Intrinsic value of Steel Dynamics, Inc. - STLD

Previous Close

$26.43

  Intrinsic Value

$345.83

stock screener

  Rating & Target

str. buy

+999%

Previous close

$26.43

 
Intrinsic value

$345.83

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of STLD 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 5.9

 

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, %
  24.30
  22.37
  20.63
  19.07
  17.66
  16.40
  15.26
  14.23
  13.31
  12.48
  11.73
  11.06
  10.45
  9.91
  9.42
  8.97
  8.58
  8.22
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
Revenue, $m
  14,695
  17,982
  21,692
  25,829
  30,391
  35,374
  40,771
  46,573
  52,771
  59,355
  66,317
  73,650
  81,347
  89,405
  97,823
  106,601
  115,743
  125,256
  135,147
  145,428
  156,112
  167,214
  178,753
  190,748
  203,222
  216,199
  229,705
  243,768
  258,419
  273,689
Variable operating expenses, $m
  10,460
  12,785
  15,408
  18,333
  21,559
  25,082
  28,898
  33,001
  37,383
  42,039
  46,892
  52,076
  57,519
  63,216
  69,168
  75,375
  81,840
  88,566
  95,560
  102,829
  110,383
  118,234
  126,392
  134,874
  143,694
  152,870
  162,419
  172,363
  182,722
  193,520
Fixed operating expenses, $m
  1,748
  1,786
  1,825
  1,866
  1,907
  1,949
  1,991
  2,035
  2,080
  2,126
  2,172
  2,220
  2,269
  2,319
  2,370
  2,422
  2,475
  2,530
  2,586
  2,642
  2,701
  2,760
  2,821
  2,883
  2,946
  3,011
  3,077
  3,145
  3,214
  3,285
Total operating expenses, $m
  12,208
  14,571
  17,233
  20,199
  23,466
  27,031
  30,889
  35,036
  39,463
  44,165
  49,064
  54,296
  59,788
  65,535
  71,538
  77,797
  84,315
  91,096
  98,146
  105,471
  113,084
  120,994
  129,213
  137,757
  146,640
  155,881
  165,496
  175,508
  185,936
  196,805
Operating income, $m
  2,487
  3,411
  4,459
  5,630
  6,926
  8,343
  9,881
  11,537
  13,308
  15,191
  17,253
  19,353
  21,559
  23,870
  26,284
  28,803
  31,428
  34,160
  37,002
  39,956
  43,028
  46,220
  49,540
  52,991
  56,582
  60,318
  64,208
  68,260
  72,482
  76,884
EBITDA, $m
  2,912
  3,916
  5,053
  6,325
  7,730
  9,269
  10,937
  12,733
  14,654
  16,696
  18,857
  21,134
  23,526
  26,032
  28,650
  31,381
  34,227
  37,189
  40,270
  43,473
  46,803
  50,264
  53,862
  57,604
  61,496
  65,546
  69,763
  74,155
  78,731
  83,503
Interest expense (income), $m
  151
  128
  177
  234
  297
  368
  446
  531
  624
  723
  829
  941
  1,060
  1,186
  1,318
  1,455
  1,599
  1,749
  1,906
  2,069
  2,238
  2,414
  2,596
  2,786
  2,984
  3,189
  3,402
  3,624
  3,855
  4,096
  4,346
Earnings before tax, $m
  2,358
  3,234
  4,225
  5,333
  6,558
  7,897
  9,350
  10,914
  12,585
  14,362
  16,312
  18,293
  20,373
  22,552
  24,829
  27,204
  29,679
  32,254
  34,933
  37,719
  40,614
  43,624
  46,754
  50,008
  53,393
  56,916
  60,584
  64,405
  68,387
  72,538
Tax expense, $m
  637
  873
  1,141
  1,440
  1,771
  2,132
  2,525
  2,947
  3,398
  3,878
  4,404
  4,939
  5,501
  6,089
  6,704
  7,345
  8,013
  8,709
  9,432
  10,184
  10,966
  11,779
  12,623
  13,502
  14,416
  15,367
  16,358
  17,389
  18,464
  19,585
Net income, $m
  1,722
  2,361
  3,084
  3,893
  4,787
  5,765
  6,826
  7,967
  9,187
  10,484
  11,908
  13,354
  14,872
  16,463
  18,125
  19,859
  21,665
  23,546
  25,501
  27,535
  29,648
  31,846
  34,130
  36,506
  38,977
  41,549
  44,226
  47,015
  49,922
  52,953

