Intrinsic value of Stryker - SYK

Previous Close

$166.21

  Intrinsic Value

$73.42

stock screener

  Rating & Target

str. sell

-56%

Previous close

$166.21

 
Intrinsic value

$73.42

 
Up/down potential

-56%

 
Rating

str. sell

We calculate the intrinsic value of SYK 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 62.2

 

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, %
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  13,676
  14,963
  16,305
  17,703
  19,157
  20,669
  22,241
  23,874
  25,571
  27,335
  29,169
  31,076
  33,060
  35,124
  37,274
  39,514
  41,849
  44,283
  46,823
  49,474
  52,242
  55,135
  58,157
  61,318
  64,623
  68,082
  71,702
  75,491
  79,459
  83,615
Variable operating expenses, $m
  10,958
  11,889
  12,860
  13,872
  14,924
  16,018
  17,155
  18,336
  19,564
  20,840
  21,102
  22,482
  23,917
  25,411
  26,966
  28,587
  30,276
  32,037
  33,874
  35,792
  37,795
  39,888
  42,074
  44,361
  46,752
  49,254
  51,873
  54,614
  57,485
  60,492
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
  10,958
  11,889
  12,860
  13,872
  14,924
  16,018
  17,155
  18,336
  19,564
  20,840
  21,102
  22,482
  23,917
  25,411
  26,966
  28,587
  30,276
  32,037
  33,874
  35,792
  37,795
  39,888
  42,074
  44,361
  46,752
  49,254
  51,873
  54,614
  57,485
  60,492
Operating income, $m
  2,717
  3,073
  3,445
  3,831
  4,233
  4,651
  5,086
  5,538
  6,007
  6,495
  8,066
  8,594
  9,142
  9,713
  10,308
  10,927
  11,573
  12,246
  12,949
  13,682
  14,447
  15,247
  16,083
  16,957
  17,871
  18,828
  19,829
  20,877
  21,974
  23,123
EBITDA, $m
  5,103
  5,583
  6,084
  6,606
  7,148
  7,712
  8,299
  8,908
  9,542
  10,200
  10,884
  11,596
  12,336
  13,106
  13,909
  14,744
  15,616
  16,524
  17,472
  18,461
  19,494
  20,573
  21,701
  22,880
  24,114
  25,404
  26,755
  28,169
  29,650
  31,201
Interest expense (income), $m
  180
  390
  454
  522
  593
  667
  744
  825
  908
  994
  1,084
  1,177
  1,275
  1,375
  1,480
  1,590
  1,704
  1,822
  1,946
  2,075
  2,209
  2,349
  2,496
  2,649
  2,809
  2,977
  3,152
  3,335
  3,526
  3,727
  3,937
Earnings before tax, $m
  2,328
  2,619
  2,922
  3,238
  3,566
  3,907
  4,261
  4,630
  5,013
  5,411
  6,889
  7,319
  7,767
  8,233
  8,718
  9,224
  9,751
  10,300
  10,874
  11,473
  12,098
  12,751
  13,434
  14,148
  14,895
  15,676
  16,494
  17,350
  18,247
  19,186
Tax expense, $m
  628
  707
  789
  874
  963
  1,055
  1,151
  1,250
  1,353
  1,461
  1,860
  1,976
  2,097
  2,223
  2,354
  2,490
  2,633
  2,781
  2,936
  3,098
  3,266
  3,443
  3,627
  3,820
  4,022
  4,233
  4,453
  4,685
  4,927
  5,180
Net income, $m
  1,699
  1,912
  2,133
  2,363
  2,603
  2,852
  3,111
  3,380
  3,659
  3,950
  5,029
  5,343
  5,670
  6,010
  6,364
  6,733
  7,118
  7,519
  7,938
  8,375
  8,831
  9,308
  9,807
  10,328
  10,873
  11,444
  12,041
  12,666
  13,320
  14,006

