Intrinsic value of Turkcell Iletisim Hizmetleri ADR - TKC

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$10.25

  Intrinsic Value

$9.45

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  Rating & Target

hold

-8%

Previous close

$10.25

 
Intrinsic value

$9.45

 
Up/down potential

-8%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TKC 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Turkcell Iletisim Hizmetleri ADR (TKC) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.89
  25.70
  23.63
  21.77
  20.09
  18.58
  17.22
  16.00
  14.90
  13.91
  13.02
  12.22
  11.50
  10.85
  10.26
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.26
  7.04
  6.83
  6.65
  6.49
  6.34
  6.20
  6.08
  5.97
Revenue, $m
  3,793
  4,768
  5,894
  7,177
  8,619
  10,221
  11,981
  13,899
  15,970
  18,191
  20,559
  23,071
  25,724
  28,514
  31,440
  34,500
  37,696
  41,026
  44,494
  48,101
  51,851
  55,749
  59,799
  64,008
  68,383
  72,931
  77,661
  82,583
  87,706
  93,042
  98,601
Variable operating expenses, $m
 
  3,499
  4,326
  5,267
  6,326
  7,501
  8,792
  10,199
  11,719
  13,349
  15,087
  16,929
  18,875
  20,922
  23,069
  25,315
  27,660
  30,104
  32,648
  35,295
  38,047
  40,906
  43,878
  46,967
  50,177
  53,514
  56,985
  60,596
  64,355
  68,270
  72,350
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
  2,876
  3,499
  4,326
  5,267
  6,326
  7,501
  8,792
  10,199
  11,719
  13,349
  15,087
  16,929
  18,875
  20,922
  23,069
  25,315
  27,660
  30,104
  32,648
  35,295
  38,047
  40,906
  43,878
  46,967
  50,177
  53,514
  56,985
  60,596
  64,355
  68,270
  72,350
Operating income, $m
  916
  1,268
  1,568
  1,910
  2,294
  2,720
  3,189
  3,699
  4,251
  4,842
  5,473
  6,142
  6,849
  7,591
  8,370
  9,185
  10,036
  10,923
  11,846
  12,806
  13,805
  14,842
  15,921
  17,041
  18,206
  19,417
  20,676
  21,987
  23,351
  24,771
  26,251
EBITDA, $m
  1,484
  1,977
  2,445
  2,977
  3,575
  4,239
  4,969
  5,764
  6,623
  7,545
  8,527
  9,569
  10,669
  11,826
  13,040
  14,309
  15,634
  17,016
  18,454
  19,950
  21,505
  23,122
  24,802
  26,547
  28,362
  30,248
  32,210
  34,251
  36,376
  38,589
  40,895
Interest expense (income), $m
  115
  114
  168
  231
  302
  382
  470
  568
  674
  788
  911
  1,042
  1,181
  1,328
  1,483
  1,644
  1,814
  1,991
  2,175
  2,367
  2,567
  2,774
  2,990
  3,214
  3,447
  3,689
  3,941
  4,203
  4,475
  4,759
  5,054
Earnings before tax, $m
  540
  1,154
  1,400
  1,679
  1,992
  2,339
  2,719
  3,132
  3,577
  4,054
  4,562
  5,100
  5,667
  6,263
  6,888
  7,541
  8,222
  8,932
  9,671
  10,439
  11,238
  12,068
  12,931
  13,827
  14,759
  15,728
  16,735
  17,784
  18,876
  20,013
  21,197
Tax expense, $m
  114
  312
  378
  453
  538
  631
  734
  846
  966
  1,095
  1,232
  1,377
  1,530
  1,691
  1,860
  2,036
  2,220
  2,412
  2,611
  2,819
  3,034
  3,258
  3,491
  3,733
  3,985
  4,247
  4,519
  4,802
  5,096
  5,403
  5,723
Net income, $m
  401
  843
  1,022
  1,226
  1,454
  1,707
  1,985
  2,286
  2,611
  2,959
  3,330
  3,723
  4,137
  4,572
  5,028
  5,505
  6,002
  6,520
  7,060
  7,621
  8,204
  8,810
  9,440
  10,094
  10,774
  11,481
  12,217
  12,982
  13,779
  14,609
  15,474

