Intrinsic value of Toyota Motor ADR - TM

Previous Close

$116.88

  Intrinsic Value

$7,192

stock screener

  Rating & Target

str. buy

+999%

Previous close

$116.88

 
Intrinsic value

$7,192

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of TM 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 2.7

 

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, %
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
  4.92
Revenue, $m
  265,208
  274,172
  283,883
  294,352
  305,594
  317,625
  330,468
  344,147
  358,687
  374,120
  390,478
  407,797
  426,113
  445,469
  465,908
  487,477
  510,225
  534,205
  559,472
  586,085
  614,106
  643,602
  674,642
  707,297
  741,647
  777,771
  815,755
  855,689
  897,667
  941,789
Variable operating expenses, $m
  164,694
  170,261
  176,292
  182,793
  189,774
  197,245
  205,221
  213,715
  222,745
  232,329
  242,487
  253,242
  264,616
  276,636
  289,329
  302,723
  316,850
  331,741
  347,432
  363,959
  381,360
  399,677
  418,952
  439,232
  460,563
  482,996
  506,584
  531,383
  557,451
  584,851
Fixed operating expenses, $m
  79,721
  81,475
  83,267
  85,099
  86,971
  88,885
  90,840
  92,839
  94,881
  96,969
  99,102
  101,282
  103,510
  105,788
  108,115
  110,494
  112,924
  115,409
  117,948
  120,543
  123,194
  125,905
  128,675
  131,506
  134,399
  137,355
  140,377
  143,466
  146,622
  149,847
Total operating expenses, $m
  244,415
  251,736
  259,559
  267,892
  276,745
  286,130
  296,061
  306,554
  317,626
  329,298
  341,589
  354,524
  368,126
  382,424
  397,444
  413,217
  429,774
  447,150
  465,380
  484,502
  504,554
  525,582
  547,627
  570,738
  594,962
  620,351
  646,961
  674,849
  704,073
  734,698
Operating income, $m
  20,793
  22,436
  24,324
  26,460
  28,849
  31,495
  34,407
  37,593
  41,061
  44,823
  48,889
  53,273
  57,986
  63,045
  68,464
  74,260
  80,451
  87,055
  94,092
  101,584
  109,552
  118,021
  127,014
  136,560
  146,685
  157,420
  168,794
  180,840
  193,594
  207,091
EBITDA, $m
  36,440
  38,612
  41,073
  43,827
  46,879
  50,235
  53,905
  57,897
  62,224
  66,896
  71,928
  77,333
  83,127
  89,328
  95,953
  103,021
  110,554
  118,573
  127,101
  136,163
  145,784
  155,993
  166,818
  178,291
  190,443
  203,308
  216,923
  231,326
  246,556
  262,656
Interest expense (income), $m
  3,157
  9,139
  9,626
  10,147
  10,710
  11,318
  11,971
  12,670
  13,416
  14,210
  15,054
  15,950
  16,900
  17,906
  18,970
  20,093
  21,280
  22,533
  23,854
  25,246
  26,713
  28,259
  29,886
  31,599
  33,401
  35,297
  37,292
  39,390
  41,595
  43,914
  46,352
Earnings before tax, $m
  11,654
  12,810
  14,178
  15,750
  17,530
  19,524
  21,737
  24,177
  26,851
  29,769
  32,939
  36,372
  40,081
  44,076
  48,371
  52,980
  57,918
  63,201
  68,846
  74,870
  81,293
  88,135
  95,416
  103,159
  111,388
  120,128
  129,404
  139,245
  149,680
  160,739
Tax expense, $m
  3,147
  3,459
  3,828
  4,252
  4,733
  5,271
  5,869
  6,528
  7,250
  8,038
  8,894
  9,821
  10,822
  11,900
  13,060
  14,305
  15,638
  17,064
  18,588
  20,215
  21,949
  23,796
  25,762
  27,853
  30,075
  32,434
  34,939
  37,596
  40,414
  43,399
Net income, $m
  8,507
  9,352
  10,350
  11,497
  12,797
  14,253
  15,868
  17,649
  19,602
  21,731
  24,045
  26,552
  29,259
  32,175
  35,311
  38,675
  42,280
  46,137
  50,257
  54,655
  59,344
  64,338
  69,653
  75,306
  81,313
  87,693
  94,465
  101,649
  109,266
  117,339

