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135 PROJECT GRADE SHEET
Company Name: Apple Inc
Student Name (s) Ryan Carreon, Nik Heisinger
1. Financial Statements and Ratios, including analysis
Possible Scores 2 4
Professor's Comments:
2. Ratio comparison and analysis..
Possible Scores 4 8
3. DuPont Analysis and Interpretation (3 Years)..
Possible Scores 1 2
4. Value Line Spread sheet and analysis .
Possible Scores 4 8
5. Intrinsic Value (Forecasting) Model and Analysis with ML, OPT., PESS.....
Possible Scores 2 4
6. Graham Model Possible Scores 1 2
7. Buffett Model and Analysis with Interpretation ....
Possible Scores 2 4
8. ROE Model and Analysis with Interpretation .
Possible Scores 2 4
9. Final Analysis. Is it consistent with the resto of your analysis and interpretation?
Does the logic flow from your previous discussion and what is your recommendati
Possible Scores 4 8
ECT GRADE SHEET
arreon, Nik Heisinger
Your Score
6 8 10
10
..
10 12 15 15
..
3 4 5 5
10 12 15 15
PT., PESS.....
6 8 10 10
3 4 5 5
....
6 8 10 10
6 8 10 10
and interpretation?
and what is your recommendation?
12 16 20 20
TOTAL 100
Apple Inc
An Analysis of Apple Stock Potenti
Presented by: Ryan Carreon and Nik Heis
About Apple
The Company designs, manufactures, and markets mobile communication and media devices, personal computers, and
portable digital music players, and sells a variety of related software, services, accessories, networking solutions, and thirdparty
digital content and applications. The Companys products and services include iPhone, iPad, Mac, iPod, Apple
TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a
variety of accessory, service and support offerings. In September 2014, the Company announced Apple Watch, which is
expected to be available in early calendar year 2015, and Apple Pay, which became available in the U.S. in October 2014.
The Company also sells and delivers digital content and applications through the iTunes Store, App Store, iBooks Store
and Mac App Store. The Company sells its products worldwide through its retail stores, online stores and direct sales force, as
well as through third-party cellular network carriers, wholesalers, retailers and value-added resellers. In addition, the Company
sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, and various
accessories, through its online and retail stores. The Company sells to consumers, small and mid-sized businesses (SMB)
and education, enterprise and government customers. The Companys fiscal year is the 52 or 53-week period that ends on the
last Saturday of September. The Company is a California corporation established in 1977.
Mission Statement: Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional
software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with
its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.
History: Intel, founded in 1968 to build computer memory products, introduced the world's first microprocessor in 1971. Intel has an
employee base of 82,500 (as of 2010) with about 55% of those employees living in the United States.
Objectives: Values:
200 million to 250 million units of iPhone 6, iPhone 6 Plus and Apple Watch after the Different kinds of people
company asked suppliers to prepare chips for the devices. Deducting the 30 million to Make a difference in the world
40 million chips for the upcoming Apple Watch, the shipments will be just enough to honor Indivividuality
produce over 200 million units of iPhone 6 and iPhone 6 Plus. Best work of our lives
Objectives: Values:
200 million to 250 million units of iPhone 6, iPhone 6 Plus and Apple Watch after the Different kinds of people
company asked suppliers to prepare chips for the devices. Deducting the 30 million to Make a difference in the world
40 million chips for the upcoming Apple Watch, the shipments will be just enough to honor Indivividuality
produce over 200 million units of iPhone 6 and iPhone 6 Plus. Best work of our lives
Board of Directors
CEO: Tim Cook is the CEO of Apple and serves on its Board of Directors.
Before being named CEO in August 2011, Tim was Apple's Chief Operating Officer and was responsible for all of the companys
worldwide sales and operations, including end-to-end management of Apples supply chain, sales activities, and service and support
in all markets and countries. He also headed Apples Macintosh division and played a key role in the continued development of
strategic reseller and supplier relationships, ensuring flexibility in response to an increasingly demanding marketplace. Prior to joining
Apple, Tim was vice president of Corporate Materials for Compaq and was responsible for procuring and managing all of Compaqs
product inventory. Previous to his work at Compaq, Tim was the chief operating officer of the Reseller Division at Intelligent
Electronics.
Executive Vice President: Andy D. Bryant is executive vice president, Technology, Manufacturing and Enterprise Services, and chief
administrative officer of Intel Corporation. He is responsible for technology development and manufacturing, financial operations,
human resources, information technology and e-business functions and activities worldwide.
Executive Vice President: Angela Ahrendts is Apple's senior vice president of retail and online stores, reporting to CEO Tim
Cook. Angela is responsible for the operation and expansion of Apple retail and online stores, which have redefined the
shopping experience for hundreds of millions of customers around the world. Apple retail stores set the standard for
customer service with innovative features like the Genius Bar, personal setup and one-to-one personal training to help
customers get the most out of their Apple products. Angela joined Apple from Burberry, where she served as CEO and led
the company through a period of outstanding global growth. Prior to Burberry, she was executive vice president at Liz
Claiborne Inc., and earlier in her career she served as president of Donna Karan International.
Board Of Directors
Arthur D Levinson, Ph. D. Tim Cook

Chairman of the Board, Apple CEO
Former Chairman and CEO Apple
Genentech
Andrea Jung Ronald D Sugar, Ph.D.