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,607
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,389
  8,529
  10,545
  12,840
  15,419
  18,285
  21,434
  24,863
  28,568
  32,542
  36,779
  41,272
  46,017
  51,008
  56,243
  61,718
  67,434
  73,393
  79,596
  86,049
  92,757
  99,730
  106,975
  114,504
  122,330
  130,467
  138,929
  147,733
  156,898
  166,443
  176,388
Adjusted assets (=assets-cash), $m
  6,782
  8,529
  10,545
  12,840
  15,419
  18,285
  21,434
  24,863
  28,568
  32,542
  36,779
  41,272
  46,017
  51,008
  56,243
  61,718
  67,434
  73,393
  79,596
  86,049
  92,757
  99,730
  106,975
  114,504
  122,330
  130,467
  138,929
  147,733
  156,898
  166,443
  176,388
Revenue / Adjusted assets
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
  0.559
Average production assets, $m
  4,169
  5,240
  6,478
  7,888
  9,473
  11,233
  13,168
  15,275
  17,551
  19,992
  22,595
  25,355
  28,270
  31,336
  34,552
  37,916
  41,428
  45,088
  48,899
  52,863
  56,985
  61,268
  65,719
  70,345
  75,152
  80,151
  85,350
  90,759
  96,389
  102,253
  108,362
Working capital, $m
  1,590
  930
  1,149
  1,400
  1,681
  1,993
  2,336
  2,710
  3,114
  3,547
  4,009
  4,499
  5,016
  5,560
  6,131
  6,728
  7,351
  8,000
  8,676
  9,380
  10,111
  10,871
  11,661
  12,482
  13,335
  14,222
  15,144
  16,104
  17,103
  18,143
  19,227
Total debt, $m
  2,597
  2,715
  3,721
  4,866
  6,153
  7,583
  9,154
  10,866
  12,714
  14,698
  16,812
  19,054
  21,422
  23,912
  26,524
  29,256
  32,109
  35,082
  38,177
  41,397
  44,745
  48,224
  51,839
  55,597
  59,502
  63,562
  67,784
  72,178
  76,751
  81,514
  86,477
Total liabilities, $m
  4,138
  4,256
  5,262
  6,407
  7,694
  9,124
  10,695
  12,407
  14,255
  16,239
  18,353
  20,595
  22,963
  25,453
  28,065
  30,797
  33,650
  36,623
  39,718
  42,938
  46,286
  49,765
  53,380
  57,138
  61,043
  65,103
  69,325
  73,719
  78,292
  83,055
  88,018
Total equity, $m
  4,251
  4,273
  5,283
  6,433
  7,725
  9,161
  10,738
  12,456
  14,313
  16,304
  18,426
  20,678
  23,055
  25,555
  28,178
  30,921
  33,785
  36,770
  39,878
  43,110
  46,471
  49,965
  53,594
  57,367
  61,287
  65,364
  69,603
  74,014
  78,606
  83,388
  88,370
Total liabilities and equity, $m
  8,389
  8,529
  10,545
  12,840
  15,419
  18,285
  21,433
  24,863
  28,568
  32,543
  36,779
  41,273
  46,018
  51,008
  56,243
  61,718
  67,435
  73,393
  79,596
  86,048
  92,757
  99,730
  106,974
  114,505
  122,330
  130,467
  138,928
  147,733
  156,898
  166,443
  176,388
Debt-to-equity ratio
  0.611
  0.640
  0.700
  0.760
  0.800
  0.830
  0.850
  0.870
  0.890
  0.900
  0.910
  0.920
  0.930
  0.940
  0.940
  0.950
  0.950
  0.950
  0.960
  0.960
  0.960
  0.970
  0.970
  0.970
  0.970
  0.970
  0.970
  0.980
  0.980
  0.980
  0.980
Adjusted equity ratio
  0.465
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501
  0.501

