5-Minute QuickScan5 Minute QuickScanDate:Basic Quality StandardsQuestion 2Question 3Question 4Question 5Question 6Question 7DecisionCompany NameTicker.OB or .PK?Mkt Cap < $500M ?Recent IPO?3 to 5 years Positive EBIT?3 to 5 years of positive Cash Flow from Operating Activities?5 years of ROE > 10%?5 Years of Debt to Equity Ratio < 1?Recent Price to Book Ratio < 2?3 years of only positive net Tangible Assets?Keep and Conitue to Analyze or Drop Company?Analog Device INC.ADINONOYESYESYESNOYESYESKeep and Conitue to Analyze Data InputStock TickerADIYear20142013201220112010QuoteCurrent Price60.19P/E26.9Market Cap1888[in million USD]Shares Outstanding313.67[in million]EarningsEarnings Growth RateCompany [Next 5 Years]11.4[in decimal]FinancialsIncome Statement20142013201220112010Total Revenue (Sales)2,864,7732,633,6892,701,1422,993,3202,761,503Gross Profit1,830,1881,692,4111,741,0011,986,5411,799,422Operating Income752,484753,075824,0481,072,025900,074Net Income629,320673,487651,236867,394712,084Interest Expense, Supplemental34,78427,10226,42219,14610,429Diluted Normalized EPS1.982.142.132.812.33Balance Sheet20142013201220112010Total Inventory367,927283,337313,723295,081277,478Total Current Assets3,811,8865,472,4254,696,1854,386,3483,478,999Total Assets6,859,6906,381,7505,620,3475,277,6354,328,831Total Current Liabilities709,056570,512525,079525,005643,467Total Long Term Debt872,789872,241807,098871,876400,635Total Liabilities1,392,7371,071,662929,909957,217485,647Retained Earnings (Accumulated Deficit)4,231,4964,056,4013,788,8693,482,3342,896,566Total Equity4,757,8974,739,5764,165,3593,795,4133,199,71720142013201220112010Total Common Shares Outstanding311,204.93311,045.08301,389.18297,960.72298,652.99Cash Flow Statement20142013201220112010Cash from Operating Activities871,602912,345814,542900,529991,175Capital Expenditures (Ignore the negative sign)177,913123,074132,176122,996111,557FundamentalsKey Ratio [10 Year Summary]Avg P/EBook Value/ Share20142.7915.2920132.9715.2420122.6813.8220113.0212.7420103.3410.7120091.4920082.2920072.520061.7420051.81 Value IndicatorsValue Indicators Worksheet1ROIC - ROIC > 12% since most businesses lends between 8% and 12%Year20142013201220112010Net Income629,320.0673,487.0651,236.0867,394.0712,084.0Interest34,784.0027,102.0026,422.0019,146.0010,429.00Long-Term Debt872,789.00872,241.00807,098.00871,876.00400,635.00Total Equity4,757,897.04,739,576.04,165,359.03,795,413.03,199,717.0Invested Capital5,630,686.05,611,817.04,972,457.04,667,289.03,600,352.0ROIC0.120.120.140.190.202Equity Growth Rates:Year20142013201220112010BVPS15.2915.2413.8212.7410.714-year Growth rate3-year Growth rate2-year Growth rate1-year Growth rate0.090.060.050.003EPS Growth Rates:Year20142013201220112010EPS1.982.142.132.812.334-year Growth rate3-year Growth rate2-year Growth rate1-year Growth rate-0.04-0.11-0.04-0.074Sales Growth RatesYear20142013201220112010Sales (Revenue)2,864,773.002,633,689.002,701,142.002,993,320.002,761,503.00Sales Growth Rate.

