Intrinsic value of United Technologies - UTX

Previous Close

$130.26

  Intrinsic Value

$129.22

stock screener

  Rating & Target

hold

-1%

Previous close

$130.26

 
Intrinsic value

$129.22

 
Up/down potential

-1%

 
Rating

hold

We calculate the intrinsic value of UTX 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 102.9

 

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, %
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
  4.87
  4.89
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
Revenue, $m
  62,530
  65,375
  68,379
  71,548
  74,891
  78,415
  82,127
  86,037
  90,154
  94,487
  99,046
  103,843
  108,889
  114,195
  119,774
  125,639
  131,805
  138,285
  145,096
  152,252
  159,772
  167,674
  175,975
  184,695
  193,857
  203,480
  213,588
  224,205
  235,357
  247,069
Variable operating expenses, $m
  54,266
  56,536
  58,933
  61,462
  64,128
  66,939
  69,901
  73,021
  76,305
  79,762
  79,020
  82,847
  86,873
  91,106
  95,557
  100,237
  105,155
  110,326
  115,759
  121,469
  127,468
  133,772
  140,395
  147,352
  154,661
  162,339
  170,403
  178,874
  187,771
  197,115
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
  54,266
  56,536
  58,933
  61,462
  64,128
  66,939
  69,901
  73,021
  76,305
  79,762
  79,020
  82,847
  86,873
  91,106
  95,557
  100,237
  105,155
  110,326
  115,759
  121,469
  127,468
  133,772
  140,395
  147,352
  154,661
  162,339
  170,403
  178,874
  187,771
  197,115
Operating income, $m
  8,263
  8,839
  9,446
  10,087
  10,763
  11,475
  12,226
  13,016
  13,849
  14,725
  20,026
  20,996
  22,016
  23,089
  24,217
  25,403
  26,649
  27,959
  29,336
  30,783
  32,304
  33,901
  35,580
  37,343
  39,195
  41,141
  43,185
  45,331
  47,586
  49,954
EBITDA, $m
  18,177
  19,004
  19,877
  20,798
  21,770
  22,794
  23,873
  25,010
  26,206
  27,466
  28,791
  30,186
  31,653
  33,195
  34,817
  36,522
  38,314
  40,198
  42,177
  44,258
  46,444
  48,741
  51,154
  53,689
  56,352
  59,149
  62,087
  65,174
  68,415
  71,820
Interest expense (income), $m
  1,157
  1,484
  1,647
  1,820
  2,003
  2,195
  2,398
  2,612
  2,838
  3,075
  3,325
  3,588
  3,865
  4,157
  4,463
  4,786
  5,124
  5,481
  5,855
  6,249
  6,662
  7,097
  7,554
  8,034
  8,538
  9,068
  9,624
  10,209
  10,823
  11,467
  12,145
Earnings before tax, $m
  6,779
  7,191
  7,626
  8,084
  8,567
  9,077
  9,613
  10,178
  10,773
  11,399
  16,437
  17,130
  17,859
  18,625
  19,431
  20,278
  21,169
  22,104
  23,088
  24,121
  25,207
  26,348
  27,546
  28,805
  30,128
  31,517
  32,976
  34,509
  36,119
  37,809
Tax expense, $m
  1,830
  1,942
  2,059
  2,183
  2,313
  2,451
  2,596
  2,748
  2,909
  3,078
  4,438
  4,625
  4,822
  5,029
  5,246
  5,475
  5,716
  5,968
  6,234
  6,513
  6,806
  7,114
  7,437
  7,777
  8,134
  8,510
  8,904
  9,317
  9,752
  10,209
Net income, $m
  4,949
  5,250
  5,567
  5,901
  6,254
  6,626
  7,018
  7,430
  7,865
  8,322
  11,999
  12,505
  13,037
  13,597
  14,185
  14,803
  15,453
  16,136
  16,854
  17,608
  18,401
  19,234
  20,109
  21,028
  21,993
  23,007
  24,073
  25,191
  26,367
  27,601

