Aapl 5yr Osv Stock Valuation Spreadsheet

Jae Jun | Old School Value Author

All spreadsheet related questions and support is now handled only through the forum. http://www.oldschoolvalue.com/forum/spreadsheet-installation/

Disclaimer Nothing on Old School Value, related pages, emails, or other communications by the author, either written or oral, are intended to be a recommendation to either buy, hold, or sell any specific security or group of securities. Likewise, nothing herein should be construed as an endorsement of any financial adviser, investment manager, commercial information provider, transaction service, or brokerage firm. The findings from this spreadsheet is merely a start to a means of further research and uncovering a great business and investment. Old School Value holds no responsibility for any investment whatsoever.

Spreadsheet Installation Related - Refer to the manual and ask for help on the forums to reduce repetitive questions and answers.The manual contains every possible problem related to the spreadsheet. - When requesting help, please try to find out whether it is a spreadsheet issue or excel issue. PDF: http://www.oldschoolvalue.com/intrinsic-value-spreadsheets/installation-troubleshooting-guide/ Forum: http://www.oldschoolvalue.com/forum/spreadsheet-installation/

How to Use - Yellow highlighted fields are user input fields. Enter ticker in the Summary tab only. - Use yellow fields to override the default values without messing up formulas and accidently saving incorrect values - If a graph is squashed or looks out of place, zoom in and zoom out to refresh the view. - Press F9 to start calculations. Automatic formula calculations have been turned off in the excel menu to improve start speed and convenience. - Protected sheets do not have any passwords. Simply unprotect it. - Summary page provides a quick overview of all valuation methods and important graphs and numbers. Easy to add more or less yourself. - DCF Valuation is based on discounted cash flow. Important company fundamental metrics included. - Useful for companies with either 5yr or 10yrs of operating history - Use 5yr version if there has been a recent turnaround or a major event changing the fundamentals of the business - Use 10yr version for stable, cash cows such as KO or JNJ. You can even use it for stable consistent small caps - Adjust user growth, discount rate, FCF override, terminal rate (default 3%) - Price vs Value tab displays only the DCF intrinsic value compared to the historical stock price. (Thinking of how to add Graham intrinsic value and EPV to the graph) - Graham Intrinsic Value is based on Ben Graham's formula defined in the Intelligent Investor Intrisic Value = "normal" earnings x (8.5 + (2 x expected 5 yr growth)) x (4.4/20yr A corp bond) - Use for companies where FCF is erratic such as cyclicals or short history companies. - Remember that earnings are usually inflated. Companies may overstate earnings by hiding some numbers in there but they will never understate earnings on purpose. - Which means that the value you get with the Graham equation will be higher than normal. - Use high margin of safety (MOS) - Adjust user growth - EPV is based on Bruce Greenwald's book. http://www.oldschoolvalue.com/book-reviews/greenwald-earnings-power-value-investing-epv/ - Detailed instructions on how to use the spreadsheet with a rundown of Microsoft http://www.oldschoolvalue.com/stock-analysis/earnings-power-value-epv-valuation-microsoft/ - To explain it here, I would have to write out the entire book again. Please read it yourself to fully understand it. - "Adjust +/-" column is for adding or subtracting values from the stated numbers - "Multiplier" is to select what % you want to consider it. e.g. intangibles usually = 0% - Select the pinkish cell to select either data from MSN or ADVFN - Cell P47, select either 3 or 4 years of R&D you want to include into the valuation - EPV section row 66, include or exclude extraordinary items to EBIT - Read the comments to see references and explanations from the book - Competitors tab allows you to view 6 companies side by side - Charts tab shows different performance graphs of the companies - Assessment tab is a checklist that you should try to folllow before making investment decisions. - You should at least be able to draw up the spider graph

Company Name

ticker

Apple Inc

AAPL

www.oldschoolvalue.com

10/1/2009

Figures in Millions except per share values

Apple Inc.designs, manufactures, and markets personal computers, portable digital music players, and mobile communication devices and sells a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. In addition, the Company sells a variety of third-party Macintosh (Mac), iPod and iPhone compatible products, including application software, printers, storage devices, speakers, headphones, and various other accessories and peripherals through its online and retail stores, , and digital content through the iTunes Store. It sells to consumer, small and mid-sized business (SMB), education, enterprise, government, and creative customers.

