Intrinsic value of T-Mobile US, Inc. - TMUS

Previous Close

$79.15

  Intrinsic Value

$74.82

stock screener

  Rating & Target

hold

-5%

Previous close

$79.15

 
Intrinsic value

$74.82

 
Up/down potential

-5%

 
Rating

hold

We calculate the intrinsic value of TMUS 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 67.3

 

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, %
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.07
Revenue, $m
  46,082
  48,967
  51,970
  55,099
  58,360
  61,761
  65,308
  69,011
  72,877
  76,916
  81,138
  85,551
  90,167
  94,996
  100,050
  105,341
  110,881
  116,684
  122,764
  129,134
  135,811
  142,809
  150,147
  157,840
  165,909
  174,371
  183,247
  192,558
  202,327
  212,577
Variable operating expenses, $m
  34,689
  36,625
  38,640
  40,740
  42,928
  45,210
  47,591
  50,076
  52,670
  55,381
  54,447
  57,409
  60,507
  63,747
  67,139
  70,689
  74,407
  78,301
  82,381
  86,655
  91,136
  95,832
  100,756
  105,919
  111,333
  117,011
  122,968
  129,216
  135,772
  142,650
Fixed operating expenses, $m
  5,421
  5,540
  5,662
  5,786
  5,914
  6,044
  6,177
  6,313
  6,452
  6,593
  6,739
  6,887
  7,038
  7,193
  7,351
  7,513
  7,678
  7,847
  8,020
  8,196
  8,377
  8,561
  8,749
  8,942
  9,139
  9,340
  9,545
  9,755
  9,970
  10,189
Total operating expenses, $m
  40,110
  42,165
  44,302
  46,526
  48,842
  51,254
  53,768
  56,389
  59,122
  61,974
  61,186
  64,296
  67,545
  70,940
  74,490
  78,202
  82,085
  86,148
  90,401
  94,851
  99,513
  104,393
  109,505
  114,861
  120,472
  126,351
  132,513
  138,971
  145,742
  152,839
Operating income, $m
  5,972
  6,802
  7,668
  8,573
  9,518
  10,507
  11,541
  12,623
  13,756
  14,942
  19,952
  21,255
  22,622
  24,056
  25,560
  27,139
  28,796
  30,536
  32,363
  34,282
  36,298
  38,416
  40,641
  42,980
  45,437
  48,020
  50,734
  53,587
  56,586
  59,738
EBITDA, $m
  14,485
  15,612
  16,787
  18,014
  19,296
  20,634
  22,034
  23,497
  25,029
  26,631
  28,310
  30,068
  31,910
  33,841
  35,866
  37,990
  40,218
  42,556
  45,009
  47,585
  50,288
  53,127
  56,108
  59,239
  62,527
  65,982
  69,610
  73,423
  77,428
  81,636
Interest expense (income), $m
  0
  1,488
  1,651
  1,823
  2,002
  2,188
  2,382
  2,584
  2,795
  3,016
  3,246
  3,486
  3,737
  4,000
  4,275
  4,562
  4,863
  5,178
  5,507
  5,853
  6,215
  6,594
  6,991
  7,407
  7,844
  8,302
  8,782
  9,286
  9,814
  10,368
  10,949
Earnings before tax, $m
  4,485
  5,151
  5,845
  6,571
  7,330
  8,125
  8,956
  9,827
  10,740
  11,697
  16,466
  17,518
  18,622
  19,781
  20,998
  22,276
  23,618
  25,029
  26,510
  28,068
  29,705
  31,425
  33,234
  35,136
  37,135
  39,238
  41,448
  43,773
  46,218
  48,789
Tax expense, $m
  1,211
  1,391
  1,578
  1,774
  1,979
  2,194
  2,418
  2,653
  2,900
  3,158
  4,446
  4,730
  5,028
  5,341
  5,669
  6,015
  6,377
  6,758
  7,158
  7,578
  8,020
  8,485
  8,973
  9,487
  10,027
  10,594
  11,191
  11,819
  12,479
  13,173
Net income, $m
  3,274
  3,760
  4,267
  4,797
  5,351
  5,931
  6,538
  7,174
  7,840
  8,538
  12,020
  12,788
  13,594
  14,440
  15,329
  16,261
  17,241
  18,271
  19,353
  20,489
  21,684
  22,940
  24,261
  25,649
  27,109
  28,643
  30,257
  31,955
  33,739
  35,616

