Intrinsic value of Telekomunikasi Indonesia ADR - TLK

Previous Close

$25.17

  Intrinsic Value

$649.62

stock screener

  Rating & Target

str. buy

+999%

Previous close

$25.17

 
Intrinsic value

$649.62

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of TLK 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 1.6

 

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, %
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  10,386
  11,363
  12,382
  13,444
  14,548
  15,696
  16,890
  18,130
  19,419
  20,759
  22,151
  23,599
  25,106
  26,674
  28,307
  30,008
  31,780
  33,629
  35,558
  37,571
  39,674
  41,870
  44,165
  46,565
  49,076
  51,702
  54,451
  57,329
  60,342
  63,499
Variable operating expenses, $m
  6,333
  6,926
  7,545
  8,190
  8,860
  9,557
  10,282
  11,035
  11,818
  12,632
  13,451
  14,331
  15,246
  16,198
  17,189
  18,222
  19,299
  20,421
  21,592
  22,815
  24,092
  25,425
  26,819
  28,277
  29,801
  31,396
  33,065
  34,813
  36,643
  38,559
Fixed operating expenses, $m
  472
  483
  493
  504
  515
  526
  538
  550
  562
  574
  587
  600
  613
  627
  640
  654
  669
  684
  699
  714
  730
  746
  762
  779
  796
  814
  831
  850
  868
  888
Total operating expenses, $m
  6,805
  7,409
  8,038
  8,694
  9,375
  10,083
  10,820
  11,585
  12,380
  13,206
  14,038
  14,931
  15,859
  16,825
  17,829
  18,876
  19,968
  21,105
  22,291
  23,529
  24,822
  26,171
  27,581
  29,056
  30,597
  32,210
  33,896
  35,663
  37,511
  39,447
Operating income, $m
  3,581
  3,954
  4,344
  4,750
  5,173
  5,612
  6,069
  6,545
  7,039
  7,553
  8,113
  8,669
  9,247
  9,850
  10,477
  11,131
  11,813
  12,524
  13,267
  14,042
  14,852
  15,699
  16,584
  17,510
  18,479
  19,493
  20,554
  21,666
  22,831
  24,052
EBITDA, $m
  5,613
  6,176
  6,762
  7,373
  8,009
  8,671
  9,359
  10,074
  10,817
  11,589
  12,393
  13,228
  14,098
  15,003
  15,946
  16,929
  17,953
  19,022
  20,137
  21,301
  22,517
  23,788
  25,117
  26,506
  27,960
  29,482
  31,074
  32,742
  34,489
  36,320
Interest expense (income), $m
  -258
  214
  277
  343
  412
  484
  558
  636
  717
  800
  887
  978
  1,072
  1,170
  1,272
  1,377
  1,488
  1,603
  1,722
  1,847
  1,978
  2,114
  2,256
  2,404
  2,559
  2,721
  2,891
  3,068
  3,254
  3,448
  3,652
Earnings before tax, $m
  3,367
  3,677
  4,001
  4,338
  4,689
  5,054
  5,434
  5,828
  6,239
  6,665
  7,135
  7,597
  8,078
  8,578
  9,100
  9,643
  10,210
  10,802
  11,420
  12,065
  12,739
  13,443
  14,180
  14,951
  15,757
  16,602
  17,486
  18,412
  19,383
  20,400
Tax expense, $m
  909
  993
  1,080
  1,171
  1,266
  1,365
  1,467
  1,574
  1,684
  1,800
  1,926
  2,051
  2,181
  2,316
  2,457
  2,604
  2,757
  2,917
  3,083
  3,257
  3,439
  3,630
  3,829
  4,037
  4,255
  4,483
  4,721
  4,971
  5,233
  5,508
Net income, $m
  2,458
  2,684
  2,921
  3,167
  3,423
  3,689
  3,967
  4,255
  4,554
  4,866
  5,209
  5,546
  5,897
  6,262
  6,643
  7,040
  7,454
  7,885
  8,336
  8,807
  9,299
  9,814
  10,351
  10,914
  11,503
  12,119
  12,765
  13,441
  14,150
  14,892

