Intrinsic value of Sherwin-Williams - SHW

Previous Close

$414.84

  Intrinsic Value

$739.56

stock screener

  Rating & Target

str. buy

+78%

Previous close

$414.84

 
Intrinsic value

$739.56

 
Up/down potential

+78%

 
Rating

str. buy

We calculate the intrinsic value of SHW 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 38.7

 

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, %
  27.80
  25.52
  23.47
  21.62
  19.96
  18.46
  17.12
  15.91
  14.81
  13.83
  12.95
  12.15
  11.44
  10.80
  10.22
  9.69
  9.22
  8.80
  8.42
  8.08
  7.77
  7.49
  7.25
  7.02
  6.82
  6.64
  6.47
  6.33
  6.19
  6.07
Revenue, $m
  19,149
  24,036
  29,677
  36,094
  43,297
  51,292
  60,071
  69,625
  79,940
  90,998
  102,783
  115,276
  128,463
  142,331
  156,871
  172,079
  187,953
  204,497
  221,720
  239,635
  258,259
  277,615
  297,729
  318,632
  340,358
  362,947
  386,441
  410,887
  436,334
  462,837
Variable operating expenses, $m
  15,978
  19,729
  24,058
  28,982
  34,511
  40,646
  47,384
  54,717
  62,633
  71,120
  78,882
  88,470
  98,590
  109,234
  120,393
  132,064
  144,247
  156,944
  170,162
  183,911
  198,204
  213,059
  228,496
  244,538
  261,212
  278,549
  296,579
  315,341
  334,870
  355,210
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
  15,978
  19,729
  24,058
  28,982
  34,511
  40,646
  47,384
  54,717
  62,633
  71,120
  78,882
  88,470
  98,590
  109,234
  120,393
  132,064
  144,247
  156,944
  170,162
  183,911
  198,204
  213,059
  228,496
  244,538
  261,212
  278,549
  296,579
  315,341
  334,870
  355,210
Operating income, $m
  3,171
  4,308
  5,619
  7,111
  8,787
  10,646
  12,687
  14,909
  17,307
  19,879
  23,901
  26,806
  29,872
  33,097
  36,478
  40,015
  43,706
  47,553
  51,558
  55,724
  60,055
  64,556
  69,233
  74,094
  79,146
  84,399
  89,862
  95,547
  101,464
  107,627
EBITDA, $m
  4,821
  6,051
  7,471
  9,086
  10,900
  12,912
  15,122
  17,527
  20,124
  22,908
  25,874
  29,019
  32,339
  35,830
  39,490
  43,319
  47,315
  51,480
  55,815
  60,325
  65,013
  69,886
  74,949
  80,212
  85,681
  91,367
  97,282
  103,436
  109,842
  116,513
Interest expense (income), $m
  154
  568
  812
  1,098
  1,429
  1,805
  2,227
  2,696
  3,210
  3,770
  4,374
  5,022
  5,713
  6,445
  7,218
  8,031
  8,883
  9,774
  10,704
  11,674
  12,683
  13,733
  14,824
  15,959
  17,137
  18,362
  19,635
  20,959
  22,336
  23,768
  25,260
Earnings before tax, $m
  2,603
  3,496
  4,521
  5,683
  6,982
  8,418
  9,992
  11,699
  13,537
  15,504
  18,878
  21,093
  23,427
  25,879
  28,448
  31,132
  33,932
  36,849
  39,885
  43,041
  46,322
  49,732
  53,275
  56,957
  60,784
  64,763
  68,903
  73,211
  77,695
  82,367
Tax expense, $m
  703
  944
  1,221
  1,534
  1,885
  2,273
  2,698
  3,159
  3,655
  4,186
  5,097
  5,695
  6,325
  6,987
  7,681
  8,406
  9,162
  9,949
  10,769
  11,621
  12,507
  13,428
  14,384
  15,378
  16,412
  17,486
  18,604
  19,767
  20,978
  22,239
Net income, $m
  1,900
  2,552
  3,300
  4,148
  5,097
  6,145
  7,294
  8,540
  9,882
  11,318
  13,781
  15,398
  17,102
  18,892
  20,767
  22,726
  24,770
  26,900
  29,116
  31,420
  33,815
  36,304
  38,890
  41,578
  44,372
  47,277
  50,299
  53,444
  56,718
  60,128