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  401
  843
  1,022
  1,226
  1,454
  1,707
  1,985
  2,286
  2,611
  2,959
  3,330
  3,723
  4,137
  4,572
  5,028
  5,505
  6,002
  6,520
  7,060
  7,621
  8,204
  8,810
  9,440
  10,094
  10,774
  11,481
  12,217
  12,982
  13,779
  14,609
  15,474
Depreciation, amort., depletion, $m
  568
  709
  876
  1,067
  1,281
  1,519
  1,780
  2,065
  2,373
  2,703
  3,054
  3,426
  3,820
  4,235
  4,669
  5,124
  5,598
  6,093
  6,608
  7,144
  7,701
  8,279
  8,881
  9,506
  10,156
  10,831
  11,534
  12,265
  13,026
  13,818
  14,644
Funds from operations, $m
  -530
  1,552
  1,898
  2,293
  2,735
  3,226
  3,765
  4,351
  4,984
  5,662
  6,384
  7,149
  7,957
  8,807
  9,697
  10,629
  11,600
  12,613
  13,668
  14,764
  15,904
  17,089
  18,320
  19,600
  20,930
  22,313
  23,751
  25,247
  26,805
  28,427
  30,118
Change in working capital, $m
  -853
  190
  220
  250
  281
  312
  343
  374
  404
  433
  462
  490
  517
  544
  571
  597
  623
  649
  676
  703
  731
  760
  790
  821
  853
  887
  922
  960
  999
  1,040
  1,084
Cash from operations, $m
  323
  1,362
  1,679
  2,043
  2,454
  2,914
  3,422
  3,977
  4,580
  5,229
  5,922
  6,660
  7,440
  8,263
  9,127
  10,032
  10,977
  11,964
  12,992
  14,061
  15,173
  16,329
  17,531
  18,779
  20,077
  21,426
  22,828
  24,287
  25,806
  27,387
  29,034
Maintenance CAPEX, $m
  0
  -563
  -708
  -875
  -1,066
  -1,280
  -1,518
  -1,779
  -2,064
  -2,372
  -2,702
  -3,053
  -3,426
  -3,820
  -4,235
  -4,669
  -5,124
  -5,598
  -6,093
  -6,608
  -7,144
  -7,701
  -8,279
  -8,881
  -9,506
  -10,156
  -10,831
  -11,534
  -12,265
  -13,026
  -13,818
New CAPEX, $m
  -910
  -1,071
  -1,238
  -1,410
  -1,585
  -1,760
  -1,935
  -2,107
  -2,276
  -2,441
  -2,603
  -2,761
  -2,915
  -3,066
  -3,216
  -3,364
  -3,512
  -3,660
  -3,811
  -3,964
  -4,121
  -4,283
  -4,451
  -4,626
  -4,808
  -4,999
  -5,199
  -5,409
  -5,630
  -5,864
  -6,110
Cash from investing activities, $m
  -952
  -1,634
  -1,946
  -2,285
  -2,651
  -3,040
  -3,453
  -3,886
  -4,340
  -4,813
  -5,305
  -5,814
  -6,341
  -6,886
  -7,451
  -8,033
  -8,636
  -9,258
  -9,904
  -10,572
  -11,265
  -11,984
  -12,730
  -13,507
  -14,314
  -15,155
  -16,030
  -16,943
  -17,895
  -18,890
  -19,928
Free cash flow, $m
  -629
  -273
  -268
  -243
  -197
  -126
  -31
  91
  240
  416
  618
  846
  1,099
  1,376
  1,676
  1,999
  2,342
  2,705
  3,088
  3,489
  3,908
  4,345
  4,800
  5,273
  5,763
  6,271
  6,798
  7,345
  7,911
  8,497
  9,106
Issuance/(repayment) of debt, $m
  1,225
  873
  1,006
  1,145
  1,287
  1,430
  1,571
  1,711
  1,849
  1,983
  2,114
  2,242
  2,368
  2,491
  2,612
  2,732
  2,852
  2,973
  3,095
  3,220
  3,348
  3,479
  3,615
  3,757
  3,905
  4,060
  4,223
  4,393
  4,573
  4,763
  4,963
Issuance/(repurchase) of shares, $m
  -17
  31
  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  
  1,299
  904
  1,006
  1,145
  1,287
  1,430
  1,571
  1,711
  1,849
  1,983
  2,114
  2,242
  2,368
  2,491
  2,612
  2,732
  2,852
  2,973
  3,095
  3,220
  3,348
  3,479
  3,615
  3,757
  3,905
  4,060
  4,223
  4,393
  4,573
  4,763
  4,963
Total cash flow (excl. dividends), $m
  846
  632
  738
  902
  1,091
  1,303
  1,541
  1,802
  2,089
  2,399
  2,732
  3,088
  3,467
  3,867
  4,288
  4,731
  5,194
  5,678
  6,183
  6,709
  7,256
  7,824
  8,416
  9,030
  9,668
  10,331
  11,021
  11,738
  12,484
  13,260
  14,069
Retained Cash Flow (-), $m
  -445
  -874
  -1,010
  -1,150
  -1,292
  -1,435
  -1,578
  -1,718
  -1,856
  -1,991
  -2,123
  -2,251
  -2,377
  -2,501
  -2,622
  -2,743
  -2,864
  -2,985
  -3,108
  -3,233
  -3,361
  -3,493
  -3,630
  -3,772
  -3,921
  -4,076
  -4,240
  -4,411
  -4,592
  -4,782
  -4,982
Prev. year cash balance distribution, $m
 
