Intrinsic value of Molson Coors Brewing Cl B - TAP

Previous Close

$67.39

  Intrinsic Value

$1,779

stock screener

  Rating & Target

str. buy

+999%

Previous close

$67.39

 
Intrinsic value

$1,779

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of TAP 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 14.5

 

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, %
  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
  17,605
  27,199
  40,677
  59,020
  83,269
  114,475
  153,659
  201,764
  259,621
  327,923
  407,206
  497,848
  600,074
  713,970
  839,501
  976,542
  1,124,894
  1,284,319
  1,454,558
  1,635,355
  1,826,475
  2,027,716
  2,238,928
  2,460,014
  2,690,939
  2,931,736
  3,182,505
  3,443,414
  3,714,700
  3,996,667
Variable operating expenses, $m
  6,050
  8,109
  11,002
  14,940
  20,146
  26,845
  35,257
  45,584
  58,004
  72,667
  87,417
  106,875
  128,821
  153,271
  180,219
  209,639
  241,486
  275,711
  312,256
  351,069
  392,097
  435,299
  480,641
  528,102
  577,676
  629,369
  683,202
  739,213
  797,451
  857,982
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
  6,050
  8,109
  11,002
  14,940
  20,146
  26,845
  35,257
  45,584
  58,004
  72,667
  87,417
  106,875
  128,821
  153,271
  180,219
  209,639
  241,486
  275,711
  312,256
  351,069
  392,097
  435,299
  480,641
  528,102
  577,676
  629,369
  683,202
  739,213
  797,451
  857,982
Operating income, $m
  11,555
  19,090
  29,674
  44,080
  63,123
  87,630
  118,402
  156,180
  201,617
  255,256
  319,789
  390,973
  471,253
  560,699
  659,282
  766,903
  883,408
  1,008,609
  1,142,302
  1,284,286
  1,434,377
  1,592,417
  1,758,287
  1,931,912
  2,113,263
  2,302,367
  2,499,302
  2,704,201
  2,917,249
  3,138,685
EBITDA, $m
  18,158
  28,054
  41,955
  60,875
  85,885
  118,072
  158,488
  208,104
  267,780
  338,228
  420,002
  513,493
  618,932
  736,406
  865,883
  1,007,230
  1,160,244
  1,324,680
  1,500,269
  1,686,747
  1,883,873
  2,091,438
  2,309,288
  2,537,321
  2,775,503
  3,023,867
  3,282,517
  3,551,625
  3,831,437
  4,122,265
Interest expense (income), $m
  163
  611
  1,162
  1,964
  3,089
  4,621
  6,647
  9,253
  12,526
  16,544
  21,376
  27,081
  33,702
  41,273
  49,811
  59,324
  69,809
  81,254
  93,645
  106,961
  121,179
  136,280
  152,243
  169,051
  186,692
  205,157
  224,444
  244,556
  265,501
  287,293
  309,951
Earnings before tax, $m
  10,944
  17,928
  27,711
  40,990
  58,501
  80,983
  109,149
  143,654
  185,073
  233,880
  292,708
  357,270
  429,980
  510,887
  599,958
  697,094
  802,154
  914,963
  1,035,341
  1,163,107
  1,298,097
  1,440,175
  1,589,237
  1,745,220
  1,908,106
  2,077,923
  2,254,746
  2,438,700
  2,629,957
  2,828,734
Tax expense, $m
  2,955
  4,841
  7,482
  11,067
  15,795
  21,866
  29,470
  38,787
  49,970
  63,148
  79,031
  96,463
  116,095
  137,940
  161,989
  188,216
  216,581
  247,040
  279,542
  314,039
  350,486
  388,847
  429,094
  471,209
  515,189
  561,039
  608,781
  658,449
  710,088
  763,758
Net income, $m
  7,989
  13,087
  20,229
  29,923
  42,706
  59,118
  79,679
  104,868
  135,104
  170,732
  213,677
  260,807
  313,886
  372,948
  437,969
  508,879
  585,572
  667,923
  755,799
  849,068
  947,611
  1,051,328
  1,160,143
  1,274,011
  1,392,917
  1,516,884
  1,645,965
  1,780,251
  1,919,868
  2,064,976