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
  77,060
  81,884
  86,907
  92,139
  97,592
  103,279
  109,211
  115,403
  121,868
  128,623
  135,682
  143,062
  150,781
  158,856
  167,308
  176,156
  185,420
  195,124
  205,291
  215,943
  227,108
  238,811
  251,081
  263,947
  277,439
  291,590
  306,433
  322,004
  338,340
  355,480
Adjusted assets (=assets-cash), $m
  77,060
  81,884
  86,907
  92,139
  97,592
  103,279
  109,211
  115,403
  121,868
  128,623
  135,682
  143,062
  150,781
  158,856
  167,308
  176,156
  185,420
  195,124
  205,291
  215,943
  227,108
  238,811
  251,081
  263,947
  277,439
  291,590
  306,433
  322,004
  338,340
  355,480
Revenue / Adjusted assets
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
  0.598
Average production assets, $m
  44,146
  46,910
  49,787
  52,785
  55,909
  59,167
  62,565
  66,112
  69,816
  73,686
  77,730
  81,958
  86,380
  91,006
  95,848
  100,917
  106,224
  111,784
  117,608
  123,711
  130,107
  136,811
  143,840
  151,211
  158,940
  167,047
  175,551
  184,471
  193,830
  203,649
Working capital, $m
  -2,488
  -2,644
  -2,806
  -2,975
  -3,151
  -3,335
  -3,527
  -3,727
  -3,935
  -4,153
  -4,381
  -4,620
  -4,869
  -5,130
  -5,403
  -5,688
  -5,988
  -6,301
  -6,629
  -6,973
  -7,334
  -7,712
  -8,108
  -8,523
  -8,959
  -9,416
  -9,895
  -10,398
  -10,926
  -11,479
Total debt, $m
  30,579
  33,758
  37,068
  40,517
  44,110
  47,858
  51,767
  55,847
  60,108
  64,559
  69,211
  74,075
  79,162
  84,483
  90,053
  95,884
  101,989
  108,384
  115,084
  122,104
  129,461
  137,174
  145,260
  153,738
  162,629
  171,955
  181,736
  191,998
  202,763
  214,059
Total liabilities, $m
  50,782
  53,961
  57,271
  60,720
  64,313
  68,061
  71,970
  76,050
  80,311
  84,762
  89,414
  94,278
  99,365
  104,686
  110,256
  116,087
  122,192
  128,587
  135,287
  142,307
  149,664
  157,377
  165,463
  173,941
  182,832
  192,158
  201,939
  212,201
  222,966
  234,262
Total equity, $m
  26,277
  27,922
  29,635
  31,419
  33,279
  35,218
  37,241
  39,352
  41,557
  43,860
  46,268
  48,784
  51,416
  54,170
  57,052
  60,069
  63,228
  66,537
  70,004
  73,637
  77,444
  81,435
  85,619
  90,006
  94,607
  99,432
  104,494
  109,803
  115,374
  121,219
Total liabilities and equity, $m
  77,059
  81,883
  86,906
  92,139
  97,592
  103,279
  109,211
  115,402
  121,868
  128,622
  135,682
  143,062
  150,781
  158,856
  167,308
  176,156
  185,420
  195,124
  205,291
  215,944
  227,108
  238,812
  251,082
  263,947
  277,439
  291,590
  306,433
  322,004
  338,340
  355,481
Debt-to-equity ratio
  1.160
  1.210
  1.250
  1.290
  1.330
  1.360
  1.390
  1.420
  1.450
  1.470
  1.500
  1.520
  1.540
  1.560
  1.580
  1.600
  1.610
  1.630
  1.640
  1.660
  1.670
  1.680
  1.700
  1.710
  1.720
  1.730
  1.740
  1.750
  1.760
  1.770
Adjusted equity ratio
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,274
  3,760
  4,267
  4,797
  5,351
  5,931
  6,538
  7,174
  7,840
  8,538
  12,020
  12,788
  13,594
  14,440
  15,329
  16,261
  17,241
  18,271
  19,353
  20,489
  21,684
  22,940
  24,261
  25,649
  27,109
  28,643
  30,257
  31,955
  33,739
  35,616
Depreciation, amort., depletion, $m
  8,513
  8,810
  9,119
  9,442
  9,778
  10,128
  10,493
  10,875
  11,273
  11,689
  8,358
  8,813
  9,288
  9,786
  10,306
  10,851
  11,422
  12,020
  12,646
  13,302
  13,990
  14,711
  15,467
  16,259
  17,090
  17,962
  18,876
  19,836
  20,842
  21,898
Funds from operations, $m
  11,786
  12,570
  13,386
  14,238
  15,129
  16,059
  17,031
  18,049
  19,113
  20,228
  20,378
  21,601
  22,882
  24,226
  25,635
  27,113
  28,663
