Intrinsic value of Vodafone Group ADR - VOD

Previous Close

$22.78

  Intrinsic Value

$1.54

stock screener

  Rating & Target

str. sell

-93%

Previous close

$22.78

 
Intrinsic value

$1.54

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of VOD 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 605.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  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
Revenue, $m
  60,653
  62,048
  63,643
  65,433
  67,417
  69,594
  71,964
  74,529
  77,293
  80,260
  83,433
  86,819
  90,425
  94,256
  98,322
  102,631
  107,192
  112,015
  117,112
  122,493
  128,170
  134,158
  140,470
  147,120
  154,124
  161,498
  169,260
  177,428
  186,020
  195,059
Variable operating expenses, $m
  58,658
  59,874
  61,264
  62,826
  64,555
  66,453
  68,520
  70,757
  73,167
  75,754
  72,750
  75,703
  78,847
  82,188
  85,733
  89,490
  93,467
  97,673
  102,117
  106,809
  111,760
  116,981
  122,484
  128,283
  134,390
  140,820
  147,588
  154,710
  162,203
  170,084
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
  58,658
  59,874
  61,264
  62,826
  64,555
  66,453
  68,520
  70,757
  73,167
  75,754
  72,750
  75,703
  78,847
  82,188
  85,733
  89,490
  93,467
  97,673
  102,117
  106,809
  111,760
  116,981
  122,484
  128,283
  134,390
  140,820
  147,588
  154,710
  162,203
  170,084
Operating income, $m
  1,996
  2,174
  2,378
  2,608
  2,862
  3,140
  3,444
  3,772
  4,126
  4,506
  10,683
  11,116
  11,578
  12,068
  12,589
  13,141
  13,725
  14,342
  14,995
  15,684
  16,411
  17,177
  17,986
  18,837
  19,734
  20,678
  21,672
  22,718
  23,818
  24,975
EBITDA, $m
  19,514
  19,963
  20,476
  21,052
  21,691
  22,391
  23,153
  23,979
  24,868
  25,823
  26,844
  27,933
  29,093
  30,326
  31,634
  33,020
  34,488
  36,040
  37,679
  39,411
  41,237
  43,164
  45,195
  47,334
  49,588
  51,960
  54,457
  57,085
  59,850
  62,758
Interest expense (income), $m
  1,334
  3,140
  3,247
  3,377
  3,526
  3,694
  3,879
  4,082
  4,304
  4,544
  4,802
  5,079
  5,376
  5,692
  6,029
  6,387
  6,767
  7,170
  7,596
  8,047
  8,523
  9,026
  9,556
  10,116
  10,706
  11,327
  11,982
  12,671
  13,396
  14,159
  14,962
Earnings before tax, $m
  -1,144
  -1,073
  -999
  -919
  -832
  -739
  -639
  -532
  -417
  -296
  5,603
  5,740
  5,886
  6,039
  6,202
  6,374
  6,555
  6,746
  6,948
  7,161
  7,385
  7,621
  7,870
  8,131
  8,407
  8,696
  9,001
  9,321
  9,658
  10,013
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1,513
  1,550
  1,589
  1,631
  1,675
  1,721
  1,770
  1,822
  1,876
  1,933
  1,994
  2,058
  2,125
  2,195
  2,270
  2,348
  2,430
  2,517
  2,608
  2,703
Net income, $m
  -1,144
  -1,073
  -999
  -919
  -832
  -739
  -639
  -532
  -417
  -296
  4,091
  4,191
  4,297
  4,409
  4,527
  4,653
  4,785
  4,925
  5,072
  5,227
  5,391
  5,563
  5,745
  5,936
  6,137
  6,348
  6,571
  6,805
  7,051
  7,309

