Intrinsic value of Steel Dynamics - STLD

Previous Close

$46.96

  Intrinsic Value

$124.21

stock screener

  Rating & Target

str. buy

+165%

Previous close

$46.96

 
Intrinsic value

$124.21

 
Up/down potential

+165%

 
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 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 11.3

 

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, %
  22.70
  20.93
  19.34
  17.90
  16.61
  15.45
  14.41
  13.47
  12.62
  11.86
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
Revenue, $m
  11,704
  14,154
  16,891
  19,915
  23,224
  26,812
  30,675
  34,805
  39,197
  43,845
  48,743
  53,888
  59,276
  64,907
  70,781
  76,899
  83,266
  89,887
  96,770
  103,922
  111,355
  119,079
  127,108
  135,458
  144,143
  153,182
  162,593
  172,396
  182,613
  193,266
Variable operating expenses, $m
  9,442
  11,405
  13,598
  16,021
  18,672
  21,548
  24,642
  27,952
  31,471
  35,195
  39,056
  43,178
  47,495
  52,007
  56,713
  61,615
  66,717
  72,022
  77,537
  83,267
  89,223
  95,412
  101,845
  108,535
  115,495
  122,737
  130,277
  138,132
  146,318
  154,854
Fixed operating expenses, $m
  801
  819
  837
  855
  874
  893
  913
  933
  954
  975
  996
  1,018
  1,040
  1,063
  1,087
  1,111
  1,135
  1,160
  1,185
  1,212
  1,238
  1,265
  1,293
  1,322
  1,351
  1,381
  1,411
  1,442
  1,474
  1,506
Total operating expenses, $m
  10,243
  12,224
  14,435
  16,876
  19,546
  22,441
  25,555
  28,885
  32,425
  36,170
  40,052
  44,196
  48,535
  53,070
  57,800
  62,726
  67,852
  73,182
  78,722
  84,479
  90,461
  96,677
  103,138
  109,857
  116,846
  124,118
  131,688
  139,574
  147,792
  156,360
Operating income, $m
  1,461
  1,930
  2,456
  3,038
  3,677
  4,371
  5,119
  5,920
  6,773
  7,675
  8,692
  9,692
  10,741
  11,837
  12,981
  14,173
  15,414
  16,705
  18,048
  19,443
  20,894
  22,402
  23,970
  25,601
  27,298
  29,065
  30,905
  32,822
  34,821
  36,906
EBITDA, $m
  1,942
  2,498
  3,122
  3,812
  4,568
  5,390
  6,276
  7,224
  8,232
  9,301
  10,427
  11,611
  12,851
  14,148
  15,501
  16,911
  18,379
  19,905
  21,493
  23,143
  24,858
  26,641
  28,495
  30,423
  32,429
  34,518
  36,693
  38,959
  41,322
  43,786
Interest expense (income), $m
  151
  134
  179
  230
  287
  349
  418
  493
  573
  658
  750
  846
  948
  1,055
  1,166
  1,283
  1,405
  1,532
  1,664
  1,802
  1,945
  2,093
  2,247
  2,408
  2,574
  2,748
  2,928
  3,116
  3,311
  3,514
  3,726
Earnings before tax, $m
  1,326
  1,751
  2,226
  2,752
  3,328
  3,953
  4,627
  5,347
  6,114
  6,926
  7,846
  8,745
  9,686
  10,671
  11,698
  12,768
  13,882
  15,041
  16,246
  17,498
  18,801
  20,154
  21,562
  23,026
  24,550
  26,137
  27,789
  29,511
  31,307
  33,179
Tax expense, $m
  358
  473
  601
  743
  898
  1,067
  1,249
  1,444
  1,651
  1,870
  2,118
  2,361
  2,615
  2,881
  3,158
  3,447
  3,748
  4,061
  4,386
  4,725
  5,076
  5,442
  5,822
  6,217
  6,629
  7,057
  7,503
  7,968
  8,453
  8,958
Net income, $m
  968
  1,278
  1,625
  2,009
  2,429
  2,886
  3,377
  3,904
  4,463
  5,056
  5,727
  6,384
  7,071
  7,790
  8,539
  9,321
  10,134
  10,980
  11,860
  12,774
  13,724
  14,713
  15,740
  16,809
  17,922
  19,080
  20,286
  21,543
  22,854
  24,221