President and CEO Former Chairman and CEO
Grameen America, Inc. Northrop Grumman
Albert Gore Jr. Susan L wagner

Former Vice President of the United States Co-founder and Director
BlackRock
Rober A Iger
Chairman and CEO
The Walt Disney Company
e Stock Potential
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Apple Inc
AAPL RATIOS
2012 2013 2014

Short term solvency ratios
Current Ratio 1.4958 1.6786 1.0801
Quick Ratio 1.4753 1.6382 1.0468
Cash Ratio 0.8654 1.0244 0.4605
Net Working Capital to Current Liabilities 0.4958 0.6786 0.0801
Asset Utilization or Turnover ratios

Average Collection Period 25.1412 27.5977 34.3861
Inventory Turnover Ratios 197.8609 96.8878 86.5917
Receivable Turnover 14.3191 13.0446 10.4694
Fixed Asset Turnover 10.1287 10.2976 8.8632
Total Asset Turnover 0.8889 0.8257 0.7885
Financial Leverage ratios

Total Debt Ratio (TD/TA) 0.3286 0.4031 0.5189
Debt/Equity 0.4894 0.6754 1.0784
Equity Ratio (TE/TA) 0.6714 0.5969 0.4811
Long-term Debt Ratio (LTD/TA) 0.0000 0.0819 0.1250
Times Interest Earned Ratio (EBIT/TI) there are no interest payments 0.0000 0.0000 0.0000
Profitability ratios
Gross Profit Margin 0.4387 0.3762 0.3859
Net Profit Margin 0.2667 0.2167 0.2161
ROA (NI/TA) 0.2370 0.1789 0.1704
ROE (NI/TE) 0.3530 0.2998 0.3542
ROEWGW (NI/TEWGW): This accounts for Goodwill 0.3374 0.2878 0.3426
Market value ratios
Price/Earnings Ratio 12.0000 12.3000 13.0000
Intel Corporation Ratios Financial Statements Cynthia Kenyon and Michael Davis
FIN 135, September 23, 2011
FINANCIAL STATEMENTS
Balance Sheet for AAPL

Three Years Ended September 29, 2014
(In Millions, Except Par Value) 2012 2013 2014
Assets
Current Assets:
Cash and cash equivalents 10,746 19% 14,259 19% 13,844
Short-term marketable securities 18,383 32% 26,287 36% 11,233
Accounts receivable, less allowances of $98 and $53, respectively 10,930 19% 13,102 18% 17,460
Inventories 791 1% 1,764 2% 2,111
Deferred tax assets 2,583 3% 3,453 3% 4,318
Vendor non trade receivables 7,762 13% 7,539 10% 9,759
Other current assets 6,458 11% 6,882 9% 9,806
Total current assets 57,653 33% 73,286 35% 68,531
Long term marketable securities 92,122 52% 106,215 51% 130,162
Property, plant and equipment, net 15,452 9% 16,597 8% 20,624
Goodwill 1,135 1% 1,577 1% 4,616
Acquired intangible assets, net 4,224 2% 4,179 2% 4,142
Other long-term assets 5,478 3% 5,146 2% 3,764
Total assets 176,064 207,000 231,839
Liabilities and stockholders' equity

Current Liabilities
Accounts payable 21,175 22,367 30,196
Accrued expenses 11,414 13,856 18,453
Deferred revenue 5,953 7,435 8,491
Commercial paper 0 0 6,308
Total current liabilities 38,542 43,658 63,448
Defered revenue- non-current 2,648 2,625 3,031
Long-term debt 0 16,960 28,987
Other non-current liabilities 16,664 20,208 24,826
Total Liabilities 57,854 83,451 120,292
Stockholders' equity:
Common stock and additional paid-in capital, $0.00001 par value,