1. 5-Minute QuickScan5 Minute QuickScanDate:Basic Quality
StandardsQuestion 2Question 3Question 4Question 5Question
6Question 7DecisionCompany NameTicker.OB or .PK?Mkt Cap
< $500M ?Recent IPO?3 to 5 years Positive EBIT?3 to 5 years
of positive Cash Flow from Operating Activities?5 years of
ROE > 10%?5 Years of Debt to Equity Ratio < 1?Recent Price
to Book Ratio < 2?3 years of only positive net Tangible
Assets?Keep and Conitue to Analyze or Drop Company?Analog
Device INC.ADINONOYESYESYESNOYESYESKeep and
Conitue to Analyze
Data InputStock
TickerADIYear20142013201220112010QuoteCurrent
Price60.19P/E26.9Market Cap1888[in million USD]Shares
Outstanding313.67[in million]EarningsEarnings Growth
RateCompany [Next 5 Years]11.4[in decimal]FinancialsIncome
Statement20142013201220112010Total Revenue
(Sales)2,864,7732,633,6892,701,1422,993,3202,761,503Gross
Profit1,830,1881,692,4111,741,0011,986,5411,799,422Operatin
g Income752,484753,075824,0481,072,025900,074Net
Income629,320673,487651,236867,394712,084Interest Expense,
Supplemental34,78427,10226,42219,14610,429Diluted
Normalized EPS1.982.142.132.812.33Balance
Sheet20142013201220112010Total
Inventory367,927283,337313,723295,081277,478Total Current
Assets3,811,8865,472,4254,696,1854,386,3483,478,999Total
Assets6,859,6906,381,7505,620,3475,277,6354,328,831Total
Current Liabilities709,056570,512525,079525,005643,467Total
Long Term Debt872,789872,241807,098871,876400,635Total
Liabilities1,392,7371,071,662929,909957,217485,647Retained
Earnings (Accumulated
Deficit)4,231,4964,056,4013,788,8693,482,3342,896,566Total
Equity4,757,8974,739,5764,165,3593,795,4133,199,7172014201
3201220112010Total Common Shares
Outstanding311,204.93311,045.08301,389.18297,960.72298,652

2. .99Cash Flow Statement20142013201220112010Cash from
Operating
Activities871,602912,345814,542900,529991,175Capital
Expenditures (Ignore the negative
sign)177,913123,074132,176122,996111,557FundamentalsKey
Ratio [10 Year Summary]Avg P/EBook Value/
Share20142.7915.2920132.9715.2420122.6813.8220113.0212.74
20103.3410.7120091.4920082.2920072.520061.7420051.81
Value IndicatorsValue Indicators Worksheet1ROIC - ROIC >
12% since most businesses lends between 8% and
12%Year20142013201220112010Net
Income629,320.0673,487.0651,236.0867,394.0712,084.0Interest
34,784.0027,102.0026,422.0019,146.0010,429.00Long-Term
Debt872,789.00872,241.00807,098.00871,876.00400,635.00Tot
al
Equity4,757,897.04,739,576.04,165,359.03,795,413.03,199,717.
0Invested
Capital5,630,686.05,611,817.04,972,457.04,667,289.03,600,352
.0ROIC0.120.120.140.190.202Equity Growth
Rates:Year20142013201220112010BVPS15.2915.2413.8212.74
10.714-year Growth rate3-year Growth rate2-year Growth rate1-
year Growth rate0.090.060.050.003EPS Growth
Rates:Year20142013201220112010EPS1.982.142.132.812.334-
year Growth rate3-year Growth rate2-year Growth rate1-year
Growth rate-0.04-0.11-0.04-0.074Sales Growth
RatesYear20142013201220112010Sales
(Revenue)2,864,773.002,633,689.002,701,142.002,993,320.002,
761,503.00Sales Growth Rates:4-year Growth rate3-year
Growth rate2-year Growth rate1-year Growth rate0.009-
0.0150.0300.0885Operating Cash Flow (OCF) and Free Cash
Flow (FCF) growth
ratesYear20142013201220112010OCF871,602.00912,345.00814
,542.00900,529.00991,175.00CAPEX177,913.00123,074.00132,
176.00122,996.00111,557.00FCF693,689.00789,271.00682,366.
