Intrinsic value of Thor Industries - THO

Previous Close

$96.42

  Intrinsic Value

$1,179

stock screener

  Rating & Target

str. buy

+999%

Previous close

$96.42

 
Intrinsic value

$1,179

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of THO 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 5.1

 

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, %
  58.20
  52.88
  48.09
  43.78
  39.90
  36.41
  33.27
  30.45
  27.90
  25.61
  23.55
  21.69
  20.03
  18.52
  17.17
  15.95
  14.86
  13.87
  12.99
  12.19
  11.47
  10.82
  10.24
  9.72
  9.24
  8.82
  8.44
  8.09
  7.78
  7.51
Revenue, $m
  11,465
  17,527
  25,957
  37,321
  52,214
  71,227
  94,926
  123,827
  158,376
  198,937
  245,786
  299,108
  359,005
  425,503
  498,564
  578,102
  663,997
  756,108
  854,289
  958,397
  1,068,305
  1,183,907
  1,305,127
  1,431,921
  1,564,282
  1,702,239
  1,845,862
  1,995,258
  2,150,573
  2,311,991
Variable operating expenses, $m
  10,454
  15,939
  23,564
  33,845
  47,318
  64,519
  85,959
  112,105
  143,360
  180,054
  222,355
  270,595
  324,782
  384,940
  451,036
  522,992
  600,699
  684,029
  772,850
  867,034
  966,464
  1,071,046
  1,180,711
  1,295,418
  1,415,161
  1,539,967
  1,669,898
  1,805,053
  1,945,562
  2,091,591
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
  10,454
  15,939
  23,564
  33,845
  47,318
  64,519
  85,959
  112,105
  143,360
  180,054
  222,355
  270,595
  324,782
  384,940
  451,036
  522,992
  600,699
  684,029
  772,850
  867,034
  966,464
  1,071,046
  1,180,711
  1,295,418
  1,415,161
  1,539,967
  1,669,898
  1,805,053
  1,945,562
  2,091,591
Operating income, $m
  1,011
  1,589
  2,392
  3,476
  4,895
  6,708
  8,967
  11,722
  15,016
  18,882
  23,430
  28,514
  34,224
  40,563
  47,528
  55,110
  63,298
  72,079
  81,438
  91,363
  101,840
  112,860
  124,416
  136,503
  149,121
  162,272
  175,964
  190,206
  205,012
  220,399
EBITDA, $m
  1,289
  1,971
  2,918
  4,196
  5,870
  8,008
  10,672
  13,922
  17,806
  22,366
  27,633
  33,628
  40,363
  47,839
  56,053
  64,995
  74,652
  85,008
  96,047
  107,751
  120,108
  133,105
  146,734
  160,989
  175,870
  191,381
  207,528
  224,325
  241,786
  259,934
Interest expense (income), $m
  9
  8
  39
  83
  145
  228
  337
  476
  650
  861
  1,114
  1,411
  1,754
  2,144
  2,583
  3,069
  3,604
  4,186
  4,815
  5,489
  6,208
  6,970
  7,774
  8,620
  9,508
  10,436
  11,405
  12,414
  13,466
  14,559
  15,696
Earnings before tax, $m
  1,003
  1,550
  2,309
  3,331
  4,667
  6,371
  8,491
  11,072
  14,154
  17,768
  22,019
  26,760
  32,079
  37,980
  44,458
  51,506
  59,112
  67,264
  75,949
  85,155
  94,870
  105,086
  115,796
  126,996
  138,685
  150,868
  163,550
  176,740
  190,453
  204,703
Tax expense, $m
  271
  418
  623
  899
  1,260
  1,720
  2,293
  2,990
  3,822
  4,797
  5,945
  7,225
  8,661
  10,255
  12,004
  13,907
  15,960
  18,161
  20,506
  22,992
  25,615
  28,373
  31,265
  34,289
  37,445
  40,734
  44,158
  47,720
  51,422
  55,270
Net income, $m
  732
  1,131
  1,686
  2,432
  3,407
  4,651
  6,198
  8,083
  10,333
  12,971
  16,074
  19,535
  23,418
  27,725
  32,454
  37,599
  43,152
  49,103
  55,443
  62,163
  69,255
  76,713
  84,531
  92,707
  101,240
  110,134
  119,391
  129,020
  139,030
  149,434