Asset Valuation Total Net Reprod. Cost Reprod. Cost of Assets BV Tangible BV NNWC

EPV Valuation 10.57 EPV $ 36.95 Normalized Income $ 30.26 Discount Rate 7.31 Margin of Safety

$ $ $ $

Key Statistics Market Cap (millions) 52-Week Low % off 52-Week Low

DCF Valuation Current Price DCF Price $ 161.07 $ 183.62 Growth Rate 20% Discount Rate 9% Margin of Safety 0%

Financial Strength

Margins & Profitability 2.09

Gross (TTM)

35.49

Operating (TTM)

188.90

Current Ratio (MRQ)

2.11

Gross - 5 Yr. Avg.

31.83

Operating - 5 Yr. Avg.

78.20

LT Debt to Equity (MRQ)

0

EBITD (TTM)

21.84

Pre-Tax (TTM)

Total Debt to Equity (MRQ)

0

EBITD - 5 Yr. Avg.

16.82

Pre-Tax - 5 Yr. Avg.

137.0%

Valuation Ratios

Growth Stats

P/E Ratio (TTM)

Management Effective

32.4

Sales (MRQ) vs Qtr. 1 Yr. Ago

Price to Sales (TTM)

4.8

Sales (TTM) vs TTM 1 Yr. Ago

Price to Book (MRQ)

6.41

Sales - 5 Yr. Growth Rate

39.23

Price to Tangible Book (MRQ)

6.56

EPS (MRQ) vs Qtr. 1 Yr. Ago

Price to Cash Flow (TTM)

28.56

Price to Free Cash Flow (TTM)

16.31

Enterprise Value/Revenue (TTM) Enterprise Value/EBITDA (TTM)

Graham Valuation Graham Price $ 102.87 Growth Rate 30% Normalized EPS $ 2.03 Margin of Safety 0%

Quick Ratio (MRQ)

166,040

52-Week High

68.52 3,692.87 9% 0%

4.1

19.98 15.4 21.2

Efficiency

12.96

Revenue/Employee (TTM)1080063

ROA - 5 Yr. Avg.

13.96

Net Income/Employee (TTM) 161719

ROI (TTM)

19.18

Receivable Turnover (TTM)16.12

13.89

ROI - 5 Yr Avg

21.57

Inventory Turnover (TTM) 48.21

EPS (TTM) vs TTM 1 Yr. Ago

11.88

ROE (TTM)

22.74

Asset Turnover (TTM)

EPS - 5 Yr. Growth Rate

124.7

ROE - 5 Yr. Avg.

Capital Spending - 5 Yr. Grwth

48.87

4.8

14.97

Net Profit - 5 Yr. Avg. 12.15

17.24

ROA (TTM)

11.7

Net Profit (TTM)

0.87

24

18.862

Historical Stock Price Vs Intrinsic Value Per Share 250

200

150 Historical Price Intrinsic Value 100

Buy Price

50

0 1/21/2003

7/21/2003

1/21/2004

7/21/2004

1/21/2005

7/21/2005

1/21/2006

7/21/2006

1/21/2007

7/21/2007

1/21/2008

7/21/2008

1/21/2009

7/21/2009

Multi-Year Performance Shareholder Equity Free Cash Flow CROIC FCF/Sales ROA ROE Revenue Growth Gross Margin Operating Margin Net Margin Earnings Growth Cash from Ops Growth

2003-2007 36.3% 261.6% 14.7% 8.1% 13.6% 21.3% 40.2% 29.0% 11.8% 9.6% 150.4% 108.6%

2004-2008 42.5% 102.6% 15.7% 9.0% 13.8% 22.8% 40.7% 29.0% 12.7% 10.3% 96.4% 79.0%

2003-2006 33.6% 342.3% 9.7% 5.5% 8.7% 13.6% 46.0% 28.2% 7.9% 6.5% 183.1% 97.3%

2004-2007 41.8% 130.9% 15.2% 8.5% 13.7% 22.0% 42.6% 29.0% 12.3% 9.9% 121.8% 80.3%

2005-2008 40.7% 49.8% 16.3% 10.9% 14.4% 25.0% 32.6% 31.5% 15.5% 12.4% 50.9% 55.8%