12,,600,000 shares authorized; 5,866,161 issued and 6,294,494
outstanding, respectively 16,422 19,764 23,313
Accumulated other comprehensive income (loss) 499 (471) 1,082
Retained earnings 101,289 104,256 87,152
Total stockholders' equity 118,210 123,549 111,547
Total liabilities and stockholders' equity 176,064 207,000 231,839
Income Statement
Three Years Ended December 25, 2010
(In Millions, Except Per Share Data) 2012 2013 2014
Net revenue 156,508 170,910 182,795
Cost of sales 87,846 106,606 112,258
Gross margin 68,662 64,304 70,537
Research and development 3,381 4,475 6,041
Selling , general and administrative 10,040 10,830 11,993
Restructuring and asset impairment charges 0 0 0
Amortization of acquisition-related intangibles 0 0 0
Operating expenses 13,421 15,305 18,034
Operating income (EBIT) 55,241 48,999 52,503
Other Income 522 1,156 980
Income before taxes 55,763 50,155 53,483
Provision for taxes 14,030 13,118 13,973
Net income 41,733 37,037 39,510
Basic earnings per common share 44.64 40.03 6.49

Diluted earnings per common share 44.15 39.75 6.45
Weighted average common shares outstanding:
Basic 934,818 925,331 6,085,572
Diluted 945,355 931,662 6,122,663
Apple Inc
RATIO COMPARISON
2012 2013 2014 MICRO Cross- Time-

Sectional Series
Solvency
Current Ratio Current Assets/Current Liabilities 1.50 1.68 1.08 2.60 Bad Variable
Quick Ratio (Acid Test) Current Assets - Inventory/Current Liabilities 1.48 1.64 1.05 2.57 Bad Variable
Cash Ratio Cash/Current Liabilities 0.87 1.02 0.46 1.93 Bad Warning
Net. Capital to Current Liabilities Networking Capital/Current Liabilities 0.50 0.68 0.08 1.60 Bad Variable
Cash as a % of Current Assets 0.19 0.19 0.20 0.17 Good OK
Efficiency
Average Collection Period Accounts Receivable/(Sales / 360) 25.14 27.60 34.39 77.06 Good GOOD
Inventory Turnover Total Revenues/Inventory 197.86 96.89 86.59 64.84 Good Variable
Receivable Turnover Total Revenues/Accounts Receivable 14.32 13.04 10.47 4.67 Good Variable
Fixed Asset Turnover Total Revenues/Fixed Assets 10.13 10.30 8.86 7.54 Good Variable
Total Asset Turnover Total Revenues/Total Assets 0.89 0.83 0.79 0.61 Good Variable
Financial Leverage Ratios

Total Debt Ratio Total Debt/Total Assets 0.33 0.40 0.52 0.45 Bad Variable
Debt-Equity Ratio Total Debt/Total Equity 0.49 0.68 1.08 0.12 Bad Warning
Equity Ratio Total Equity/Total Assets 0.67 0.60 0.48 0.55 Good Warning
Long-term Debt Ratio (LTD/TA) Long-term Debt / Total Assets 0.00 0.08 0.13 0.09 Bad OK
Times Interest Earned EBIT/Total Interest Payments 0.00 0.00 0.00 22267.00 Good Warning
Profitability
Gross Profit Margin (GPM) Gross Profits/Net Operating Income 0.44 0.38 0.39 0.76 Bad Variable
Net Profit Margin (NPM) Net Profits/Net Operating Income 0.27 0.22 0.22 0.31 Bad Variable
Return on Total Assets (ROA) Net Income/Total Assets 0.24 0.18 0.17 0.14 Good Variable
Return on Equity (ROE) RETURN ON EQUITY 0.35 0.30 0.35 0.26 Good Variable
Intel Corporation Ratio Comparison Cynthia Kenyon and Michael Davis

FIN 135, October 5, 2011
Apple Inc
VALUE LINE
Value Line Data
Symbol: AAPL Beta: 0.85
2009 2010 2011 2012

