Intuit Inc. Consolidated Cash Flow Statement Analysis

Intuit Inc., consolidated cash flow statement

US$ in millions

	12 Month period	31/07/2024	31/07/2023	31/07/2022	31/07/2021	31/07/2020
	Net Income	2963	2384	2066	2062	1826
Add	Depreciation	159	160	187	166	189
Add	Amortization of intangible Assets	630	646	559	197	29
Add	Non cash operating lease cost	81	90	83	62	60
Add	Share based compensation expense	1940	1712	1308	753	435
Add	Other	92	81	2	(39)	6
Less	Deferred Income taxes	554	628	120	(42)	(179)
	Changes in Operating Assets and liabilities
	Net cash provided by operating activities	4884	5046	3889	3250	2414
	Net cash used in investing activities	(227)	(922)	(5421)	(3965)	(97)
	Net cash provided by financing activities	(397)	(4269)	1732	(3176)	2034
	Net increase in cash,cash equivalents ,restricted cash	4247	(145)	178	(3878)	4345
	Cash equivalents at the end of period	7099	2852	2997	2819	6697

 

 

 

 

 

Analysis

Free cash flow is positive (Total netcash flow from operating activities -Capital Expenditure). So company is going good.

	Percent growth 2024	2023	2022	2021	2020
Year on year growth on Net cash provided by operating activities	-3%	30%	20%	35%	4%

Net cash from operating Activities are positive and Intuit Inc reported average 22.5% growth in operating activities other than year 2024(-3% growth) . In year 2023,2022,2021 company reported higher growth in Net cash from operating activities.

 

Source: https://www.stock-analysis-on.net, Form 10 K 07/31/2024

 

 

Intuit Inc. Dividend Discount Model Valuation

Intuit Inc. offers to shareholders dividend of $3.60 per year at dividend yield of 0.63%. That means for every $100 investment shareholder gets dividend at $0.63. Intuit Inc. declares dividend on quarterly basis and company s dividend payout raised for 11 consecutive years. Management of the company is good as about 65% of its earnings reinvested in the business and delivering consistent dividend growth.

Dividend Growth table

	1 year	3 years	5 years	10 years
Annualized Growth %	15.38%	15.11%	13.88%	16.83%

 

US$ in millions, except per share data, based on values on 09/10/2024

Year	Value	DPS or Terminal Value	Present Value at 15.73%
0	DPS0	3.60
1	DPS1	4.04 = 3.60 x (1+12.16%)	3.49
2	DPS2	4.54 = 4.04 x (1+ 12.89%)	3.40
3	DPS3	5.18 = 4.56 x (1+ 13.61%)	3.34
4	DPS4	5.92 = 5.18 x (1+14.34%)	3.30
5	DPS5	6.81 = 5.92 x (1+15.06%)	3.28
5	Terminal Value (TV5)	1186.55 = 6.81 x (1+15.06%) / (15.33% - 12.06%)	571.68
Intrinsic value of Intuit Inc. common stock (per share)			$588.49
Current share price on 09/10/2024			$626.99

Based on Form 10 K 07/31/2024

Required rate of Return

Assumptions

Rate of return on LT Treasury Composite(Rf)	4.04%
Expected rate of return on market portfolio(E(RM)	13.85%
Systematic risk of Intuit Inc. Common stock (β)	1.19
Required rate of return on Intuit Inc. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.04% +1.19[13.85% - 4.04%]	15.73%

 

DIVIDEND Growth rate (G) Forecast

Intuit Inc. H-Model

Year	Value	gt
1	g1 (PRAT Model)	12.16%
2	g2 (Linear Interpolation)	12.89%
3	g3 (Linear Interpolation)	13.61%
4	g4 (Linear Interpolation)	14.34%
5 and thereafter	g5 (Gordon Growth Model)	15.06%

 

 

 

Dividend Growth rate (G) implied by GORDON GROWTH MODEL

g = 100 X (P₀ X r   D₀) (P₀ + D₀)

= 100 X ($626.99 X 15.73%   $3.60) ($626.99 + $3.60)

= 15.06%

 

Source: https://www.stock-analysis-on.net, Form 10 K 07/31/2024

 

Intuit Inc. Free Cash Flow to the Firm (FCFF)

US$ in millions, except per share data, based on values on 09/10/2024

 