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
  196,926
  201,456
  206,633
  212,446
  218,886
  225,953
  233,648
  241,978
  250,952
  260,583
  270,886
  281,880
  293,586
  306,027
  319,228
  333,217
  348,026
  363,686
  380,233
  397,703
  416,138
  435,579
  456,071
  477,662
  500,402
  524,344
  549,545
  576,064
  603,962
  633,307
Adjusted assets (=assets-cash), $m
  196,926
  201,456
  206,633
  212,446
  218,886
  225,953
  233,648
  241,978
  250,952
  260,583
  270,886
  281,880
  293,586
  306,027
  319,228
  333,217
  348,026
  363,686
  380,233
  397,703
  416,138
  435,579
  456,071
  477,662
  500,402
  524,344
  549,545
  576,064
  603,962
  633,307
Revenue / Adjusted assets
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
Average production assets, $m
  117,485
  120,188
  123,276
  126,744
  130,587
  134,803
  139,394
  144,363
  149,717
  155,463
  161,610
  168,169
  175,152
  182,574
  190,450
  198,796
  207,631
  216,974
  226,845
  237,268
  248,266
  259,865
  272,090
  284,971
  298,538
  312,822
  327,856
  343,677
  360,322
  377,828
Working capital, $m
  -22,927
  -23,454
  -24,057
  -24,734
  -25,484
  -26,306
  -27,202
  -28,172
  -29,217
  -30,338
  -31,538
  -32,818
  -34,180
  -35,629
  -37,166
  -38,794
  -40,519
  -42,342
  -44,268
  -46,302
  -48,448
  -50,712
  -53,098
  -55,611
  -58,259
  -61,046
  -63,980
  -67,068
  -70,316
  -73,732
Total debt, $m
  60,130
  62,544
  65,304
  68,402
  71,835
  75,601
  79,703
  84,143
  88,926
  94,059
  99,551
  105,410
  111,650
  118,280
  125,317
  132,773
  140,666
  149,013
  157,832
  167,144
  176,970
  187,332
  198,254
  209,762
  221,882
  234,644
  248,076
  262,210
  277,080
  292,721
Total liabilities, $m
  104,962
  107,376
  110,135
  113,233
  116,666
  120,433
  124,535
  128,974
  133,757
  138,891
  144,382
  150,242
  156,481
  163,112
  170,148
  177,605
  185,498
  193,845
  202,664
  211,976
  221,801
  232,163
  243,086
  254,594
  266,714
  279,475
  292,908
  307,042
  321,912
  337,553
Total equity, $m
  91,965
  94,080
  96,498
  99,212
  102,220
  105,520
  109,114
  113,004
  117,195
  121,692
  126,504
  131,638
  137,105
  142,914
  149,079
  155,612
  162,528
  169,841
  177,569
  185,727
  194,336
  203,415
  212,985
  223,068
  233,688
  244,869
  256,638
  269,022
  282,050
  295,754
Total liabilities and equity, $m
  196,927
  201,456
  206,633
  212,445
  218,886
  225,953
  233,649
  241,978
  250,952
  260,583
  270,886
  281,880
  293,586
  306,026
  319,227
  333,217
  348,026
  363,686
  380,233
  397,703
  416,137
  435,578
  456,071
  477,662
  500,402
  524,344
  549,546
  576,064
  603,962
  633,307
Debt-to-equity ratio
  0.650
  0.660
  0.680
  0.690
  0.700
  0.720
  0.730
  0.740
  0.760
  0.770
  0.790
  0.800
  0.810
  0.830
  0.840
  0.850
  0.870
  0.880
  0.890
  0.900
  0.910
  0.920
  0.930
  0.940
  0.950
  0.960
  0.970
  0.970
  0.980
  0.990
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
  -1,144
  -1,073
  -999
  -919
  -832
  -739
  -639
  -532
  -417
  -296
  4,091
  4,191
  4,297
  4,409
  4,527
  4,653
  4,785
  4,925
  5,072
  5,227
  5,391
  5,563
  5,745
  5,936
  6,137
  6,348
  6,571
  6,805
  7,051
  7,309
Depreciation, amort., depletion, $m
  17,519
  17,789
  18,098
  18,445
  18,829
  19,251
  19,710
  20,207
  20,742
  21,317
  16,161
  16,817
  17,515
  18,257
  19,045
  19,880
  20,763
  21,697
  22,685
  23,727
  24,827
  25,986
  27,209
  28,497
  29,854
  31,282
  32,786
  34,368
  36,032
  37,783
Funds from operations, $m
  16,375
  16,716
  17,099
  17,526
  17,997
  18,512
  19,071
  19,675
  20,325
  21,021
  20,251
  21,007
  21,812
  22,666
  23,572
  24,532
  25,548
  26,622
  27,757
  28,954
  30,218
  31,550
  32,954
  34,433
  35,991
  37,630
  39,356
  41,172
  43,083
  45,092
Change in working capital, $m
  -450
  -527
  -603
  -677
  -750
  -823
  -896
  -970
  -1,045
  -1,121