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
  101,345
  105,956
  110,825
  115,962
  121,379
  127,090
  133,107
  139,444
  146,116
  153,139
  160,529
  168,303
  176,481
  185,080
  194,123
  203,629
  213,622
  224,125
  235,163
  246,762
  258,950
  271,756
  285,210
  299,344
  314,192
  329,789
  346,172
  363,380
  381,454
  400,437
Adjusted assets (=assets-cash), $m
  101,345
  105,956
  110,825
  115,962
  121,379
  127,090
  133,107
  139,444
  146,116
  153,139
  160,529
  168,303
  176,481
  185,080
  194,123
  203,629
  213,622
  224,125
  235,163
  246,762
  258,950
  271,756
  285,210
  299,344
  314,192
  329,789
  346,172
  363,380
  381,454
  400,437
Revenue / Adjusted assets
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
  0.617
Average production assets, $m
  55,339
  57,857
  60,515
  63,320
  66,279
  69,397
  72,682
  76,143
  79,786
  83,621
  87,656
  91,901
  96,366
  101,062
  106,000
  111,191
  116,647
  122,382
  128,410
  134,743
  141,399
  148,391
  155,738
  163,455
  171,563
  180,080
  189,025
  198,422
  208,291
  218,656
Working capital, $m
  313
  327
  342
  358
  374
  392
  411
  430
  451
  472
  495
  519
  544
  571
  599
  628
  659
  691
  725
  761
  799
  838
  880
  923
  969
  1,017
  1,068
  1,121
  1,177
  1,235
Total debt, $m
  30,508
  33,708
  37,087
  40,652
  44,412
  48,376
  52,551
  56,949
  61,579
  66,453
  71,582
  76,977
  82,653
  88,621
  94,896
  101,494
  108,429
  115,718
  123,378
  131,428
  139,887
  148,774
  158,111
  167,920
  178,224
  189,049
  200,418
  212,361
  224,904
  238,078
Total liabilities, $m
  70,333
  73,533
  76,912
  80,477
  84,237
  88,201
  92,376
  96,774
  101,404
  106,278
  111,407
  116,802
  122,478
  128,446
  134,721
  141,319
  148,254
  155,543
  163,203
  171,253
  179,712
  188,599
  197,936
  207,745
  218,049
  228,874
  240,243
  252,186
  264,729
  277,903
Total equity, $m
  31,011
  32,422
  33,912
  35,484
  37,142
  38,890
  40,731
  42,670
  44,711
  46,860
  49,122
  51,501
  54,003
  56,635
  59,402
  62,311
  65,368
  68,582
  71,960
  75,509
  79,239
  83,157
  87,274
  91,599
  96,143
  100,915
  105,929
  111,194
  116,725
  122,534
Total liabilities and equity, $m
  101,344
  105,955
  110,824
  115,961
  121,379
  127,091
  133,107
  139,444
  146,115
  153,138
  160,529
  168,303
  176,481
  185,081
  194,123
  203,630
  213,622
  224,125
  235,163
  246,762
  258,951
  271,756
  285,210
  299,344
  314,192
  329,789
  346,172
  363,380
  381,454
  400,437
Debt-to-equity ratio
  0.980
  1.040
  1.090
  1.150
  1.200
  1.240
  1.290
  1.330
  1.380
  1.420
  1.460
  1.490
  1.530
  1.560
  1.600
  1.630
  1.660
  1.690
  1.710
  1.740
  1.770
  1.790
  1.810
  1.830
  1.850
  1.870
  1.890
  1.910
  1.930
  1.940
Adjusted equity ratio
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,949
  5,250
  5,567
  5,901
  6,254
  6,626
  7,018
  7,430
  7,865
  8,322
  11,999
  12,505
  13,037
  13,597
  14,185
  14,803
  15,453
  16,136
  16,854
  17,608
  18,401
  19,234
  20,109
  21,028
  21,993
  23,007
  24,073
  25,191
  26,367
  27,601
Depreciation, amort., depletion, $m
  9,913
  10,165
  10,431
  10,711
  11,007
  11,319
  11,648
  11,994
  12,358
  12,741
  8,766
  9,190
  9,637
  10,106
  10,600
  11,119
  11,665
  12,238
  12,841
  13,474
  14,140
  14,839
  15,574
  16,346
  17,156
  18,008
  18,903
  19,842
  20,829
  21,866
Funds from operations, $m
  14,862
  15,415
  15,998
  16,613
  17,261
  17,945
  18,665
  19,424
  20,222
  21,063
  20,765
  21,695
  22,674
  23,703
  24,785
  25,922
  27,118
  28,374
  29,695
  31,083
  32,541
  34,073
  35,682
  37,373
  39,149
  41,015
  42,975
  45,034
  47,196
  49,467
Change in working capital, $m
