Intrinsic value of United States Steel - X

Previous Close

$37.13

  Intrinsic Value

$468.27

stock screener

  Rating & Target

str. buy

+999%

Previous close

$37.13

 
Intrinsic value

$468.27

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of X 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 6.5

 

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, %
  19.40
  17.96
  16.66
  15.50
  14.45
  13.50
  12.65
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.29
  7.96
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
Revenue, $m
  14,627
  17,253
  20,129
  23,248
  26,607
  30,200
  34,021
  38,065
  42,328
  46,805
  51,496
  56,397
  61,511
  66,838
  72,382
  78,147
  84,139
  90,367
  96,839
  103,564
  110,556
  117,825
  125,387
  133,257
  141,451
  149,985
  158,880
  168,154
  177,829
  187,927
Variable operating expenses, $m
  8,612
  10,155
  11,845
  13,678
  15,652
  17,763
  20,008
  22,385
  24,890
  27,521
  30,261
  33,141
  36,146
  39,277
  42,534
  45,922
  49,443
  53,103
  56,906
  60,858
  64,966
  69,238
  73,682
  78,307
  83,122
  88,137
  93,364
  98,814
  104,499
  110,433
Fixed operating expenses, $m
  4,671
  4,773
  4,878
  4,986
  5,095
  5,207
  5,322
  5,439
  5,559
  5,681
  5,806
  5,934
  6,064
  6,198
  6,334
  6,473
  6,616
  6,761
  6,910
  7,062
  7,217
  7,376
  7,539
  7,704
  7,874
  8,047
  8,224
  8,405
  8,590
  8,779
Total operating expenses, $m
  13,283
  14,928
  16,723
  18,664
  20,747
  22,970
  25,330
  27,824
  30,449
  33,202
  36,067
  39,075
  42,210
  45,475
  48,868
  52,395
  56,059
  59,864
  63,816
  67,920
  72,183
  76,614
  81,221
  86,011
  90,996
  96,184
  101,588
  107,219
  113,089
  119,212
Operating income, $m
  1,344
  2,325
  3,405
  4,584
  5,860
  7,229
  8,690
  10,241
  11,879
  13,603
  15,429
  17,323
  19,301
  21,364
  23,514
  25,752
  28,080
  30,503
  33,023
  35,644
  38,372
  41,211
  44,167
  47,246
  50,455
  53,801
  57,292
  60,936
  64,740
  68,715
EBITDA, $m
  1,874
  2,947
  4,128
  5,417
  6,810
  8,306
  9,901
  11,594
  13,381
  15,263
  17,236
  19,302
  21,460
  23,710
  26,054
  28,494
  31,034
  33,675
  36,422
  39,279
  42,252
  45,346
  48,568
  51,923
  55,420
  59,066
  62,869
  66,838
  70,982
  75,311
Interest expense (income), $m
  193
  289
  425
  575
  739
  917
  1,109
  1,314
  1,532
  1,763
  2,007
  2,263
  2,531
  2,811
  3,103
  3,407
  3,724
  4,053
  4,395
  4,751
  5,120
  5,505
  5,904
  6,319
  6,751
  7,201
  7,669
  8,156
  8,664
  9,194
  9,747
Earnings before tax, $m
  1,055
  1,900
  2,831
  3,845
  4,943
  6,120
  7,376
  8,708
  10,115
  11,596
  13,166
  14,792
  16,490
  18,261
  20,107
  22,028
  24,027
  26,108
  28,272
  30,523
  32,867
  35,307
  37,847
  40,495
  43,254
  46,133
  49,136
  52,271
  55,546
  58,969
Tax expense, $m
  285
  513
  764
  1,038
  1,334
  1,652
  1,992
  2,351
  2,731
  3,131
  3,555
  3,994
  4,452
  4,931
  5,429
  5,948
  6,487
  7,049
  7,633
  8,241
  8,874
  9,533
  10,219
  10,934
  11,679
  12,456
  13,267
  14,113
  14,998
  15,922
Net income, $m
  770
  1,387
  2,066
  2,807
  3,608
  4,468
  5,384
  6,357
  7,384
  8,465
  9,611
  10,798
  12,038
  13,331
  14,678
  16,080
  17,540
  19,059
  20,638
  22,282
  23,993
  25,774
  27,629
  29,561
  31,576
  33,677
  35,869
  38,158
  40,549
  43,047