  -1,200
  -1,280
  -1,363
  -1,448
  -1,537
  -1,629
  -1,724
  -1,823
  -1,926
  -2,034
  -2,146
  -2,263
  -2,386
  -2,514
  -2,647
  -2,787
  -2,934
  -3,087
  -3,248
  -3,416
Cash from operations, $m
  16,824
  17,244
  17,702
  18,203
  18,747
  19,335
  19,967
  20,645
  21,369
  22,142
  21,451
  22,287
  23,175
  24,115
  25,109
  26,161
  27,272
  28,445
  29,683
  30,988
  32,364
  33,813
  35,340
  36,947
  38,638
  40,418
  42,290
  44,260
  46,331
  48,509
Maintenance CAPEX, $m
  -11,519
  -11,749
  -12,019
  -12,328
  -12,674
  -13,059
  -13,480
  -13,939
  -14,436
  -14,972
  -15,546
  -16,161
  -16,817
  -17,515
  -18,257
  -19,045
  -19,880
  -20,763
  -21,697
  -22,685
  -23,727
  -24,827
  -25,986
  -27,209
  -28,497
  -29,854
  -31,282
  -32,786
  -34,368
  -36,032
New CAPEX, $m
  -2,292
  -2,702
  -3,089
  -3,468
  -3,843
  -4,216
  -4,591
  -4,970
  -5,354
  -5,746
  -6,147
  -6,559
  -6,984
  -7,422
  -7,876
  -8,346
  -8,835
  -9,343
  -9,872
  -10,423
  -10,998
  -11,598
  -12,226
  -12,881
  -13,567
  -14,284
  -15,035
  -15,821
  -16,644
  -17,507
Cash from investing activities, $m
  -13,811
  -14,451
  -15,108
  -15,796
  -16,517
  -17,275
  -18,071
  -18,909
  -19,790
  -20,718
  -21,693
  -22,720
  -23,801
  -24,937
  -26,133
  -27,391
  -28,715
  -30,106
  -31,569
  -33,108
  -34,725
  -36,425
  -38,212
  -40,090
  -42,064
  -44,138
  -46,317
  -48,607
  -51,012
  -53,539
Free cash flow, $m
  3,013
  2,793
  2,594
  2,407
  2,230
  2,060
  1,896
  1,736
  1,579
  1,424
  -242
  -433
  -626
  -823
  -1,024
  -1,230
  -1,442
  -1,660
  -1,886
  -2,119
  -2,361
  -2,612
  -2,872
  -3,143
  -3,426
  -3,720
  -4,027
  -4,347
  -4,681
  -5,031
Issuance/(repayment) of debt, $m
  1,985
  2,414
  2,760
  3,098
  3,433
  3,767
  4,102
  4,440
  4,783
  5,133
  5,492
  5,860
  6,239
  6,631
  7,036
  7,456
  7,893
  8,347
  8,819
  9,312
  9,826
  10,362
  10,922
  11,508
  12,120
  12,761
  13,432
  14,134
  14,870
  15,641
Issuance/(repurchase) of shares, $m
  2,972
  3,188
  3,417
  3,633
  3,840
  4,039
  4,232
  4,422
  4,608
  4,794
  721
  944
  1,170
  1,401
  1,638
  1,880
  2,130
  2,388
  2,655
  2,931
  3,218
  3,516
  3,825
  4,147
  4,483
  4,833
  5,198
  5,579
  5,978
  6,395
Cash from financing (excl. dividends), $m  
  4,957
  5,602
  6,177
  6,731
  7,273
  7,806
  8,334
  8,862
  9,391
  9,927
  6,213
  6,804
  7,409
  8,032
  8,674
  9,336
  10,023
  10,735
  11,474
  12,243
  13,044
  13,878
  14,747
  15,655
  16,603
  17,594
  18,630
  19,713
  20,848
  22,036
Total cash flow (excl. dividends), $m
  7,970
  8,395
  8,771
  9,139
  9,503
  9,865
  10,230
  10,597
  10,971
  11,351
  5,971
  6,371
  6,783
  7,209
  7,650
  8,107
  8,581
  9,075
  9,589
  10,124
  10,683
  11,266
  11,875
  12,512
  13,178
  13,874
  14,604
  15,367
  16,167
  17,005
Retained Cash Flow (-), $m
  -2,972
  -3,188
  -3,417
  -3,633
  -3,840
  -4,039
  -4,232
  -4,422
  -4,608
  -4,794
  -4,812
  -5,134
  -5,467
  -5,810
  -6,165
  -6,533
  -6,916
  -7,313
  -7,727
  -8,159
  -8,609
  -9,079
  -9,570
  -10,083
  -10,620
  -11,181
  -11,769
  -12,384
  -13,029
  -13,704
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
  4,998
  5,207
  5,354
  5,505
  5,663
  5,827
  5,997
  6,176
  6,362
  6,558
  1,159
  1,237
  1,317
  1,399
  1,485
  1,574
  1,666
  1,762
  1,861
  1,965
  2,074
  2,187
  2,305
  2,429
  2,558
  2,693
  2,835
  2,983
  3,138
  3,301
Discount rate, %
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
  4,729
  4,636
  4,459
  4,264
  4,051
  3,823
  3,582
  3,331
  3,073
  2,810
  436
  405
  371
  335
  299
  262
  227
  193
  162
  133
  108
  85
  66
  51
  38
  27
  19
  13
  9
  6
Current shareholders' claim on cash, %
  99.5
  99.0
  98.5
  97.9
  97.4
  96.8
  96.2
  95.6
  95.1
  94.5
  94.4
  94.3
  94.2
  94.0
  93.9
  93.7
  93.5
  93.3
  93.1
  92.8
  92.6
  92.4
  92.1
  91.8
  91.6
  91.3
  91.0
  90.7
  90.4
  90.1