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
  25,498
  32,006
  39,517
  48,061
  57,653
  68,298
  79,988
  92,710
  106,445
  121,170
  136,861
  153,496
  171,055
  189,522
  208,883
  229,133
  250,270
  272,300
  295,233
  319,088
  343,887
  369,661
  396,444
  424,277
  453,207
  483,286
  514,569
  547,120
  581,004
  616,294
Adjusted assets (=assets-cash), $m
  25,498
  32,006
  39,517
  48,061
  57,653
  68,298
  79,988
  92,710
  106,445
  121,170
  136,861
  153,496
  171,055
  189,522
  208,883
  229,133
  250,270
  272,300
  295,233
  319,088
  343,887
  369,661
  396,444
  424,277
  453,207
  483,286
  514,569
  547,120
  581,004
  616,294
Revenue / Adjusted assets
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
Average production assets, $m
  6,434
  8,076
  9,971
  12,127
  14,548
  17,234
  20,184
  23,394
  26,860
  30,575
  34,535
  38,733
  43,163
  47,823
  52,709
  57,818
  63,152
  68,711
  74,498
  80,517
  86,775
  93,279
  100,037
  107,060
  114,360
  121,950
  129,844
  138,058
  146,608
  155,513
Working capital, $m
  1,168
  1,466
  1,810
  2,202
  2,641
  3,129
  3,664
  4,247
  4,876
  5,551
  6,270
  7,032
  7,836
  8,682
  9,569
  10,497
  11,465
  12,474
  13,525
  14,618
  15,754
  16,935
  18,161
  19,437
  20,762
  22,140
  23,573
  25,064
  26,616
  28,233
Total debt, $m
  15,036
  20,339
  26,460
  33,424
  41,242
  49,917
  59,445
  69,813
  81,007
  93,008
  105,796
  119,354
  133,665
  148,714
  164,494
  180,998
  198,224
  216,179
  234,869
  254,311
  274,522
  295,528
  317,356
  340,040
  363,618
  388,132
  413,628
  440,157
  467,773
  496,534
Total liabilities, $m
  20,781
  26,085
  32,206
  39,169
  46,987
  55,663
  65,190
  75,559
  86,753
  98,753
  111,542
  125,100
  139,410
  154,460
  170,240
  186,743
  203,970
  221,924
  240,615
  260,057
  280,268
  301,273
  323,102
  345,786
  369,364
  393,878
  419,374
  445,903
  473,518
  502,280
Total equity, $m
  4,717
  5,921
  7,311
  8,891
  10,666
  12,635
  14,798
  17,151
  19,692
  22,416
  25,319
  28,397
  31,645
  35,061
  38,643
  42,390
  46,300
  50,375
  54,618
  59,031
  63,619
  68,387
  73,342
  78,491
  83,843
  89,408
  95,195
  101,217
  107,486
  114,014
Total liabilities and equity, $m
  25,498
  32,006
  39,517
  48,060
  57,653
  68,298
  79,988
  92,710
  106,445
  121,169
  136,861
  153,497
  171,055
  189,521
  208,883
  229,133
  250,270
  272,299
  295,233
  319,088
  343,887
  369,660