00777,533.00879,618.00OCF Growth Rates:4-year Growth
rate3-year Growth rate2-year Growth rate1-year Growth rate-

3. 0.032-0.0110.034-0.045FCF Growth Rates:4-year Growth rate3-
year Growth rate2-year Growth rate1-year Growth rate-0.058-
0.0370.008-0.1216Gross Margin (>40% is sign of durable
competitive advantage; <20% is indicator of highly competitive
industry).Year20142013201220112010Sales2864773263368927
0114229933202761503Gross
Profit1830188.001692411.001741001.001986541.001799422.00
Gross Margin0.640.640.640.660.657Operating Margin (>=
industry or sector average). (Industry: … ...%; Average of
competitors: …
…%)Year20142013201220112010Sales28647732633689270114
229933202761503Operating
Profit752,484.00753,075.00824,048.001,072,025.00900,074.00
Operating Margin0.260.290.310.360.338Net Margin (> 20% =>
competitive advantage; <10% sign of
competition)Year20142013201220112010Sales28647732633689
270114229933202761503Net
Income629320.00673487.00651236.00867394.00712084.00Net
Margin0.220.260.240.290.269Free Cash Flow Margin (>= 10%
indicator of competitive advantage; must not be <
3%).Year20142013201220112010Sales2864773.002633689.002
701142.002993320.002761503.00Free Cash
Flow693689.00789271.00682366.00777533.00879618.00FCF
Margin0.240.300.250.260.3210Short-Term Financial
Health10.1Current Ratio ≥
2Year20142013201220112010Current
Assets3,811,886.005,472,425.004,696,185.004,386,348.003,478
,999.00Current
Liabilities709,056.00570,512.00525,079.00525,005.00643,467.0
0Current Ratio5.389.598.948.355.4110.2Quick Ratio ≥
1.5Year20142013201220112010Current
Assets3,811,886.05,472,425.04,696,185.04,386,348.03,478,999.
0Inventory367,927.0283,337.0313,723.0295,081.0277,478.0Cur
rent
Liabilities709,056.0570,512.0525,079.0525,005.0643,467.0Quic
k Ratio4.869.108.357.794.9810.3Interest Coverage Ratio ≥ 5

4. minimum; but preferably ≥ 10 (except utilities ≥
2)Year20142013201220112010EBIT752,484.00753,075.00824,0
48.001,072,025.00900,074.00Interest
Expense34,784.0027,102.0026,422.0019,146.0010,429.00Interes
t Coverage21.627.831.256.086.310.4Operating Cash Flow Ratio
≥
1Year20142013201220112010OCF871,602.00912,345.00814,54
2.00900,529.00991,175.00Current
Liabilities709,056.00570,512.00525,079.00525,005.00643,467.0
0OCF Ratio1.231.601.551.721.5411Long-Term Financial
Health11.1Leverage Ratio: Debt to Total Asset Ratio ≤ 0.50
except utilities for which 1.0 is
acceptableYear20142013201220112010Long-Term
Debt872,789.0872,241.0807,098.0871,876.0400,635.0Total
Assets6,859,690.06,381,750.05,620,347.05,277,635.04,328,831.
0Debt to Assets Ratio0.130.140.140.170.0911.2Debt to Equity
Ratio ≤ 1Year20142013201220112010Long-Term
Debt872,789.0872,241.0807,098.0871,876.0400,635.0Total
Equity4,757,897.04,739,576.04,165,359.03,795,413.03,199,717.
0Debt - Equity Ratio0.180.180.190.230.1311.3How long will it
take the company to pay off its long-term debt using Cash Flow
from Operations? 3 years or
less.Year20142013201220112010Long-Term
Debt872,789.0872,241.0807,098.0871,876.0400,635.0OCF871,6
02.0912,345.0814,542.0900,529.0991,175.0How long to payoff
Debt1.01.01.01.00.412Growth in Retained
EarningsYear20142013201220112010Retained
Earnings423149640564013788869348233428965664-year
Growth rate3-year Growth rate2-year Growth rate1-year Growth
rate0.100.120.140.2013CAPEX Per
ShareYear20142013201220112010CAPEX177913123074132176
122996111557Common Stock
Outstanding311204.926311045.084301389.176297960.7182986
52.994CAPEX per
Share0.57169082210.39567897490.43855589560.41279266890.
