Intrinsic value of VISA Cl A - V

Previous Close

$140.65

  Intrinsic Value

$120.45

stock screener

  Rating & Target

hold

-14%

Previous close

$140.65

 
Intrinsic value

$120.45

 
Up/down potential

-14%

 
Rating

hold

We calculate the intrinsic value of V 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 295.9

 

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, %
  21.70
  20.03
  18.53
  17.17
  15.96
  14.86
  13.88
  12.99
  12.19
  11.47
  10.82
  10.24
  9.72
  9.24
  8.82
  8.44
  8.09
  7.79
  7.51
  7.26
  7.03
  6.83
  6.64
  6.48
  6.33
  6.20
  6.08
  5.97
  5.87
  5.79
Revenue, $m
  22,342
  26,817
  31,785
  37,244
  43,187
  49,605
  56,488
  63,824
  71,603
  79,816
  88,455
  97,513
  106,988
  116,879
  127,188
  137,921
  149,085
  160,691
  172,754
  185,289
  198,315
  211,855
  225,931
  240,572
  255,805
  271,662
  288,177
  305,384
  323,322
  342,032
Variable operating expenses, $m
  9,725
  10,812
  12,020
  13,346
  14,790
  16,350
  18,022
  19,805
  21,695
  23,691
  21,494
  23,696
  25,998
  28,401
  30,907
  33,515
  36,227
  39,048
  41,979
  45,025
  48,190
  51,480
  54,901
  58,459
  62,160
  66,014
  70,026
  74,208
  78,567
  83,113
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
  9,725
  10,812
  12,020
  13,346
  14,790
  16,350
  18,022
  19,805
  21,695
  23,691
  21,494
  23,696
  25,998
  28,401
  30,907
  33,515
  36,227
  39,048
  41,979
  45,025
  48,190
  51,480
  54,901
  58,459
  62,160
  66,014
  70,026
  74,208
  78,567
  83,113
Operating income, $m
  12,617
  16,005
  19,766
  23,898
  28,397
  33,255
  38,465
  44,019
  49,908
  56,125
  66,960
  73,818
  80,990
  88,478
  96,282
  104,406
  112,858
  121,644
  130,775
  140,264
  150,125
  160,374
  171,030
  182,113
  193,645
  205,649
  218,150
  231,176
  244,755
  258,918
EBITDA, $m
  22,369
  26,849
  31,823
  37,289
  43,239
  49,665
  56,556
  63,901
  71,689
  79,912
  88,561
  97,630
  107,117
  117,019
  127,341
  138,087
  149,264
  160,884
  172,961
  185,511
  198,553
  212,109
  226,203
  240,861
  256,113
  271,989
  288,523
  305,751
  323,711
  342,443
Interest expense (income), $m
  489
  897
  1,290
  1,731
  2,220
  2,758
  3,343
  3,975
  4,652
  5,375
  6,141
  6,950
  7,800
  8,692
  9,625
  10,599
  11,614
  12,671
  13,771
  14,913
  16,101
  17,336
  18,618
  19,952
  21,338
  22,779
  24,279
  25,841
  27,467
  29,161
  30,928
Earnings before tax, $m
  11,720
  14,714
  18,035
  21,678
  25,639
  29,912
  34,491
  39,367
  44,533
  49,984
  60,011
  66,017
  72,298
  78,852
  85,682
  92,792
  100,186
  107,873
  115,861
  124,162
  132,789
  141,756
  151,079
  160,776
  170,866
  181,369
  192,309
  203,709
  215,594
  227,991
Tax expense, $m
  3,164
  3,973
  4,869
  5,853
  6,923
  8,076
  9,312
  10,629
  12,024
  13,496
  16,203
  17,825
  19,520
  21,290
  23,134
  25,054
  27,050
  29,126
  31,283
  33,524
  35,853
  38,274
  40,791
  43,409
  46,134
  48,970
  51,924
  55,001
  58,210
  61,557
Net income, $m
  8,555
  10,742
  13,165
  15,825
  18,717
  21,836
  25,178
  28,738
  32,509
  36,489
  43,808
  48,193
  52,777
  57,562
  62,548
  67,738
  73,136
  78,747
  84,579
  90,639
  96,936
  103,482
  110,288
  117,366
  124,732
  132,400
  140,386
  148,708
  157,384
  166,433