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
  8,196
  9,912
  11,828
  13,946
  16,263
  18,776
  21,481
  24,373
  27,449
  30,704
  34,134
  37,737
  41,510
  45,453
  49,566
  53,851
  58,310
  62,946
  67,766
  72,775
  77,979
  83,389
  89,012
  94,858
  100,941
  107,270
  113,861
  120,726
  127,880
  135,340
Adjusted assets (=assets-cash), $m
  8,196
  9,912
  11,828
  13,946
  16,263
  18,776
  21,481
  24,373
  27,449
  30,704
  34,134
  37,737
  41,510
  45,453
  49,566
  53,851
  58,310
  62,946
  67,766
  72,775
  77,979
  83,389
  89,012
  94,858
  100,941
  107,270
  113,861
  120,726
  127,880
  135,340
Revenue / Adjusted assets
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
  1.428
Average production assets, $m
  4,167
  5,039
  6,013
  7,090
  8,268
  9,545
  10,920
  12,391
  13,954
  15,609
  17,353
  19,184
  21,102
  23,107
  25,198
  27,376
  29,643
  32,000
  34,450
  36,996
  39,642
  42,392
  45,251
  48,223
  51,315
  54,533
  57,883
  61,373
  65,010
  68,803
Working capital, $m
  1,264
  1,529
  1,824
  2,151
  2,508
  2,896
  3,313
  3,759
  4,233
  4,735
  5,264
  5,820
  6,402
  7,010
  7,644
  8,305
  8,993
  9,708
  10,451
  11,224
  12,026
  12,861
  13,728
  14,629
  15,567
  16,544
  17,560
  18,619
  19,722
  20,873
Total debt, $m
  3,140
  4,032
  5,029
  6,130
  7,335
  8,642
  10,048
  11,552
  13,152
  14,844
  16,628
  18,501
  20,463
  22,514
  24,653
  26,881
  29,199
  31,610
  34,117
  36,721
  39,427
  42,240
  45,164
  48,205
  51,367
  54,659
  58,086
  61,655
  65,376
  69,255
Total liabilities, $m
  4,262
  5,154
  6,151
  7,252
  8,457
  9,763
  11,170
  12,674
  14,274
  15,966
  17,750
  19,623
  21,585
  23,636
  25,774
  28,002
  30,321
  32,732
  35,238
  37,843
  40,549
  43,362
  46,286
  49,326
  52,489
  55,781
  59,208
  62,777
  66,498
  70,377
Total equity, $m
  3,934
  4,758
  5,678
  6,694
  7,806
  9,012
  10,311
  11,699
  13,176
  14,738
  16,384
  18,114
  19,925
  21,818
  23,792
  25,848
  27,989
  30,214
  32,528
  34,932
  37,430
  40,027
  42,726
  45,532
  48,452
  51,490
  54,653
  57,948
  61,382
  64,963
Total liabilities and equity, $m
  8,196
  9,912
  11,829
  13,946
  16,263
  18,775
  21,481
  24,373
  27,450
  30,704
  34,134
  37,737
  41,510
  45,454
  49,566
  53,850
  58,310
  62,946
  67,766
  72,775
  77,979
  83,389
  89,012
  94,858
  100,941
  107,271
  113,861
  120,725
  127,880
  135,340
Debt-to-equity ratio
  0.800
  0.850
  0.890
  0.920
  0.940
  0.960
  0.970
  0.990
  1.000
  1.010
  1.010
  1.020
  1.030
  1.030
  1.040
  1.040
  1.040
  1.050
  1.050
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.070
  1.070
Adjusted equity ratio
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  968
  1,278
  1,625
  2,009
  2,429
  2,886
  3,377
  3,904
  4,463
  5,056
  5,727
  6,384
  7,071
  7,790
  8,539
  9,321
  10,134
  10,980
  11,860
  12,774
  13,724
  14,713
  15,740
  16,809
  17,922
  19,080
  20,286
  21,543
  22,854
  24,221
Depreciation, amort., depletion, $m
  481
  568
  666
  773
  891
  1,019
  1,156
  1,303
  1,460
  1,625
  1,735
  1,918
  2,110
  2,311
  2,520
  2,738
  2,964
  3,200
  3,445
  3,700
  3,964
  4,239
  4,525
  4,822
  5,131
  5,453
  5,788
  6,137
  6,501
  6,880
Funds from operations, $m
  1,449
  1,846
  2,291
  2,782
  3,320
  3,905
  4,534
  5,207
  5,923
  6,681
  7,463
  8,302
  9,181
  10,100
  11,059
  12,058
  13,098
  14,180
  15,305
  16,474
  17,689
  18,952
  20,265
  21,632
  23,053
  24,533
  26,074
  27,680
  29,355
  31,101
Change in working capital, $m
  234
  265
  296
  327
  357
  388
  417
  446
  474
  502
  529
  556
  582
  608
  634
  661
  688
  715
  743
  772
  803
  834
  867
  902
  938
  976
  1,016
  1,059
  1,103
  1,151
Cash from operations, $m
  1,216
  1,582
  1,995
  2,456
  2,963
  3,517
  4,117
  4,761
  5,449
  6,179
  6,934
  7,746
  8,599
  9,492
  10,425
  11,398
  12,411
  13,465
  14,561
  15,701
  16,886
  18,118
  19,398
  20,730
  22,115
  23,557
  25,058
  26,622
  28,251
  29,951
Maintenance CAPEX, $m
  -339
  -417
  -504
  -601
  -709
  -827
  -955
  -1,092
  -1,239
  -1,395
  -1,561
  -1,735
  -1,918
  -2,110
  -2,311
  -2,520
  -2,738
  -2,964
  -3,200
  -3,445
  -3,700
  -3,964
  -4,239
  -4,525
  -4,822
  -5,131
  -5,453
  -5,788
  -6,137
  -6,501
New CAPEX, $m
  -775
  -872
  -974
  -1,077
  -1,178
  -1,277
