Intrinsic value of Exxon Mobil - XOM

Previous Close

$78.26

  Intrinsic Value

$100.77

stock screener

  Rating & Target

buy

+29%

Previous close

$78.26

 
Intrinsic value

$100.77

 
Up/down potential

+29%

 
Rating

buy

We calculate the intrinsic value of XOM 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 331.6

 

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, %
  17.40
  16.16
  15.04
  14.04
  13.14
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
Revenue, $m
  286,882
  333,242
  383,375
  437,200
  494,629
  555,577
  619,968
  687,736
  758,832
  833,228
  910,915
  991,907
  1,076,240
  1,163,975
  1,255,192
  1,349,997
  1,448,517
  1,550,898
  1,657,307
  1,767,933
  1,882,983
  2,002,680
  2,127,269
  2,257,011
  2,392,186
  2,533,090
  2,680,039
  2,833,366
  2,993,421
  3,160,576
Variable operating expenses, $m
  201,104
  233,603
  268,746
  306,477
  346,735
  389,460
  434,597
  482,103
  531,942
  584,093
  638,552
  695,327
  754,445
  815,946
  879,890
  946,348
  1,015,410
  1,087,179
  1,161,772
  1,239,321
  1,319,971
  1,403,879
  1,491,216
  1,582,165
  1,676,922
  1,775,696
  1,878,708
  1,986,190
  2,098,388
  2,215,564
Fixed operating expenses, $m
  56,304
  57,543
  58,809
  60,102
  61,425
  62,776
  64,157
  65,569
  67,011
  68,485
  69,992
  71,532
  73,106
  74,714
  76,358
  78,037
  79,754
  81,509
  83,302
  85,135
  87,008
  88,922
  90,878
  92,877
  94,921
  97,009
  99,143
  101,324
  103,553
  105,832
Total operating expenses, $m
  257,408
  291,146
  327,555
  366,579
  408,160
  452,236
  498,754
  547,672
  598,953
  652,578
  708,544
  766,859
  827,551
  890,660
  956,248
  1,024,385
  1,095,164
  1,168,688
  1,245,074
  1,324,456
  1,406,979
  1,492,801
  1,582,094
  1,675,042
  1,771,843
  1,872,705
  1,977,851
  2,087,514
  2,201,941
  2,321,396
Operating income, $m
  29,474
  42,097
  55,821
  70,620
  86,469
  103,342
  121,213
  140,064
  159,880
  180,650
  202,372
  225,048
  248,690
  273,315
  298,945
  325,612
  353,352
  382,210
  412,233
  443,477
  476,004
  509,880
  545,175
  581,969
  620,343
  660,385
  702,189
  745,852
  791,480
  839,181
EBITDA, $m
  58,650
  75,987
  94,810
  115,083
  136,773
  159,844
  184,264
  210,007
  237,053
  265,389
  295,012
  325,925
  358,144
  391,691
  426,598
  462,907
  500,666
  539,936
  580,781
  623,276
  667,504
  713,552
  761,519
  811,507
  863,628
  918,000
  974,749
  1,034,005
  1,095,911
  1,160,611
Interest expense (income), $m
  818
  2,286
  3,802
  5,452
  7,236
  9,152
  11,195
  13,365
  15,656
  18,068
  20,598
  23,246
  26,011
  28,893
  31,894
  35,017
  38,263
  41,637
  45,143
  48,787
  52,574
  56,511
  60,606
  64,866
  69,300
  73,917
  78,728
  83,743
  88,972
  94,429
  100,125
Earnings before tax, $m
  27,188
  38,295
  50,369
  63,384
  77,318
  92,146
  107,849
  124,408
  141,812
  160,052
  179,126
  199,038
  219,797
  241,420
  263,928
  287,349
  311,715
  337,066
  363,446
  390,903
  419,493
  449,274
  480,310
  512,669
  546,426
  581,657
  618,446
  656,880
  697,050
  739,055
Tax expense, $m
  7,341
  10,340
  13,600
  17,114
  20,876
  24,879
  29,119
  33,590
  38,289
  43,214
  48,364
  53,740
  59,345
  65,183
  71,261
  77,584
  84,163
  91,008
  98,130
  105,544
  113,263
  121,304
  129,684
  138,421
  147,535
  157,047
  166,980
  177,358
  188,204
  199,545
Net income, $m
  19,847
  27,955
  36,769
  46,271
  56,442
  67,267
  78,730
  90,818
  103,523
  116,838
  130,762
  145,298
  160,452
  176,237
  192,667
  209,764
  227,552
  246,058
  265,315
  285,359
  306,230
  327,970
  350,626
  374,249
  398,891
  424,610
  451,466
  479,522
  508,847
  539,510