  396,444
  424,277
  453,207
  483,286
  514,569
  547,120
  581,004
  616,294
Debt-to-equity ratio
  3.190
  3.440
  3.620
  3.760
  3.870
  3.950
  4.020
  4.070
  4.110
  4.150
  4.180
  4.200
  4.220
  4.240
  4.260
  4.270
  4.280
  4.290
  4.300
  4.310
  4.320
  4.320
  4.330
  4.330
  4.340
  4.340
  4.350
  4.350
  4.350
  4.360
Adjusted equity ratio
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,900
  2,552
  3,300
  4,148
  5,097
  6,145
  7,294
  8,540
  9,882
  11,318
  13,781
  15,398
  17,102
  18,892
  20,767
  22,726
  24,770
  26,900
  29,116
  31,420
  33,815
  36,304
  38,890
  41,578
  44,372
  47,277
  50,299
  53,444
  56,718
  60,128
Depreciation, amort., depletion, $m
  1,649
  1,743
  1,851
  1,975
  2,113
  2,266
  2,435
  2,618
  2,817
  3,029
  1,973
  2,213
  2,466
  2,733
  3,012
  3,304
  3,609
  3,926
  4,257
  4,601
  4,959
  5,330
  5,716
  6,118
  6,535
  6,969
  7,420
  7,889
  8,378
  8,886
Funds from operations, $m
  3,550
  4,295
  5,152
  6,123
  7,210
  8,412
  9,729
  11,159
  12,699
  14,347
  15,755
  17,611
  19,568
  21,625
  23,779
  26,030
  28,379
  30,826
  33,373
  36,021
  38,774
  41,634
  44,607
  47,696
  50,907
  54,246
  57,719
  61,333
  65,095
  69,014
Change in working capital, $m
  254
  298
  344
  391
  439
  488
  536
  583
  629
  675
  719
  762
  804
  846
  887
  928
  968
  1,009
  1,051
  1,093
  1,136
  1,181
  1,227
  1,275
  1,325
  1,378
  1,433
  1,491
  1,552
  1,617
Cash from operations, $m
  3,296
  3,997
  4,808
  5,732
  6,770
  7,924
  9,193
  10,576
  12,070
  13,673
  15,036
  16,849
  18,764
  20,779
  22,892
  25,103
  27,411
  29,817
  32,322
  34,928
  37,638
  40,454
  43,380
  46,421
  49,582
  52,868
  56,286
  59,842
  63,543
  67,398
Maintenance CAPEX, $m
  -288
  -368
  -461
  -570
  -693
  -831
  -985
  -1,153
  -1,337
  -1,535
  -1,747
  -1,973
  -2,213
  -2,466
  -2,733
  -3,012
  -3,304
  -3,609
  -3,926
  -4,257
  -4,601
  -4,959
  -5,330
  -5,716
  -6,118
  -6,535
  -6,969
  -7,420
  -7,889
  -8,378
New CAPEX, $m
  -1,398
  -1,642
  -1,895
  -2,156
  -2,421
  -2,686
  -2,950
  -3,210
  -3,466
  -3,716
  -3,959
  -4,198
  -4,431
  -4,660
  -4,886
  -5,110
  -5,334
  -5,559
  -5,787
  -6,019
  -6,258
  -6,504
  -6,758
  -7,023
  -7,300
  -7,590
  -7,894
  -8,214
  -8,550
  -8,905
Cash from investing activities, $m
  -1,686
  -2,010
  -2,356
  -2,726
  -3,114
  -3,517
  -3,935
  -4,363
  -4,803
  -5,251
  -5,706
  -6,171
  -6,644