  -1,375
  -1,470
  -1,564
  -1,655
  -1,744
  -1,831
  -1,918
  -2,005
  -2,091
  -2,178
  -2,267
  -2,357
  -2,450
  -2,546
  -2,646
  -2,750
  -2,859
  -2,972
  -3,092
  -3,218
  -3,350
  -3,490
  -3,637
  -3,792
Cash from investing activities, $m
  -1,114
  -1,289
  -1,478
  -1,678
  -1,887
  -2,104
  -2,330
  -2,562
  -2,803
  -3,050
  -3,305
  -3,566
  -3,836
  -4,115
  -4,402
  -4,698
  -5,005
  -5,321
  -5,650
  -5,991
  -6,346
  -6,714
  -7,098
  -7,497
  -7,914
  -8,349
  -8,803
  -9,278
  -9,774
  -10,293
Free cash flow, $m
  102
  293
  517
  778
  1,076
  1,413
  1,787
  2,198
  2,646
  3,129
  3,629
  4,180
  4,763
  5,377
  6,023
  6,700
  7,406
  8,143
  8,911
  9,710
  10,540
  11,404
  12,300
  13,232
  14,201
  15,208
  16,254
  17,343
  18,477
  19,657
Issuance/(repayment) of debt, $m
  787
  892
  997
  1,101
  1,205
  1,307
  1,407
  1,504
  1,599
  1,692
  1,784
  1,873
  1,962
  2,050
  2,139
  2,228
  2,319
  2,411
  2,506
  2,604
  2,706
  2,813
  2,924
  3,040
  3,163
  3,291
  3,427
  3,570
  3,720
  3,879
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  
  787
  892
  997
  1,101
  1,205
  1,307
  1,407
  1,504
  1,599
  1,692
  1,784
  1,873
  1,962
  2,050
  2,139
  2,228
  2,319
  2,411
  2,506
  2,604
  2,706
  2,813
  2,924
  3,040
  3,163
  3,291
  3,427
  3,570
  3,720
  3,879
Total cash flow (excl. dividends), $m
  889
  1,185
  1,514
  1,879
  2,281
  2,720
  3,194
  3,703
  4,245
  4,821
  5,413
  6,053
  6,725
  7,428
  8,162
  8,928
  9,725
  10,554
  11,417
  12,314
  13,247
  14,216
  15,224
  16,273
  17,364
  18,499
  19,681
  20,913
  22,197
  23,536
Retained Cash Flow (-), $m
  -731
  -823
  -920
  -1,016
  -1,112
  -1,206
  -1,298
  -1,388
  -1,476
  -1,562
  -1,646
  -1,729
  -1,811
  -1,893
  -1,974
  -2,057
  -2,140
  -2,226
  -2,313
  -2,404
  -2,498
  -2,596
  -2,699
  -2,807
  -2,919
  -3,038
  -3,163
  -3,295
  -3,434
  -3,581
Prev. year cash balance distribution, $m
  148
  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
  38
  47
  57
  68
  80
  93
  107
  123
  139
  157
  175
  195
  216
  237
  260
  283
  308
  333
  360
  387
  416
  445
  476
  508
  542
  577
  613
  650
  690
  730
Cash available for distribution, $m
  307
  362
  594
  862
  1,169
  1,513
  1,895
  2,314
  2,769
  3,259
  3,766
  4,324
  4,914
  5,535
  6,188
  6,871
  7,585
  8,329
  9,104
  9,910
  10,749
  11,620
  12,525
  13,466
  14,444
  15,461
  16,518
  17,618
  18,763
  19,956
Discount rate, %
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
  293
  329
  512
  701
  891
  1,075
  1,247
  1,401
  1,532
  1,636
  1,701
  1,742
  1,751
  1,727
  1,674
  1,594
  1,491
  1,371
  1,238
  1,099
  957
  819
  687
  565
  455
  359
  276
  208
  153
  110
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 (STLD)

Valuation Ratios
P/E Ratio 30
Price to Sales 1.5
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 13.4
Price to Free Cash Flow 17.5
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 $9539 million for the last fiscal year's total revenue generated by Steel Dynamics. The default revenue input number comes from 2017 income statement of Steel Dynamics. 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 22.7% 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 4.6%, whose default value for STLD is calculated based on our internal credit rating of Steel Dynamics, 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.
    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 80.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $784 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 5.7% for Steel Dynamics.

Corporate tax rate of 27% is the nominal tax rate for Steel Dynamics. 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 0.4%.

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 35.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Steel Dynamics 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 10.8%. 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 - $3352 million for Steel Dynamics - 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 240 million for Steel Dynamics 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 at the current share price and the inputted number of shares is $11.3 billion.

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COMPANY NEWS

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