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
  409,247
  475,381
  546,898
  623,680
  705,604
  792,549
  884,405
  981,078
  1,082,500
  1,188,628
  1,299,451
  1,414,989
  1,535,293
  1,660,449
  1,790,574
  1,925,817
  2,066,358
  2,212,407
  2,364,204
  2,522,016
  2,686,138
  2,856,890
  3,034,621
  3,219,702
  3,412,534
  3,613,538
  3,823,166
  4,041,892
  4,270,216
  4,508,667
Adjusted assets (=assets-cash), $m
  409,247
  475,381
  546,898
  623,680
  705,604
  792,549
  884,405
  981,078
  1,082,500
  1,188,628
  1,299,451
  1,414,989
  1,535,293
  1,660,449
  1,790,574
  1,925,817
  2,066,358
  2,212,407
  2,364,204
  2,522,016
  2,686,138
  2,856,890
  3,034,621
  3,219,702
  3,412,534
  3,613,538
  3,823,166
  4,041,892
  4,270,216
  4,508,667
Revenue / Adjusted assets
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
  0.701
Average production assets, $m
  291,759
  338,907
  389,893
  444,632
  503,037
  565,022
  630,507
  699,427
  771,733
  847,393
  926,401
  1,008,770
  1,094,537
  1,183,762
  1,276,530
  1,372,947
  1,473,142
  1,577,263
  1,685,482
  1,797,988
  1,914,993
  2,036,726
  2,163,433
  2,295,380
  2,432,853
  2,576,153
  2,725,600
  2,881,533
  3,044,310
  3,214,306
Working capital, $m
  -23,237
  -26,993
  -31,053
  -35,413
  -40,065
  -45,002
  -50,217
  -55,707
  -61,465
  -67,492
  -73,784
  -80,344
  -87,175
  -94,282
  -101,671
  -109,350
  -117,330
  -125,623
  -134,242
  -143,203
  -152,522
  -162,217
  -172,309
  -182,818
  -193,767
  -205,180
  -217,083
  -229,503
  -242,467
  -256,007
Total debt, $m
  70,405
  100,959
  134,000
  169,473
  207,322
  247,491
  289,928
  334,591
  381,448
  430,479
  481,680
  535,058
  590,638
  648,460
  708,578
  771,060
  835,990
  903,465
  973,595
  1,046,505
  1,122,329
  1,201,216
  1,283,328
  1,368,835
  1,457,924
  1,550,788
  1,647,636
  1,748,687
  1,854,173
  1,964,337
Total liabilities, $m
  189,072
  219,626
  252,667
  288,140
  325,989
  366,158
  408,595
  453,258
  500,115
  549,146
  600,347
  653,725
  709,305
  767,127
  827,245
  889,727
  954,657
  1,022,132
  1,092,262
  1,165,172
  1,240,996
  1,319,883
  1,401,995
  1,487,502
  1,576,591
  1,669,455
  1,766,303
  1,867,354
  1,972,840
  2,083,004
Total equity, $m
  220,175
  255,755
  294,231
  335,540
  379,615
  426,392
  475,810
  527,820
  582,385
  639,482
  699,105
  761,264
  825,988
  893,321
  963,329
  1,036,089
  1,111,700
  1,190,275
  1,271,942
  1,356,845
  1,445,142
  1,537,007
  1,632,626
  1,732,200
  1,835,943
  1,944,084
  2,056,863
  2,174,538
  2,297,376
  2,425,663
Total liabilities and equity, $m
  409,247
  475,381
  546,898
  623,680
  705,604
  792,550
  884,405
  981,078
  1,082,500
  1,188,628
  1,299,452
  1,414,989
  1,535,293
  1,660,448
  1,790,574
  1,925,816
  2,066,357
  2,212,407
  2,364,204
  2,522,017
  2,686,138
  2,856,890
  3,034,621
  3,219,702
  3,412,534
  3,613,539
  3,823,166
  4,041,892
  4,270,216
  4,508,667
Debt-to-equity ratio
  0.320
  0.390
  0.460
  0.510
  0.550
  0.580
  0.610
  0.630
  0.650
  0.670
  0.690
  0.700
  0.720
  0.730
  0.740
  0.740
  0.750
  0.760
  0.770
  0.770
  0.780
  0.780
  0.790
  0.790
  0.790
  0.800
  0.800
  0.800
  0.810
  0.810
Adjusted equity ratio
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  19,847
  27,955
  36,769
  46,271
  56,442
  67,267
  78,730
  90,818
  103,523
  116,838
  130,762
  145,298
  160,452
  176,237
  192,667
  209,764
  227,552
  246,058
  265,315
  285,359
  306,230
  327,970
  350,626
  374,249
  398,891
  424,610
  451,466
  479,522
  508,847
  539,510
Depreciation, amort., depletion, $m
  29,176
  33,891
  38,989
  44,463
  50,304
  56,502
  63,051
  69,943
  77,173
  84,739
  92,640
  100,877
  109,454
  118,376
  127,653
  137,295
  147,314
  157,726
  168,548
  179,799
  191,499
  203,673
  216,343
  229,538
  243,285
  257,615
  272,560
  288,153
  304,431
  321,431
Funds from operations, $m
  49,023
  61,846
  75,758
  90,734
  106,746
  123,769
  141,780
  160,761
  180,696
  201,577
  223,402
  246,175
  269,906
  294,613
  320,321
  347,059
  374,866
  403,784
  433,864
  465,158
  497,729
  531,642