ACRR
Sales per share 40.0% $5.80 $10.17 $16.64 $23.81
Cash flow per share 51.3% $1.02 $2.35 $4.26 $6.85
Earnings per share 48.3% $0.90 $2.16 $3.95 $6.31
Dividends per share 36.6% $0.00 $0.00 $0.00 $0.38
Capital Spending per share 55.4% $0.18 $0.31 $0.65 $1.26
Book value per share 33.9% $4.42 $7.45 $11.78 $17.98
Common Shares Outstanding (Mill) 6298.6 6411.8 6504.9 6574.5
Average annual P/E ratio 19.2 15.2 12.4 12.0
Average price to earnings ratio 14.0
Average annual dividend yield 0.0% 0.0% 0.0% 0.5%
Sales ($mill) 38.0% $36,537 $65,225 $108,249 $156,508
Operating margin 7.6% 22.9% 29.8% 32.9% 37.4%
Depreciation ($Mill) $703.0 $1,027.0 $1,814.0 $3,277.0
Net profit ($Mill) 47.3% $5,704.0 $14,013.0 $25,922.0 $41,733.0
Income tax rate (%) 28.6% 24.4% 24.2% 25.2%
Net profit margin (%) 0.1% 21.5% 22.5% 23.9% 26.7%
Working Capital ($Mill) $16,983.0 $20,956.0 $17,018.0 $19,111.0
Long-term Debt ($Mill) $0.0 $0.0 $0.0 $0.0
Shareholder equity ($Mill) 32.0% $27,832.0 $47,791.0 $76,615.0 $118,210.0
Return on equity 20.49% 29.32% 33.83% 35.30%
Average return on equity 30.73%
ACRR = AVERAGE Compounded Rate of Return
Dividend payout ratio 0% 0% 0% 6%
Minimum P/E Ratio 12.0
Maximum P/E Ratio 19.2
Calculations
Cynthia Kenyon and Michael Davis

Intel Corporation Ratio Comparison FIN 135, October 5, 2011
2009 2010 2011 2012
ACGR
Price per share $17.28 $32.83 $48.98 $75.72
Owners cash flow 48.4% $5,273.24 $13,052.35 $23,507.79 $36,726.18
Annual cash flow growth rate 147.52% 80.10% 56.23%
5 year average cash flow growth 57.4%
Annual sales growth 78.49% 66.00% 44.62%
5 year average sales growth 41.0%
VALUE ADDED $7.26 $4.17 $4.29
Average value added $3.09
Owners cash flow per share $0.84 $2.04 $3.61 $5.59
SHARE PRICE/BOOK VALUE 3.91 4.41 4.16 4.21
The first 35 rows are simply restated from your Value Line Data Sheet. These numbers must be accurately transcribed in order
to provide relevant information. Make sure all information is consistent with what is found on the Financial Statements and
the Ratio Comparison page.

ALUE LINE
ue Line Data
Price: $125.86
2013 2014
$27.15 $31.16
$6.96 $8.09
$5.66 $6.45
$1.63 $1.81
$1.30 $1.63
$19.63 $19.02
6294.5 5866.0
12.3 13.0
2.3% 2.2%
$170,910 $182,795
32.6% 33.1%
$6,757.0 $7,946.0
$37,037.0 $39,510.0
26.2% 26.1%
21.7% 21.6%
$29,628.0 $5,083.0
$16,960.0 $28,987.0
$123,549.0 $111,547.0
29.98% 35.42%
29% 28%
lculations

2013 2014
$69.62 $83.85
$35,611.16 $37,894.42
-3.04% 6.41%
9.17% 6.96%
($1.61) $1.36
$5.66 $6.46
3.55 4.41

Apple Inc
FORECAST - PESSIMISTIC
INTRINSIC VALUATION MODEL - TWO-STAGE EARNINGS GROWTH PROJECTIONS
2014 2015 2016

### 2017
### 2018
### 2019
###
Prior year cash flows (mil) 37,894 45,473 54,568 65,482 78,578 94,293
10-year growth rate (.00) 20.00% 20.00% 20.00% 20.00% 20.00% 20.00%
Cash flow 45,473 54,568 65,482 78,578 94,293 113,152
Discount Rate (.00) 0.15 0.15 0.15 0.15 0.15 0.15
Discount Factor (mult.) 0.869565 0.756144 0.657516 0.571753 0.497177 0.432328
Discounted value per annum 39,542 41,261 43,055 44,927 46,881 48,919
Sum of present value of cash flows $482,474
Residual value
Cash flow in year 10 $234,632 8
Growth rate (.00) (g) 0.04
Cash flow in year 11 $244,018 7
Capitalization rate (k-g) 0.11
6
Value at end of year 10 $2,218,341
Discount factor year 10 0.24718 5
Present value of residual $548,340 4

Market value (mil) $1,030,814
3
Number of shares (mil) 5,866
Intrinsic value per share $175.73 2
Intrinsic / Market 1.40
1
Input discount & growth rates 0
First 10 year growth rate 20.00% 1 2 3 4 5 6 7
2nd period growth rate 0.04 -1
Discount rate 0.15
-2
Owners cash flow (mil) $37,894.42

ST - PESSIMISTIC
WO-STAGE EARNINGS GROWTH PROJECTIONS
2020
### 2021
### 2022
### 2023
113,152 135,783 162,939 195,527

20.00% 20.00% 20.00% 20.00%
135,783 162,939 195,527 234,632
0.15 0.15 0.15 0.15
0.375937 0.326902 0.284262 0.247185
51,046 53,265 55,581 57,998
Annual sales growth