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
  46
  48
  51
  53
  56
  59
Cash from operations, $m
  14,849
  15,400
  15,983
  16,597
  17,245
  17,927
  18,647
  19,404
  20,202
  21,041
  20,742
  21,671
  22,649
  23,676
  24,757
  25,893
  27,087
  28,342
  29,661
  31,047
  32,503
  34,033
  35,641
  37,330
  39,104
  40,967
  42,925
  44,981
  47,140
  49,408
Maintenance CAPEX, $m
  -5,294
  -5,534
  -5,786
  -6,052
  -6,332
  -6,628
  -6,940
  -7,268
  -7,614
  -7,979
  -8,362
  -8,766
  -9,190
  -9,637
  -10,106
  -10,600
  -11,119
  -11,665
  -12,238
  -12,841
  -13,474
  -14,140
  -14,839
  -15,574
  -16,346
  -17,156
  -18,008
  -18,903
  -19,842
  -20,829
New CAPEX, $m
  -2,399
  -2,518
  -2,659
  -2,805
  -2,958
  -3,118
  -3,285
  -3,460
  -3,643
  -3,835
  -4,035
  -4,245
  -4,465
  -4,696
  -4,938
  -5,191
  -5,457
  -5,735
  -6,027
  -6,334
  -6,655
  -6,993
  -7,346
  -7,718
  -8,108
  -8,517
  -8,946
  -9,396
  -9,869
  -10,365
Cash from investing activities, $m
  -7,693
  -8,052
  -8,445
  -8,857
  -9,290
  -9,746
  -10,225
  -10,728
  -11,257
  -11,814
  -12,397
  -13,011
  -13,655
  -14,333
  -15,044
  -15,791
  -16,576
  -17,400
  -18,265
  -19,175
  -20,129
  -21,133
  -22,185
  -23,292
  -24,454
  -25,673
  -26,954
  -28,299
  -29,711
  -31,194
Free cash flow, $m
  7,156
  7,349
  7,538
  7,740
  7,954
  8,181
  8,422
  8,676
  8,944
  9,228
  8,345
  8,660
  8,993
  9,344
  9,713
  10,102
  10,511
  10,942
  11,395
  11,872
  12,374
  12,901
  13,455
  14,038
  14,651
  15,294
  15,971
  16,682
  17,429
  18,213
Issuance/(repayment) of debt, $m
  3,023
  3,200
  3,379
  3,565
  3,760
  3,963
  4,176
  4,398
  4,630
  4,874
  5,129
  5,396
  5,675
  5,968
  6,275
  6,597
  6,935
  7,289
  7,660
  8,050
  8,459
  8,887
  9,337
  9,809
  10,304
  10,824
  11,370
  11,942
  12,543
  13,174
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  
  3,023
  3,200
  3,379
  3,565
  3,760
  3,963
  4,176
  4,398
  4,630
  4,874
  5,129
  5,396
  5,675
  5,968
  6,275
  6,597
  6,935
  7,289
  7,660
  8,050
  8,459
  8,887
  9,337
  9,809
  10,304
  10,824
  11,370
  11,942
  12,543
  13,174
Total cash flow (excl. dividends), $m
  10,179
  10,549
  10,917
  11,305
  11,714
  12,145
  12,597
  13,074
  13,575
  14,102
  13,473
  14,056
  14,668
  15,312
  15,988
  16,699
  17,446
  18,231
  19,056
  19,922
  20,832
  21,788
  22,792
  23,847
  24,955
  26,118
  27,341
  28,624
  29,972
  31,387
Retained Cash Flow (-), $m
  -1,401
  -1,411
  -1,490
  -1,572
  -1,658
  -1,747
  -1,841
  -1,939
  -2,042
  -2,149
  -2,261
  -2,379
  -2,502
  -2,632
  -2,767
  -2,909
  -3,058
  -3,214
  -3,378
  -3,549
  -3,730
  -3,919
  -4,117
  -4,325
  -4,543
  -4,773
  -5,013
  -5,266
  -5,531
  -5,809
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
  180
  188
  196
  205
  215
  225
  235
  246
  258
  270
  283
  297
  312
  327
  343
  359
  377
  395
  415
  435
  457
  479
  503
  528
  554
  582
  610
  641
  673
  706
Cash available for distribution, $m
  8,778
  9,138
  9,427
  9,733
  10,056
  10,397
  10,756
  11,135
  11,533
  11,953
  11,212
  11,677
  12,166
  12,680
  13,222
  13,790
  14,389
  15,017
  15,678
  16,373
  17,103
  17,870
  18,675
  19,522
  20,411
  21,346
  22,327
  23,358
  24,441
  25,579
Discount rate, %
  5.40
  5.67
  5.95
  6.25
  6.56
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.04
  15.80
  16.59
  17.42
  18.29
  19.20
  20.16
  21.17
  22.23
PV of cash for distribution, $m
  8,328
  8,183
  7,926
  7,637
  7,318
  6,970
  6,596
  6,198
  5,780
  5,347
  4,435
  4,045
  3,652
  3,263
  2,881
  2,513
  2,164
  1,838
  1,539
  1,268
  1,028
  819
  640
  491
  369
  271
  195
  136
  93
  62
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