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
  24,378
  26,672
  29,064
  31,555
  34,148
  36,843
  39,645
  42,556
  45,581
  48,726
  51,994
  55,394
  58,930
  62,610
  66,443
  70,435
  74,597
  78,936
  83,463
  88,189
  93,124
  98,279
  103,667
  109,301
  115,193
  121,358
  127,810
  134,565
  141,638
  149,047
Adjusted assets (=assets-cash), $m
  24,378
  26,672
  29,064
  31,555
  34,148
  36,843
  39,645
  42,556
  45,581
  48,726
  51,994
  55,394
  58,930
  62,610
  66,443
  70,435
  74,597
  78,936
  83,463
  88,189
  93,124
  98,279
  103,667
  109,301
  115,193
  121,358
  127,810
  134,565
  141,638
  149,047
Revenue / Adjusted assets
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
Average production assets, $m
  13,211
  14,454
  15,751
  17,101
  18,505
  19,966
  21,484
  23,062
  24,702
  26,406
  28,177
  30,019
  31,936
  33,930
  36,007
  38,171
  40,426
  42,777
  45,231
  47,792
  50,466
  53,260
  56,180
  59,233
  62,426
  65,767
  69,264
  72,924
  76,758
  80,773
Working capital, $m
  2,174
  2,379
  2,592
  2,815
  3,046
  3,286
  3,536
  3,796
  4,066
  4,346
  4,638
  4,941
  5,256
  5,585
  5,927
  6,283
  6,654
  7,041
  7,445
  7,866
  8,307
  8,766
  9,247
  9,750
  10,275
  10,825
  11,401
  12,003
  12,634
  13,295
Total debt, $m
  8,413
  9,674
  10,990
  12,360
  13,786
  15,269
  16,810
  18,411
  20,075
  21,804
  23,602
  25,472
  27,416
  29,441
  31,549
  33,744
  36,033
  38,420
  40,910
  43,509
  46,223
  49,059
  52,022
  55,121
  58,361
  61,752
  65,301
  69,016
  72,906
  76,981
Total liabilities, $m
  13,408
  14,669
  15,985
  17,355
  18,781
  20,264
  21,805
  23,406
  25,070
  26,799
  28,597
  30,467
  32,411
  34,436
  36,544
  38,739
  41,028
  43,415
  45,905
  48,504
  51,218
  54,054
  57,017
  60,116
  63,356
  66,747
  70,296
  74,011
  77,901
  81,976
Total equity, $m
  10,970
  12,002
  13,079
  14,200
  15,366
  16,579
  17,840
  19,150
  20,512
  21,927
  23,398
  24,927
  26,518
  28,175
  29,899
  31,696
  33,568
  35,521
  37,559
  39,685
  41,906
  44,226
  46,650
  49,185
  51,837
  54,611
  57,515
  60,554
  63,737
  67,071
Total liabilities and equity, $m
  24,378
  26,671
  29,064
  31,555
  34,147
  36,843
  39,645
  42,556
  45,582
  48,726
  51,995
  55,394
  58,929
  62,611
  66,443
  70,435
  74,596
  78,936
  83,464
  88,189
  93,124
  98,280
  103,667
  109,301
  115,193
  121,358
  127,811
  134,565
  141,638
  149,047
Debt-to-equity ratio
  0.770
  0.810
  0.840
  0.870
  0.900
  0.920
  0.940
  0.960
  0.980
  0.990
  1.010
  1.020
  1.030
  1.040
  1.060
  1.060
  1.070
  1.080
  1.090
  1.100
  1.100
  1.110
  1.120
  1.120
  1.130
  1.130
  1.140
  1.140
  1.140
  1.150
Adjusted equity ratio
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,699
  1,912
  2,133
  2,363
  2,603
  2,852
  3,111
  3,380
  3,659
  3,950
  5,029
  5,343
  5,670
  6,010
  6,364
  6,733
  7,118
  7,519
  7,938
  8,375
  8,831
  9,308
  9,807
  10,328
  10,873
  11,444
  12,041
  12,666
  13,320
  14,006
Depreciation, amort., depletion, $m
  2,386
  2,510
  2,640
  2,775
  2,915
  3,061
  3,213
  3,371
  3,535
  3,705
  2,818
  3,002
  3,194
  3,393
  3,601
  3,817
  4,043
  4,278
  4,523
  4,779
  5,047
  5,326
  5,618
  5,923
  6,243
  6,577
  6,926
  7,292
  7,676
  8,077
Funds from operations, $m
  4,085
  4,422
  4,773
  5,138
  5,518
  5,913
  6,324
  6,751
  7,194
  7,655
  7,847
  8,345
  8,863
  9,403
  9,965
  10,550
  11,161
  11,797
  12,461
  13,154
  13,878
  14,634
  15,425
  16,251
  17,116
  18,020
  18,967
  19,958
  20,996
  22,083
Change in working capital, $m
  196
  205
  213
  222
  231
  240
  250
  260
  270
  280
  292
  303
  315
  328