37353384114-year Growth rate3-year Growth rate2-year Growth

5. rate1-year Growth rate0.110.020.080.11
PE Ratio ValuationEstimating Intrinsic Value (P-E Ratio
Approach), comparing with Price and Making Purchase
Decision based on Margin of SafetyStep 8Step 8A: Gathering
DataP/E RatiosYearLatestYear -1Year -2Year -3Year -4Year -
5Year -6Year -7Year -8Year -9Year -10P/E
Ratio26.92.792.972.683.023.341.492.292.51.741.81Average P/E
Ratio4.68**(Check the formula for average)Analysts Estimate
of EPS Growth Rate:11.4(see MSN Moneycentral Analysts
Estimates)Latest (full year) EPS =1.98k =0.15(may try different
numbers based on what you know about the company's moat,
financial health and historical ROA).Current Price =60.19Step
8B:Using the DataEPS at end of last year, EPS0 =1.981.
Average EPS growth rate =-0.04(use the EPS growth rate over
the longest period (3-, 4- or 5- year period) you can find)2.
Average Equity growth rate =0.09(use the BVPS growth rate
over the longest period (3-, 4- or 5- year period) you can find)3.
Analysts estimate of EPS growth rate =11.4(see above)Equity
Growth Rate to use for Calculations =-0.04(This the lowest of
the three numbers above)Average P/E over 5 years or 10 years
=4.68k, the required rate of return =0.15Step 9:Estimating what
the business is worth1. Estimate EPS ten years from now,
EPS10 = EPS0 (1+g)101.322. Multiply EPS10 by P/E and call
that V10; that is V10 = (EPS10.)x(P/E).6.17This gives you the
intrinsic value ("Sticker Price") ten years from now.3. Calculate
today’s supposed intrinsic value, V0 = V10 x
[1/(1+k)10)]1.53Purchase DecisionStep 10:Current Price
=60.19Current Price/Intrinsic Value =39.44Margin of Safety-
38.44Decision:Buy if margin of Safety is greater 50%.Consider
buying or put on Watch List if Margin of Safety is between 20%
and 50%.Put on Watch List if Margin of Safety is less than
20%.
FCF ValuationEstimating Intrinsic Value Using Free Cash Flow
Approach1DataOCF =871,602.0Capital Expenditure
=177,913.0a. Latest FCF693,689.0b. Rate of Growth of FCF
over the next 10 years (use lower of 10% or company's 5-year

6. growth rate)-0.06c. Terminal Growth Rate (Rate of growth of
FCF from year 11 in perpetuity - use average GDP growth
rate)0.03d. Discount rate0.15e. Number of shares outstanding
(undiluted)313.67Number of shares outstanding from last
year311204.926(for use in calculating F-Score)Number of
shares outstanding two years ago311045.0842Estimatesa.
Estimates of FCF from year 1 to year 10b. Estimate of intrinsic
value in year 10c. Estimate of intrinsic value
todayYear:01234567891011FCF0FCF1FCF2FCF3FCF4FCF5FC
F6FCF7FCF8FCF9FCF10FCF11FCF693689.0653706.0616027.6
580520.9547060.7515529.1485814.9457813.4431425.9406559.3
383125.9394619.7PV of
FCF568440.0465805.4381701.9312783.7256309.1210031.21721
09.0141033.9115569.594702.9Intrinsic Value in Year
10706840.3Intrinsic Value$3,425,327Intrinsic Value per
share$10,920.163Current market price$ 60.194Ratio of current
price to intrinsic value0.01Margin of Safety =0.995Purchase or
sale decisionBuy if Margin of Safety is 50% or more.Consider
buying or putting on Watch List if Margin of Safety is between
20% and 50%.Put on Watch List if Margin of Safety is less than
20%.