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
  9,499
  11,624
  14,022
  16,696
  19,645
  22,866
  26,355
  30,105
  34,112
  38,368
  42,868
  47,608
  52,584
  57,792
  63,234
  68,908
  74,818
  80,967
  87,361
  94,006
  100,913
  108,089
  115,548
  123,302
  131,365
  139,754
  148,484
  157,575
  167,045
  176,916
Adjusted assets (=assets-cash), $m
  9,499
  11,624
  14,022
  16,696
  19,645
  22,866
  26,355
  30,105
  34,112
  38,368
  42,868
  47,608
  52,584
  57,792
  63,234
  68,908
  74,818
  80,967
  87,361
  94,006
  100,913
  108,089
  115,548
  123,302
  131,365
  139,754
  148,484
  157,575
  167,045
  176,916
Revenue / Adjusted assets
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
  1.547
Average production assets, $m
  3,909
  4,783
  5,770
  6,870
  8,084
  9,409
  10,845
  12,388
  14,037
  15,789
  17,640
  19,591
  21,638
  23,782
  26,021
  28,356
  30,788
  33,318
  35,949
  38,684
  41,526
  44,479
  47,548
  50,739
  54,057
  57,509
  61,101
  64,842
  68,739
  72,801
Working capital, $m
  2,469
  3,021
  3,644
  4,339
  5,106
  5,943
  6,850
  7,824
  8,866
  9,972
  11,141
  12,373
  13,666
  15,020
  16,434
  17,909
  19,445
  21,043
  22,705
  24,432
  26,227
  28,092
  30,030
  32,046
  34,141
  36,321
  38,590
  40,953
  43,414
  45,980
Total debt, $m
  3,287
  4,328
  5,503
  6,814
  8,259
  9,837
  11,546
  13,384
  15,347
  17,433
  19,638
  21,960
  24,398
  26,951
  29,617
  32,397
  35,293
  38,306
  41,439
  44,696
  48,080
  51,596
  55,251
  59,050
  63,001
  67,112
  71,390
  75,844
  80,485
  85,321
Total liabilities, $m
  4,654
  5,696
  6,871
  8,181
  9,626
  11,204
  12,914
  14,752
  16,715
  18,800
  21,005
  23,328
  25,766
  28,318
  30,985
  33,765
  36,661
  39,674
  42,807
  46,063
  49,447
  52,964
  56,619
  60,418
  64,369
  68,479
  72,757
  77,212
  81,852
  86,689
Total equity, $m
  4,844
  5,928
  7,151
  8,515
  10,019
  11,662
  13,441
  15,354
  17,397
  19,568
  21,863
  24,280
  26,818
  29,474
  32,249
  35,143
  38,157
  41,293
  44,554
  47,943
  51,465
  55,126
  58,930
  62,884
  66,996
  71,274
  75,727
  80,363
  85,193
  90,227
Total liabilities and equity, $m
  9,498
  11,624
  14,022
  16,696
  19,645
  22,866
  26,355
  30,106
  34,112
  38,368
  42,868
  47,608
  52,584
  57,792
  63,234
  68,908
  74,818
  80,967
  87,361
  94,006
  100,912
  108,090
  115,549
  123,302
  131,365
  139,753
  148,484
  157,575
  167,045
  176,916
Debt-to-equity ratio
  0.680
  0.730
  0.770
  0.800
  0.820
  0.840
  0.860
  0.870
  0.880
  0.890
  0.900
  0.900
  0.910
  0.910
  0.920
  0.920
  0.920
  0.930
  0.930
  0.930
  0.930
  0.940
  0.940
  0.940
  0.940
  0.940
  0.940
  0.940
  0.940
  0.950
Adjusted equity ratio
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,722
  2,361
  3,084
  3,893
  4,787
  5,765
  6,826
  7,967
  9,187
  10,484
  11,908
  13,354
  14,872
  16,463
  18,125
  19,859
  21,665
  23,546
  25,501
  27,535
  29,648
  31,846
  34,130
  36,506
  38,977
  41,549
  44,226
  47,015
  49,922
  52,953
Depreciation, amort., depletion, $m
  425
  505
  595
  695
  805
  925
  1,056
  1,196
  1,346
  1,505
  1,604
  1,781
  1,967
  2,162
  2,366
  2,578
  2,799
  3,029
  3,268
  3,517
  3,775
  4,044
  4,323
  4,613
  4,914
  5,228
  5,555
  5,895
  6,249
  6,618
Funds from operations, $m
  2,147
  2,865
  3,679
  4,588
  5,592
  6,690
  7,881
  9,163
  10,533
  11,990
  13,511
  15,135
  16,840
  18,625
  20,491
  22,437
  24,464
  26,575
  28,769
  31,051
  33,423
  35,889
  38,453
  41,118
  43,891
