶ Simmons First National posts 2Q profit   [Jul-19-17 10:14PM  Associated Press]
▶ Simmons Reports 2017 Second Quarter Earnings   [05:00PM  GlobeNewswire]
▶ Simmons First National posts 1Q profit   [Apr-19-17 05:12PM  Associated Press]
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