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
  11,777
  13,892
  16,207
  18,718
  21,423
  24,315
  27,392
  30,648
  34,080
  37,685
  41,462
  45,409
  49,526
  53,815
  58,278
  62,920
  67,745
  72,759
  77,970
  83,385
  89,014
  94,867
  100,956
  107,292
  113,889
  120,761
  127,923
  135,390
  143,180
  151,310
Adjusted assets (=assets-cash), $m
  11,777
  13,892
  16,207
  18,718
  21,423
  24,315
  27,392
  30,648
  34,080
  37,685
  41,462
  45,409
  49,526
  53,815
  58,278
  62,920
  67,745
  72,759
  77,970
  83,385
  89,014
  94,867
  100,956
  107,292
  113,889
  120,761
  127,923
  135,390
  143,180
  151,310
Revenue / Adjusted assets
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
Average production assets, $m
  5,134
  6,056
  7,065
  8,160
  9,339
  10,600
  11,941
  13,361
  14,857
  16,429
  18,075
  19,796
  21,590
  23,460
  25,406
  27,430
  29,533
  31,719
  33,990
  36,351
  38,805
  41,357
  44,011
  46,773
  49,649
  52,645
  55,767
  59,022
  62,418
  65,962
Working capital, $m
  -936
  -1,104
  -1,288
  -1,488
  -1,703
  -1,933
  -2,177
  -2,436
  -2,709
  -2,996
  -3,296
  -3,609
  -3,937
  -4,278
  -4,632
  -5,001
  -5,385
  -5,783
  -6,198
  -6,628
  -7,076
  -7,541
  -8,025
  -8,528
  -9,053
  -9,599
  -10,168
  -10,762
  -11,381
  -12,027
Total debt, $m
  3,969
  5,371
  6,906
  8,571
  10,364
  12,282
  14,322
  16,481
  18,756
  21,146
  23,650
  26,267
  28,997
  31,840
  34,800
  37,877
  41,076
  44,400
  47,855
  51,445
  55,177
  59,058
  63,095
  67,296
  71,670
  76,226
  80,974
  85,925
  91,089
  96,480
Total liabilities, $m
  7,808
  9,210
  10,745
  12,410
  14,203
  16,121
  18,161
  20,320
  22,595
  24,985
  27,489
  30,106
  32,836
  35,679
  38,639
  41,716
  44,915
  48,239
  51,694
  55,284
  59,016
  62,897
  66,934
  71,135
  75,509
  80,065
  84,813
  89,764
  94,928
  100,319
Total equity, $m
  3,969
  4,681
  5,462
  6,308
  7,219
  8,194
  9,231
  10,328
  11,485
  12,700
  13,973
  15,303
  16,690
  18,136
  19,640
  21,204
  22,830
  24,520
  26,276
  28,101
  29,998
  31,970
  34,022
  36,157
  38,381
  40,696
  43,110
  45,626
  48,252
  50,991
Total liabilities and equity, $m
  11,777
  13,891
  16,207
  18,718
  21,422
  24,315
  27,392
  30,648
  34,080
  37,685
  41,462
  45,409
  49,526
  53,815
  58,279
  62,920
  67,745
  72,759
  77,970
  83,385
  89,014
  94,867
  100,956
  107,292
  113,890
  120,761
  127,923
  135,390
  143,180
  151,310
Debt-to-equity ratio
  1.000
  1.150
  1.260
  1.360
  1.440
  1.500
  1.550
  1.600
  1.630
  1.670
  1.690
  1.720
  1.740
  1.760
  1.770
  1.790
  1.800
  1.810
  1.820
  1.830
  1.840
  1.850
  1.850
  1.860
  1.870
  1.870
  1.880
  1.880
  1.890
  1.890
Adjusted equity ratio
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  770
  1,387
  2,066
  2,807
  3,608
  4,468
  5,384
  6,357
  7,384
  8,465
  9,611
  10,798
  12,038
  13,331
  14,678
  16,080
  17,540
  19,059
  20,638
  22,282
  23,993
  25,774
  27,629
  29,561
  31,576
  33,677
  35,869
  38,158
  40,549
  43,047
Depreciation, amort., depletion, $m
  530
  622
  723
  833
  951
  1,077
  1,211
  1,353
  1,502
  1,660
  1,807
  1,980
  2,159
  2,346
  2,541
  2,743
  2,953
  3,172
  3,399
  3,635
  3,880
  4,136
  4,401
  4,677
  4,965
  5,264
  5,577
  5,902
  6,242
  6,596
Funds from operations, $m
  1,300
  2,009
  2,790
  3,640
  4,559
  5,544
  6,595
  7,710
  8,887
  10,125
  11,419
  12,778
  14,197
  15,677
  17,218
  18,823
  20,493
  22,230
  24,037
  25,917
  27,873
  29,909
  32,030
  34,239
  36,541
  38,941
  41,446
  44,060
  46,791
  49,643
Change in working capital, $m
  -152
  -168
  -184
  -200
  -215
  -230
  -245
  -259
  -273
  -287
  -300
  -314
  -327
  -341
  -355
  -369
  -384
  -399
  -414
  -430
  -447
  -465
  -484
  -504
  -524
  -546
  -569
  -594
  -619
  -646
Cash from operations, $m
  1,452
  2,177
  2,974
  3,839
  4,774
  5,774
  6,840
  7,969
  9,160