Year	Value	FCFE or Terminal Value	Present Value at 15.70%
0	FCFE0	4,801
1	FCFE1	5,243 = 4,801 x (1+9.21%)	4,546
2	FCFE2	5,767 = 5,243 x (1+ 9.99%)	4,336
3	FCFE3	6,388 = 5,767 x (1+ 10.76%)	4,164
4	FCFE4	7,124 = 6,388 x (1+11.53%)	4,027
5	FCFE5	8,001 = 7,124 x (1+12.31%)	3,922
5	Terminal Value (TV5)	297,427 = 8,001 x (1+12.31%) / (15.33% - 12.31%)	145,783
Intrinsic value of Intuit Inc.			166,778
Less : Debt			6,052
Intrinsic value of Intuit Inc. common stock			16,0726
Intrinsic value of Intuit Inc. common stock (per share)			$573.42
Current share price on 09/10/2024			$615.12

Source: Form 10 K 07/31/2024

Weighted Average Cost of Capital

US$ in millions, share price on 09/10/2024

	Value	Weight	Required rate of return
Equity	No of shares x Current share price =280,292,000 x $615.12	0.97	15.74%
Debt	6,052	0.03	3.73% =weighted average interest rate x (1 -Tax rate) = 4.56% x(1- 18.16%)
WACC = 15.33%		= 0.97 X15.74% + 0.03 X3.73%

 

FCFF Growth rate (G) Forecast

Intuit Inc. H-Model

Year	Value	g
1	g1 (PRAT Model)	9.21%
2	g2 (Linear Interpolation)	10.00%
3	g3 (Linear Interpolation)	10.79%
4	g4 (Linear Interpolation)	11.57%
5	g5 (Single stage model)	12.36%

 

 

Source: https://www.stock-analysis-on.net , Form 10 K 07/31/2024

 

Intuit Inc., free cash flow to equity (FCFE) forecast

 

 

   US$ in millions, except per share data, based on values on 09/06/2024

Year	Value	FCFE or Terminal Value	Present Value at 15.70%
0	FCFE0	4,545
1	FCFE1	5,098 = 4545 x (1+12.16%)	4,406
2	FCFE2	5,725 = 5098 x (1+ 12.31%)	4,277
3	FCFE3	6,439 = 5725 x (1+ 12.46%)	4,157
4	FCFE4	7,251 = 6439 x (1+12.61%)	4,046
5	FCFE5	8,177 = 7251 x (1+12.77%)	3,944
5	Terminal Value (TV5)	314,197 = 8177 x (1+12.77%) / (15.70% - 12.77%)	151,540

Intrinsic value of Intuit  Inc.	172,370
Intrinsic value of Intuit Inc. common stock (per share)	$614.96
Current share price on 09/06/2024	$623.10

 

Required rate of Return

Assumptions

Rate of return on LT Treasury Composite(Rf)	4.10%
Expected rate of return on market portfolio(E(RM)	13.84%
Systematic risk of Intuit Inc. Common stock  (β)	1.19
Required rate of return on Intuit Inc. Common Stock (r) Calculation :  Rf + β(E(RM)- (Rf) = 4.10% +1.19[13.84% - 4.10%]	15.70%

 

FCFE Growth rate (G) Forecast

Intuit Inc. H-Model

Year	Value	g
1	g1 (PRAT Model)	12.16%
2	g2 (Linear Interpolation)	12.31%
3	g3 (Linear Interpolation)	12.46%
4	g4 (Linear Interpolation)	12.61%
5	g5 (Single stage model)	12.77%

 

2024 Calculations

Retention rate = (Net income – Dividends and dividend rights declared) ÷ Net income

= (2,963 – 1,041) ÷ 2,963

= 0.65

 

Profit margin = 100 × Net income ÷ Net revenue

= 100 × 2,963 ÷ 16,285

= 18.19%

 

Asset turnover = Net revenue ÷ Total assets

= 16,285 ÷ 32,132

= 0.51

 

Financial leverage = Total assets ÷ Stockholders’ equity

= 32,132 ÷ 18,436

= 1.74

 

g = Retention rate × Profit margin × Asset turnover × Financial leverage

= 0.66 × 19.86% × 0.56 × 1.66

= 12.16%

 

Source: https://www.stock-analysis-on.net