  -7,126
  -7,619
  -8,122
  -8,638
  -9,168
  -9,713
  -10,276
  -10,859
  -11,463
  -12,088
  -12,739
  -13,418
  -14,125
  -14,863
  -15,634
  -16,439
  -17,283
Free cash flow, $m
  1,610
  1,987
  2,451
  3,006
  3,657
  4,407
  5,259
  6,212
  7,267
  8,422
  9,329
  10,678
  12,120
  13,653
  15,274
  16,981
  18,773
  20,649
  22,609
  24,652
  26,779
  28,991
  31,291
  33,681
  36,164
  38,743
  41,423
  44,208
  47,104
  50,115
Issuance/(repayment) of debt, $m
  4,515
  5,303
  6,122
  6,963
  7,818
  8,675
  9,528
  10,369
  11,194
  12,001
  12,788
  13,558
  14,311
  15,050
  15,780
  16,504
  17,227
  17,954
  18,691
  19,442
  20,211
  21,005
  21,828
  22,684
  23,578
  24,514
  25,496
  26,529
  27,616
  28,761
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  
  4,515
  5,303
  6,122
  6,963
  7,818
  8,675
  9,528
  10,369
  11,194
  12,001
  12,788
  13,558
  14,311
  15,050
  15,780
  16,504
  17,227
  17,954
  18,691
  19,442
  20,211
  21,005
  21,828
  22,684
  23,578
  24,514
  25,496
  26,529
  27,616
  28,761
Total cash flow (excl. dividends), $m
  6,125
  7,291
  8,572
  9,969
  11,475
  13,082
  14,786
  16,581
  18,461
  20,423
  22,118
  24,236
  26,430
  28,702
  31,053
  33,485
  36,000
  38,604
  41,300
  44,093
  46,990
  49,997
  53,119
  56,365
  59,742
  63,257
  66,919
  70,737
  74,720
  78,876
Retained Cash Flow (-), $m
  -1,025
  -1,204
  -1,390
  -1,581
  -1,775
  -1,969
  -2,163
  -2,354
  -2,541
  -2,724
  -2,903
  -3,078
  -3,248
  -3,416
  -3,582
  -3,746
  -3,910
  -4,076
  -4,243
  -4,413
  -4,588
  -4,768
  -4,955
  -5,149
  -5,352
  -5,565
  -5,787
  -6,022
  -6,269
  -6,529
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
  5,100
  6,087
  7,183
  8,388
  9,700
  11,113
  12,624
  14,227
  15,920
  17,699
  19,215
  21,158
  23,182
  25,286
  27,471
  29,738
  32,090
  34,528
  37,057
  39,680
  42,402
  45,229
  48,165
  51,216
  54,390
  57,693
  61,132
  64,715
  68,451
  72,348
Discount rate, %
  10.00
  10.50
  11.03
  11.58
  12.16
  12.76
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.07
  25.27
  26.53
  27.86
  29.25
  30.72
  32.25
  33.86
  35.56
  37.33
  39.20
  41.16
PV of cash for distribution, $m
  4,636
  4,985
  5,249
  5,412
  5,466
  5,406
  5,234
  4,963
  4,606
  4,184
  3,654
  3,182
  2,708
  2,252
  1,828
  1,448
  1,118
  841
  616
  438
  303
  203
  132
  83
  50
  29
  17
  9
  5
  2
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