Piotroski F ScorePiotroski Screening (F-Score)
CriteriaCriterionScore1The return on assets for the last fiscal
year (Y1) is positive12Cash from operations for the last fiscal
year (Y1) is positive13The return on assets ratio for the last
fiscal year (Y1) is greater than the return on assets ratio for the
fiscal year two years ago (Y2)04Cash from operations for the
last fiscal year (Y1) is greater than income after taxes for the
last fiscal year (Y1)15The long-term debt to assets ratio for the
last fiscal year (Y1) is less than the long-term debt to assets
ratio for the fiscal year two years ago (Y2)16The current ratio
for the last fiscal year (Y1) is greater than the current ratio for
the fiscal year two years ago (Y2)07The average shares
outstanding for the last fiscal year (Y1) is less than or equal to
the average number of shares outstanding for the fiscal year two
years ago (Y2)08The gross margin for the last fiscal year (Y1)

7. is greater than the gross margin for the fiscal year two years ago
(Y2)09The asset turnover for the last fiscal year (Y1) is greater
than the asset turnover for the fiscal year two years ago
(Y2)1TOTAL5F-Score of 8 or 9 => strong company; low
probability of bankruptcy.F-Score between 0 and 2 => weak
company; high probability of failing.
Altman Z ScoreAltman Z Score:Current Assets3,811,886Current
Liabilities709,056Total Aseets6,859,690Operating
Income752,484Market Cap1,888Total
Liabilities1,392,737Retained
Earnings4,231,496Sales2,864,773RatiosScoreX1 = Working
Capital / Total Assets0.45232802070.5427936248X2 =Retained
Earnings/Total Asets0.61686402740.8636096383X3 = Operating
Income/Total Assets0.10969650230.3619984577X4 = Market
Capitalization / Liabilities0.00135560410.0008133625X5 =
Sales / Total
Assets0.41762426580.4176242658Total2.1868393491Z = 1.2X1
+ 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5Z < 1.8 => High probability
of bankruptcy1.8 < Z < 2.7 => caution; moderate probability of
bankruptcy2.7 < Z < 2.99=> proceed with cautionZ > 3 => safe;
bankruptcy unlikely.
5-Minute QuickScan5 Minute QuickScanDate:Basic Quality
StandardsQuestion 2Question 3Question 4Question 5Question
6Question 7DecisionCompany NameTicker.OB or .PK?Mkt Cap
< $500M ?Recent IPO?3 to 5 years Positive EBIT?3 to 5 years
of positive Cash Flow from Operating Activities?5 years of
ROE > 10%?5 Years of Debt to Equity Ratio < 1?Recent Price
to Book Ratio < 2?3 years of only positive net Tangible
Assets?Keep and Conitue to Analyze or Drop
Company?Alphabet IncGOOG
LNoNOnoyesyesyesyesyesyessafe company
Data InputStock TickerGOOG
LYear20142013201220112010QuoteCurrent
Price695.32P/E32.9068Market Cap201,563,533[in million
USD]Shares Outstanding289.89EarningsEarnings Growth

8. RateCompany [Next 5 Years]16.74[in decimal]FinancialsIncome
Statement20142013201220112010Total Revenue
(Sales)66,00159,82550,17537,90529,321Gross
Profit40,31033,96729,54124,71718,904Operating
Income16,49613,96612,76011,74210,381Net
Income14,44412,92010,7379,7378,505Interest Expense,
Supplemental1018384580Diluted Normalized
EPS21.0219.0716.1614.8813.16Balance
Sheet20142013201220112010Total Inventory042650500Total
Current Assets80,68572,88660,45452,75841,562Total
Assets131,133110,92093,79872,57457,851Total Current
Liabilities16,80515,90814,3378,9139,996Total Long Term
Debt3,2282,2362,9882,9860Total
Liabilities26,63323,61122,08314,42911,610Retained Earnings
(Accumulated Deficit)75,70661,26248,34237,60527,868Total
Equity104,50087,30971,71558,14546,241201420132012201120
10Total Common Shares
Outstanding680.172671.665659.958649.79642.603Cash Flow
Statement20142013201220112010Cash from Operating
Activities22,37618,65916,61914,56511,081Capital Expenditures
(Ignore the negative sign)00000FundamentalsKey Ratio [10
Year Summary]Avg P/EBook Value/
Share201433.1153.64201330.77129.99201228.12108.67201125.
