Intrinsic value of TAL Education Group ADR - TAL

Previous Close

$28.12

  Intrinsic Value

$244.55

stock screener

  Rating & Target

str. buy

+770%

Previous close

$28.12

 
Intrinsic value

$244.55

 
Up/down potential

+770%

 
Rating

str. buy

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

We calculate the intrinsic value of TAL 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 9.6

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  2,744
  4,240
  6,340
  9,199
  12,979
  17,843
  23,951
  31,449
  40,467
  51,113
  63,470
  77,599
  93,532
  111,285
  130,851
  152,212
  175,335
  200,184
  226,719
  254,900
  284,689
  316,056
  348,977
  383,438
  419,431
  456,964
  496,051
  536,718
  579,003
  622,953
Variable operating expenses, $m
  2,370
  3,643
  5,432
  7,866
  11,085
  15,226
  20,427
  26,811
  34,490
  43,555
  54,043
  66,073
  79,640
  94,756
  111,416
  129,604
  149,293
  170,452
  193,045
  217,040
  242,405
  269,113
  297,145
  326,487
  357,135
  389,093
  422,374
  457,001
  493,006
  530,428
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
  2,370
  3,643
  5,432
  7,866
  11,085
  15,226
  20,427
  26,811
  34,490
  43,555
  54,043
  66,073
  79,640
  94,756
  111,416
  129,604
  149,293
  170,452
  193,045
  217,040
  242,405
  269,113
  297,145
  326,487
  357,135
  389,093
  422,374
  457,001
  493,006
  530,428
Operating income, $m
  374
  596
  908
  1,333
  1,894
  2,617
  3,524
  4,637
  5,977
  7,558
  9,427
  11,525
  13,892
  16,529
  19,435
  22,607
  26,042
  29,733
  33,674
  37,859
  42,284
  46,943
  51,832
  56,951
  62,297
  67,871
  73,677
  79,717
  85,997
  92,525
EBITDA, $m
  473
  731
  1,093
  1,586
  2,237
  3,076
  4,129
  5,421
  6,976
  8,811
  10,942
  13,377
  16,124
  19,184
  22,558
  26,240
  30,226
  34,510
  39,084
  43,942
  49,078
  54,485
  60,160
  66,101
  72,306
  78,776
  85,514
  92,525
  99,815
  107,391
Interest expense (income), $m
  7
  13
  59
  127
  221
  350
  521
  741
  1,016
  1,354
  1,761
  2,242
  2,800
  3,437
  4,156
  4,957
  5,840
  6,804
  7,848
  8,969
  10,166
  11,438
  12,782
  14,198
  15,684
  17,239
  18,863
  20,557
  22,320
  24,156
  26,064
Earnings before tax, $m
  361
  537
  782
  1,111
  1,544
  2,096
  2,783
  3,621
  4,622
  5,797
  7,185
  8,726
  10,455
  12,373
  14,478
  16,767
  19,238
  21,885
  24,705
  27,693
  30,846
  34,160
  37,635
  41,267
  45,058
  49,008
  53,120
  57,397
  61,842
  66,461
Tax expense, $m
  98
  145
  211
  300
  417
  566
  751
  978
  1,248
  1,565
  1,940
  2,356
  2,823
  3,341
  3,909
  4,527
  5,194
  5,909
  6,670
  7,477
  8,328
  9,223
  10,161
  11,142
  12,166
  13,232
  14,342
  15,497
  16,697
  17,945
Net income, $m
  264
  392
  571
  811
  1,127
  1,530
  2,032
  2,644
  3,374
  4,232
  5,245
  6,370
  7,632
  9,032
  10,569
  12,240
  14,044
  15,976
  18,035
  20,216
  22,517
  24,937
  27,473
  30,125
  32,892
  35,776
  38,778
  41,899
  45,144
  48,517