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
  48,365
  74,724
  111,749
  162,143
  228,760
  314,492
  422,140
  554,297
  713,245
  900,886
  1,118,696
  1,367,714
  1,648,555
  1,961,455
  2,306,322
  2,682,807
  3,090,368
  3,528,349
  3,996,039
  4,492,734
  5,017,787
  5,570,649
  6,150,902
  6,758,279
  7,392,690
  8,054,220
  8,743,145
  9,459,929
  10,205,221
  10,979,856
Adjusted assets (=assets-cash), $m
  48,365
  74,724
  111,749
  162,143
  228,760
  314,492
  422,140
  554,297
  713,245
  900,886
  1,118,696
  1,367,714
  1,648,555
  1,961,455
  2,306,322
  2,682,807
  3,090,368
  3,528,349
  3,996,039
  4,492,734
  5,017,787
  5,570,649
  6,150,902
  6,758,279
  7,392,690
  8,054,220
  8,743,145
  9,459,929
  10,205,221
  10,979,856
Revenue / Adjusted assets
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
Average production assets, $m
  43,325
  66,938
  100,105
  145,248
  204,924
  281,723
  378,155
  496,541
  638,928
  807,018
  1,002,133
  1,225,203
  1,476,782
  1,757,079
  2,066,013
  2,403,269
  2,768,364
  3,160,709
  3,579,668
  4,024,609
  4,494,954
  4,990,210
  5,510,002
  6,054,094
  6,622,401
  7,215,002
  7,832,144
  8,474,242
  9,141,878
  9,835,798
Working capital, $m
  -3,345
  -5,168
  -7,729
  -11,214
  -15,821
  -21,750
  -29,195
  -38,335
  -49,328
  -62,305
  -77,369
  -94,591
  -114,014
  -135,654
  -159,505
  -185,543
  -213,730
  -244,021
  -276,366
  -310,717
  -347,030
  -385,266
  -425,396
  -467,403
  -511,278
  -557,030
  -604,676
  -654,249
  -705,793
  -759,367
Total debt, $m
  21,522
  36,362
  57,207
  85,579
  123,084
  171,351
  231,957
  306,362
  395,850
  501,492
  624,119
  764,315
  922,429
  1,098,592
  1,292,752
  1,504,713
  1,734,170
  1,980,753
  2,244,063
  2,523,702
  2,819,307
  3,130,568
  3,457,250
  3,799,204
  4,156,377
  4,528,818
  4,916,683
  5,320,233
  5,739,832
  6,175,951
Total liabilities, $m
  27,229
  42,069
  62,915
  91,286
  128,792
  177,059
  237,665
  312,069
  401,557
  507,199
  629,826
  770,023
  928,136
  1,104,299
  1,298,460
  1,510,420
  1,739,877
  1,986,461
  2,249,770
  2,529,409
  2,825,014
  3,136,276
  3,462,958
  3,804,911
  4,162,084
  4,534,526
  4,922,391
  5,325,940
  5,745,539
  6,181,659
Total equity, $m
  21,135
  32,654
  48,834
  70,856
  99,968
  137,433
  184,475
  242,228
  311,688
  393,687
  488,870
  597,691
  720,418
  857,156
  1,007,863
  1,172,387
  1,350,491
  1,541,889
  1,746,269
  1,963,325
  2,192,773
  2,434,374
  2,687,944
  2,953,368
  3,230,605
  3,519,694
  3,820,754
  4,133,989
  4,459,682
  4,798,197
Total liabilities and equity, $m
  48,364
  74,723
  111,749
  162,142
  228,760
  314,492
  422,140
  554,297
  713,245
  900,886
  1,118,696
  1,367,714
  1,648,554
  1,961,455
  2,306,323
  2,682,807
  3,090,368
  3,528,350
  3,996,039
  4,492,734
  5,017,787
  5,570,650
  6,150,902
  6,758,279
  7,392,689
  8,054,220
  8,743,145
  9,459,929
  10,205,221
  10,979,856
Debt-to-equity ratio
  1.020
  1.110
  1.170
  1.210
  1.230
  1.250
  1.260
  1.260
  1.270
  1.270
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.290
  1.290
  1.290
  1.290
  1.290
  1.290
  1.290
  1.290
  1.290
  1.290
  1.290
  1.290
Adjusted equity ratio
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  7,989
  13,087
  20,229
  29,923
  42,706
  59,118
  79,679
  104,868
  135,104
  170,732
  213,677
  260,807
  313,886
  372,948
  437,969
  508,879
  585,572
  667,923
  755,799
  849,068
  947,611
  1,051,328
  1,160,143
  1,274,011
  1,392,917
  1,516,884
  1,645,965
  1,780,251
  1,919,868
  2,064,976
Depreciation, amort., depletion, $m
  6,603
  8,964
  12,281
  16,795
  22,763
  30,443
  40,086
  51,924
  66,163
  82,972
  100,213
  122,520
  147,678
  175,708
  206,601
  240,327
  276,836
  316,071
  357,967
  402,461
  449,495
  499,021
  551,000
  605,409
  662,240
  721,500
  783,214
  847,424
  914,188
  983,580
Funds from operations, $m
  14,592
  22,051
  32,510
  46,718
  65,469
  89,560
  119,765
  156,792
  201,267
  253,704
  313,890
  383,328
  461,564
  548,656
  644,571
  749,206
  862,409
  983,994
  1,113,766
  1,251,529
  1,397,106
  1,550,349
  1,711,143
  1,879,420
  2,055,158
  2,238,384
  2,429,179
  2,627,675
  2,834,056
  3,048,556
Change in working capital, $m
  -1,254
  -1,823
  -2,561