  852
  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
 
  610
  -272
  -247
  -202
  -132
  -37
  84
  232
  408
  609
  837
  1,089
  1,366
  1,666
  1,988
  2,330
  2,693
  3,075
  3,476
  3,895
  4,331
  4,786
  5,258
  5,747
  6,255
  6,781
  7,327
  7,892
  8,478
  9,086
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
 
  585
  -249
  -215
  -166
  -102
  -27
  57
  145
  234
  319
  397
  465
  519
  559
  584
  592
  586
  566
  535
  495
  448
  397
  345
  293
  243
  198
  157
  122
  93
  68
Current shareholders' claim on cash, %
  100
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6

Turkcell Iletisim Hizmetleri AS is engaged in establishing and operating a Global System for Mobile Communications (GSM) network in Turkey and regional states. The Company's segments include Turkcell Turkey, which includes the operations of Turkcell Superonline, Turkcell Satis ve Dagitim Hizmetleri A.S., group call center operations of Global Bilgi Pazarlama Danisma ve Cagri Servisi Hizmetleri A.S., Turktell Bilisim Servisleri A.S., Kule Hizmet ve Isletmecilik A.S., Turkcell Odeme Hizmetleri A.S. and Turkcell Gayrimenkul Hizmetleri A.S; Turkcell International, which includes the operations of Kibris Mobile Telekomunikasyon Limited Sirketi, Eastasian Consortium BV, lifecell LLC, UkrTower LLC, LLC Global Bilgi, Turkcell Europe GmbH, Lifetech LLC, Beltower LLC and Fintur Holdings BV, and Other, which comprises the information and entertainment services in Turkey and Azerbaijan, and non-group call center operations of Turkcell Global Bilgi and Turkcell Finansman AS.

FINANCIAL RATIOS  of  Turkcell Iletisim Hizmetleri ADR (TKC)

Valuation Ratios
P/E Ratio 56.1
Price to Sales 5.9
Price to Book 5.3
Price to Tangible Book
Price to Cash Flow 69.6
Price to Free Cash Flow -38.3
Growth Rates
Sales Growth Rate 11.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -25.4%
Cap. Spend. - 3 Yr. Gr. Rate 0.9%
Financial Strength
Quick Ratio 2
Current Ratio 0.2
LT Debt to Equity 43.3%
Total Debt to Equity 61.1%
Interest Coverage 6
Management Effectiveness
Return On Assets 6.4%
Ret/ On Assets - 3 Yr. Avg. 7.3%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 8.2%
Return On Equity 10%
Return On Equity - 3 Yr. Avg. 10.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 35.5%
Gross Margin - 3 Yr. Avg. 37.8%
EBITDA Margin 32.2%
EBITDA Margin - 3 Yr. Avg. 32.1%
Operating Margin 24.2%
Oper. Margin - 3 Yr. Avg. 22.6%
Pre-Tax Margin 14.2%
Pre-Tax Margin - 3 Yr. Avg. 16.6%
Net Profit Margin 10.6%
Net Profit Margin - 3 Yr. Avg. 14.2%
Effective Tax Rate 21.1%
Eff/ Tax Rate - 3 Yr. Avg. 28.3%
Payout Ratio 3.5%