The Sherwin-Williams Company (Sherwin-Williams) is engaged in the development, manufacture, distribution and sale of paint, coatings and related products. The Company's segments are Paint Stores Group, Consumer Group, Global Finishes Group, Latin America Coatings Group and Administrative. The Paint Stores Group markets and sells Sherwin-Williams branded architectural paint and coatings, protective and marine products, original equipment manufacturer (OEM) product finishes and related items. The Consumer Group segment manufactures and distributes a range of paint, coatings and related products. The Global Finishes Group develops, licenses and manufactures a range of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products. The Latin America Coatings Group develops, licenses, manufactures and distributes a range of architectural paint and coatings, protective and marine products, OEM product finishes and related products.

FINANCIAL RATIOS  of  Sherwin-Williams (SHW)

Valuation Ratios
P/E Ratio 34.1
Price to Sales 3.3
Price to Book 20.5
Price to Tangible Book
Price to Cash Flow 29.5
Price to Free Cash Flow 36.1
Growth Rates
Sales Growth Rate 4.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 2.1%
Cap. Spend. - 3 Yr. Gr. Rate 7.4%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 64.5%
Total Debt to Equity 104%
Interest Coverage 11
Management Effectiveness
Return On Assets 19.8%
Ret/ On Assets - 3 Yr. Avg. 18%
Return On Total Capital 34.1%
Ret/ On T. Cap. - 3 Yr. Avg. 33%
Return On Equity 82.5%
Return On Equity - 3 Yr. Avg. 86%
Asset Turnover 1.9
Profitability Ratios
Gross Margin 49.9%
Gross Margin - 3 Yr. Avg. 48.5%
EBITDA Margin 16.4%
EBITDA Margin - 3 Yr. Avg. 15.3%
Operating Margin 14.7%
Oper. Margin - 3 Yr. Avg. 13.5%
Pre-Tax Margin 13.5%
Pre-Tax Margin - 3 Yr. Avg. 12.8%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 8.9%
Effective Tax Rate 29%
Eff/ Tax Rate - 3 Yr. Avg. 30.7%
Payout Ratio 27.5%

SHW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SHW stock intrinsic value calculation we used $14983.788 million for the last fiscal year's total revenue generated by Sherwin-Williams. The default revenue input number comes from 0001 income statement of Sherwin-Williams. 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 SHW stock valuation model: a) initial revenue growth rate of 27.8% 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%, whose default value for SHW is calculated based on our internal credit rating of Sherwin-Williams, 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 Sherwin-Williams.
    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 SHW stock the variable cost ratio is equal to 85.3%.

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 SHW 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 Sherwin-Williams.

Corporate tax rate of 27% is the nominal tax rate for Sherwin-Williams. 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 SHW 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 SHW are equal to 33.6%.

Life of production assets of 17.5 years is the average useful life of capital assets used in Sherwin-Williams 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 SHW is equal to 6.1%. 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 - $3692.188 million for Sherwin-Williams - 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 93.381 million for Sherwin-Williams 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 Sherwin-Williams at the current share price and the inputted number of shares is $38.7 billion.

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COMPANY NEWS

▶ Sherwin-Williams: Minneapolis 'Like a second headquarters' after Valspar deal   [Nov-12-18 08:13AM  American City Business Journals]
▶ Why Sherwin-Williams Stock Lost 14% in October   [Nov-05-18 03:34PM  Motley Fool]
▶ Sherwin-Williams: 3Q Earnings Snapshot   [08:03AM  Associated Press]
▶ Valspar sues insurer over employee scheme worth millions   [Oct-05-18 03:38PM  American City Business Journals]
▶ 7 Fast-Growing Stocks to Buy Today   [02:53PM  InvestorPlace]
▶ [$$] Sherwin-Williams Lands in Trouble Over 114-Year-Old Paint Ad   [Sep-03-18 10:12PM  The Wall Street Journal]
▶ [$$] Sherwin-Williams Lands in Trouble Over 114-Year-Old Paint Ad   [Sep-02-18 07:00AM  The Wall Street Journal]
▶ Atlanta-based flooring company expands 'diversity' with third female board member   [Jul-27-18 03:57PM  American City Business Journals]
▶ [$$] Sherwin-Williams Raises Earnings Targets   [08:59AM  The Wall Street Journal]
▶ Sherwin-Williams: 2Q Earnings Snapshot   [07:21AM  Associated Press]
▶ 7 Stocks to Buy Over $200   [Jul-05-18 02:20PM  InvestorPlace]
▶ [$$] S&P analyst charged with insider trading   [Jun-25-18 11:47PM  Financial Times]
▶ 3 Stocks That Turned $8,000 into $64,000   [Jun-14-18 09:00AM  Motley Fool]
▶ Should You Buy The Sherwin-Williams Company (NYSE:SHW)?   [Jun-05-18 03:14PM  Simply Wall St.]
▶ 3 Dividend Aristocrats With Embarrassingly Low Yields   [Apr-12-18 08:31PM  Motley Fool]
▶ 3 Embarrassingly Low Dividend Stocks   [06:30AM  Motley Fool]
▶ 21 Stocks to Beat a Bear Market   [Mar-28-18 10:29AM  Barrons.com]
▶ Sherwin-Williams Still Looks Bullish on a Longer-Term Basis   [Feb-28-18 11:34AM  TheStreet.com]

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