United Technologies Corporation is engaged in providing high technology products and services to the building systems and aerospace industries around the world. The Company operates through four segments: Otis; UTC Climate, Controls & Security; Pratt & Whitney, and UTC Aerospace Systems. Otis operates as an elevator and escalator manufacturing, installation and service company. UTC Climate, Controls & Security segment is engaged in providing heating, ventilating, air conditioning (HVAC) and refrigeration solutions. The Pratt & Whitney segment supplies aircraft engines for the commercial, military, business jet and general aviation markets. Pratt & Whitney segment provides fleet management services and aftermarket maintenance, repair and overhaul services. The UTC Aerospace Systems segment provides aerospace products and aftermarket service solutions for aircraft manufacturers, airlines, regional, business and general aviation markets, military, space and undersea operations.

FINANCIAL RATIOS  of  United Technologies (UTX)

Valuation Ratios
P/E Ratio 20.8
Price to Sales 1.8
Price to Book 3.8
Price to Tangible Book
Price to Cash Flow 27.1
Price to Free Cash Flow 58.8
Growth Rates
Sales Growth Rate 2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -0.1%
Cap. Spend. - 3 Yr. Gr. Rate -1.8%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 78.7%
Total Debt to Equity 86.7%
Interest Coverage 7
Management Effectiveness
Return On Assets 6.7%
Ret/ On Assets - 3 Yr. Avg. 7.9%
Return On Total Capital 10.2%
Ret/ On T. Cap. - 3 Yr. Avg. 12.6%
Return On Equity 18.4%
Return On Equity - 3 Yr. Avg. 21.4%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 27.6%
Gross Margin - 3 Yr. Avg. 28.4%
EBITDA Margin 17.9%
EBITDA Margin - 3 Yr. Avg. 18.2%
Operating Margin 14.3%
Oper. Margin - 3 Yr. Avg. 14.6%
Pre-Tax Margin 12.5%
Pre-Tax Margin - 3 Yr. Avg. 13%
Net Profit Margin 8.8%
Net Profit Margin - 3 Yr. Avg. 11%
Effective Tax Rate 23.8%
Eff/ Tax Rate - 3 Yr. Avg. 27.4%
Payout Ratio 40.9%

UTX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UTX stock intrinsic value calculation we used $59837 million for the last fiscal year's total revenue generated by United Technologies. The default revenue input number comes from 2017 income statement of United Technologies. 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 UTX stock valuation model: a) initial revenue growth rate of 4.5% 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 5.4%, whose default value for UTX is calculated based on our internal credit rating of United Technologies, 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 United Technologies.
    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 UTX stock the variable cost ratio is equal to 87.1%.

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 UTX 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 United Technologies.

Corporate tax rate of 27% is the nominal tax rate for United Technologies. 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 UTX stock is equal to 0.3%.

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 UTX are equal to 88.5%.

Life of production assets of 10 years is the average useful life of capital assets used in United Technologies 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 UTX is equal to 0.5%. 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 - $29610 million for United Technologies - 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 790 million for United Technologies 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 United Technologies at the current share price and the inputted number of shares is $102.9 billion.

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