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
  77,307
  92,791
  109,983
  128,872
  149,436
  171,643
  195,459
  220,845
  247,763
  276,181
  306,072
  337,416
  370,201
  404,426
  440,098
  477,235
  515,865
  556,025
  597,764
  641,137
  686,211
  733,061
  781,769
  832,429
  885,139
  940,008
  997,151
  1,056,692
  1,118,762
  1,183,500
Adjusted assets (=assets-cash), $m
  77,307
  92,791
  109,983
  128,872
  149,436
  171,643
  195,459
  220,845
  247,763
  276,181
  306,072
  337,416
  370,201
  404,426
  440,098
  477,235
  515,865
  556,025
  597,764
  641,137
  686,211
  733,061
  781,769
  832,429
  885,139
  940,008
  997,151
  1,056,692
  1,118,762
  1,183,500
Revenue / Adjusted assets
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
Average production assets, $m
  54,558
  65,486
  77,619
  90,950
  105,462
  121,135
  137,943
  155,858
  174,856
  194,911
  216,007
  238,127
  261,265
  285,419
  310,594
  336,803
  364,065
  392,408
  421,865
  452,475
  484,285
  517,349
  551,724
  587,477
  624,676
  663,399
  703,727
  745,748
  789,553
  835,241
Working capital, $m
  -2,659
  -3,191
  -3,782
  -4,432
  -5,139
  -5,903
  -6,722
  -7,595
  -8,521
  -9,498
  -10,526
  -11,604
  -12,732
  -13,909
  -15,135
  -16,413
  -17,741
  -19,122
  -20,558
  -22,049
  -23,599
  -25,211
  -26,886
  -28,628
  -30,441
  -32,328
  -34,293
  -36,341
  -38,475
  -40,702
Total debt, $m
  23,891
  32,051
  41,111
  51,065
  61,903
  73,606
  86,157
  99,535
  113,721
  128,697
  144,450
  160,968
  178,246
  196,282
  215,081
  234,653
  255,011
  276,175
  298,171
  321,029
  344,783
  369,473
  395,142
  421,840
  449,618
  478,534
  508,649
  540,027
  572,738
  606,855
Total liabilities, $m
  40,741
  48,901
  57,961
  67,915
  78,753
  90,456
  103,007
  116,385
  130,571
  145,547
  161,300
  177,818
  195,096
  213,132
  231,931
  251,503
  271,861
  293,025
  315,021
  337,879
  361,633
  386,323
  411,992
  438,690
  466,468
  495,384
  525,499
  556,877
  589,588
  623,705
Total equity, $m
  36,566
  43,890
  52,022
  60,956
  70,683
  81,187
  92,452
  104,459
  117,192
  130,634
  144,772
  159,598
  175,105
  191,293
  208,166
  225,732
  244,004
  263,000
  282,742
  303,258
  324,578
  346,738
  369,777
  393,739
  418,671
  444,624
  471,652
  499,815
  529,174
  559,796
Total liabilities and equity, $m
  77,307
  92,791
  109,983
  128,871
  149,436
  171,643
  195,459
  220,844
  247,763
  276,181
  306,072
  337,416
  370,201
  404,425
  440,097
  477,235
  515,865
  556,025
  597,763
  641,137
  686,211
  733,061
  781,769
  832,429
  885,139
  940,008
  997,151
  1,056,692
  1,118,762
  1,183,501
Debt-to-equity ratio
  0.650
  0.730
  0.790
  0.840
  0.880
  0.910
  0.930
  0.950
  0.970
  0.990
  1.000
  1.010
  1.020
  1.030
  1.030
  1.040
  1.050
  1.050
  1.050
  1.060
  1.060
  1.070
  1.070
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.080
Adjusted equity ratio
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8,555
  10,742
  13,165
  15,825
  18,717
  21,836
  25,178
  28,738
  32,509
  36,489
  43,808
  48,193
  52,777
  57,562
  62,548
  67,738
  73,136
  78,747
  84,579
  90,639
  96,936
  103,482
  110,288
  117,366
  124,732
  132,400
  140,386
  148,708
  157,384
  166,433
Depreciation, amort., depletion, $m
  9,752
  10,844
  12,058
  13,391
  14,842
  16,409
  18,090
  19,882
  21,781
  23,787
  21,601
  23,813
  26,126
  28,542
  31,059
  33,680
  36,407
  39,241
  42,186
  45,247
  48,429
  51,735
  55,172
  58,748
  62,468
  66,340
  70,373
  74,575
  78,955
  83,524
Funds from operations, $m
  18,307
  21,586
  25,223
  29,216
  33,559
  38,245
  43,268
  48,619
  54,291
  60,276
  65,408
  72,005
  78,904
  86,104
  93,608
  101,418
  109,543
  117,988
  126,765
  135,886
  145,365
  155,217
  165,460
  176,114
  187,200
  198,740
  210,759
  223,282
  236,339
  249,957
Change in working capital, $m
  -474
  -533
  -591
  -650
  -707
  -764
  -819
  -873
  -926