  46,777
  49,781
  52,910
  56,171
  59,571
Change in working capital, $m
  483
  552
  623
  695
  766
  837
  907
  975
  1,041
  1,106
  1,170
  1,232
  1,293
  1,354
  1,414
  1,475
  1,536
  1,598
  1,662
  1,727
  1,795
  1,865
  1,939
  2,015
  2,096
  2,180
  2,269
  2,363
  2,461
  2,565
Cash from operations, $m
  1,664
  2,313
  3,056
  3,893
  4,826
  5,853
  6,975
  8,188
  9,492
  10,883
  12,342
  13,903
  15,546
  17,271
  19,076
  20,962
  22,928
  24,976
  27,108
  29,324
  31,629
  34,024
  36,514
  39,103
  41,796
  44,597
  47,512
  50,548
  53,710
  57,006
Maintenance CAPEX, $m
  -286
  -355
  -435
  -525
  -625
  -735
  -855
  -986
  -1,126
  -1,276
  -1,435
  -1,604
  -1,781
  -1,967
  -2,162
  -2,366
  -2,578
  -2,799
  -3,029
  -3,268
  -3,517
  -3,775
  -4,044
  -4,323
  -4,613
  -4,914
  -5,228
  -5,555
  -5,895
  -6,249
New CAPEX, $m
  -762
  -874
  -987
  -1,100
  -1,214
  -1,325
  -1,436
  -1,543
  -1,649
  -1,751
  -1,852
  -1,950
  -2,047
  -2,143
  -2,239
  -2,335
  -2,432
  -2,530
  -2,631
  -2,735
  -2,842
  -2,953
  -3,069
  -3,191
  -3,318
  -3,452
  -3,593
  -3,741
  -3,897
  -4,062
Cash from investing activities, $m
  -1,048
  -1,229
  -1,422
  -1,625
  -1,839
  -2,060
  -2,291
  -2,529
  -2,775
  -3,027
  -3,287
  -3,554
  -3,828
  -4,110
  -4,401
  -4,701
  -5,010
  -5,329
  -5,660
  -6,003
  -6,359
  -6,728
  -7,113
  -7,514
  -7,931
  -8,366
  -8,821
  -9,296
  -9,792
  -10,311
Free cash flow, $m
  616
  1,083
  1,634
  2,268
  2,987
  3,793
  4,684
  5,659
  6,717
  7,856
  9,055
  10,349
  11,718
  13,161
  14,675
  16,262
  17,919
  19,647
  21,448
  23,321
  25,270
  27,296
  29,401
  31,590
  33,865
  36,231
  38,691
  41,252
  43,918
  46,695
Issuance/(repayment) of debt, $m
  910
  1,041
  1,175
  1,310
  1,445
  1,578
  1,709
  1,838
  1,963
  2,086
  2,205
  2,322
  2,438
  2,552
  2,666
  2,780
  2,896
  3,013
  3,133
  3,256
  3,384
  3,517
  3,655
  3,799
  3,951
  4,110
  4,278
  4,454
  4,640
  4,837
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  
  910
  1,041
  1,175
  1,310
  1,445
  1,578
  1,709
  1,838
  1,963
  2,086
  2,205
  2,322
  2,438
  2,552
  2,666
  2,780
  2,896
  3,013
  3,133
  3,256
  3,384
  3,517
  3,655
  3,799
  3,951
  4,110
  4,278
  4,454
  4,640
  4,837
Total cash flow (excl. dividends), $m
  1,526
  2,125
  2,809
  3,578
  4,432
  5,371
  6,393
  7,497
  8,680
  9,941
  11,260
  12,671
  14,156
  15,713
  17,342
  19,042
  20,815
  22,660
  24,581
  26,578
  28,654
  30,812
  33,056
  35,389
  37,816
  40,341
  42,969
  45,707
  48,559
  51,532
Retained Cash Flow (-), $m
  -947
  -1,084
  -1,223
  -1,364
  -1,504
  -1,643
  -1,779
  -1,913
  -2,043
  -2,171
  -2,295
  -2,417
  -2,537
  -2,657
  -2,775
  -2,894
  -3,014
  -3,136
  -3,261
  -3,389
  -3,522
  -3,660
  -3,804
  -3,954
  -4,112
  -4,278
  -4,453
  -4,636
  -4,830
  -5,034
Prev. year cash balance distribution, $m
  38
  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
  617
  1,041
  1,586
  2,214
  2,928
  3,728
  4,614
  5,584
  6,637
  7,771
  8,964
  10,254
  11,619
  13,056
  14,567
  16,148
  17,801
  19,524
  21,320
  23,188
  25,132
  27,152
  29,252
  31,435
  33,704
  36,063
  38,517
  41,070
  43,729
  46,497
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
  592
  953
  1,380
  1,823
  2,270
  2,706
  3,117
  3,490
  3,813
  4,074
  4,257
  4,376
  4,418
  4,383
  4,276
  4,104
  3,873
  3,596
  3,283
  2,947
  2,599
  2,253
  1,917
  1,601
  1,311
  1,052
  827
  635
  477
  350
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