VALUE ADDED
Owners cash flow per
share
2 3 4 5 6 7 8

Apple Inc
FORECAST - MOST LIKEL

INTRINSIC VALUATION MODEL - TWO-STAGE EARNINGS
2014 2015 2016

### 2017
###
Prior year cash flows (mil) 37,894 47,368 59,210 74,013

10-year growth rate (.00) 25.00% 25.00% 25.00% 25.00%
Cash flow 47,368 59,210 74,013 92,516
Discount Rate (.00) 0.15 0.15 0.15 0.15
Discount Factor (mult.) 0.869565 0.756144 0.657516 0.571753
Discounted value per annum 41,190 44,771 48,664 52,896
Sum of present value of cash flows $616,773
Residual value
Cash flow in year 10 $352,919
Growth rate (.00) (g) 0.04 8
Cash flow in year 11 $367,036
Capitalization rate (k-g) 0.11 7
Value at end of year 10 $3,336,691
6
Discount factor year 10 0.24718
5
Present value of residual $824,779
Total Intrinsic Value (mil) $1,441,552 4
Number of shares (mil) 5,866
3
Intrinsic value per share 245.75
Intrinsic / Market 1.95 2
Input discount & growth rates 1

First 10 year growth rate 25.00%
0
Growth Rate Year 11 in perpetuity 0.04
1 2 3 4
Discount rate 0.15 -1
-2

AST - MOST LIKELY
- TWO-STAGE EARNINGS GROWTH PROJECTIONS
2018
### 2019
### 2020
### 2021
### 2022
### 2023
92,516 115,645 144,556 180,695 225,868 282,335

25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
115,645 144,556 180,695 225,868 282,335 352,919
0.15 0.15 0.15 0.15 0.15 0.15
0.497177 0.432328 0.375937 0.326902 0.284262 0.247185
57,496 62,495 67,930 73,837 80,257 87,236
Annual sales growth

VALUE ADDED
Owners cash flow per share
2 3 4 5 6 7 8

Apple Inc
FORECAST - OPTIMISTIC
INTRINSIC VALUATION MODEL - TWO-STAGE EARNINGS GROWTH PROJECTIONS
2011 2012 2013

### 2014
### 2015
### 2016
###
Prior year cash flows (mil) 37,894 61,558 99,998 162,443 263,882 428,666
10-year growth rate (.00) 62.45% 62.45% 62.45% 62.45% 62.45% 62.45%
Cash flow 61,558 99,998 162,443 263,882 428,666 696,351
Discount Rate (.00) 0.15 0.15 0.15 0.15 0.15 0.15
Discount Factor (mult.) 0.869565 0.756144 0.657516 0.571753 0.497177 0.432328
Discounted value per annum 53,529 75,613 106,809 150,876 213,123 301,052
Sum of present value of cash flows $3,974,138
Residual value
Cash flow in year 10 $4,849,123
Growth rate (.00) (g) 0.04 8
Cash flow in year 11 $5,043,088
Capitalization rate (k-g) 0.11 7
Value at end of year 10 $45,846,253 6
Discount factor year 10 0.24718
5
Present value of residual $11,332,493
Market value (mil) $15,306,630 4
Number of shares (mil) 5,866 3
Intrinsic value per share $2,609.38
Intrinsic / Market 20.73 2
1
Input discount & growth rates
First 10 year growth rate 62.45% 0
2nd period growth rate 0.04 1 2 3 4 5 6 7
Discount rate 0.15 -1
-2

ST - OPTIMISTIC
WO-STAGE EARNINGS GROWTH PROJECTIONS
2017
### 2018
### 2019
### 2020
696,351 1,131,193 1,837,577 2,985,069

62.45% 62.45% 62.45% 62.45%
1,131,193 1,837,577 2,985,069 4,849,123
0.15 0.15 0.15 0.15
0.375937 0.326902 0.284262 0.247185
425,257 600,707 848,543 1,198,629
Annual sales growth

VALUE ADDED
Owners cash flow per
share
2 3 4 5 6 7 8

Apple Inc
DuPont Analysis 2012
Sales
$156,508 Net Income Net Profit Margin
Cost of Goods Sold $41,733 AAPL
$87,846 26.67%
Income Operating Expenses MSFT
Statement $13,421 Sales 31.40%
Other Inc./Exp. $156,508
$522
Taxes
$14,030 Sales T.A. Turnover
$156,508 AAPL
88.89%
Current Assets MSFT
$57,653 Total Assets 60.79%
Net Fixed Assets $176,064
Balance Sheet
$118,411
Current Liabilities
$38,542 Total Liabilities Total Liab. & Equity
Long-term Debt $57,854 AAPL
$19,312 $176,064
MSFT
Stockholders Equity $121,271
$118,210
Stockholders Equity
AAPL
$118,210
MSFT
$66,363
012
Return on Assets (ROA)
AAPL
23.70%
MSFT
14.000%
Return on Equity
(ROE)
AAPL
35.30%
MSFT
25.58%
Financial Leverage Mult.