  10,411
  11,719
  13,091
  14,524
  16,018
  17,573
  19,192
  20,877
  22,629
  24,452
  26,348
  28,321
  30,375
  32,514
  34,742
  37,065
  39,488
  42,015
  44,654
  47,410
  50,290
Maintenance CAPEX, $m
  -430
  -513
  -606
  -707
  -816
  -934
  -1,060
  -1,194
  -1,336
  -1,486
  -1,643
  -1,807
  -1,980
  -2,159
  -2,346
  -2,541
  -2,743
  -2,953
  -3,172
  -3,399
  -3,635
  -3,880
  -4,136
  -4,401
  -4,677
  -4,965
  -5,264
  -5,577
  -5,902
  -6,242
New CAPEX, $m
  -833
  -922
  -1,009
  -1,095
  -1,179
  -1,261
  -1,341
  -1,420
  -1,496
  -1,572
  -1,646
  -1,721
  -1,795
  -1,870
  -1,946
  -2,024
  -2,103
  -2,186
  -2,272
  -2,361
  -2,454
  -2,552
  -2,654
  -2,762
  -2,876
  -2,996
  -3,122
  -3,255
  -3,396
  -3,544
Cash from investing activities, $m
  -1,263
  -1,435
  -1,615
  -1,802
  -1,995
  -2,195
  -2,401
  -2,614
  -2,832
  -3,058
  -3,289
  -3,528
  -3,775
  -4,029
  -4,292
  -4,565
  -4,846
  -5,139
  -5,444
  -5,760
  -6,089
  -6,432
  -6,790
  -7,163
  -7,553
  -7,961
  -8,386
  -8,832
  -9,298
  -9,786
Free cash flow, $m
  189
  742
  1,359
  2,038
  2,779
  3,579
  4,439
  5,355
  6,327
  7,354
  8,430
  9,563
  10,750
  11,989
  13,281
  14,628
  16,030
  17,490
  19,008
  20,588
  22,232
  23,943
  25,724
  27,579
  29,512
  31,527
  33,629
  35,822
  38,112
  40,504
Issuance/(repayment) of debt, $m
  1,266
  1,402
  1,535
  1,665
  1,793
  1,918
  2,040
  2,159
  2,276
  2,390
  2,504
  2,617
  2,730
  2,844
  2,959
  3,077
  3,199
  3,324
  3,455
  3,590
  3,732
  3,881
  4,037
  4,201
  4,374
  4,556
  4,748
  4,951
  5,165
  5,390
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  
  1,266
  1,402
  1,535
  1,665
  1,793
  1,918
  2,040
  2,159
  2,276
  2,390
  2,504
  2,617
  2,730
  2,844
  2,959
  3,077
  3,199
  3,324
  3,455
  3,590
  3,732
  3,881
  4,037
  4,201
  4,374
  4,556
  4,748
  4,951
  5,165
  5,390
Total cash flow (excl. dividends), $m
  1,455
  2,144
  2,894
  3,703
  4,572
  5,497
  6,478
  7,514
  8,603
  9,744
  10,934
  12,180
  13,479
  14,832
  16,241
  17,706
  19,229
  20,814
  22,463
  24,178
  25,964
  27,823
  29,760
  31,780
  33,886
  36,083
  38,377
  40,773
  43,276
  45,894
Retained Cash Flow (-), $m
  -649
  -713
  -780
  -846
  -911
  -975
  -1,037
  -1,097
  -1,157
  -1,215
  -1,273
  -1,330
  -1,387
  -1,445
  -1,504
  -1,564
  -1,626
  -1,690
  -1,756
  -1,825
  -1,897
  -1,973
  -2,052
  -2,135
  -2,223
  -2,316
  -2,413
  -2,516
  -2,625
  -2,740
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
  806
  1,432
  2,113
  2,857
  3,660
  4,522
  5,442
  6,417
  7,446
  8,529
  9,661
  10,850
  12,092
  13,387
  14,737
  16,141
  17,603
  19,124
  20,707
  22,353
  24,067
  25,851
  27,709
  29,644
  31,662
  33,767
  35,963
  38,256
  40,651
  43,154
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
  773
  1,310
  1,839
  2,352
  2,837
  3,282
  3,676
  4,011
  4,277
  4,472
  4,588
  4,630
  4,598
  4,494
  4,326
  4,102
  3,830
  3,522
  3,188
  2,840
  2,489
  2,145
  1,816
  1,510
  1,232
  985
  772
  592
  444
  325
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 States Steel Corporation is an integrated steel producer. The Company is engaged in producing flat-rolled and tubular products with production operations in North America and Europe. The Company operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE) and Tubular Products (Tubular). The Flat-Rolled segment includes the operating results of its integrated steel plants and equity investees in the United States involved in the production of slabs, rounds, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. The USSE segment includes the operating results of U. S. Steel Kosice (USSK) and its integrated steel plant and coke production facilities in Slovakia. The Tubular segment includes the operating results of its tubular production facilities, primarily in the United States and equity investees in the United States and Brazil.