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
  16,052
  17,563
  19,138
  20,778
  22,485
  24,260
  26,105
  28,022
  30,014
  32,084
  34,237
  36,475
  38,804
  41,227
  43,751
  46,379
  49,120
  51,977
  54,958
  58,070
  61,319
  64,714
  68,262
  71,971
  75,851
  79,911
  84,159
  88,607
  93,265
  98,143
Adjusted assets (=assets-cash), $m
  16,052
  17,563
  19,138
  20,778
  22,485
  24,260
  26,105
  28,022
  30,014
  32,084
  34,237
  36,475
  38,804
  41,227
  43,751
  46,379
  49,120
  51,977
  54,958
  58,070
  61,319
  64,714
  68,262
  71,971
  75,851
  79,911
  84,159
  88,607
  93,265
  98,143
Revenue / Adjusted assets
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
Average production assets, $m
  10,033
  10,977
  11,961
  12,986
  14,053
  15,163
  16,316
  17,514
  18,759
  20,053
  21,398
  22,797
  24,252
  25,767
  27,344
  28,987
  30,700
  32,486
  34,349
  36,294
  38,325
  40,446
  42,664
  44,982
  47,407
  49,944
  52,600
  55,380
  58,291
  61,340
Working capital, $m
  -1,433
  -1,568
  -1,709
  -1,855
  -2,008
  -2,166
  -2,331
  -2,502
  -2,680
  -2,865
  -3,057
  -3,257
  -3,465
  -3,681
  -3,906
  -4,141
  -4,386
  -4,641
  -4,907
  -5,185
  -5,475
  -5,778
  -6,095
  -6,426
  -6,772
  -7,135
  -7,514
  -7,911
  -8,327
  -8,763
Total debt, $m
  3,380
  4,185
  5,025
  5,899
  6,809
  7,755
  8,738
  9,760
  10,822
  11,925
  13,072
  14,265
  15,506
  16,798
  18,143
  19,544
  21,005
  22,528
  24,117
  25,775
  27,507
  29,317
  31,208
  33,185
  35,253
  37,417
  39,681
  42,052
  44,534
  47,134
Total liabilities, $m
  8,556
  9,361
  10,200
  11,075
  11,985
  12,931
  13,914
  14,936
  15,997
  17,101
  18,248
  19,441
  20,682
  21,974
  23,319
  24,720
  26,181
  27,704
  29,293
  30,951
  32,683
  34,493
  36,384
  38,361
  40,429
  42,592
  44,857
  47,227
  49,710
  52,310
Total equity, $m
  7,496
  8,202
  8,937
  9,703
  10,501
  11,329
  12,191
  13,086
  14,016
  14,983
  15,989
  17,034
  18,121
  19,253
  20,432
  21,659
  22,939
  24,273
  25,665
  27,119
  28,636
  30,221
  31,878
  33,611
  35,423
  37,318
  39,302
  41,379
  43,555
  45,833
Total liabilities and equity, $m
  16,052
  17,563
  19,137
  20,778
  22,486
  24,260
  26,105
  28,022
  30,013
  32,084
  34,237
  36,475
  38,803
  41,227
  43,751
  46,379
  49,120
  51,977
  54,958
  58,070
  61,319
  64,714
  68,262
  71,972
  75,852
  79,910
  84,159
  88,606
  93,265
  98,143
Debt-to-equity ratio
  0.450
  0.510
  0.560
  0.610
  0.650
  0.680
  0.720
  0.750
  0.770
  0.800
  0.820
  0.840
  0.860
  0.870
  0.890
  0.900
  0.920
  0.930
  0.940
  0.950
  0.960
  0.970
  0.980
  0.990
  1.000
  1.000
  1.010
  1.020
  1.020
  1.030
Adjusted equity ratio
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467
  0.467