(FLM)
AAPL
1.49
MSFT
1.83
COMMENTARY
Apple Inc
Sales
$106,606 21.67%
$1,156
Taxes
$170,910 AAPL
82.57%
Current Assets MSFT
Balance Sheet
$133,714
Current Liabilities
$39,793 $207,000
MSFT
$123,549
Stockholders Equity
AAPL
$123,549
MSFT
$78,944
13
Return on Assets
(ROA)
AAPL
17.89%
MSFT
15.35%
Return on Equity
(ROE)
AAPL
29.98%
MSFT
27.69%
Financial Leverage
Mult. (FLM)
AAPL
1.68
MSFT
1.80
COMMENTARY
Apple Inc
Sales
$112,258 21.61%
$980
Taxes
$182,795 AAPL
79%
Current Assets MSFT
Balance Sheet
$163,308
Current Liabilities
$56,844 $231,839
MSFT
$111,547
Stockholders Equity
AAPL
$111,547
MSFT
$89,784
14
Return on Assets
(ROA)
AAPL
17.04%
MSFT
12.81%
Return on Equity
(ROE)
AAPL
35.42%
MSFT
24.59%
Financial Leverage
Mult. (FLM)
AAPL
2.08
MSFT
1.92
INTERPRETATION/COMMENTARY
Apple Inc
The Buffett Model

INSTRUCTIONAL INFORMATION
EPS ACGR (from Value Line) 48.27%
Average ROE (8 Years) 30.73% ! This is the average ROE from the Value Line
Initial EPS Rate of Return @ Curent Price 5.12% ! Equal to 2010 EPS divided by current share price
VALUE RELATIVE TO GOVERNMENT BONDS $430.00 ! Most recent EPS divided by yield on treasury bonds
Projected ACRR as Equity Bond
Average Dividend Payout Ratio 28% ! From Value Line, last Dividend %
Average % of Earnings Retained 72% ! 1 minus average dividend payout ratio
Average ROE in R/E over the last 10 Years 22.10% ! Average ROE times 59%
Future Book (Equity) Value in 10 Years $140.11 ! Book Value times 1.1324% to the 10th
Projected EPS in 10 Years $43.05 ! Future book value times 10%
Average P/E Ratio 14.02 ! Average P/E from Value Line
VALUE RELATIVE TO GROWING GOV'T BONDS $603.42 ! Projected EPS times average P/E ratio
ACRR @ Current Price 16.97%
Projected ACRR Using Average EPS

Last Year EPS 6.45 ! From Value Line
Projected EPS in 10 Years $331.28 ! 10 year ACGR times last years EPS
Projected Share Price in 10 Years $4,643.43 ! Projected EPS in 10 Years times average P/E ratio
ACGR @ Current Price 43.45%
November 2011 ACGR - Average Compounded Growth Rate in EPS from Value Line
Yield on T-Bonds: 1.50% ACRR - Average Compounded Rate of Return
Share Price: $125.86
Shares Outstanding: 5866
Book (Equity) Value per Share: $19.02
Apple Inc
Graham Analysis
Variables Values
Current Price $125.86

AAA Yield 3.50%
Average P/E over last 3 years 12.43
Average P/E over last 8 years 14.02
Net Current Assets per Share (4.08)
Total Debt per Share $20.51
Group A Values Points

#1 Earnings / Price 5.12% 0.5
#2 Price / Earnings 19.5 0.0
#3 Price / Book 4.41 0.0
#4 Dividends / Price 1.44% 0.0
#5 Price / Net Current Assets Per Share ($30.89) 0.0
Group B Values Points

#6 Current Ratio 1.08 0.0
#7 Total Debt / Equity 1.08 0.5
#8 Total Debt / Net Current Assets (5.03) 0.0
#9 Growth for last 10 years 4.50% 0.5
Growth for last 5 years 48.27%
#10 Number of earnings decline 0 1.0
This Graham Analysis is based on Results

my presentation in class related to Group Total Points
the Graham model. Virtually no Group A 0.5
stock is likely to pass this con- Group B 2.0
servative criteria but it is still worth Does Company Pass the Graham Model?
looking at. No
Apple Inc
Projected ROE Based on P/E Ratios
The Kuhle ROE Model