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
  4,047
  6,187
  9,162
  13,174
  18,431
  25,142
  33,507
  43,709
  55,904
  70,221
  86,758
  105,580
  126,723
  150,195
  175,984
  204,060
  234,379
  266,893
  301,549
  338,298
  377,093
  417,899
  460,687
  505,443
  552,164
  600,861
  651,557
  704,292
  759,115
  816,093
Adjusted assets (=assets-cash), $m
  4,047
  6,187
  9,162
  13,174
  18,431
  25,142
  33,507
  43,709
  55,904
  70,221
  86,758
  105,580
  126,723
  150,195
  175,984
  204,060
  234,379
  266,893
  301,549
  338,298
  377,093
  417,899
  460,687
  505,443
  552,164
  600,861
  651,557
  704,292
  759,115
  816,093
Revenue / Adjusted assets
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
  2.833
Average production assets, $m
  1,960
  2,997
  4,439
  6,382
  8,929
  12,180
  16,232
  21,174
  27,082
  34,018
  42,029
  51,148
  61,390
  72,761
  85,254
  98,855
  113,543
  129,294
  146,083
  163,886
  182,680
  202,448
  223,177
  244,859
  267,492
  291,083
  315,642
  341,189
  367,748
  395,350
Working capital, $m
  206
  315
  467
  672
  940
  1,282
  1,709
  2,229
  2,851
  3,581
  4,424
  5,384
  6,462
  7,659
  8,974
  10,406
  11,952
  13,610
  15,377
  17,251
  19,229
  21,310
  23,492
  25,775
  28,157
  30,640
  33,226
  35,915
  38,710
  41,616
Total debt, $m
  718
  1,540
  2,682
  4,223
  6,241
  8,819
  12,031
  15,948
  20,631
  26,129
  32,479
  39,707
  47,826
  56,839
  66,742
  77,523
  89,166
  101,651
  114,959
  129,070
  143,968
  159,637
  176,068
  193,254
  211,195
  229,895
  249,362
  269,612
  290,664
  312,544
Total liabilities, $m
  1,554
  2,376
  3,518
  5,059
  7,077
  9,654
  12,867
  16,784
  21,467
  26,965
  33,315
  40,543
  48,662
  57,675
  67,578
  78,359
  90,002
  102,487
  115,795
  129,906
  144,804
  160,473
  176,904
  194,090
  212,031
  230,731
  250,198
  270,448
  291,500
  313,380
Total equity, $m
  2,493
  3,811
  5,644
  8,115
  11,353
  15,487
  20,640
  26,925
  34,437
  43,256
  53,443
  65,037
  78,061
  92,520
  108,406
  125,701
  144,378
  164,406
  185,754
  208,391
  232,289
  257,426
  283,783
  311,353
  340,133
  370,130
  401,359
  433,844
  467,615
  502,713
Total liabilities and equity, $m
  4,047
  6,187
  9,162
  13,174
  18,430
  25,141
  33,507
  43,709
  55,904
  70,221
  86,758
  105,580
  126,723
  150,195
  175,984
  204,060
  234,380
  266,893
  301,549
  338,297
  377,093
  417,899
  460,687
  505,443
  552,164
  600,861
  651,557
  704,292
  759,115
  816,093
Debt-to-equity ratio
  0.290
  0.400
  0.480
  0.520
  0.550
  0.570
  0.580
  0.590
  0.600
  0.600
  0.610
  0.610
  0.610
  0.610
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
Adjusted equity ratio
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616
  0.616