  -977
  -1,028
  -1,078
  -1,128
  -1,177
  -1,227
  -1,277
  -1,329
  -1,381
  -1,435
  -1,492
  -1,550
  -1,611
  -1,675
  -1,742
  -1,813
  -1,887
  -1,965
  -2,048
  -2,135
  -2,226
Cash from operations, $m
  18,781
  22,118
  25,814
  29,865
  34,266
  39,009
  44,087
  49,492
  55,216
  61,253
  66,436
  73,083
  80,031
  87,281
  94,834
  102,696
  110,871
  119,369
  128,201
  137,378
  146,915
  156,828
  167,135
  177,856
  189,012
  200,627
  212,724
  225,330
  238,474
  252,184
Maintenance CAPEX, $m
  -4,483
  -5,456
  -6,549
  -7,762
  -9,095
  -10,546
  -12,114
  -13,794
  -15,586
  -17,486
  -19,491
  -21,601
  -23,813
  -26,126
  -28,542
  -31,059
  -33,680
  -36,407
  -39,241
  -42,186
  -45,247
  -48,429
  -51,735
  -55,172
  -58,748
  -62,468
  -66,340
  -70,373
  -74,575
  -78,955
New CAPEX, $m
  -9,728
  -10,928
  -12,133
  -13,331
  -14,513
  -15,673
  -16,808
  -17,915
  -18,997
  -20,056
  -21,095
  -22,120
  -23,138
  -24,154
  -25,175
  -26,209
  -27,263
  -28,343
  -29,456
  -30,610
  -31,810
  -33,064
  -34,376
  -35,752
  -37,200
  -38,723
  -40,328
  -42,020
  -43,805
  -45,688
Cash from investing activities, $m
  -14,211
  -16,384
  -18,682
  -21,093
  -23,608
  -26,219
  -28,922
  -31,709
  -34,583
  -37,542
  -40,586
  -43,721
  -46,951
  -50,280
  -53,717
  -57,268
  -60,943
  -64,750
  -68,697
  -72,796
  -77,057
  -81,493
  -86,111
  -90,924
  -95,948
  -101,191
  -106,668
  -112,393
  -118,380
  -124,643
Free cash flow, $m
  4,570
  5,735
  7,133
  8,773
  10,658
  12,790
  15,166
  17,783
  20,633
  23,711
  25,850
  29,362
  33,081
  37,001
  41,117
  45,427
  49,928
  54,620
  59,503
  64,581
  69,857
  75,336
  81,025
  86,931
  93,065
  99,436
  106,056
  112,937
  120,094
  127,540
Issuance/(repayment) of debt, $m
  7,273
  8,160
  9,060
  9,954
  10,837
  11,704
  12,551
  13,378
  14,186
  14,976
  15,752
  16,518
  17,278
  18,036
  18,799
  19,571
  20,358
  21,165
  21,996
  22,858
  23,754
  24,690
  25,669
  26,698
  27,778
  28,916
  30,114
  31,378
  32,711
  34,117
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  
  7,273
  8,160
  9,060
  9,954
  10,837
  11,704
  12,551
  13,378
  14,186
  14,976
  15,752
  16,518
  17,278
  18,036
  18,799
  19,571
  20,358
  21,165
  21,996
  22,858
  23,754
  24,690
  25,669
  26,698
  27,778
  28,916
  30,114
  31,378
  32,711
  34,117
Total cash flow (excl. dividends), $m
  11,843
  13,895
  16,193
  18,727
  21,495
  24,494
  27,717
  31,161
  34,819
  38,688
  41,603
  45,880
  50,359
  55,037
  59,917
  64,998
  70,286
  75,785
  81,500
  87,439
  93,611
  100,026
  106,694
  113,629
  120,843
  128,352
  136,170
  144,315
  152,804
  161,657
Retained Cash Flow (-), $m
  -6,532
  -7,324
  -8,132
  -8,934
  -9,727
  -10,504
  -11,265
  -12,007
  -12,732
  -13,442
  -14,138
  -14,826
  -15,507
  -16,188
  -16,873
  -17,566
  -18,272
  -18,996
  -19,742
  -20,516
  -21,320
  -22,160
  -23,039
  -23,962
  -24,932
  -25,953
  -27,029
  -28,163
  -29,359
  -30,621
Prev. year cash balance distribution, $m
  2,726
  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
  239
  290
  349
  413
  484
  561
  645
  734
  830
  931
  1,038
  1,150
  1,268
  1,391
  1,519
  1,653
  1,793
  1,938
  2,089
  2,246
  2,409
  2,578
  2,754
  2,937
  3,127
  3,325
  3,532
  3,746
  3,970
  4,203
Cash available for distribution, $m
  8,037
  6,571
  8,061
  9,793
  11,769
  13,989
  16,452
  19,153
  22,087
  25,246
  27,464
  31,055
  34,851
  38,849
  43,044
  47,432
  52,014
  56,789
  61,757
  66,923
  72,291
  77,866
  83,655
  89,667
  95,911
  102,399
  109,141
  116,152
  123,445
  131,036
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
  7,705
  6,015
  7,016
  8,063
  9,122
  10,153
  11,115
  11,971
  12,688
  13,236
  13,042
  13,252
  13,251
  13,042
  12,637
  12,054
  11,317
  10,458
  9,509
  8,504
  7,477
  6,461
  5,483
  4,567
  3,731
  2,987
  2,342
  1,797
  1,348
  987
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