  342
  356
  371
  387
  404
  422
  440
  460
  481
  503
  526
  550
  576
  603
  631
  661
Cash from operations, $m
  3,889
  4,217
  4,559
  4,916
  5,287
  5,673
  6,074
  6,491
  6,924
  7,374
  7,555
  8,042
  8,548
  9,075
  9,623
  10,194
  10,789
  11,410
  12,057
  12,733
  13,438
  14,174
  14,944
  15,749
  16,590
  17,470
  18,391
  19,356
  20,365
  21,422
Maintenance CAPEX, $m
  -1,203
  -1,321
  -1,445
  -1,575
  -1,710
  -1,851
  -1,997
  -2,148
  -2,306
  -2,470
  -2,641
  -2,818
  -3,002
  -3,194
  -3,393
  -3,601
  -3,817
  -4,043
  -4,278
  -4,523
  -4,779
  -5,047
  -5,326
  -5,618
  -5,923
  -6,243
  -6,577
  -6,926
  -7,292
  -7,676
New CAPEX, $m
  -1,184
  -1,243
  -1,296
  -1,350
  -1,405
  -1,461
  -1,518
  -1,578
  -1,640
  -1,704
  -1,771
  -1,842
  -1,916
  -1,995
  -2,077
  -2,164
  -2,255
  -2,352
  -2,453
  -2,561
  -2,674
  -2,794
  -2,920
  -3,053
  -3,193
  -3,341
  -3,497
  -3,661
  -3,833
  -4,015
Cash from investing activities, $m
  -2,387
  -2,564
  -2,741
  -2,925
  -3,115
  -3,312
  -3,515
  -3,726
  -3,946
  -4,174
  -4,412
  -4,660
  -4,918
  -5,189
  -5,470
  -5,765
  -6,072
  -6,395
  -6,731
  -7,084
  -7,453
  -7,841
  -8,246
  -8,671
  -9,116
  -9,584
  -10,074
  -10,587
  -11,125
  -11,691
Free cash flow, $m
  1,502
  1,653
  1,817
  1,991
  2,172
  2,361
  2,559
  2,765
  2,978
  3,200
  3,143
  3,382
  3,630
  3,887
  4,153
  4,430
  4,717
  5,016
  5,326
  5,649
  5,984
  6,334
  6,698
  7,078
  7,474
  7,887
  8,318
  8,769
  9,239
  9,732
Issuance/(repayment) of debt, $m
  1,191
  1,262
  1,316
  1,370
  1,426
  1,482
  1,541
  1,601
  1,664
  1,729
  1,798
  1,870
  1,945
  2,024
  2,108
  2,196
  2,289
  2,387
  2,490
  2,599
  2,714
  2,836
  2,964
  3,098
  3,241
  3,391
  3,549
  3,715
  3,890
  4,075
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  
  1,191
  1,262
  1,316
  1,370
  1,426
  1,482
  1,541
  1,601
  1,664
  1,729
  1,798
  1,870
  1,945
  2,024
  2,108
  2,196
  2,289
  2,387
  2,490
  2,599
  2,714
  2,836
  2,964
  3,098
  3,241
  3,391
  3,549
  3,715
  3,890
  4,075
Total cash flow (excl. dividends), $m
  2,692
  2,915
  3,133
  3,361
  3,598
  3,844
  4,100
  4,366
  4,642
  4,930
  4,941
  5,252
  5,575
  5,911
  6,261
  6,626
  7,006
  7,402
  7,816
  8,248
  8,698
  9,169
  9,662
  10,176
  10,714
  11,278
  11,867
  12,484
  13,130
  13,807
Retained Cash Flow (-), $m
  -990
  -1,032
  -1,076
  -1,121
  -1,167
  -1,213
  -1,261
  -1,310
  -1,361
  -1,415
  -1,471
  -1,530
  -1,591
  -1,656
  -1,725
  -1,797
  -1,873
  -1,953
  -2,037
  -2,127
  -2,221
  -2,320
  -2,425
  -2,535
  -2,652
  -2,774
  -2,903
  -3,040
  -3,183
  -3,334
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
  112
  123
  135
  147
  159
  172
  186
  200
  215
  230
  246
  263
  280
  298
  316
  335
  356
  377
  399
  421
  445
  470
  496
  523
  552
  582
  613
  645
  679
  715
Cash available for distribution, $m
  1,702
  1,882
  2,057
  2,240
  2,431
  2,631
  2,839
  3,056
  3,281
  3,515
  3,470
  3,722
  3,983
  4,255
  4,537
  4,829
  5,133
  5,450
  5,779
  6,121
  6,478
  6,849
  7,237
  7,641
  8,063
  8,503
  8,963
  9,444
  9,947
  10,473
Discount rate, %
  5.50
  5.78
  6.06
  6.37
  6.69
  7.02
  7.37
  7.74
  8.13
  8.53
  8.96
  9.41
  9.88
  10.37
  10.89
  11.43
  12.01
  12.61
  13.24
  13.90
  14.59
  15.32
  16.09
  16.89
  17.74
  18.62
  19.56
  20.53
  21.56
  22.64
PV of cash for distribution, $m
  1,614
  1,682
  1,724
  1,750
  1,759
  1,751
  1,726
  1,683
  1,624
  1,550
  1,350
  1,265
  1,171
  1,069
  962
  854
  747
  643
  545
  453
  371
  298
  234
  180
  136
  100
  72
  51
  35
  23
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