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
  4,294
  6,635
  9,922
  14,396
  20,311
  27,923
  37,481
  49,215
  63,328
  79,989
  99,328
  121,437
  146,373
  174,155
  204,775
  238,203
  274,390
  313,277
  354,803
  398,904
  445,523
  494,611
  546,130
  600,059
  656,387
  715,124
  776,292
  839,935
  906,108
  974,887
Adjusted assets (=assets-cash), $m
  4,294
  6,635
  9,922
  14,396
  20,311
  27,923
  37,481
  49,215
  63,328
  79,989
  99,328
  121,437
  146,373
  174,155
  204,775
  238,203
  274,390
  313,277
  354,803
  398,904
  445,523
  494,611
  546,130
  600,059
  656,387
  715,124
  776,292
  839,935
  906,108
  974,887
Revenue / Adjusted assets
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
Average production assets, $m
  576
  890
  1,331
  1,932
  2,726
  3,747
  5,030
  6,604
  8,498
  10,734
  13,329
  16,296
  19,642
  23,370
  27,479
  31,964
  36,820
  42,039
  47,611
  53,529
  59,785
  66,372
  73,285
  80,522
  88,081
  95,962
  104,171
  112,711
  121,591
  130,820
Working capital, $m
  -1,561
  -2,412
  -3,608
  -5,234
  -7,385
  -10,153
  -13,628
  -17,894
  -23,026
  -29,083
  -36,115
  -44,154
  -53,220
  -63,321
  -74,454
  -86,608
  -99,766
  -113,905
  -129,003
  -145,038
  -161,988
  -179,836
  -198,568
  -218,176
  -238,656
  -260,012
  -282,253
  -305,393
  -329,453
  -354,460
Total debt, $m
  1,095
  2,345
  4,101
  6,490
  9,648
  13,713
  18,817
  25,083
  32,619
  41,516
  51,843
  63,650
  76,965
  91,801
  108,152
  126,003
  145,326
  166,092
  188,267
  211,817
  236,711
  262,924
  290,436
  319,234
  349,313
  380,678
  413,342
  447,327
  482,664
  519,392
Total liabilities, $m
  2,293
  3,543
  5,298
  7,688
  10,846
  14,911
  20,015
  26,281
  33,817
  42,714
  53,041
  64,848
  78,163
  92,999
  109,350
  127,200
  146,524
  167,290
  189,465
  213,015
  237,909
  264,122
  291,634
  320,431
  350,511
  381,876
  414,540
  448,525
  483,862
  520,590
Total equity, $m
  2,001
  3,092
  4,624
  6,709
  9,465
  13,012
  17,466
  22,934
  29,511
  37,275
  46,287
  56,590
  68,210
  81,156
  95,425
  111,003
  127,866
  145,987
  165,338
  185,889
  207,614
  230,489
  254,497
  279,627
  305,876
  333,248
  361,752
  391,410
  422,246
  454,297
Total liabilities and equity, $m
  4,294
  6,635
  9,922
  14,397
  20,311
  27,923
  37,481
  49,215
  63,328
  79,989
  99,328
  121,438
  146,373
  174,155
  204,775
  238,203
  274,390
  313,277
  354,803
  398,904
  445,523
  494,611
  546,131
  600,058
  656,387
  715,124
  776,292
  839,935
  906,108
  974,887
Debt-to-equity ratio
  0.550
  0.760
  0.890
  0.970
  1.020
  1.050
  1.080
  1.090
  1.110
  1.110
  1.120
  1.120
  1.130
  1.130
  1.130
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
Adjusted equity ratio
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  264
  392
  571
  811
  1,127
  1,530
  2,032
  2,644
  3,374
  4,232
  5,245
  6,370
  7,632
  9,032
  10,569
  12,240
  14,044
  15,976
  18,035
  20,216
  22,517
  24,937
  27,473
  30,125
  32,892
  35,776
  38,778
  41,899
  45,144
  48,517
Depreciation, amort., depletion, $m
  99
  135
  185
  253
  343
  459
  605
  784
  999
  1,253
  1,515
  1,852
  2,232
  2,656
  3,123
  3,632
  4,184
  4,777
  5,410
  6,083
  6,794
  7,542
  8,328
  9,150
  10,009
  10,905
  11,838
  12,808
  13,817
  14,866
Funds from operations, $m
  363
  527
  755
  1,064
  1,470
  1,989
  2,637
  3,428
  4,374
  5,485
  6,760
  8,222
  9,864
  11,688
  13,691
  15,872
  18,228
  20,753
  23,445
  26,299
  29,311
  32,479
  35,801
  39,275
  42,902
  46,681
  50,615
  54,708
  58,962
  63,383
Change in working capital, $m
  -586
  -851
  -1,195
  -1,627
  -2,151
  -2,768
  -3,475
  -4,266
  -5,131
  -6,058
  -7,032
  -8,039
  -9,066
  -10,101
  -11,133
  -12,154
  -13,157
  -14,139
  -15,098