Visa Inc. (Visa) is a payments technology company that connects consumers, merchants, financial institutions, businesses, strategic partners and government entities to electronic payments. The Company operates through payment services segment. The Company enables global commerce through the transfer of value and information among the participants. The Company's transaction processing network facilitates authorization, clearing and settlement of payment transactions and enables to provide its financial institution and merchant clients a range of products, platforms and value-added services. The Company is a retail electronic payment network based on payments volume, number of transactions and number of cards in circulation. Its products/services include core products, processing infrastructure, transaction processing services, digital products, merchant products, and risk products and payment security initiatives.

FINANCIAL RATIOS  of  VISA Cl A (V)

Valuation Ratios
P/E Ratio 47.7
Price to Sales 17.4
Price to Book 9.8
Price to Tangible Book
Price to Cash Flow 34.7
Price to Free Cash Flow 37.6
Growth Rates
Sales Growth Rate 21.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 35.2%
Cap. Spend. - 3 Yr. Gr. Rate 5%
Financial Strength
Quick Ratio 8
Current Ratio 0.2
LT Debt to Equity 50.7%
Total Debt to Equity 56.1%
Interest Coverage 25
Management Effectiveness
Return On Assets 10.6%
Ret/ On Assets - 3 Yr. Avg. 13%
Return On Total Capital 13.4%
Ret/ On T. Cap. - 3 Yr. Avg. 16.9%
Return On Equity 20.4%
Return On Equity - 3 Yr. Avg. 20.5%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 69.4%
EBITDA Margin - 3 Yr. Avg. 65.5%
Operating Margin 66.2%
Oper. Margin - 3 Yr. Avg. 61.2%
Pre-Tax Margin 63.7%
Pre-Tax Margin - 3 Yr. Avg. 60.5%
Net Profit Margin 36.5%
Net Profit Margin - 3 Yr. Avg. 40.6%
Effective Tax Rate 42.7%
Eff/ Tax Rate - 3 Yr. Avg. 32.5%
Payout Ratio 23.6%

V stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the V stock intrinsic value calculation we used $18358 million for the last fiscal year's total revenue generated by VISA Cl A. The default revenue input number comes from 2017 income statement of VISA Cl A. 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 V stock valuation model: a) initial revenue growth rate of 21.7% 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 V is calculated based on our internal credit rating of VISA Cl A, 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 VISA Cl A.
    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 V stock the variable cost ratio is equal to 47.7%.

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 V 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 VISA Cl A.

Corporate tax rate of 27% is the nominal tax rate for VISA Cl A. 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 V stock is equal to 1.3%.

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 V are equal to 244.2%.

Life of production assets of 10 years is the average useful life of capital assets used in VISA Cl A 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 V is equal to -11.9%. 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 - $32760 million for VISA Cl A - 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 2104 million for VISA Cl A 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 VISA Cl A at the current share price and the inputted number of shares is $295.9 billion.

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COMPANY NEWS

▶ At US$141, Is Visa Inc (NYSE:V) A Buy?   [Aug-17-18 07:26AM  Simply Wall St.]
▶ FBI warns of coming attack on global ATMs   [01:49PM  Yahoo Finance Video]
▶ Top 10 Largest Global IPOs Of All Time   [Aug-13-18 01:44PM  Investopedia]
▶ PRESS DIGEST- Financial Times - Aug 13   [Aug-12-18 08:16PM  Reuters]
▶ 5 Companies Making Giant Buybacks   [Aug-08-18 10:15AM  InvestorPlace]
▶ Visa's Strong Third-Quarter Earnings   [12:54PM  Motley Fool]
▶ How Do Visa and Mastercard Make Money?   [12:43PM  Motley Fool]
▶ Indexes Gather Steam As PepsiCo Stock Climbs Past A Buy Point   [01:36PM  Investor's Business Daily]
▶ Visa Renews Olympic Partnership Through 2032   [08:00AM  Business Wire]
▶ [$$] Kroger Unit Wont Take Visa Credit Cards in California Stores   [Jul-30-18 07:44PM  The Wall Street Journal]
▶ Broad-based boom in consumer spending lifts Visa profit   [10:24AM  American City Business Journals]
▶ How MasterCard Makes its Money   [10:17AM  Investopedia]
▶ [$$] Visa's Quarterly Results Beat Expectations   [08:15PM  The Wall Street Journal]
▶ [$$] Visa's Quarterly Results Beat Expectations   [05:09PM  The Wall Street Journal]
▶ Visa Inc. Class A to Host Earnings Call   [03:00PM  ACCESSWIRE]
▶ 3 Warren Buffett Stocks Worth Buying Now   [08:33AM  Motley Fool]
▶ Why Visa's Surging Shares May Have Further to Rise   [Jul-20-18 02:00PM  Investopedia]
▶ 7 High Return Stocks for Your Portfolio   [06:00AM  Investopedia]
▶ Cramer Remix: The most worshiped group in this market   [Jul-19-18 07:00PM  CNBC Videos]
▶ Visa, Square soar to all-time highs on bullish stampede into payments   [05:50PM  American City Business Journals]
▶ Options Traders: Watch These Stocks   [01:48PM  CNBC Videos]
▶ How American Express Makes its Money   [Jul-18-18 04:24PM  Investopedia]
▶ Visa Inc. Declares Quarterly Dividend   [Jul-17-18 04:10PM  Business Wire]
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