  30,291
  31,999
  33,792
  35,674
  37,651
  39,728
  41,908
  44,199
  46,606
  49,134
  51,790
  54,581
  57,514
Change in working capital, $m
  -150
  -156
  -162
  -169
  -176
  -184
  -192
  -200
  -209
  -218
  -228
  -238
  -249
  -261
  -273
  -286
  -299
  -313
  -328
  -344
  -361
  -378
  -396
  -415
  -436
  -457
  -479
  -503
  -528
  -553
Cash from operations, $m
  11,936
  12,726
  13,548
  14,407
  15,305
  16,242
  17,223
  18,249
  19,322
  20,446
  20,606
  21,839
  23,132
  24,487
  25,908
  27,398
  28,963
  30,604
  32,327
  34,136
  36,035
  38,029
  40,124
  42,324
  44,635
  47,063
  49,613
  52,293
  55,109
  58,067
Maintenance CAPEX, $m
  -4,463
  -4,747
  -5,044
  -5,353
  -5,676
  -6,012
  -6,362
  -6,727
  -7,109
  -7,507
  -7,923
  -8,358
  -8,813
  -9,288
  -9,786
  -10,306
  -10,851
  -11,422
  -12,020
  -12,646
  -13,302
  -13,990
  -14,711
  -15,467
  -16,259
  -17,090
  -17,962
  -18,876
  -19,836
  -20,842
New CAPEX, $m
  -2,638
  -2,764
  -2,877
  -2,998
  -3,124
  -3,258
  -3,399
  -3,547
  -3,704
  -3,869
  -4,044
  -4,228
  -4,422
  -4,626
  -4,842
  -5,069
  -5,308
  -5,559
  -5,824
  -6,103
  -6,396
  -6,705
  -7,029
  -7,371
  -7,729
  -8,107
  -8,503
  -8,920
  -9,359
  -9,819
Cash from investing activities, $m
  -7,101
  -7,511
  -7,921
  -8,351
  -8,800
  -9,270
  -9,761
  -10,274
  -10,813
  -11,376
  -11,967
  -12,586
  -13,235
  -13,914
  -14,628
  -15,375
  -16,159
  -16,981
  -17,844
  -18,749
  -19,698
  -20,695
  -21,740
  -22,838
  -23,988
  -25,197
  -26,465
  -27,796
  -29,195
  -30,661
Free cash flow, $m
  4,835
  5,215
  5,627
  6,056
  6,505
  6,973
  7,462
  7,974
  8,509
  9,069
  8,639
  9,253
  9,897
  10,572
  11,280
  12,024
  12,804
  13,623
  14,483
  15,387
  16,337
  17,335
  18,384
  19,487
  20,646
  21,865
  23,148
  24,496
  25,914
  27,406
Issuance/(repayment) of debt, $m
  3,032
  3,179
  3,310
  3,448
  3,594
  3,747
  3,909
  4,080
  4,261
  4,451
  4,652
  4,864
  5,087
  5,322
  5,570
  5,831
  6,105
  6,395
  6,700
  7,020
  7,358
  7,712
  8,086
  8,478
  8,891
  9,325
  9,782
  10,261
  10,766
  11,295
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  
  3,032
  3,179
  3,310
  3,448
  3,594
  3,747
  3,909
  4,080
  4,261
  4,451
  4,652
  4,864
  5,087
  5,322
  5,570
  5,831
  6,105
  6,395
  6,700
  7,020
  7,358
  7,712
  8,086
  8,478
  8,891
  9,325
  9,782
  10,261
  10,766
  11,295
Total cash flow (excl. dividends), $m
  7,867
  8,394
  8,937
  9,504
  10,098
  10,720
  11,372
  12,054
  12,770
  13,520
  13,291
  14,117
  14,984
  15,894
  16,850
  17,854
  18,909
  20,018
  21,183
  22,407
  23,694
  25,047
  26,469
  27,965
  29,537
  31,191
  32,929
  34,757
  36,680
  38,701
Retained Cash Flow (-), $m
  -1,559
  -1,645
  -1,713
  -1,784
  -1,860
  -1,939
  -2,023
  -2,111
  -2,205
  -2,303
  -2,407
  -2,517
  -2,632
  -2,754
  -2,882
  -3,017
  -3,159
  -3,309
  -3,467
  -3,633
  -3,807
  -3,991
  -4,184
  -4,387
  -4,601
  -4,825
  -5,062
  -5,310
  -5,571
  -5,845
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
  6,308
  6,749
  7,224
  7,720
  8,239
  8,781
  9,349
  9,943
  10,565
  11,217
  10,883
  11,600
  12,351
  13,140
  13,968
  14,837
  15,750
  16,709
  17,716
  18,774
  19,887
  21,056
  22,285
  23,578
  24,937
  26,365
  27,868
  29,448
  31,109
  32,857
Discount rate, %
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
  5,830
  5,721
  5,572
  5,371
  5,123
  4,833
  4,506
  4,151
  3,775
  3,387
  2,741
  2,401
  2,071
  1,756
  1,462
  1,196
  958
  753
  578
  434
  319
  228
  159
  107
  71
  45
  28
  17
  10
  5
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