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  732
  1,131
  1,686
  2,432
  3,407
  4,651
  6,198
  8,083
  10,333
  12,971
  16,074
  19,535
  23,418
  27,725
  32,454
  37,599
  43,152
  49,103
  55,443
  62,163
  69,255
  76,713
  84,531
  92,707
  101,240
  110,134
  119,391
  129,020
  139,030
  149,434
Depreciation, amort., depletion, $m
  278
  382
  526
  720
  975
  1,300
  1,705
  2,200
  2,790
  3,484
  4,203
  5,115
  6,139
  7,276
  8,525
  9,886
  11,354
  12,929
  14,608
  16,389
  18,268
  20,245
  22,318
  24,486
  26,749
  29,108
  31,564
  34,119
  36,775
  39,535
Funds from operations, $m
  1,010
  1,513
  2,212
  3,152
  4,382
  5,951
  7,904
  10,282
  13,123
  16,455
  20,277
  24,649
  29,557
  35,002
  40,980
  47,485
  54,506
  62,032
  70,051
  78,552
  87,523
  96,958
  106,849
  117,193
  127,990
  139,242
  150,955
  163,139
  175,805
  188,969
Change in working capital, $m
  76
  109
  152
  205
  268
  342
  427
  520
  622
  730
  843
  960
  1,078
  1,197
  1,315
  1,432
  1,546
  1,658
  1,767
  1,874
  1,978
  2,081
  2,182
  2,282
  2,382
  2,483
  2,585
  2,689
  2,796
  2,906
Cash from operations, $m
  934
  1,404
  2,060
  2,947
  4,114
  5,609
  7,477
  9,762
  12,501
  15,725
  19,434
  23,690
  28,479
  33,805
  39,665
  46,053
  52,960
  60,374
  68,284
  76,678
  85,545
  94,877
  104,667
  114,910
  125,607
  136,759
  148,370
  160,450
  173,010
  186,063
Maintenance CAPEX, $m
  -124
  -196
  -300
  -444
  -638
  -893
  -1,218
  -1,623
  -2,117
  -2,708
  -3,402
  -4,203
  -5,115
  -6,139
  -7,276
  -8,525
  -9,886
  -11,354
  -12,929
  -14,608
  -16,389
  -18,268
  -20,245
  -22,318
  -24,486
  -26,749
  -29,108
  -31,564
  -34,119
  -36,775
New CAPEX, $m
  -723
  -1,037
  -1,441
  -1,943
  -2,547
  -3,251
  -4,053
  -4,942
  -5,908
  -6,936
  -8,011
  -9,118
  -10,242
  -11,371
  -12,493
  -13,601
  -14,688
  -15,751
  -16,789
  -17,802
  -18,794
  -19,768
  -20,729
  -21,682
  -22,634
  -23,591
  -24,560
  -25,547
  -26,559
  -27,602
Cash from investing activities, $m
  -847
  -1,233
  -1,741
  -2,387
  -3,185
  -4,144
  -5,271
  -6,565
  -8,025
  -9,644
  -11,413
  -13,321
  -15,357
  -17,510
  -19,769
  -22,126
  -24,574
  -27,105
  -29,718
  -32,410
  -35,183
  -38,036
  -40,974
  -44,000
  -47,120
  -50,340
  -53,668
  -57,111
  -60,678
  -64,377
Free cash flow, $m
  88
  171
  319
  560
  929
  1,464
  2,207
  3,197
  4,476
  6,080
  8,021
  10,368
  13,122
  16,295
  19,895
  23,927
  28,386
  33,269
  38,566
  44,267
  50,362
  56,841
  63,693
  70,911
  78,488
  86,419
  94,702
  103,339
  112,332
  121,686
Issuance/(repayment) of debt, $m
  573
  822
  1,143
  1,540
  2,019
  2,577
  3,212
  3,917
  4,683
  5,498
  6,350
  7,228
  8,119
  9,013
  9,903
  10,781
  11,643
  12,485
  13,308
  14,111
  14,897
  15,669
  16,431
  17,186
  17,941
  18,699
  19,467
  20,250
  21,052
  21,879
Issuance/(repurchase) of shares, $m
  184
  187
  147
  40
  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  
  757
  1,009
  1,290
  1,580
  2,019
  2,577
  3,212
  3,917
  4,683
  5,498
  6,350
  7,228
  8,119
  9,013
  9,903
  10,781
  11,643
  12,485
  13,308
  14,111
  14,897
  15,669
  16,431
  17,186
  17,941
  18,699
  19,467
  20,250
  21,052
  21,879
Total cash flow (excl. dividends), $m
  845
  1,180
  1,608
  2,140
  2,948
  4,042
  5,419
  7,114
  9,159
  11,578
  14,371
  17,596
  21,240
  25,308
  29,798
  34,708
  40,029
  45,754
  51,874
  58,378
  65,260
  72,510
  80,124
  88,097
  96,428
  105,118
  114,170
  123,589
  133,384
  143,565
Retained Cash Flow (-), $m
  -916
  -1,318
  -1,833
  -2,471
  -3,238
  -4,134
  -5,153
  -6,284
  -7,512
  -8,820
  -10,187
  -11,594
  -13,024
  -14,459
  -15,886
  -17,295
  -18,677
  -20,028
  -21,348
  -22,637
  -23,898
  -25,136
  -26,358
  -27,570
  -28,780
  -29,997
  -31,229
  -32,484
  -33,771
  -35,098
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
  14
  23
  35
  52
  75
  104
  142
  190
  248
  317
  398
  492
  598
  718
  851
  997
  1,156
  1,328
  1,512
  1,709
  1,917
  2,137
  2,368
  2,610
  2,864
  3,129
  3,404
  3,692
  3,991
  4,301
Cash available for distribution, $m
  -71
  -138
  -224
  -331
  -290
  -93
  266
  830
  1,647
  2,759
  4,184
  6,002
  8,217
  10,849
  13,912
  17,413
  21,352
  25,726
  30,525
  35,741
  41,362
  47,374
  53,766
  60,528
  67,648
  75,121
  82,941
  91,105
  99,613
  108,467
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
  -68
  -127
  -195
  -273
  -225
  -67
  180
  519
  946
  1,446
  1,987
  2,561
  3,124
  3,642
  4,084
  4,425
  4,646
  4,738
  4,700
  4,542
  4,278
  3,931
  3,524
  3,083
  2,632
  2,192
  1,780
  1,410
  1,087
  817
Current shareholders' claim on cash, %
  96.5
  94.3
  93.2
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0
  93.0