Stryker Corporation is a medical technology company. The Company offers a range of medical technologies, including orthopedic, medical and surgical, and neurotechnology and spine products. The Company's segments include Orthopaedics; MedSurg; Neurotechnology and Spine, and Corporate and Other. The Orthopaedics segment includes reconstructive (hip and knee) and trauma implant systems and other related products. The MedSurg segment includes surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment, intensive care disposable products; reprocessed and remanufactured medical devices, and other related products. The Neurotechnology and Spine segment includes neurovascular products, spinal implant systems and other related products. The Company's products include implants, which are used in joint replacement and trauma surgeries, and other products that are used in a range of medical specialties.

FINANCIAL RATIOS  of  Stryker (SYK)

Valuation Ratios
P/E Ratio 37.8
Price to Sales 5.5
Price to Book 6.5
Price to Tangible Book
Price to Cash Flow 34.4
Price to Free Cash Flow 47.1
Growth Rates
Sales Growth Rate 13.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 81.5%
Cap. Spend. - 3 Yr. Gr. Rate 20.2%
Financial Strength
Quick Ratio 15
Current Ratio 0
LT Debt to Equity 70%
Total Debt to Equity 72.4%
Interest Coverage 12
Management Effectiveness
Return On Assets 9.8%
Ret/ On Assets - 3 Yr. Avg. 7.3%
Return On Total Capital 11.4%
Ret/ On T. Cap. - 3 Yr. Avg. 9%
Return On Equity 18.2%
Return On Equity - 3 Yr. Avg. 13.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 66.6%
Gross Margin - 3 Yr. Avg. 66.2%
EBITDA Margin 23.4%
EBITDA Margin - 3 Yr. Avg. 20.6%
Operating Margin 19.1%
Oper. Margin - 3 Yr. Avg. 16.9%
Pre-Tax Margin 17%
Pre-Tax Margin - 3 Yr. Avg. 15.5%
Net Profit Margin 14.5%
Net Profit Margin - 3 Yr. Avg. 11.4%
Effective Tax Rate 14.3%
Eff/ Tax Rate - 3 Yr. Avg. 29%
Payout Ratio 34.5%

SYK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SYK stock intrinsic value calculation we used $12444 million for the last fiscal year's total revenue generated by Stryker. The default revenue input number comes from 2017 income statement of Stryker. 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 SYK stock valuation model: a) initial revenue growth rate of 9.9% 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 5.5%, whose default value for SYK is calculated based on our internal credit rating of Stryker, 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 Stryker.
    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 SYK stock the variable cost ratio is equal to 80.9%.

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 SYK 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 Stryker.

Corporate tax rate of 27% is the nominal tax rate for Stryker. 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 SYK stock is equal to 0.9%.

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 SYK are equal to 96.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Stryker 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 SYK is equal to 15.9%. 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 - $9980 million for Stryker - 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 374 million for Stryker 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 Stryker at the current share price and the inputted number of shares is $62.2 billion.

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