  -16,035
  -16,950
  -17,848
  -18,732
  -19,608
  -20,481
  -21,356
  -22,240
  -23,140
  -24,060
  -25,007
Cash from operations, $m
  948
  1,378
  1,951
  2,691
  3,621
  4,757
  6,112
  7,694
  9,505
  11,542
  13,791
  16,261
  18,930
  21,789
  24,825
  28,026
  31,385
  34,892
  38,543
  42,333
  46,261
  50,327
  54,533
  58,883
  63,382
  68,037
  72,856
  77,847
  83,022
  88,390
Maintenance CAPEX, $m
  -41
  -65
  -101
  -151
  -220
  -310
  -426
  -572
  -750
  -966
  -1,220
  -1,515
  -1,852
  -2,232
  -2,656
  -3,123
  -3,632
  -4,184
  -4,777
  -5,410
  -6,083
  -6,794
  -7,542
  -8,328
  -9,150
  -10,009
  -10,905
  -11,838
  -12,808
  -13,817
New CAPEX, $m
  -215
  -314
  -441
  -600
  -794
  -1,021
  -1,283
  -1,575
  -1,894
  -2,236
  -2,595
  -2,967
  -3,346
  -3,728
  -4,109
  -4,486
  -4,856
  -5,218
  -5,572
  -5,918
  -6,256
  -6,587
  -6,913
  -7,237
  -7,559
  -7,882
  -8,208
  -8,540
  -8,880
  -9,229
Cash from investing activities, $m
  -256
  -379
  -542
  -751
  -1,014
  -1,331
  -1,709
  -2,147
  -2,644
  -3,202
  -3,815
  -4,482
  -5,198
  -5,960
  -6,765
  -7,609
  -8,488
  -9,402
  -10,349
  -11,328
  -12,339
  -13,381
  -14,455
  -15,565
  -16,709
  -17,891
  -19,113
  -20,378
  -21,688
  -23,046
Free cash flow, $m
  692
  998
  1,408
  1,939
  2,608
  3,426
  4,404
  5,548
  6,861
  8,341
  9,976
  11,779
  13,733
  15,829
  18,060
  20,418
  22,897
  25,490
  28,194
  31,005
  33,923
  36,946
  40,078
  43,319
  46,673
  50,146
  53,743
  57,470
  61,334
  65,343
Issuance/(repayment) of debt, $m
  859
  1,250
  1,755
  2,389
  3,159
  4,065
  5,104
  6,266
  7,536
  8,897
  10,327
  11,807
  13,316
  14,836
  16,351
  17,850
  19,324
  20,766
  22,175
  23,550
  24,894
  26,213
  27,512
  28,798
  30,079
  31,365
  32,664
  33,985
  35,337
  36,728
Issuance/(repurchase) of shares, $m
  488
  699
  961
  1,274
  1,629
  2,017
  2,422
  2,824
  3,202
  3,532
  3,767
  3,933
  3,988
  3,914
  3,700
  3,337
  2,819
  2,146
  1,316
  335
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,347
  1,949
  2,716
  3,663
  4,788
  6,082
  7,526
  9,090
  10,738
  12,429
  14,094
  15,740
  17,304
  18,750
  20,051
  21,187
  22,143
  22,912
  23,491
  23,885
  24,894
  26,213
  27,512
  28,798
  30,079
  31,365
  32,664
  33,985
  35,337
  36,728
Total cash flow (excl. dividends), $m
  2,039
  2,946
  4,125
  5,602
  7,395
  9,508
  11,930
  14,638
  17,599
  20,770
  24,070
  27,519
  31,036
  34,579
  38,112
  41,606
  45,040
  48,402
  51,685
  54,890
  58,817
  63,159
  67,589
  72,116
  76,753
  81,511
  86,407
  91,455
  96,670
  102,071
Retained Cash Flow (-), $m
  -752
  -1,091
  -1,532
  -2,085
  -2,756
  -3,547
  -4,454
  -5,468
  -6,577
  -7,764
  -9,012
  -10,303
  -11,620
  -12,946
  -14,269
  -15,577
  -16,863
  -18,122
  -19,351
  -20,551
  -21,724
  -22,875
  -24,008
  -25,131
  -26,249
  -27,371
  -28,505
  -29,657
  -30,837
  -32,051
Prev. year cash balance distribution, $m
  372
  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
  1,659
  1,856
  2,593
  3,517
  4,639
  5,961
  7,476
  9,170
  11,022
  13,006
  15,058
  17,216
  19,416
  21,632
  23,843
  26,028
  28,177
  30,280
  32,334
  34,339
  37,093
  40,284
  43,581
  46,986
  50,504
  54,140
  57,902
  61,797
  65,834
  70,020
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
  1,591
  1,699
  2,257
  2,896
  3,596
  4,326
  5,051
  5,732
  6,332
  6,819
  7,151
  7,347
  7,382
  7,262
  7,000
  6,614
  6,131
  5,576
  4,978
  4,363
  3,837
  3,343
  2,856
  2,393
  1,965
  1,580
  1,243
  956
  719
  527
Current shareholders' claim on cash, %
  93.8
  88.6
  84.2
  80.4
  77.2
  74.6
  72.3
  70.4
  68.7
  67.4
  66.2
  65.3
  64.5
  63.9
  63.4
  63.1
  62.8
  62.6
  62.5
  62.5
  62.5
  62.5
  62.5
  62.5
  62.5
  62.5
  62.5
  62.5
  62.5
  62.5