2689.48201019.6271.96200916.7200814.1820079.2920065.9420
054.46
Value IndicatorsValue Indicators Worksheet1ROIC - ROIC >
12% since most businesses lends between 8% and
12%Year20142013201220112010Net
Income14,444.012,920.010,737.09,737.08,505.0Interest101.008
3.0084.0058.000.00Long-Term
Debt3,228.002,236.002,988.002,986.00- 0Total
Equity104,500.087,309.071,715.058,145.046,241.0Invested
Capital107,728.089,545.074,703.061,131.046,241.0ROIC0.140.
150.140.160.182Equity Growth
Rates:Year20142013201220112010BVPS153.64129.99108.6789
.4871.964-year Growth rate3-year Growth rate2-year Growth

9. rate1-year Growth rate0.210.200.190.183EPS Growth
Rates:Year20142013201220112010EPS21.0219.0716.1614.8813
.164-year Growth rate3-year Growth rate2-year Growth rate1-
year Growth rate0.120.120.140.104Sales Growth
RatesYear20142013201220112010Sales
(Revenue)66,001.0059,825.0050,175.0037,905.0029,321.00Sale
s Growth Rates:4-year Growth rate3-year Growth rate2-year
Growth rate1-year Growth rate0.2250.2030.1470.1035Operating
Cash Flow (OCF) and Free Cash Flow (FCF) growth
ratesYear20142013201220112010OCF22,376.0018,659.0016,61
9.0014,565.0011,081.00CAPEX0.000.000.000.000.00FCF22,376
.0018,659.0016,619.0014,565.0011,081.00OCF Growth Rates:4-
year Growth rate3-year Growth rate2-year Growth rate1-year
Growth rate0.1920.1540.1600.199FCF Growth Rates:4-year
Growth rate3-year Growth rate2-year Growth rate1-year Growth
rate0.1920.1540.1600.1996Gross Margin (>40% is sign of
durable competitive advantage; <20% is indicator of highly
competitive
industry).Year20142013201220112010Sales6600159825501753
790529321Gross
Profit40310.0033967.0029541.0024717.0018904.00Gross
Margin0.610.570.590.650.647Operating Margin (>= industry or
sector average). (Industry: … ...%; Average of competitors: …
…%)Year20142013201220112010Sales66001598255017537905
29321Operating
Profit16,496.0013,966.0012,760.0011,742.0010,381.00Operatin
g Margin0.250.230.250.310.358Net Margin (> 20% =>
competitive advantage; <10% sign of
competition)Year20142013201220112010Sales66001598255017
53790529321Net
Income14444.0012920.0010737.009737.008505.00Net
Margin0.220.220.210.260.299Free Cash Flow Margin (>= 10%
indicator of competitive advantage; must not be <
3%).Year20142013201220112010Sales66001.0059825.0050175.
0037905.0029321.00Free Cash
Flow22376.0018659.0016619.0014565.0011081.00FCF

10. Margin0.340.310.330.380.3810Short-Term Financial
Health10.1Current Ratio ≥
2Year20142013201220112010Current
Assets80,685.0072,886.0060,454.0052,758.0041,562.00Current
Liabilities16,805.0015,908.0014,337.008,913.009,996.00Curren
t Ratio4.804.584.225.924.1610.2Quick Ratio ≥
1.5Year20142013201220112010Current
Assets80,685.072,886.060,454.052,758.041,562.0Inventory0.04
26.0505.00.00.0Current
Liabilities16,805.015,908.014,337.08,913.09,996.0Quick
Ratio4.804.554.185.924.1610.3Interest Coverage Ratio ≥ 5
minimum; but preferably ≥ 10 (except utilities ≥
2)Year20142013201220112010EBIT16,496.0013,966.0012,760.