  -3,485
  -4,607
  -5,929
  -7,445
  -9,140
  -10,993
  -12,977
  -15,064
  -17,222
  -19,423
  -21,640
  -23,851
  -26,038
  -28,187
  -30,291
  -32,345
  -34,351
  -36,313
  -38,236
  -40,130
  -42,006
  -43,876
  -45,751
  -47,646
  -49,573
  -51,544
  -53,574
Cash from operations, $m
  15,846
  23,874
  35,070
  50,203
  70,076
  95,490
  127,209
  165,932
  212,259
  266,682
  328,954
  400,550
  480,987
  570,296
  668,422
  775,244
  890,595
  1,014,285
  1,146,111
  1,285,880
  1,433,419
  1,588,585
  1,751,273
  1,921,426
  2,099,033
  2,284,135
  2,476,825
  2,677,248
  2,885,601
  3,102,129
Maintenance CAPEX, $m
  -2,708
  -4,333
  -6,694
  -10,011
  -14,525
  -20,492
  -28,172
  -37,815
  -49,654
  -63,893
  -80,702
  -100,213
  -122,520
  -147,678
  -175,708
  -206,601
  -240,327
  -276,836
  -316,071
  -357,967
  -402,461
  -449,495
  -499,021
  -551,000
  -605,409
  -662,240
  -721,500
  -783,214
  -847,424
  -914,188
New CAPEX, $m
  -16,243
  -23,612
  -33,168
  -45,143
  -59,676
  -76,799
  -96,432
  -118,386
  -142,387
  -168,090
  -195,115
  -223,071
  -251,579
  -280,297
  -308,934
  -337,256
  -365,095
  -392,345
  -418,959
  -444,941
  -470,345
  -495,256
  -519,792
  -544,092
  -568,307
  -592,601
  -617,142
  -642,098
  -667,636
  -693,921
Cash from investing activities, $m
  -18,951
  -27,945
  -39,862
  -55,154
  -74,201
  -97,291
  -124,604
  -156,201
  -192,041
  -231,983
  -275,817
  -323,284
  -374,099
  -427,975
  -484,642
  -543,857
  -605,422
  -669,181
  -735,030
  -802,908
  -872,806
  -944,751
  -1,018,813
  -1,095,092
  -1,173,716
  -1,254,841
  -1,338,642
  -1,425,312
  -1,515,060
  -1,608,109
Free cash flow, $m
  -3,105
  -4,070
  -4,791
  -4,950
  -4,125
  -1,802
  2,605
  9,730
  20,219
  34,699
  53,137
  77,266
  106,888
  142,321
  183,780
  231,386
  285,173
  345,104
  411,082
  482,972
  560,613
  643,833
  732,460
  826,335
  925,317
  1,029,294
  1,138,183
  1,251,936
  1,370,541
  1,494,021
Issuance/(repayment) of debt, $m
  10,209
  14,840
  20,845
  28,371
  37,505
  48,267
  60,606
  74,404
  89,488
  105,642
  122,627
  140,197
  158,114
  176,163
  194,160
  211,961
  229,457
  246,583
  263,309
  279,639
  295,605
  311,261
  326,682
  341,954
  357,173
  372,442
  387,865
  403,549
  419,599
  436,119
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  
  10,209
  14,840
  20,845
  28,371
  37,505
  48,267
  60,606
  74,404
  89,488
  105,642
  122,627
  140,197
  158,114
  176,163
  194,160
  211,961
  229,457
  246,583
  263,309
  279,639
  295,605
  311,261
  326,682
  341,954
  357,173
  372,442
  387,865
  403,549
  419,599
  436,119
Total cash flow (excl. dividends), $m
  7,104
  10,770
  16,054
  23,422
  33,381
  46,465
  63,211
  84,134
  109,707
  140,341
  175,764
  217,462
  265,001
  318,483
  377,940
  443,347
  514,630
  591,687
  674,391
  762,611
  856,218
  955,095
  1,059,142
  1,168,288
  1,282,490
  1,401,735
  1,526,048
  1,655,485
  1,790,140
  1,930,140
Retained Cash Flow (-), $m
  -7,909
  -11,519
  -16,180
  -22,022
  -29,112
  -37,465
  -47,042
  -57,752
  -69,460
  -81,999
  -95,183
  -108,820
  -122,728
  -136,737
  -150,707
  -164,524
  -178,104
  -191,398
  -204,380
  -217,056
  -229,448
  -241,601
  -253,570
  -265,424
  -277,237
  -289,089
  -301,060
  -313,234
  -325,693
  -338,515
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
  55
  88
  136
  203
  295
  416
  572
  768
  1,009
  1,298
  1,640
  2,036
  2,489
  3,000
  3,570
  4,198
  4,883
  5,624
  6,422
  7,273
  8,177
  9,132
  10,139
  11,195
  12,300
  13,455
  14,659
  15,913
  17,217
  18,574
Cash available for distribution, $m
  -806
  -749
  -126
  1,400
  4,269
  9,000
  16,169
  26,382
  40,246
  58,342
  80,581
  108,642
  142,274
  181,746
  227,233
  278,823
  336,526
  400,289
  470,011
  545,556
  626,770
  713,494
  805,572
  902,864
  1,005,253
  1,112,647
  1,224,988
  1,342,251
  1,464,447
  1,591,625
Discount rate, %
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
  -751
  -646
  -100
  1,012
  2,791
  5,274
  8,413
  12,067
  16,010
  19,956
  23,415
  26,475
  28,683
  29,877
  29,994
  29,075
  27,250
  24,716
  21,707
  18,466
  15,219
  12,150
  9,393
  7,030
  5,091
  3,564
  2,411
  1,574
  991
  601
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