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
  454,124
  469,473
  486,102
  504,028
  523,277
  543,879
  565,870
  589,292
  614,191
  640,617
  668,627
  698,282
  729,646
  762,790
  797,788
  834,721
  873,673
  914,734
  957,999
  1,003,570
  1,051,552
  1,102,059
  1,155,208
  1,211,126
  1,269,943
  1,331,799
  1,396,840
  1,465,220
  1,537,101
  1,612,653
Adjusted assets (=assets-cash), $m
  454,124
  469,473
  486,102
  504,028
  523,277
  543,879
  565,870
  589,292
  614,191
  640,617
  668,627
  698,282
  729,646
  762,790
  797,788
  834,721
  873,673
  914,734
  957,999
  1,003,570
  1,051,552
  1,102,059
  1,155,208
  1,211,126
  1,269,943
  1,331,799
  1,396,840
  1,465,220
  1,537,101
  1,612,653
Revenue / Adjusted assets
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
  0.584
Average production assets, $m
  93,884
  97,057
  100,495
  104,201
  108,180
  112,439
  116,986
  121,828
  126,975
  132,439
  138,229
  144,360
  150,844
  157,696
  164,932
  172,567
  180,620
  189,108
  198,053
  207,474
  217,394
  227,835
  238,823
  250,383
  262,543
  275,331
  288,777
  302,914
  317,774
  333,393
Working capital, $m
  35,803
  37,013
  38,324
  39,738
  41,255
  42,879
  44,613
  46,460
  48,423
  50,506
  52,715
  55,053
  57,525
  60,138
  62,898
  65,809
  68,880
  72,118
  75,529
  79,121
  82,904
  86,886
  91,077
  95,485
  100,122
  104,999
  110,127
  115,518
  121,185
  127,142
Total debt, $m
  178,259
  187,899
  198,341
  209,599
  221,688
  234,626
  248,436
  263,145
  278,781
  295,377
  312,968
  331,591
  351,287
  372,102
  394,081
  417,275
  441,736
  467,523
  494,693
  523,312
  553,444
  585,163
  618,540
  653,657
  690,594
  729,439
  770,285
  813,228
  858,369
  905,816
Total liabilities, $m
  285,190
  294,829
  305,272
  316,530
  328,618
  341,556
  355,367
  370,075
  385,712
  402,307
  419,898
  438,521
  458,218
  479,032
  501,011
  524,205
  548,667
  574,453
  601,624
  630,242
  660,375
  692,093
  725,471
  760,587
  797,524
  836,370
  877,216
  920,158
  965,299
  1,012,746
Total equity, $m
  168,934
  174,644
  180,830
  187,498
  194,659
  202,323
  210,504
  219,217
  228,479
  238,310
  248,729
  259,761
  271,428
  283,758
  296,777
  310,516
  325,006
  340,281
  356,376
  373,328
  391,177
  409,966
  429,737
  450,539
  472,419
  495,429
  519,625
  545,062
  571,802
  599,907
Total liabilities and equity, $m
  454,124
  469,473
  486,102
  504,028
  523,277
  543,879
  565,871
  589,292
  614,191
  640,617
  668,627
  698,282
  729,646
  762,790
  797,788
  834,721
  873,673
  914,734
  958,000
  1,003,570
  1,051,552
  1,102,059
  1,155,208
  1,211,126
  1,269,943
  1,331,799
  1,396,841
  1,465,220
  1,537,101
  1,612,653
Debt-to-equity ratio
  1.060
  1.080
  1.100
  1.120
  1.140
  1.160
  1.180
  1.200
  1.220
  1.240
  1.260
  1.280
  1.290
  1.310
  1.330
  1.340
  1.360
  1.370
  1.390
  1.400
  1.410
  1.430
  1.440
  1.450
  1.460
  1.470
  1.480
  1.490
  1.500
  1.510
Adjusted equity ratio
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8,507
  9,352
  10,350
  11,497
  12,797
  14,253
  15,868
  17,649
  19,602
  21,731
  24,045
  26,552
  29,259
  32,175
  35,311
  38,675
  42,280
  46,137
  50,257
  54,655
  59,344
  64,338
  69,653
  75,306
  81,313
  87,693
  94,465
  101,649
  109,266
  117,339
Depreciation, amort., depletion, $m
  15,647
  16,176
  16,749
  17,367
  18,030
  18,740
  19,498
  20,305
  21,163
  22,073
  23,038
  24,060
  25,141
  26,283
  27,489
  28,761
  30,103
  31,518
  33,009
  34,579
  36,232
  37,973
  39,804
  41,731
  43,757
  45,888
  48,130
  50,486
  52,962
  55,566
Funds from operations, $m
  24,155
  25,528
  27,099
  28,864
  30,827
  32,992
  35,366
  37,954
  40,764
  43,804
  47,084
  50,612
  54,400
  58,458
  62,799
  67,437
  72,383
  77,655
  83,266
  89,234
  95,576
  102,311
  109,457
  117,037
  125,070
  133,582
  142,594
  152,134
  162,229