0011,742.0010,381.00Interest
Expense101.0083.0084.0058.000.00Interest
Coverage163.3168.3151.9202.40.010.4Operating Cash Flow
Ratio ≥
1Year20142013201220112010OCF22,376.0018,659.0016,619.00
14,565.0011,081.00Current
Liabilities16,805.0015,908.0014,337.008,913.009,996.00OCF
Ratio1.331.171.161.631.1111Long-Term Financial
Health11.1Leverage Ratio: Debt to Total Asset Ratio ≤ 0.50
except utilities for which 1.0 is
acceptableYear20142013201220112010Long-Term
Debt3,228.02,236.02,988.02,986.00.0Total
Assets131,133.0110,920.093,798.072,574.057,851.0Debt to
Assets Ratio0.020.020.030.040.0011.2Debt to Equity Ratio ≤
1Year20142013201220112010Long-Term
Debt3,228.02,236.02,988.02,986.00.0Total
Equity104,500.087,309.071,715.058,145.046,241.0Debt -
Equity Ratio0.030.030.040.050.0011.3How long will it take the
company to pay off its long-term debt using Cash Flow from
Operations? 3 years or less.Year20142013201220112010Long-
Term
Debt3,228.02,236.02,988.02,986.00.0OCF22,376.018,659.016,6
19.014,565.011,081.0How long to payoff

11. Debt0.10.10.20.20.012Growth in Retained
EarningsYear20142013201220112010Retained
Earnings75706612624834237605278684-year Growth rate3-year
Growth rate2-year Growth rate1-year Growth
rate0.280.300.320.3513CAPEX Per
ShareYear20142013201220112010CAPEX00000Common Stock
Outstanding680.172671.665659.958649.79642.603CAPEX per
Share000004-year Growth rate3-year Growth rate2-year Growth
rate1-year Growth rate0.000.000.000.00
PE Ratio ValuationEstimating Intrinsic Value (P-E Ratio
Approach), comparing with Price and Making Purchase
Decision based on Margin of SafetyStep 8Step 8A: Gathering
DataP/E RatiosYearLatestYear -1Year -2Year -3Year -4Year -
5Year -6Year -7Year -8Year -9Year -10P/E
Ratio32.906833.130.7728.1225.2619.6216.714.189.295.944.46A
verage P/E Ratio20.03**(Check the formula for
average)Analysts Estimate of EPS Growth Rate:16.74(see MSN
Moneycentral Analysts Estimates)Latest (full year) EPS
=21.02k =0.15(may try different numbers based on what you
know about the company's moat, financial health and historical
ROA).Current Price =695.32Step 8B:Using the DataEPS at end
of last year, EPS0 =21.021. Average EPS growth rate =0.12(use
the EPS growth rate over the longest period (3-, 4- or 5- year
period) you can find)2. Average Equity growth rate =0.21(use
the BVPS growth rate over the longest period (3-, 4- or 5- year
period) you can find)3. Analysts estimate of EPS growth rate
=16.74(see above)Equity Growth Rate to use for Calculations
=0.12(This the lowest of the three numbers above)Average P/E
over 5 years or 10 years =20.03k, the required rate of return
=0.15Step 9:Estimating what the business is worth1. Estimate
EPS ten years from now, EPS10 = EPS0 (1+g)1067.782.
Multiply EPS10 by P/E and call that V10; that is V10 =
(EPS10.)x(P/E).1,357.65This gives you the intrinsic value
("Sticker Price") ten years from now.3. Calculate today’s
supposed intrinsic value, V0 = V10 x
[1/(1+k)10)]335.59Purchase DecisionStep 10:Current Price

12. =695.32Current Price/Intrinsic Value =2.07Margin of Safety-
1.07Decision:Buy if margin of Safety is greater 50%.Consider
buying or put on Watch List if Margin of Safety is between 20%
and 50%.Put on Watch List if Margin of Safety is less than
20%.