Thor Industries, Inc. manufactures a range of recreational vehicles (RVs) in the United States and sells those vehicles primarily in the United States and Canada. The Company's segments include towable recreational vehicles, which consists of the operations of Airstream, Inc. (Airstream) (towable); Heartland Recreational Vehicles, LLC (Heartland) (including Bison Coach, LLC (Bison), Cruiser RV, LLC (CRV) and DRV, LLC (DRV)); Jayco, Corp. (Jayco) (including Jayco towable, Starcraft and Highland Ridge), Keystone RV Company (Keystone) (including CrossRoads and Dutchmen) and K.Z., Inc. (KZ) (including Livin' Lite RV, Inc. (Livin' Lite)); motorized recreational vehicles, which consists of the operations of Airstream (motorized), Jayco (including Jayco motorized and Entegra Coach) and Thor Motor Coach, Inc. (Thor Motor Coach), and Other, which includes the operations of its subsidiary, Postle Operating, LLC (Postle).

FINANCIAL RATIOS  of  Thor Industries (THO)

Valuation Ratios
P/E Ratio 13.6
Price to Sales 0.7
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 12.1
Price to Free Cash Flow 16.7
Growth Rates
Sales Growth Rate 58.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 121.2%
Cap. Spend. - 3 Yr. Gr. Rate 30.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 9.2%
Total Debt to Equity 9.2%
Interest Coverage 63
Management Effectiveness
Return On Assets 15.6%
Ret/ On Assets - 3 Yr. Avg. 14.2%
Return On Total Capital 22.3%
Ret/ On T. Cap. - 3 Yr. Avg. 20.3%
Return On Equity 26.3%
Return On Equity - 3 Yr. Avg. 22.6%
Asset Turnover 3
Profitability Ratios
Gross Margin 14.4%
Gross Margin - 3 Yr. Avg. 14.7%
EBITDA Margin 9.1%
EBITDA Margin - 3 Yr. Avg. 8.9%
Operating Margin 7.7%
Oper. Margin - 3 Yr. Avg. 7.8%
Pre-Tax Margin 7.7%
Pre-Tax Margin - 3 Yr. Avg. 7.8%
Net Profit Margin 5.2%
Net Profit Margin - 3 Yr. Avg. 5.2%
Effective Tax Rate 32.7%
Eff/ Tax Rate - 3 Yr. Avg. 32.1%
Payout Ratio 18.4%

THO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the THO stock intrinsic value calculation we used $7247 million for the last fiscal year's total revenue generated by Thor Industries. The default revenue input number comes from 2017 income statement of Thor Industries. 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 THO stock valuation model: a) initial revenue growth rate of 58.2% 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 THO is calculated based on our internal credit rating of Thor Industries, 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 Thor Industries.
    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 THO stock the variable cost ratio is equal to 91.6%.

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 THO 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 Thor Industries.

Corporate tax rate of 27% is the nominal tax rate for Thor Industries. 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 THO stock is equal to 0.2%.

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 THO are equal to 17.1%.

Life of production assets of 10 years is the average useful life of capital assets used in Thor Industries 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 THO is equal to 1.8%. 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 - $1577 million for Thor Industries - 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 53 million for Thor Industries 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 Thor Industries at the current share price and the inputted number of shares is $5.1 billion.

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