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Hi guys, 

I'm new to reading financial statemtements and been having trouble upon trying to get owner's earnings and intrinsic value. Been reading and researching a lot on the subjet but i haven't find a clear answer, so i turn to you guys in hopes of resolving the matter once and for all ;) (although i'm guessing this is probably a life-long art to be constantly improving).

On Owner's Earning calculations I'm not clear with how to treat negative amounts when the formula calls for substracting that amount and also with regards to what should and shouldn't be included in the calculation.

For example i'm using TTM numbers for The Trade Desk (TTD) and change in working capital es -59,950. If i substract this, it turns into a positive. Is this correct or should I treat cashflow numbers as absolute and use the formula's signs (+/-)?

The second doubt i had arose while looking at some examples and articles, since some did include things like: stock based compensation, deferred taxes, other working capital but these were not in the original definition of the formula. To make matter worse, some examples use "net cash provided from operations" numbers to simplify and only substract capex from that.

As for intrinsic value i'm using this formula: intrinsic value = annual owner's earnings / discount rate - growth rate. The problem is that with growth rates above the discount rate (10%) intrinsic value turn negative. What am I missing?

Here are my numbers: 
(I'm using a 9% growth rate since anything equal or above the discount rate messes up the results)

Owner earnings	TTM
	
Reported Earnings	$96.808
	
Depreciation, Depletion and Amortization	$18.961
Deferred income taxes	
Stock based compensation	$70.620
Other working capital	
Other non-cash charges	$12.958
	
	
	
Change in working capital	-$59.950
	
Capital Expenditure	-$35.976
	
Owner's Earnings	$103.421
	
	
	
Intrinsic Value (10% discount, 9% growth)	$10.342.100
	
# of Shares	39.830
	
Intrisic Share Value	$260

Thanks in advance for any tips or help on the matter.

Saludos!!

ML
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