Vodafone Group Plc (Vodafone) is a telecommunications company. The Company's business is organized into two geographic regions: Europe, and Africa, Middle East and Asia Pacific (AMAP). Its segments include Europe and AMAP. Its Europe segment includes geographic regions, such as Germany, Italy, the United Kingdom, Spain and Other Europe. The Other Europe includes the Netherlands, Portugal, Greece, Hungary and Romania, among others. Its AMAP segment includes India, South Africa, Tanzania, Mozambique, Lesotho, Africa, Turkey, Australia, Egypt, Ghana, Kenya, New Zealand and Qatar, among others. The Company provides a range of services, including voice, messaging and data across mobile and fixed networks. The Company acquires spectrum and licenses to use radio frequencies that deliver mobile services. Its fixed capabilities include cable, fiber and copper networks to enable television, broadband and voice services.

FINANCIAL RATIOS  of  Vodafone Group ADR (VOD)

Valuation Ratios
P/E Ratio -91.3
Price to Sales 12.1
Price to Book 8
Price to Tangible Book
Price to Cash Flow 40.4
Price to Free Cash Flow 107.2
Growth Rates
Sales Growth Rate -4.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -36.2%
Cap. Spend. - 3 Yr. Gr. Rate 3%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 47.4%
Total Debt to Equity 57.7%
Interest Coverage 3
Management Effectiveness
Return On Assets -4.4%
Ret/ On Assets - 3 Yr. Avg. 7.6%
Return On Total Capital -5.1%
Ret/ On T. Cap. - 3 Yr. Avg. -1.1%
Return On Equity -8.1%
Return On Equity - 3 Yr. Avg. -1.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 27.4%
Gross Margin - 3 Yr. Avg. 27.1%
EBITDA Margin 31.8%
EBITDA Margin - 3 Yr. Avg. 29.1%
Operating Margin 7.8%
Oper. Margin - 3 Yr. Avg. 4.9%
Pre-Tax Margin 5.9%
Pre-Tax Margin - 3 Yr. Avg. 3%
Net Profit Margin -13.2%
Net Profit Margin - 3 Yr. Avg. -3%
Effective Tax Rate 170.6%
Eff/ Tax Rate - 3 Yr. Avg. -923.9%
Payout Ratio -59%