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the U.S. Virgin Islands. The company offers voice, messaging, and data services to approximately 71 million customers in the postpaid, prepaid, and wholesale markets. It also provides wireless devices, including smartphones, tablets, and other mobile communication devices, as well as accessories that are manufactured by various suppliers. The company offers services, devices, and accessories under the T-Mobile and MetroPCS brands through its owned and operated retail stores, as well as Websites. T-Mobile US, Inc. also sells its devices and accessories to dealers and other third party distributors for resale through independent third-party retail outlets and various third-party Websites. As of December 31, 2016, it had approximately 2,000 T-Mobile and MetroPCS retail locations, including stores and kiosks. The company was founded in 1994 and is headquartered in Bellevue, Washington. T-Mobile US, Inc. is as a subsidiary of Deutsche Telekom Holding B.V.

FINANCIAL RATIOS  of  T-Mobile US, Inc. (TMUS)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

TMUS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TMUS stock intrinsic value calculation we used $43310 million for the last fiscal year's total revenue generated by T-Mobile US, Inc.. The default revenue input number comes from 0001 income statement of T-Mobile US, Inc.. 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 TMUS stock valuation model: a) initial revenue growth rate of 6.4% 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 8.2%, whose default value for TMUS is calculated based on our internal credit rating of T-Mobile US, Inc., 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 T-Mobile US, Inc..
    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 TMUS stock the variable cost ratio is equal to 75.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5304 million in the base year in the intrinsic value calculation for TMUS 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 T-Mobile US, Inc..

Corporate tax rate of 27% is the nominal tax rate for T-Mobile US, Inc.. 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 TMUS 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 TMUS are equal to 95.8%.

Life of production assets of 9.3 years is the average useful life of capital assets used in T-Mobile US, Inc. 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 TMUS is equal to -5.4%. 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 - $24718 million for T-Mobile US, Inc. - 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 850.259 million for T-Mobile US, Inc. 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 T-Mobile US, Inc. at the current share price and the inputted number of shares is $67.3 billion.

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