TKC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TKC stock intrinsic value calculation we used $3793 million for the last fiscal year's total revenue generated by Turkcell Iletisim Hizmetleri ADR. The default revenue input number comes from 2016 income statement of Turkcell Iletisim Hizmetleri 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 TKC stock valuation model: a) initial revenue growth rate of 25.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TKC is calculated based on our internal credit rating of Turkcell Iletisim Hizmetleri 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 Turkcell Iletisim Hizmetleri 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 TKC stock the variable cost ratio is equal to 73.4%.

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 TKC 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 6.2% for Turkcell Iletisim Hizmetleri ADR.

Corporate tax rate of 27% is the nominal tax rate for Turkcell Iletisim Hizmetleri 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 TKC 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 TKC are equal to 109.9%.

Life of production assets of 7.4 years is the average useful life of capital assets used in Turkcell Iletisim Hizmetleri 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 TKC is equal to 19.5%. 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 - $4251 million for Turkcell Iletisim Hizmetleri 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 884.314 million for Turkcell Iletisim Hizmetleri 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 Turkcell Iletisim Hizmetleri ADR at the current share price and the inputted number of shares is $9.1 billion.

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COMPANY NEWS

▶ Top Ranked Value Stocks to Buy for December 13th   [Dec-13-17 03:50PM  InvestorPlace]
▶ Turkcell Launches Turkeys Search Engine Yaani   [Oct-26-17 12:44PM  Business Wire]
▶ Turkcell Iletisim Hizmetleri: Third Quarter 2017 Results   [Oct-25-17 11:24AM  Business Wire]
▶ Turkcell Rolls Out NarrowBand-IoT Network across Turkey   [Aug-24-17 03:41AM  Business Wire]
▶ [$$] 2 Steady Stocks in a Volatile Post-Coup Turkey   [Jul-29-17 12:01AM  Barrons.com]
▶ Turkcell Iletisim Hizmetleri: Second Quarter 2017 Results   [Jul-27-17 11:46AM  Business Wire]
▶ Turkcell Moving Fast on the Way To 5G   [Jun-16-17 10:28AM  Business Wire]
▶ 12 Emerging Market Headlines: Earnings, Oil & Risk   [Apr-26-17 07:04PM  Barrons.com]
▶ Turkcell Files Its 2016 Annual Report on Form 20-F   [Mar-20-17 05:15PM  Business Wire]
▶ Turkcell Earnings Socked By Weak Lira   [Feb-15-17 01:59PM  at Barrons.com]
▶ Turkey: Lira & Stocks Hit New Lows Despite Bank Action   [Jan-10-17 03:59PM  at Barrons.com]
▶ Turkey: Central Bank Holds Rates; Syria Peace?   [Dec-20-16 10:30AM  at Barrons.com]
▶ Is Aramark (ARMK) Worthy of Your Portfolio?   [Dec-01-16 12:06PM  at Insider Monkey]
▶ Turkcell Feud Unresolved as Fridman Buyout Option Expires   [Nov-28-16 01:41PM  at Bloomberg]
▶ S&P Ups Turkey Credit Outlook, Eyes 100,000 In Coup Purge   [Nov-04-16 02:08PM  at Barrons.com]
▶ VimpelCom To Pay U.S. Dividend, Shares Rise 5%   [Nov-03-16 02:26PM  at Barrons.com]
▶ Turkcell Slips 3%, Coup Attempt Hurt 3Q Earnings   [Nov-02-16 12:50PM  at Barrons.com]
▶ Turkcell CEO Kaan Terzioglu Elected to the GSMA Board   [Oct-31-16 08:51AM  Business Wire]
▶ Moodys Maintains Turkcells Investment Grade Rating   [Sep-27-16 04:06PM  Business Wire]
▶ Turkey Market Analysts & Media Silenced In Post-Coup Purge   [Jul-29-16 02:10PM  at Barrons.com]
Financial statements of TKC
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