Projections for 10 Year Period
Reinvested Dividends
Year Equity Value Per Share Earnings Dividends Paidout High P/E Low P/E Retained Earnings
1 $23.22 $5.84 $1.64 $7.45 $4.88 $4.20
2 $28.36 $7.14 $2.00 $7.69 $5.28 $5.13
3 $34.63 $8.71 $2.45 $7.94 $5.71 $6.27
4 $42.28 $10.64 $2.99 $8.19 $6.18 $7.65
5 $51.62 $12.99 $3.65 $8.45 $6.68 $9.34
6 $63.03 $15.86 $4.45 $8.72 $7.23 $11.41
7 $76.97 $19.37 $5.43 $9.00 $7.82 $13.93
8 $93.98 $23.65 $6.64 $9.29 $8.46 $17.01
9 $114.75 $28.87 $8.10 $9.59 $9.15 $20.77
10 $140.11 $35.26 $9.89 $9.89 $9.89 $25.36
47.24 ### 86.23 ### 71.29 121.09
Price Appreciation (Low P/E) $423.09 Price Appreciation (High P/E) $676.94
Rate of Return on Appreciation 236% Rate of Return on Appreciation 437.85%
Annualized 12.89% Annualized 18.32%
With Reinvested Dividends 273.69% With Reinvested Dividends 506.36%
Annualized 14.09% Annualized 19.75%
This model is intended to present a projection of the annual compounded
Input Variables return on equity over a projected 10 year period. This projection is made
assuming re-invested dividends. If dividends are re-invested the investor
must receive the ROE rate on all dividends that are re-invested. The
Current Price $125.86 ROE's are based on the low and high P/E ratios from the Value Line.
Average ROE from Value Line 30.73%
Initial Book Value $19.02
Payout Ratio 28.1%
P/E High 19.20
P/E Low 12.00

SUMMARY
Apple Inc
Summary
Decision Summary
Model Method Value Recommendation

2012 35.30%
2013 29.98%
DuPont Analysis Yes
2014 35.42%
Geometric Mean 33.47%
Pessimistic 1.40 No
Intrinsic Value Analysis Optimistic 20.73 Yes
Most Likely 1.95 Yes
Group A 0.5
The Graham Model Group B 2 No
Combined 2.5
ACRR - Equity Bond 16.97% Yes
Buffett Model
ACRR - EPS 43.45% Yes
Low P/E 14.1% No
Kuhle ROE Projections
High P/E 19.75% Yes
The Decision
Page 37
SUMMARY
Page 38
SUMMARY
COMMENTARY
The Decision
Page 39
SUMMARY
Page 40
Microsoft (MSFT)
RATIOS
2012 2013 2014

Short term solvency ratios
Current Ratio 2.60 2.71 2.50
Quick Ratio 2.57 2.66 2.45
Cash Ratio 1.93 2.06 1.88
Net Working Capital to Current Liabilities 1.60 1.71 1.50
Asset Utilization or Turnover ratios

Average Collection Period 77.06 80.86 81.03
Inventory Turnover Ratios 64.84 40.17 32.64
Receivable Turnover 4.67 4.45 4.44
Fixed Asset Turnover 7.54 7.18 5.95
Total Asset Turnover 0.61 0.55 0.50
Financial Leverage ratios

Total Debt Ratio (TD/TA) 0.45 0.45 0.48
Debt/Equity 0.12 0.13 0.13
Equity Ratio (TE/TA) 0.55 0.55 0.52
Long-term Debt Ratio (LTD/TA) 0.09 0.09 0.12
Times Interest Earned Ratio (EBIT/TI) 22,267.00 27,052.00 27,820.00
Profitability ratios
Gross Profit Margin 0.76 0.74 0.69
Net Profit Margin 0.314 0.289 0.254
ROA (NI/TA) 0.1400 0.1535 0.1281
ROE (NI/TE) 0.2558 0.2769 0.2459
Market value ratios

Price/Earnings Ratio 10.4000 11.20 14.00
FINANCIAL STATEMENTS
Balance Sheet
(In Millions, Except Par Value) 2012 2013 2014
Assets
Current Assets:
Cash and cash equivalents 6,938 3,804 8,669
Short-term investments 56,102 73,218 77,040
Accounts Receivable, Net 15,780 17,486 19,544
Inventories 1,137 1,938 2,660
Deferred Income Taxes 2,035 1,632 1,941
Other 3,092 3,388 4,392
Total current assets 85,084 101,466 114,246

Long Term Assets:
Property, plant and equipment, net 8,269 9,991 13,011
Equity and other investments 9,776 10,844 14,597
Goodwill 13,452 14,655 20,127
Intangible Assets 3,170 3,083 6,981
Other long term assets 1,520 2,392 3,422
Total assets 121,271 142,431 172,384
Liabilities and stockholders' equity