Molson Coors Brewing Company (MCBC) is a holding company. The Company operates as a brewer. The Company's segments include MillerCoors LLC (United States segment), operating in the United States; Molson Coors Canada (Canada segment), operating in Canada; Molson Coors Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, Republic of Ireland, Romania, Serbia, the United Kingdom and various other European countries; Molson Coors International (Molson Coors International segment), operating in various other countries, and Corporate. The Company brews, markets, sells and distributes a range of beer brands. The Company offers a portfolio of owned and partner brands, including Carling, Coors Light, Miller Lite, Molson Canadian and Staropramen, as well as craft and specialty beers, such as the Blue Moon Brewing Company brands, the Jacob Leinenkugel Brewing Company brands, Creemore Springs, Cobra and Doom Bar.

FINANCIAL RATIOS  of  Molson Coors Brewing Cl B (TAP)

Valuation Ratios
P/E Ratio 7.3
Price to Sales 3
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 12.9
Price to Free Cash Flow 18.4
Growth Rates
Sales Growth Rate 36.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 24.4%
Cap. Spend. - 3 Yr. Gr. Rate 3.1%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 99.7%
Total Debt to Equity 105.7%
Interest Coverage 20
Management Effectiveness
Return On Assets 10%
Ret/ On Assets - 3 Yr. Avg. 5.9%
Return On Total Capital 11.8%
Ret/ On T. Cap. - 3 Yr. Avg. 6.5%
Return On Equity 21.4%
Return On Equity - 3 Yr. Avg. 10.8%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 40.2%
Gross Margin - 3 Yr. Avg. 39.8%
EBITDA Margin 73.4%
EBITDA Margin - 3 Yr. Avg. 40.5%
Operating Margin 67.7%
Oper. Margin - 3 Yr. Avg. 33.3%
Pre-Tax Margin 62.1%
Pre-Tax Margin - 3 Yr. Avg. 29.3%
Net Profit Margin 40.5%
Net Profit Margin - 3 Yr. Avg. 21%
Effective Tax Rate 34.6%
Eff/ Tax Rate - 3 Yr. Avg. 19.7%
Payout Ratio 17.9%