TAL Education Group is a holding company for a group of companies engaged in provision of after-school tutoring programs for primary and secondary school students in the People's Republic of China (the PRC). The Company is a K-12 after-school tutoring services provider in China. The Company's Xueersi Peiyou small classes course consists of approximately four semesters, which include approximately two school semesters in Spring and Fall, and approximately two holiday semesters in summer and winter. It operates a Website, www.jzb.com, which is an online education platform in China. It offers personalized premium services under its Zhikang brand. It offers online courses through www.xueersi.com. Through www.xueersi.com, the Company offers online courses on mathematics, English, Chinese, physics, chemistry, biology and other subjects. It also offers select online courses through other Websites. The Company has over 10 call centers in Beijing, Shanghai, Tianjin, Guangzhou and Shenzhen.

FINANCIAL RATIOS  of  TAL Education Group ADR (TAL)

Valuation Ratios
P/E Ratio 39.6
Price to Sales 4.4
Price to Book 7.2
Price to Tangible Book
Price to Cash Flow 12.9
Price to Free Cash Flow 16
Growth Rates
Sales Growth Rate 68.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 102.9%
Cap. Spend. - 3 Yr. Gr. Rate 45.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 69.9%
Total Debt to Equity 69.9%
Interest Coverage 23
Management Effectiveness
Return On Assets 8.5%
Ret/ On Assets - 3 Yr. Avg. 10.6%
Return On Total Capital 13.3%
Ret/ On T. Cap. - 3 Yr. Avg. 15.7%
Return On Equity 21.6%
Return On Equity - 3 Yr. Avg. 24.2%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 50%
Gross Margin - 3 Yr. Avg. 51.4%
EBITDA Margin 18.8%
EBITDA Margin - 3 Yr. Avg. 22.1%
Operating Margin 12.1%
Oper. Margin - 3 Yr. Avg. 13.4%
Pre-Tax Margin 14.9%
Pre-Tax Margin - 3 Yr. Avg. 18.2%
Net Profit Margin 11.2%
Net Profit Margin - 3 Yr. Avg. 14.4%
Effective Tax Rate 21.9%
Eff/ Tax Rate - 3 Yr. Avg. 19.5%
Payout Ratio 0%

TAL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TAL stock intrinsic value calculation we used $1715.015984 million for the last fiscal year's total revenue generated by TAL Education Group ADR. The default revenue input number comes from 0001 income statement of TAL Education Group ADR. 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 TAL stock valuation model: a) initial revenue growth rate of 60% 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 TAL is calculated based on our internal credit rating of TAL Education Group ADR, 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 TAL Education Group ADR.
    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 TAL stock the variable cost ratio is equal to 87.1%.

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 TAL 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 TAL Education Group ADR.

Corporate tax rate of 27% is the nominal tax rate for TAL Education Group ADR. 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 TAL 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 TAL are equal to 21%.

Life of production assets of 8.8 years is the average useful life of capital assets used in TAL Education Group ADR 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 TAL is equal to -56.9%. 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 - $1620.747787 million for TAL Education Group ADR - 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 341.154 million for TAL Education Group ADR 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 TAL Education Group ADR at the current share price and the inputted number of shares is $9.6 billion.

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COMPANY NEWS

▶ Tiger Global Throws Support Behind Struggling Chinese Stocks   [Nov-12-18 04:04PM  Insider Monkey]
▶ Why TAL Education Group Gained 13% in October   [Nov-07-18 02:30PM  Motley Fool]
▶ Why TAL Education Group Stock Jumped Today   [Oct-25-18 12:44PM  Motley Fool]
▶ TAL Education: Fiscal 2Q Earnings Snapshot   [05:05AM  Associated Press]
▶ How Should You Value TAL Education Groups (NYSE:TAL)?   [Oct-16-18 07:32AM  Simply Wall St.]
▶ Stock Market Gives Back Gains, But This Health Play Is Hot   [11:57AM  Investor's Business Daily]
▶ Carson Block Says TAL Education 'Committing Fraud'   [Jul-27-18 12:21PM  Bloomberg]
▶ Chinese Stocks: Are They Finally Cheap?   [11:57AM  InvestorPlace]
▶ TAL Education: Fiscal 1Q Earnings Snapshot   [05:08AM  Associated Press]

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