  566,969
  603,787
  642,176
  682,225
  724,026
  767,676
  813,278
  860,941
Change in working capital, $m
  -3,444
  -3,755
  -4,061
  -4,360
  -4,652
  -4,937
  -5,216
  -5,489
  -5,759
  -6,026
  -6,293
  -6,560
  -6,831
  -7,106
  -7,389
  -7,679
  -7,980
  -8,293
  -8,619
  -8,961
  -9,319
  -9,695
  -10,092
  -10,509
  -10,949
  -11,413
  -11,903
  -12,419
  -12,964
  -13,540
Cash from operations, $m
  52,467
  65,601
  79,819
  95,093
  111,397
  128,706
  146,996
  166,250
  186,455
  207,603
  229,695
  252,735
  276,737
  301,719
  327,709
  354,738
  382,846
  412,077
  442,483
  474,119
  507,048
  541,338
  577,061
  614,296
  653,125
  693,638
  735,929
  780,095
  826,242
  874,480
Maintenance CAPEX, $m
  -24,843
  -29,176
  -33,891
  -38,989
  -44,463
  -50,304
  -56,502
  -63,051
  -69,943
  -77,173
  -84,739
  -92,640
  -100,877
  -109,454
  -118,376
  -127,653
  -137,295
  -147,314
  -157,726
  -168,548
  -179,799
  -191,499
  -203,673
  -216,343
  -229,538
  -243,285
  -257,615
  -272,560
  -288,153
  -304,431
New CAPEX, $m
  -43,332
  -47,148
  -50,985
  -54,739
  -58,405
  -61,985
  -65,485
  -68,920
  -72,305
  -75,661
  -79,008
  -82,369
  -85,767
  -89,226
  -92,768
  -96,417
  -100,194
  -104,121
  -108,219
  -112,507
  -117,005
  -121,732
  -126,707
  -131,948
  -137,473
  -143,300
  -149,447
  -155,933
  -162,776
  -169,996
Cash from investing activities, $m
  -68,175
  -76,324
  -84,876
  -93,728
  -102,868
  -112,289
  -121,987
  -131,971
  -142,248
  -152,834
  -163,747
  -175,009
  -186,644
  -198,680
  -211,144
  -224,070
  -237,489
  -251,435
  -265,945
  -281,055
  -296,804
  -313,231
  -330,380
  -348,291
  -367,011
  -386,585
  -407,062
  -428,493
  -450,929
  -474,427
Free cash flow, $m
  -15,708
  -10,723
  -5,057
  1,365
  8,529
  16,417
  25,008
  34,279
  44,207
  54,769
  65,948
  77,726
  90,093
  103,040
  116,565
  130,668
  145,357
  160,642
  176,538
  193,064
  210,244
  228,106
  246,681
  266,005
  286,115
  307,053
  328,866
  351,602
  375,313
  400,053
Issuance/(repayment) of debt, $m
  28,069
  30,554
  33,041
  35,473
  37,849
  40,169
  42,437
  44,663
  46,857
  49,031
  51,200
  53,378
  55,581
  57,822
  60,118
  62,482
  64,930
  67,475
  70,130
  72,909
  75,824
  78,888
  82,111
  85,508
  89,088
  92,864
  96,848
  101,051
  105,486
  110,164
Issuance/(repurchase) of shares, $m
  12,640
  7,625
  1,707
  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  
  40,709
  38,179
  34,748
  35,473
  37,849
  40,169
  42,437
  44,663
  46,857
  49,031
  51,200
  53,378
  55,581
  57,822
  60,118
  62,482
  64,930
  67,475
  70,130
  72,909
  75,824
  78,888
  82,111
  85,508
  89,088
  92,864
  96,848
  101,051
  105,486
  110,164
Total cash flow (excl. dividends), $m
  25,001
  27,456
  29,690
  36,838
  46,378
  56,586
  67,446
  78,942
  91,064
  103,801
  117,148
  131,104
  145,673
  160,862
  176,682
  193,151
  210,287
  228,117
  246,668
  265,973
  286,068
  306,994
  328,793
  351,512
  375,203
  399,917
  425,714
  452,653
  480,798
  510,218
Retained Cash Flow (-), $m
  -32,487
  -35,580
  -38,476
  -41,309
  -44,075
  -46,776
  -49,418
  -52,010
  -54,565
  -57,097
  -59,623
  -62,159
  -64,724
  -67,334
  -70,007
  -72,761
  -75,611
  -78,575
  -81,667
  -84,903
  -88,297
  -91,865
  -95,619
  -99,574
  -103,743
  -108,141
  -112,780
  -117,674
  -122,839
  -128,287
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
  -7,486
  -8,124
  -8,785
  -4,471
  2,303
  9,809
  18,027
  26,932
  36,499
  46,703
  57,525
  68,945
  80,950
  93,528
  106,675
  120,390
  134,676
  149,542
  165,001
  181,070
  197,771
  215,129
  233,174
  251,938
  271,459
  291,777
  312,934
  334,979
  357,960
  381,931
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
  -7,177
  -7,437
  -7,646
  -3,681
  1,785
  7,119
  12,179
  16,833
  20,967
  24,485
  27,318
  29,421
  30,779
  31,399
  31,318
  30,594
  29,303
  27,540
  25,405
  23,009
  20,456
  17,850
  15,282
  12,832
  10,560
  8,513
  6,716
  5,183
  3,907
  2,876
Current shareholders' claim on cash, %
  96.3
  94.5
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1