Current Liabilities
Accounts Payable 4,175 4,828 7,432
Short term debt 0 0 2,000
Current Portion long term debt 1,231 2,999 0
Accrued compensation 3,875 4,117 4,797
Income Taxes 789 592 782
Short term unearned revenue 18,653 20,639 23,150
Securities lending payable 814 645 558
Other 3,151 3,597 6,906
Total current liabilities 32,688 37,417 45,625
Long-term debt 10,713 12,601 20,645

Long term unearned revenue 1,406 1,760 2,008
Deferred Income Taxes 1,893 1,709 2,728
Other long-term liabilities 8,208 10,000 11,594
Total Liabilities 54,908 63,487 82,600
Stockholders' equity:
outstanding 8,239 and 8,328 65,797 67,306 68,366
Retained Earnings (856) 9,895 17,710
Accumulated other comprehensive income 1,422 1,743 3,708
Total stockholders' equity 66,363 78,944 89,784

Total liabilities and stockholders' equity 121,271 142,431 172,384
Income Statement
(In Millions, Except Per Share Data) 2012 2013 2014
Net revenue 73,723 77,849 86,833
Cost of revenue 17,530 20,249 26,934
Gross margin 56,193 57,600 59,899
Research and development 9,811 10,411 11,381
Sales and marketing 13,857 15,276 15,811
General and administrative 4,569 5,149 4,821
Goodwill impairment 6,193 0 0
Integration and restructuring 0 0 127
Total 34,430 30,836 32,140
Operating income 21,763 26,764 27,759
Other Income 504 288 61
Income before taxes 22,267 27,052 27,820
Provision for taxes 5,289 5,189 5,746
Net Income 16,978 21,863 22,074
Net income 16,978 21,863 22,074
Basic earnings per common share 2.02 2.61 2.66

Dilluted earnings per common share 2.00 2.58 2.63
Weighted average common shares outstanding:
Basic 8,396 8,375 8,299
Dilluted 8,506 8,470 8,399

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135 PROJECT GRADE SHEET

Company Name: Apple Inc

Student Name (s) Ryan Carreon, Nik Heisinger

1. Financial Statements and Ratios, including analysis

2. Ratio comparison and analysis..

3. DuPont Analysis and Interpretation (3 Years)..

4. Value Line Spread sheet and analysis .

6. Graham Model Possible Scores 1 2

7. Buffett Model and Analysis with Interpretation ....

8. ROE Model and Analysis with Interpretation .

arreon, Nik Heisinger

and what is your recommendation?

An Analysis of Apple Stock Potenti

Presented by: Ryan Carreon and Nik Heis

Arthur D Levinson, Ph. D. Tim Cook

Andrea Jung Ronald D Sugar, Ph.D.

Albert Gore Jr. Susan L wagner

eon and Nik Heisinger

sor in 1971. Intel has an

e Services, and chief

, reporting to CEO Tim

2012 2013 2014

Asset Utilization or Turnover ratios

Financial Leverage ratios

Balance Sheet for AAPL

Liabilities and stockholders' equity

Common stock and additional paid-in capital, $0.00001 par value,

Basic earnings per common share 44.64 40.03 6.49

2012 2013 2014 MICRO Cross- Time-

Financial Leverage Ratios

Intel Corporation Ratio Comparison Cynthia Kenyon and Michael Davis

Value Line Data

Symbol: AAPL Beta: 0.85

2009 2010 2011 2012

Cynthia Kenyon and Michael Davis

Cynthia Kenyon and Michael Davis

Cynthia Kenyon and Michael Davis

Cynthia Kenyon and Michael Davis

2014 2015 2016

Present value of residual $548,340 4

Cynthia Kenyon and Michael Davis

113,152 135,783 162,939 195,527

Annual sales growth

Cynthia Kenyon and Michael Davis

FORECAST - MOST LIKEL

2014 2015 2016

Prior year cash flows (mil) 37,894 47,368 59,210 74,013

Input discount & growth rates 1

Cynthia Kenyon and Michael Davis

92,516 115,645 144,556 180,695 225,868 282,335

Annual sales growth

Cynthia Kenyon and Michael Davis

2011 2012 2013

Cynthia Kenyon and Michael Davis

696,351 1,131,193 1,837,577 2,985,069

Annual sales growth

Cynthia Kenyon and Michael Davis

DuPont Analysis 2012

Return on Assets (ROA)

Financial Leverage Mult.

DuPont Analysis 2013

DuPont Analysis 2014

The Buffett Model

Projected ACRR Using Average EPS