I'm trying to answer the questions: "if I owned all of a company, how much would I make?" and "once I know that, how much should I pay?"
Let's say I owned Wal-mart outright (took it private and owned 100% of the company). I'm not paying off all its debts so we'll leave interest expense, etc. the same. For this discussion, ignore any minority interest. I believe I would earn:
all of the net earnings. That's after taxes, after interest, after capex - the Net Income on the income statement. For 2018, that was $10,523 billion.
all of the dividends. From 2018's Cash Flow Statement, that puts another $6,124 billion in my pocket.
all of the share buyback money. Again from the 2018 CFS, that's another $8,296 billion I get.
Adding these three, Wal-mart throws off about $24,943 billion per year. I say "throws off" in the accounting sense, not the free cash flow sense.
If I spent $100bn to buy Wal-mart, I'd earn about 25% annual return. If I spent $400bn, it'd be only a 6% return. I'd want my return to at least equal an index fund, and perhaps a bit more since it's riskier, so 10-15% return would mean I'd value Wal-mart at maybe $150-250bn.
Obviously, I'm ignoring future growth prospects, which greatly complicates the math, but let's pretend for a moment that Wal-mart is going to perform exactly as it did in 2018 for the foreseeable future. With that assumption, am I thinking about these numbers correctly?