  172,905
Change in working capital, $m
  1,110
  1,210
  1,311
  1,413
  1,518
  1,624
  1,734
  1,847
  1,963
  2,083
  2,208
  2,338
  2,473
  2,613
  2,759
  2,912
  3,071
  3,237
  3,411
  3,593
  3,783
  3,982
  4,190
  4,409
  4,637
  4,877
  5,128
  5,391
  5,667
  5,957
Cash from operations, $m
  23,045
  24,318
  25,788
  27,451
  29,309
  31,368
  33,632
  36,107
  38,801
  41,721
  44,875
  48,274
  51,927
  55,845
  60,040
  64,525
  69,313
  74,418
  79,855
  85,641
  91,793
  98,329
  105,267
  112,628
  120,433
  128,705
  137,467
  146,743
  156,561
  166,948
Maintenance CAPEX, $m
  -15,154
  -15,647
  -16,176
  -16,749
  -17,367
  -18,030
  -18,740
  -19,498
  -20,305
  -21,163
  -22,073
  -23,038
  -24,060
  -25,141
  -26,283
  -27,489
  -28,761
  -30,103
  -31,518
  -33,009
  -34,579
  -36,232
  -37,973
  -39,804
  -41,731
  -43,757
  -45,888
  -48,130
  -50,486
  -52,962
New CAPEX, $m
  -2,959
  -3,173
  -3,438
  -3,706
  -3,979
  -4,259
  -4,546
  -4,842
  -5,147
  -5,463
  -5,791
  -6,131
  -6,484
  -6,852
  -7,235
  -7,635
  -8,053
  -8,489
  -8,945
  -9,421
  -9,920
  -10,442
  -10,988
  -11,560
  -12,160
  -12,788
  -13,446
  -14,137
  -14,860
  -15,619
Cash from investing activities, $m
  -18,113
  -18,820
  -19,614
  -20,455
  -21,346
  -22,289
  -23,286
  -24,340
  -25,452
  -26,626
  -27,864
  -29,169
  -30,544
  -31,993
  -33,518
  -35,124
  -36,814
  -38,592
  -40,463
  -42,430
  -44,499
  -46,674
  -48,961
  -51,364
  -53,891
  -56,545
  -59,334
  -62,267
  -65,346
  -68,581
Free cash flow, $m
  4,931
  5,497
  6,174
  6,996
  7,963
  9,079
  10,346
  11,768
  13,349
  15,095
  17,011
  19,105
  21,383
  23,852
  26,522
  29,401
  32,499
  35,826
  39,393
  43,212
  47,295
  51,655
  56,307
  61,264
  66,543
  72,160
  78,132
  84,477
  91,215
  98,367
Issuance/(repayment) of debt, $m
  9,025
  9,639
  10,443
  11,258
  12,088
  12,938
  13,810
  14,709
  15,636
  16,596
  17,590
  18,623
  19,697
  20,814
  21,979
  23,194
  24,462
  25,786
  27,171
  28,618
  30,133
  31,718
  33,378
  35,116
  36,937
  38,846
  40,846
  42,943
  45,141
  47,447
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  
  9,025
  9,639
  10,443
  11,258
  12,088
  12,938
  13,810
  14,709
  15,636
  16,596
  17,590
  18,623
  19,697
  20,814
  21,979
  23,194
  24,462
  25,786
  27,171
  28,618
  30,133
  31,718
  33,378
  35,116
  36,937
  38,846
  40,846
  42,943
  45,141
  47,447
Total cash flow (excl. dividends), $m
  13,956
  15,136
  16,617
  18,253
  20,052
  22,017
  24,156
  26,477
  28,985
  31,691
  34,602
  37,728
  41,079
  44,667
  48,501
  52,595
  56,960
  61,612
  66,563
  71,830
  77,427
  83,373
  89,684
  96,380
  103,480
  111,005
  118,978
  127,420
  136,357
  145,813
Retained Cash Flow (-), $m
  -5,049
  -5,710
  -6,186
  -6,669
  -7,161
  -7,664
  -8,181
  -8,713
  -9,262
  -9,831
  -10,420
  -11,031
  -11,667
  -12,330
  -13,019
  -13,739
  -14,490
  -15,275
  -16,095
  -16,952
  -17,849
  -18,788
  -19,772
  -20,801
  -21,880
  -23,010
  -24,195
  -25,437
  -26,740
  -28,105
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
  8,907
  9,426
  10,431
  11,585
  12,891
  14,353
  15,976
  17,764
  19,723
  21,860
  24,182
  26,697
  29,412
  32,337
  35,481
  38,856
  42,470
  46,337
  50,469
  54,878
  59,578
  64,585
  69,913
  75,579
  81,600
  87,995
  94,782
  101,983
  109,617
  117,708
Discount rate, %
  5.90
  6.20
  6.50
  6.83
  7.17
  7.53
  7.91
  8.30
  8.72
  9.15
  9.61
  10.09
  10.60
  11.13
  11.68
  12.27
  12.88
  13.52
  14.20
  14.91
  15.65
  16.44
  17.26
  18.12
  19.03
  19.98
  20.98
  22.03
  23.13
  24.29
PV of cash for distribution, $m
  8,411
  8,359
  8,634
  8,894
  9,118
  9,285
  9,378
  9,385
  9,296
  9,105
  8,813
  8,422
  7,942
  7,384
  6,765
  6,102
  5,416
  4,725
  4,050
  3,407
  2,810
  2,270
  1,796
  1,388
  1,048
  772
  554
  387
  263
  173
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