FINANCIAL RATIOS  of  United States Steel (X)

Valuation Ratios
P/E Ratio -14.7
Price to Sales 0.6
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 8.9
Price to Free Cash Flow 15.3
Growth Rates
Sales Growth Rate -11.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -38.8%
Cap. Spend. - 3 Yr. Gr. Rate -8.6%
Financial Strength
Quick Ratio 30
Current Ratio 0
LT Debt to Equity 131.1%
Total Debt to Equity 133.3%
Interest Coverage -1
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. -4.6%
Return On Total Capital -8.1%
Ret/ On T. Cap. - 3 Yr. Avg. -10.7%
Return On Equity -18.7%
Return On Equity - 3 Yr. Avg. -22.8%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 6.2%
Gross Margin - 3 Yr. Avg. 7.2%
EBITDA Margin 2.8%
EBITDA Margin - 3 Yr. Avg. 0.9%
Operating Margin -1.8%
Oper. Margin - 3 Yr. Avg. -3.4%
Pre-Tax Margin -4.1%
Pre-Tax Margin - 3 Yr. Avg. -5.2%
Net Profit Margin -4.3%
Net Profit Margin - 3 Yr. Avg. -6%
Effective Tax Rate -5.8%
Eff/ Tax Rate - 3 Yr. Avg. 7.2%
Payout Ratio -7%

X stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the X stock intrinsic value calculation we used $12250 million for the last fiscal year's total revenue generated by United States Steel. The default revenue input number comes from 2017 income statement of United States Steel. 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 X stock valuation model: a) initial revenue growth rate of 19.4% 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 4.3%, whose default value for X is calculated based on our internal credit rating of United States Steel, 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 States Steel.
    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 X stock the variable cost ratio is equal to 58.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4570 million in the base year in the intrinsic value calculation for X 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 10.7% for United States Steel.

Corporate tax rate of 27% is the nominal tax rate for United States Steel. 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 X 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 X are equal to 35.1%.

Life of production assets of 10 years is the average useful life of capital assets used in United States Steel 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 X is equal to -6.4%. 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 - $3320 million for United States Steel - 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 175 million for United States Steel 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 States Steel at the current share price and the inputted number of shares is $6.5 billion.

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COMPANY NEWS

▶ 5 Top Stock Trades for Thursday Morning   [Jul-18-18 03:52PM  InvestorPlace]
▶ No Trump Bump for U.S. Steel Shareholders   [Jul-11-18 09:55AM  Investopedia]
▶ U. S. Steel Conference Call Available on Company Website   [Jul-02-18 12:14PM  GlobeNewswire]
▶ Is United States Steel Corporation a Buy?   [Jun-27-18 11:20AM  Motley Fool]
▶ Steel pipe company CEOs push for waivers from Trump's tariff   [Jun-25-18 05:32PM  Associated Press]
▶ U.S. Steel sells land to pave way for Amazon project   [Jun-21-18 04:05PM  American City Business Journals]
▶ Four Stocks Poised for Big Gains: Cramer's 'Off the Charts'   [Jun-18-18 04:06PM  TheStreet.com]
▶ U.S. Steel Corporation Is Primed for a Massive Breakout   [Jun-13-18 11:26AM  InvestorPlace]
▶ 5 Top Stock Trades for Wednesday Morning   [Jun-12-18 04:15PM  InvestorPlace]
▶ After Trump, steel plant reopens   [Jun-11-18 04:55PM  CNBC Videos]
▶ Can Trump win on trade with little support at home?   [01:13PM  Yahoo Finance Video]
▶ US stocks pare losses as G7 summit gets underway   [Jun-08-18 01:00PM  Yahoo Finance Video]
▶ World Banks warning: Tariffs could take us back to 2008 Crisis   [Jun-06-18 12:58PM  Yahoo Finance Video]
▶ Trump is making a difference for our industry: US Steel CEO   [Jun-05-18 08:04PM  Fox Business Videos]
▶ The week in Trumponomics - redo edition   [Jun-01-18 05:17PM  Yahoo Finance Video]
▶ Yahoo Finance Live: The Final Round - Jun 1st, 2018   [01:50PM  Yahoo Finance Video]
▶ A Tariff Windfall For Steel? Probably Not.   [07:10AM  Investopedia]
▶ Yahoo Finance Live: The Final Round - May 31st, 2018   [01:50PM  Yahoo Finance Video]
▶ US plans steel, aluminum tariffs on EU   [05:06PM  CNBC Videos]
▶ U.S. Steel Prices on Knifes Edge as Tariff Deadline Nears   [May-25-18 11:25PM  The Wall Street Journal]
▶ Final Trade: X, DE & More   [May-21-18 05:30PM  CNBC Videos]
▶ [$$] U.S. Workers Already Feel the Effects of U.S.-China Trade Tensions   [May-16-18 01:30PM  The Wall Street Journal]
▶ Here's How the Steel Industry's Getting Hot   [May-08-18 02:51PM  Zacks]
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