Steel Dynamics, Inc. is a steel producing and a metal recycling company. The Company is engaged in the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and fabrication and sale of steel joists and deck products. Its segments include steel operations, metals recycling operations, steel fabrication operations and Other Operations. It offers a range of steel products, such as sheet products, long products and steel finishing. The steel operations segment includes Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia and Iron Dynamics. The metals recycling operations segment consists of OmniSource Corporation. The fabrication operations produce steel building components. The Other Operations segment consists of subsidiary operations and smaller joint ventures.

FINANCIAL RATIOS  of  Steel Dynamics, Inc. (STLD)

Valuation Ratios
P/E Ratio 16.9
Price to Sales 0.8
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 7.6
Price to Free Cash Flow 9.8
Growth Rates
Sales Growth Rate 2.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 72.2%
Cap. Spend. - 3 Yr. Gr. Rate 1.1%
Financial Strength
Quick Ratio 211
Current Ratio 0.1
LT Debt to Equity 80.4%
Total Debt to Equity 80.5%
Interest Coverage 5
Management Effectiveness
Return On Assets 7.6%
Ret/ On Assets - 3 Yr. Avg. 3.5%
Return On Total Capital 7.2%
Ret/ On T. Cap. - 3 Yr. Avg. 2.6%
Return On Equity 13.6%
Return On Equity - 3 Yr. Avg. 4.9%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 17.2%
Gross Margin - 3 Yr. Avg. 12.6%
EBITDA Margin 13%
EBITDA Margin - 3 Yr. Avg. 7.3%
Operating Margin 9.4%
Oper. Margin - 3 Yr. Avg. 4%
Pre-Tax Margin 7.3%
Pre-Tax Margin - 3 Yr. Avg. 2%
Net Profit Margin 4.9%
Net Profit Margin - 3 Yr. Avg. 1.7%
Effective Tax Rate 36.2%
Eff/ Tax Rate - 3 Yr. Avg. 40.2%
Payout Ratio 35.6%

STLD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the STLD stock intrinsic value calculation we used $11822 million for the last fiscal year's total revenue generated by Steel Dynamics, Inc.. The default revenue input number comes from 0001 income statement of Steel Dynamics, Inc.. 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 STLD stock valuation model: a) initial revenue growth rate of 24.3% 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 4.3%, whose default value for STLD is calculated based on our internal credit rating of Steel Dynamics, Inc., 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 Steel Dynamics, Inc..
    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 STLD stock the variable cost ratio is equal to 71.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1710 million in the base year in the intrinsic value calculation for STLD 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 Steel Dynamics, Inc..

Corporate tax rate of 27% is the nominal tax rate for Steel Dynamics, Inc.. 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 STLD 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 STLD are equal to 26.6%.

Life of production assets of 11 years is the average useful life of capital assets used in Steel Dynamics, Inc. 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 STLD is equal to 16.8%. 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 - $3935.071 million for Steel Dynamics, Inc. - 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 224.089 million for Steel Dynamics, Inc. 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 Steel Dynamics, Inc. at the current share price and the inputted number of shares is $5.9 billion.

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