Toyota Motor Corporation (Toyota) conducts business in the automotive industry. The Company also conducts business in finance and other industries. The Company's segments include Automotive, Financial Services and All Other. Toyota sells its vehicles in approximately 190 countries and regions. Toyota's markets for its automobiles are Japan, North America, Europe and Asia. The Company's Automotive segment includes the design, manufacture, assembly and sale of passenger vehicles, minivans and commercial vehicles, such as trucks and related parts and accessories. The Company's Financial Services segment consists of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. The All Other segment includes the design, manufacturing and sale of housing, telecommunications and other businesses. Its information technology related businesses include a Web portal for automobile information called GAZOO.com.

FINANCIAL RATIOS  of  Toyota Motor ADR (TM)

Valuation Ratios
P/E Ratio 21.8
Price to Sales 1.4
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 11.7
Price to Free Cash Flow -314.1
Growth Rates
Sales Growth Rate -2.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -12.8%
Cap. Spend. - 3 Yr. Gr. Rate 5.7%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 55.1%
Total Debt to Equity 106.4%
Interest Coverage 7
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 5.5%
Return On Total Capital 5%
Ret/ On T. Cap. - 3 Yr. Avg. 6%
Return On Equity 10.4%
Return On Equity - 3 Yr. Avg. 12.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 17.6%
Gross Margin - 3 Yr. Avg. 19.3%
EBITDA Margin 15.1%
EBITDA Margin - 3 Yr. Avg. 17.6%
Operating Margin 7.2%
Oper. Margin - 3 Yr. Avg. 9.1%
Pre-Tax Margin 7.9%
Pre-Tax Margin - 3 Yr. Avg. 9.7%
Net Profit Margin 6.6%
Net Profit Margin - 3 Yr. Avg. 7.6%
Effective Tax Rate 28.7%
Eff/ Tax Rate - 3 Yr. Avg. 29.7%
Payout Ratio 34.9%

TM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TM stock intrinsic value calculation we used $256984.622651 million for the last fiscal year's total revenue generated by Toyota Motor ADR. The default revenue input number comes from 0001 income statement of Toyota Motor 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 TM stock valuation model: a) initial revenue growth rate of 3.2% 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 5.9%, whose default value for TM is calculated based on our internal credit rating of Toyota Motor 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 Toyota Motor 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 TM stock the variable cost ratio is equal to 62.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $78005 million in the base year in the intrinsic value calculation for TM 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 Toyota Motor ADR.

Corporate tax rate of 27% is the nominal tax rate for Toyota Motor 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 TM 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 TM are equal to 35.4%.

Life of production assets of 6 years is the average useful life of capital assets used in Toyota Motor 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 TM is equal to 13.5%. 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 - $163884.941045 million for Toyota Motor 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 22.891 million for Toyota Motor 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 Toyota Motor ADR at the current share price and the inputted number of shares is $2.7 billion.

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