TAP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TAP stock intrinsic value calculation we used $11003 million for the last fiscal year's total revenue generated by Molson Coors Brewing Cl B. The default revenue input number comes from 2017 income statement of Molson Coors Brewing Cl B. 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 TAP 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 7.3%, whose default value for TAP is calculated based on our internal credit rating of Molson Coors Brewing Cl B, 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 Molson Coors Brewing Cl B.
    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 TAP stock the variable cost ratio is equal to 42.1%.

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 TAP 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 Molson Coors Brewing Cl B.

Corporate tax rate of 27% is the nominal tax rate for Molson Coors Brewing Cl B. 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 TAP stock is equal to 0.5%.

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 TAP are equal to 246.1%.

Life of production assets of 10 years is the average useful life of capital assets used in Molson Coors Brewing Cl B 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 TAP is equal to -19%. 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 - $13226 million for Molson Coors Brewing Cl B - 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 215 million for Molson Coors Brewing Cl B 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 Molson Coors Brewing Cl B at the current share price and the inputted number of shares is $14.5 billion.

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COMPANY NEWS

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▶ Molson Coors Has Found Its Marijuana Partner   [Aug-04-18 11:41AM  Motley Fool]
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▶ Coors Plans Cannabis-Infused Beverages in Canada   [Aug-02-18 11:54AM  Investopedia]
▶ Coors working on pot-infused beer in Canada   [07:17AM  Fox Business Videos]
▶ [$$] Molson Coors Turns to Marijuana as Beer Sales Drop   [Aug-01-18 07:42PM  The Wall Street Journal]
▶ [$$] Molson Coors Turns to Marijuana as Beer Sales Drop   [12:48PM  The Wall Street Journal]
▶ Molson Coors to make cannabis drinks   [12:18PM  Bloomberg]
▶ [$$] America's Long Love Affair With Beer Is on the Rocks   [10:41AM  The Wall Street Journal]
▶ Molson Coors makes cannabis-infused beverage deal in Canada   [10:00AM  American City Business Journals]
▶ Molson Coors: 2Q Earnings Snapshot   [07:20AM  Associated Press]
▶ Top 4 Beer Stocks for 2018   [Jul-22-18 07:25PM  Investopedia]
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▶ Is It Time to Invest in Marijuana Stocks?   [08:10AM  Motley Fool]
▶ Anheuser-Busch InBev Is a Solid Buy at $100/Share   [Jul-05-18 11:54PM  InvestorPlace]
▶ RBC's top consumer staples picks   [02:17PM  CNBC Videos]
▶ Yahoo Finance Live: Market Movers - Jun 25th, 2018   [07:20AM  Yahoo Finance Video]
▶ Why Molson Coors may be in 'serious' talks with Canadian pot companies   [Jun-22-18 05:05PM  American City Business Journals]
▶ Cramer Remix: Go ahead, Chinasell your U.S. Treasurys!   [Jun-19-18 07:07PM  CNBC Videos]
▶ Trial involving former Eden brewery moves forward   [07:45AM  American City Business Journals]
▶ MillerCoors, Pabst Brewing Co. going to trial in November in $400 million lawsuit   [Jun-18-18 03:57PM  American City Business Journals]
▶ Is Molson Coors Brewing Co Stock Set to Rebound 20%?   [Jun-12-18 11:09AM  InvestorPlace]
▶ How to Invest in Craft Beer   [Jun-11-18 09:43PM  Motley Fool]
▶ Yahoo Finance Live: Market Movers - Jun 7th, 2018   [Jun-07-18 07:20AM  Yahoo Finance Video]
▶ Molson Coors acquires Clearly Kombucha brand   [Jun-06-18 04:13PM  American City Business Journals]
▶ Molson Coors Brewing Could Rebound   [Jun-05-18 01:58PM  TheStreet.com]
▶ Free 'Cheers to Milwaukee' concert returning to Riverside Theater   [Jun-01-18 02:35PM  American City Business Journals]
▶ Yahoo Finance Live: Midday Movers - Jun 1st, 2018   [09:40AM  Yahoo Finance Video]
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