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- 1. Apple STUDENT MANAGED INVESTMENT FUND Katherine Gonzalez Zachary Schwager Carlos Valcarcel Special Thanks to: John Neumann
- 7. AAPL 10 Year Stock Chart
- 10. Income/Cash Flow Sales Net Income Cash Flow from Operations
- 11. Sales Growth
- 13. Cash Flow from Operations
- 14. Operating Performance ROE ROA EBIT Net Profit Margin Asset Turnover
- 15. ROE
- 16. ROA
- 17. EBIT
- 19. Asset Turnover
- 20. Short Term Liquidity Current Ratio Quick Ratio Receivables Turnover
- 21. Current Ratio
- 22. Quick Ratio
- 25. DuPont Analysis Decompose ROE into its components (Asset Turnover, Net Profit Margin, Financial Leverage) in order to analyze what might be trying to change ROE. Net Profit Margin Has significantly been increasing and affecting ROE.
- 27. Pro Forma Income Statement Industry Revenues ---------------------> 379,580.90 307,620.00 461,917.00 2006 2007 2008 Market Share 5.09% 7.80% 6.50% Desktop 3,319.0 17.18% 4,020.0 16.75% Portables 4,056.0 21.00% 6,294.0 26.22% Ipod 7,676.0 39.74% 8,305.0 34.60% Other Music Related products & Services 1,885.0 9.76% 2,496.0 10.40% Iphone & Related products and Serivces - 123.0 0.51% Peripherals & other hardware 1,100.0 5.70% 1,260.0 5.25% Software, service, and other net sales 1,279.0 6.62% 1,508.0 6.28% Total Net Revenue 19,315.0 100.00% 24,006.0 100.00% 30,045.0 Total COGS 13,717.00 15,852.00 21,559.95 GROSS PROFIT 5,598.00 8,154.00 8,485.05 Gross Profit Margin 28.98% 33.97% Total COGS as % of Rev 71.02% 66.03% 71.76% SGA, Operating Expenses 3,145.0 3,745.0 4,482.71 Op Exp as % of Revenue 16.28% 15.60% 14.92% OPERATING INCOME $2,453.00 $4,409.00 4,002.33
- 28. Pro Forma Income Statement cont . Unusual Item 0 OPERATING Inc After Unusual Item $2,453.00 $4,409.00 4,002.33 OTHER INCOME (EXPENSE) Interest Income 394.0 647 657.5624 Interest Expense 0.0 0.0 0.0 Net Interest Income ( Expense ) 394.0 647.0 657.6 Gain on sales of prop/equip 0.0 0.0 0 Other Income (Expense) Net 29.0 48.0 48.0 EBT $2,818.00 $5,008.00 4,611.90 Income Taxes $829.00 $1,512.00 1,385.87 EAT $1,989.00 $3,496.00 3,226.02 NET INCOME $1,989.00 $3,496.00 3,226.02 Diluted Shares 877.5 889.3 905.3 EPS $2.27 $3.93 3.56 Realized Tax Rates: 29.42% 30.19% 30.05%
- 32. Absolute Valuation FCFF Model
- 33. Absolute Valuation - Cost Of Capital
- 35. Absolute Valuation E(FCFF) = FCFF 2007 * (1+g) t
- 36. Absolute Valuation Terminal Value E(FCFF) 2014 = FCFF 20013 * (1+g)
- 38. Recommendation Buy 100 Shares
Editor's Notes
- Katherine
- katherine
- Zack
- Apple products include computers, cell-phone, mp3 players, software, online music vendor, etc DESKtop – 17% Laptop – 26% Ipod – 35% Put snazzy pie chart based on pro forma Apple computer share has gone from 2-3 % to 8% 2007 in the us So we can see the trend changing from – 2 years ago you would have to explain to your friends why your buying a mac, now you have to xplain to your friends why your buying a pc.
- Katherine
- zach
- Zack
- Carlos – over 120 million ipods sold since debut in 2001 Debut of 3G Iphone by Mid 2008 Pro at MacWorld in January. The strategy has paid off in a big way. Apple stores pulled in $1.25 billion in revenue in the company's last fiscal quarter, a 42 percent jump from a year earlier and accounting for a fifth of total revenue. Debut of Sub –portable MacBook Pro by Jan expected to be 50% thinner than existing MacBook Contains flash-based memory instead of disc drive New stores lighlight “Genius” Services Has paid off, Stores generate over $1.25 Billion in revenue last fiscal quarter (42% jump)
- Katherine
- katherine
- Katherine
- Katherine
- Zack
- Carlos
- Current Ratio is the ability to pay back its short-term liabilities with its short-term assets
- This ratio measures a company’s ability to meet short term obligations with its most liquid assets
- Katherine
- Carlos
- Market Share - You should mention that apple is a pretty diverse company. Not every company is comparable to apple. you should be able to know what each company does and how each company relates to apple. How their market share directly reflects to apples market Ytd 2007- only represents the last 3 quarters of 2007, even though there fiscal year has ended. We wanted to remain consistent with all other companies. Katherine… if you have any questions on how to explain your slides.. Pease call or email us.. This is very important.
- Combination of carlos and Zack These numbers are different then the market share numbers.. Because here we have include all 4 quarters of the fiscal year SGA- Service, general, administrative -in order to calculate cogs sold we had to calculate cost of goods sold as a percentage of revenue. We origionally calculated cogs as an average percentage of revenue. Which came out to 71.76, however we felt this was not representitive of the downward tred in cogs. As you can see 2006 to 2007 it decreaseed almost5%.
- carlos
- Price estimate based on a comparison ratio between our company and its competition and its index
- K2= bond yeild + 3% uthendal K1= capm
- Zack – Cost of Capital, , yield to maturity Free Cash Flow for firm –CARLOS E(FCFF) what we expect – Carlos
- We just wanted to show at a small increase of 30% we can clearly see that apple is an undervalued stock. Since 30% is a very conservitive estimate when compaderd to the geomtric average of 147% we can see that apple is very undervalued. So a a likely tred continuing past 30% growth growth would only increase the amount of which apple is undervalued by.