Exxon Mobil Corporation is engaged in energy business. The Company is engaged in the exploration, production, transportation and sale of crude oil and natural gas, and the manufacture, transportation and sale of petroleum products. The Company also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and a range of specialty products. The Company's segments include Upstream, Downstream, Chemical, and Corporate and Financing. The Upstream segment operates to explore for and produce crude oil and natural gas. The Downstream operates to manufacture and sell petroleum products. The Chemical segment operates to manufacture and sell petrochemicals. The Company has exploration and development activities in projects located in the United States, Canada/South America, Europe, Africa, Asia and Australia/Oceania.

FINANCIAL RATIOS  of  Exxon Mobil (XOM)

Valuation Ratios
P/E Ratio 41.4
Price to Sales 1.5
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 14.7
Price to Free Cash Flow 54.8
Growth Rates
Sales Growth Rate -15.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -39%
Cap. Spend. - 3 Yr. Gr. Rate -13.7%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 17.3%
Total Debt to Equity 25.6%
Interest Coverage 11
Management Effectiveness
Return On Assets 2.6%
Ret/ On Assets - 3 Yr. Avg. 5.6%
Return On Total Capital 3.7%
Ret/ On T. Cap. - 3 Yr. Avg. 9.3%
Return On Equity 4.6%
Return On Equity - 3 Yr. Avg. 10.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 28.1%
Gross Margin - 3 Yr. Avg. 26.8%
EBITDA Margin 14.2%
EBITDA Margin - 3 Yr. Avg. 15.8%
Operating Margin 0.4%
Oper. Margin - 3 Yr. Avg. 4.7%
Pre-Tax Margin 3.6%
Pre-Tax Margin - 3 Yr. Avg. 8.4%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 6%
Effective Tax Rate -5.1%
Eff/ Tax Rate - 3 Yr. Avg. 18.1%
Payout Ratio 158.8%

XOM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the XOM stock intrinsic value calculation we used $244363 million for the last fiscal year's total revenue generated by Exxon Mobil. The default revenue input number comes from 2017 income statement of Exxon Mobil. 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 XOM stock valuation model: a) initial revenue growth rate of 17.4% 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 XOM is calculated based on our internal credit rating of Exxon Mobil, 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 Exxon Mobil.
    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 XOM stock the variable cost ratio is equal to 70.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $55092 million in the base year in the intrinsic value calculation for XOM 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 Exxon Mobil.