FCF ValuationEstimating Intrinsic Value Using Free Cash Flow
Approach1DataOCF =22,376.0Capital Expenditure =0.0a. Latest
FCF22,376.0b. Rate of Growth of FCF over the next 10 years
(use lower of 10% or company's 5-year growth rate)0.10c.
Terminal Growth Rate (Rate of growth of FCF from year 11 in
perpetuity - use average GDP growth rate)0.03d. Discount
rate0.15e. Number of shares outstanding
(undiluted)289.89Number of shares outstanding from last
year680.172(for use in calculating F-Score)Number of shares
outstanding two years ago671.6652Estimatesa. Estimates of
FCF from year 1 to year 10b. Estimate of intrinsic value in year
10c. Estimate of intrinsic value
todayYear:01234567891011FCF0FCF1FCF2FCF3FCF4FCF5FC
F6FCF7FCF8FCF9FCF10FCF11FCF22376.024613.627075.0297
82.532760.736036.839640.443604.547964.952761.458037.6597
78.7PV of
FCF21403.120472.619582.418731.017916.617137.716392.5156
79.814998.114346.0Intrinsic Value in Year 10107075.2Intrinsic
Value$283,735Intrinsic Value per share$978.773Current market
price$ 695.324Ratio of current price to intrinsic
value0.71Margin of Safety =0.295Purchase or sale decisionBuy
if Margin of Safety is 50% or more.Consider buying or putting
on Watch List if Margin of Safety is between 20% and 50%.Put
on Watch List if Margin of Safety is less than 20%.
Piotroski F ScorePiotroski Screening (F-Score)
CriteriaCriterionScore1The return on assets for the last fiscal
year (Y1) is positive12Cash from operations for the last fiscal
year (Y1) is positive13The return on assets ratio for the last
fiscal year (Y1) is greater than the return on assets ratio for the
fiscal year two years ago (Y2)04Cash from operations for the
last fiscal year (Y1) is greater than income after taxes for the

13. last fiscal year (Y1)15The long-term debt to assets ratio for the
last fiscal year (Y1) is less than the long-term debt to assets
ratio for the fiscal year two years ago (Y2)06The current ratio
for the last fiscal year (Y1) is greater than the current ratio for
the fiscal year two years ago (Y2)17The average shares
outstanding for the last fiscal year (Y1) is less than or equal to
the average number of shares outstanding for the fiscal year two
years ago (Y2)08The gross margin for the last fiscal year (Y1)
is greater than the gross margin for the fiscal year two years ago
(Y2)19The asset turnover for the last fiscal year (Y1) is greater
than the asset turnover for the fiscal year two years ago
(Y2)0TOTAL5F-Score of 8 or 9 => strong company; low
probability of bankruptcy.F-Score between 0 and 2 => weak
company; high probability of failing.
Altman Z ScoreAltman Z Score:Current Assets80,685Current
Liabilities16,805Total Aseets131,133Operating
Income16,496Market Cap201,563,533Total
Liabilities26,633Retained
Earnings75,706Sales66,001RatiosScoreX1 = Working Capital /
Total Assets0.48713901150.5845668138X2 =Retained
Earnings/Total Asets0.57732226060.8082511648X3 = Operating
Income/Total Assets0.12579594760.4151266272X4 = Market
Capitalization /
Liabilities7568.18732399654540.9123943979X5 = Sales / Total
Assets0.50331342990.5033134299Total4543.2236524337Z =
1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5Z < 1.8 => High
probability of bankruptcy1.8 < Z < 2.7 => caution; moderate
probability of bankruptcy2.7 < Z < 2.99=> proceed with
cautionZ > 3 => safe; bankruptcy unlikely.