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,458
  2,684
  2,921
  3,167
  3,423
  3,689
  3,967
  4,255
  4,554
  4,866
  5,209
  5,546
  5,897
  6,262
  6,643
  7,040
  7,454
  7,885
  8,336
  8,807
  9,299
  9,814
  10,351
  10,914
  11,503
  12,119
  12,765
  13,441
  14,150
  14,892
Depreciation, amort., depletion, $m
  2,033
  2,221
  2,418
  2,623
  2,837
  3,059
  3,289
  3,529
  3,778
  4,037
  4,280
  4,559
  4,850
  5,153
  5,469
  5,797
  6,140
  6,497
  6,870
  7,259
  7,665
  8,089
  8,533
  8,996
  9,481
  9,989
  10,520
  11,076
  11,658
  12,268
Funds from operations, $m
  4,490
  4,906
  5,339
  5,790
  6,260
  6,748
  7,256
  7,783
  8,332
  8,902
  9,488
  10,105
  10,747
  11,415
  12,112
  12,837
  13,594
  14,383
  15,206
  16,066
  16,964
  17,903
  18,884
  19,911
  20,984
  22,108
  23,285
  24,517
  25,808
  27,160
Change in working capital, $m
  -129
  -135
  -141
  -146
  -152
  -158
  -165
  -171
  -178
  -185
  -192
  -200
  -208
  -216
  -225
  -235
  -245
  -255
  -266
  -278
  -290
  -303
  -317
  -331
  -346
  -362
  -379
  -397
  -416
  -436
Cash from operations, $m
  4,619
  5,040
  5,479
  5,936
  6,412
  6,906
  7,420
  7,955
  8,510
  9,087
  9,680
  10,305
  10,955
  11,632
  12,337
  13,072
  13,838
  14,638
  15,472
  16,344
  17,254
  18,206
  19,201
  20,242
  21,331
  22,471
  23,664
  24,914
  26,223
  27,595
Maintenance CAPEX, $m
  -1,826
  -2,007
  -2,195
  -2,392
  -2,597
  -2,811
  -3,033
  -3,263
  -3,503
  -3,752
  -4,011
  -4,280
  -4,559
  -4,850
  -5,153
  -5,469
  -5,797
  -6,140
  -6,497
  -6,870
  -7,259
  -7,665
  -8,089
  -8,533
  -8,996
  -9,481
  -9,989
  -10,520
  -11,076
  -11,658
New CAPEX, $m
  -903
  -944
  -984
  -1,025
  -1,067
  -1,109
  -1,153
  -1,198
  -1,245
  -1,294
  -1,345
  -1,399
  -1,455
  -1,515
  -1,577
  -1,643
  -1,713
  -1,786
  -1,863
  -1,945
  -2,031
  -2,122
  -2,217
  -2,318
  -2,425
  -2,537
  -2,655
  -2,780
  -2,911
  -3,049
Cash from investing activities, $m
  -2,729
  -2,951
  -3,179
  -3,417
  -3,664
  -3,920
  -4,186
  -4,461
  -4,748
  -5,046
  -5,356
  -5,679
  -6,014
  -6,365
  -6,730
  -7,112
  -7,510
  -7,926
  -8,360
  -8,815
  -9,290
  -9,787
  -10,306
  -10,851
  -11,421
  -12,018
  -12,644
  -13,300
  -13,987
  -14,707
Free cash flow, $m
  1,890
  2,090
  2,300
  2,519
  2,748
  2,986
  3,235
  3,493
  3,762
  4,041
  4,325
  4,626
  4,940
  5,267
  5,606
  5,960
  6,328
  6,712
  7,112
  7,529
  7,965
  8,419
  8,894
  9,391
  9,909
  10,452
  11,020
  11,614
  12,237
  12,888
Issuance/(repayment) of debt, $m
  766
  805
  840
  874
  910
  946
  983
  1,022
  1,062
  1,104
  1,147
  1,193
  1,241
  1,292
  1,345
  1,401
  1,460
  1,523
  1,589
  1,659
  1,732
  1,809
  1,891
  1,977
  2,068
  2,164
  2,264
  2,371
  2,482
  2,600
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  
  766
  805
  840
  874
  910
  946
  983
  1,022
  1,062
  1,104
  1,147
  1,193
  1,241
  1,292
  1,345
  1,401
  1,460
  1,523
  1,589
  1,659
  1,732
  1,809
  1,891
  1,977
  2,068
  2,164
  2,264
  2,371
  2,482
  2,600
Total cash flow (excl. dividends), $m
  2,657
  2,895
  3,139
  3,393
  3,658
  3,932
  4,218
  4,515
  4,824
  5,145
  5,472
  5,819
  6,181
  6,558
  6,951
  7,361
  7,789
  8,235
  8,701
  9,188
  9,697
  10,229
  10,785
  11,368
  11,977
  12,616
  13,284
  13,985
  14,719
  15,488
Retained Cash Flow (-), $m
  -683
  -705
  -736
  -766
  -797
  -829
  -861
  -895
  -930
  -967
  -1,005
  -1,045
  -1,087
  -1,132
  -1,178
  -1,228
  -1,280
  -1,334
  -1,392
  -1,453
  -1,517
  -1,585
  -1,657
  -1,732
  -1,812
  -1,896
  -1,984
  -2,077
  -2,175
  -2,278
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
  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
  1,973
  2,190
  2,404
  2,627
  2,860
  3,104
  3,357
  3,620
  3,893
  4,178
  4,467
  4,774
  5,094
  5,427
  5,773
  6,133
  6,509
  6,900
  7,309
  7,735
  8,179
  8,643
  9,128
  9,635
  10,165
  10,720
  11,300
  11,908
  12,544
  13,210
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
  1,892
  2,005
  2,092
  2,163
  2,217
  2,252
  2,268
  2,262
  2,237
  2,190
  2,121
  2,037
  1,937
  1,822
  1,695
  1,559
  1,416
  1,271
  1,125
  983
  846
  717
  598
  491
  395
  313
  243
  184
  137
  99
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

Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk offers telecommunications and network services. The Company's segments include Corporate, Home, Personal and Others. The Corporate segment provides telecommunications services, including interconnection, leased lines, satellite, contact center, broadband access, information technology services, and data and Internet services to companies and institutions. The Home segment provides fixed wireline telecommunications services, pay television, and data and Internet services to home customers. The Personal segment provides mobile cellular and fixed wireless telecommunications services to individual customers. The Others segment provides building management services. The Company's postpaid mobile services are marketed under the kartuHalo brand, and its prepaid services are marketed under the simPATI, Kartu As and Loop brands. The Company operates its e-money business under the T-cash brand name.

FINANCIAL RATIOS  of  Telekomunikasi Indonesia ADR (TLK)

Valuation Ratios
P/E Ratio 1727.9
Price to Sales 287.1
Price to Book 395.8
Price to Tangible Book
Price to Cash Flow 707.1
Price to Free Cash Flow 1855.2
Growth Rates
Sales Growth Rate 13.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.4%
Cap. Spend. - 3 Yr. Gr. Rate 6.8%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 31.2%
Total Debt to Equity 37.7%
Interest Coverage -10
Management Effectiveness
Return On Assets 9.7%
Ret/ On Assets - 3 Yr. Avg. 9.4%
Return On Total Capital 17.1%
Ret/ On T. Cap. - 3 Yr. Avg. 16.5%
Return On Equity 24.3%
Return On Equity - 3 Yr. Avg. 22.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 70.4%
Gross Margin - 3 Yr. Avg. 69.7%
EBITDA Margin 29.8%
EBITDA Margin - 3 Yr. Avg. 29.2%
Operating Margin 33.7%
Oper. Margin - 3 Yr. Avg. 32.6%
Pre-Tax Margin 32.8%
Pre-Tax Margin - 3 Yr. Avg. 31.7%
Net Profit Margin 16.6%
Net Profit Margin - 3 Yr. Avg. 15.9%
Effective Tax Rate 23.6%
Eff/ Tax Rate - 3 Yr. Avg. 25%
Payout Ratio 58%

TLK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TLK stock intrinsic value calculation we used $9450.11105295 million for the last fiscal year's total revenue generated by Telekomunikasi Indonesia ADR. The default revenue input number comes from 0001 income statement of Telekomunikasi Indonesia 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 TLK stock valuation model: a) initial revenue growth rate of 9.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TLK is calculated based on our internal credit rating of Telekomunikasi Indonesia 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 Telekomunikasi Indonesia 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 TLK stock the variable cost ratio is equal to 61%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $462 million in the base year in the intrinsic value calculation for TLK 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 8.2% for Telekomunikasi Indonesia ADR.

Corporate tax rate of 27% is the nominal tax rate for Telekomunikasi Indonesia 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 TLK 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 TLK are equal to 96.6%.

Life of production assets of 0 years is the average useful life of capital assets used in Telekomunikasi Indonesia 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 TLK is equal to -13.8%. 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 - $6813.11922041 million for Telekomunikasi Indonesia 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 64.306 million for Telekomunikasi Indonesia 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 Telekomunikasi Indonesia ADR at the current share price and the inputted number of shares is $1.6 billion.

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