Corporate tax rate of 27% is the nominal tax rate for Exxon Mobil. 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 XOM 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 XOM are equal to 101.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Exxon Mobil 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 XOM is equal to -8.1%. 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 - $187688 million for Exxon Mobil - 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 4237 million for Exxon Mobil 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 Exxon Mobil at the current share price and the inputted number of shares is $331.6 billion.

RELATED COMPANIES Price Int.Val. Rating
CVX Chevron 117.80 224.57  str.buy
BP BP ADR 41.91 52.68  buy
TOT Total ADR 60.09 21.68  str.sell
MPC Marathon Petro 77.11 347.97  str.buy
E ENI ADR 36.21 3.61  str.sell
COP ConocoPhillips 69.77 83.34  buy

COMPANY NEWS

▶ 2 Bargain Stocks You Can Buy Right Now   [09:17AM  Motley Fool]
▶ 20 Dividend Stocks to Fund 20 Years of Retirement   [Aug-13-18 03:46PM  Kiplinger]
▶ Safe Investments to Regularly Earn 12%-Plus   [12:26PM  InvestorPlace]
▶ Yahoo Finance Live: Market Movers - Aug 13th, 2018   [07:20AM  Yahoo Finance Video]
▶ Are Natural Gas Prices About To Break Out?   [Aug-12-18 12:59AM  Oilprice.com]
▶ [$$] As Gas Boom Falters in Papua New Guinea, China Steps In   [Aug-11-18 10:00AM  The Wall Street Journal]
▶ Top 10 Most Held Stocks In ETFs   [01:00PM  ETF.com]
▶ Exxon Seeks Long-Term Deals for U.S. Oil Exports   [Aug-08-18 02:22PM  Bloomberg]
▶ Big Oil Earningspalooza -- Who Stands Out?   [Aug-07-18 09:00PM  Motley Fool]
▶ The Oil Bulls Are Back   [03:00PM  Oilprice.com]
▶ The Weirdest Oil Lawsuit Of 2018   [04:00PM  Oilprice.com]
▶ Big Oil and Big Trucks   [01:32PM  Motley Fool]
▶ [$$] SEC Drops Probe of Exxons Climate-Change Disclosures   [Aug-03-18 07:40PM  The Wall Street Journal]
▶ Business Highlights   [05:42PM  Associated Press]
▶ 10 Hot Stocks to Invest In Right Now   [03:32PM  InvestorPlace]
▶ 10 High-Dividend Stocks to Buy When the Market Is Blue   [Aug-02-18 03:13PM  InvestorPlace]
▶ 3 Top Value Stocks to Buy Now   [09:00AM  Motley Fool]
▶ [$$] Big Oil switches focus from profits to production   [Aug-01-18 11:01PM  Financial Times]
▶ The 5 Best Energy Stocks for 2018   [Jul-31-18 06:50PM  Investopedia]
▶ 3 Top Oil Stocks to Buy Right Now   [08:04AM  Motley Fool]
▶ [$$] Apple Could've Been a Trillionaire Long Ago   [06:00AM  The Wall Street Journal]
▶ [$$] Can Brazil fix its democracy?   [12:00AM  Financial Times]
▶ [$$] Slouching Tiger: Why Exxon Isnt Worth Its Premium   [Jul-30-18 07:42PM  The Wall Street Journal]
▶ 5 of the Most Profitable Companies to Buy   [08:35AM  InvestorPlace]
▶ [$$] Slouching Tiger: Why Exxon Isn't Worth Its Premium   [07:53AM  The Wall Street Journal]
▶ Crude Oil Price Forecast: Strong Oil, Weak Earnings   [Jul-29-18 04:16PM  Investopedia]
▶ Exxon profit surges, just not enough   [Jul-27-18 09:01PM  Associated Press]
▶ [$$] Big Oil Profits Fall Short of Crude-Price Rally   [07:51PM  The Wall Street Journal]
▶ [$$] Big Oil Profits Fall Short of Crude-Price Rally   [02:15PM  The Wall Street Journal]
▶ Fort Worth's historic Petroleum Building marketed by Sundance Square   [02:15PM  American City Business Journals]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.