VOD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VOD stock intrinsic value calculation we used $59464 million for the last fiscal year's total revenue generated by Vodafone Group ADR. The default revenue input number comes from 2017 income statement of Vodafone Group 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 VOD stock valuation model: a) initial revenue growth rate of 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 5.7%, whose default value for VOD is calculated based on our internal credit rating of Vodafone Group 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 Vodafone Group 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 VOD stock the variable cost ratio is equal to 96.9%.

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 VOD 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 Vodafone Group ADR.

Corporate tax rate of 27% is the nominal tax rate for Vodafone Group 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 VOD 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 VOD are equal to 193.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Vodafone Group 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 VOD is equal to -37.8%. 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 - $90137 million for Vodafone Group 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 26559 million for Vodafone Group 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 Vodafone Group ADR at the current share price and the inputted number of shares is $605.0 billion.

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COMPANY NEWS

▶ What Does Vodafone Group Plcs (LON:VOD) PE Ratio Tell You?   [Aug-18-18 04:33AM  Simply Wall St.]
▶ [$$] Proposed Huawei ban seen hitting Australian 5G push   [Aug-13-18 05:00AM  Financial Times]
▶ [$$] Europes telecoms landscape warms to maverick operators   [Aug-12-18 08:13AM  Financial Times]
▶ Vodafone Could Be┬áRipe for Activist┬áInvestors   [Jul-31-18 06:21AM  Bloomberg]
▶ [$$] Vodafone jumps on report of Elliott interest   [Jul-29-18 11:09PM  Financial Times]
▶ 3 Top Stocks With High Dividend Yields   [Jul-27-18 04:24PM  Motley Fool]
▶ 3 Top Dividend Stocks With Yields Over 3%   [Jul-19-18 06:33AM  Motley Fool]
▶ Indias Billion-Dollar Shakedown   [Jul-12-18 11:30PM  Bloomberg]
▶ 3 Companies To Make Trumps Trade War Feel Irrelevant   [Jul-10-18 11:56AM  InvestorPlace]
▶ [$$] Are telecoms companies losing the brand battle?   [Jul-09-18 12:00AM  Financial Times]
▶ [$$] Vodafone develops drone detection system   [Jul-08-18 12:07AM  Financial Times]
▶ Vodafone overhauls recruitment to attract more LGBT+ talent   [Jul-04-18 09:47AM  The Telegraph]
▶ [$$] Sprint Names New Finance Chief   [Jun-29-18 12:56PM  The Wall Street Journal]
▶ Sprint names Andrew Davies CFO   [11:54AM  Reuters]
▶ BT's Fundamental Value Is Overlooked   [Jun-22-18 07:00AM  Morningstar]
▶ [$$] Vodafone CEO Vittorio Colao to Depart After a Decade   [May-16-18 10:55AM  The Wall Street Journal]
▶ [$$] Permanent Digital Revolution Faces Vodafones New Boss   [10:55AM  The Wall Street Journal]
▶ FTSE gets energy boost while Vodafone flags   [May-15-18 12:20PM  Reuters]
▶ [$$] Permanent Digital Revolution Faces Vodafone's New Boss   [11:08AM  The Wall Street Journal]
▶ [$$] Vodafone Chief to Depart After a Decade   [08:03AM  The Wall Street Journal]
▶ [$$] Vodafone CEO to Stand Down   [03:50AM  The Wall Street Journal]
▶ Should You Buy Vodafone Group Plc (LON:VOD)?   [May-12-18 03:27AM  Simply Wall St.]
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