2003-2005 33.8% 734.7% 4.7% 3.0% 3.7% 5.9% 49.8% 27.5% 3.9% 3.3% 295.0% 196.2%

2004-2006 40.3% 149.6% 14.7% 8.1% 13.6% 21.3% 52.7% 29.0% 11.8% 9.6% 151.1% 54.2%

2005-2007 38.8% 56.7% 15.7% 9.0% 13.8% 22.8% 31.3% 29.0% 12.7% 10.3% 58.7% 46.9%

2006-2008 44.7% 64.6% 16.9% 12.8% 14.9% 27.2% 29.7% 34.0% 18.4% 14.6% 53.7% 107.9%

Median 40.3% 130.9% 15.2% 8.5% 13.7% 22.0% 40.7% 29.0% 12.3% 9.9% 121.8% 80.3%

Margin Percentages 40.00% 35.00% 30.00% 27.65%

27.92%

27.13%

27.52%

29.02%

27.29%

33.97%

34.31%

18.37%

19.32%

Gross Margin

14.56%

14.88%

Operating Margin

28.98%

25.00% 23.03%

20.00% 15.00% 10.00%

9.80%

9.85%

5.00%

5.85%

6.54%

12.70% 10.30%

2005

2006

Net Margin

3.94% 3.33%

0.00% -5.00%

11.84% 9.58%

1999

-0.47% 2001

2000

1.13% 0.30%

1.11% -0.02%

2002

2003

2004

2007

2008

-6.41%

-10.00%

Free Cash Flow vs Tangible Shareholder Equity Trend

Efficiency & Profitability

$25,000.0

35.0% 30.0%

$20,000.0

25.0%

20.0%

CROIC

FCF

15.0%

FCF/Sales

Shareholder Equity

10.0%

ROA

5.0%

ROE

$15,000.0 $10,000.0 $5,000.0

0.0%

$$(5,000.0)

1999

2000

2001

2002

2003

2004

2005

2006

2007

1999

-5.0%

2008

2000

2001

2002

2003

2004

2005

2006

2007

2008

-10.0%

Sales, AR, Inventory

CAPEX vs PPE

$40,000.0

$3,500.0

$35,000.0

$3,000.0

$30,000.0

Last 6 yrs

$2,500.0

Last 5 yrs

$25,000.0 $20,000.0 $15,000.0

Sales

$2,000.0

Last 4 yrs

Accts Receivable

$1,500.0

Last 3 yrs

Inventory

$10,000.0

Last 2 yrs

$1,000.0

Last 1 yr

$5,000.0

$500.0

$-

$1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

TTM

PPE 2002

2003

2004

2005

2006

2007

2008

TTM

Company Name

ticker

Apple Inc

AAPL

www.oldschoolvalue.com

10/1/2009

Figures in Millions except per share values Financial Data

AAPL

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

TTM

Income Statement Revenue % change from last year COGS COGS (%)

$

6,134.0

$

$

4,438.0 72.4%

$

Gross Profit

$

1,696.0

$

Gross Profit (%)

27.6%

7,983.0 $ 23.2% 5,817.0 $ 72.9%

5,363.0 $ -48.9% 4,128.0 $ 77.0%

5,742.0 $ 6.6% 4,139.0 $ 72.1%

6,207.0 $ 7.5% 4,499.0 $ 72.5%

8,279.0 $ 25.0% 6,020.0 $ 72.7%

2,166.0

1,235.0

1,603.0

1,708.0

2,259.0

$

27.1%

$

23.0%

$

27.9%

$

27.5%

$

27.3%

13,931.0 $ 40.6% 9,888.0 $ 71.0% 4,043.0

$

29.0%

19,315.0 $ 27.9% 13,717.0 $ 71.0% 5,598.0

$

29.0%

24,006.0 $ 19.5% 15,852.0 $ 66.0% 8,154.0

$

34.0%

32,479.0 $ 26.1% 21,334.0 $ 65.7%

34,562.0 6.0% 22,297.0 64.5%

11,145.0

12,265.0

$

34.3%

35.5%

Operating Expenses SG&A SG&A (%) R&D R&D (%) Other Other (%) Operating Income

$ $ $

$

Operating Income (%)

996.0 16.2% 314.0 5.1% 27.0 0.4% 359.0

$ $ $

$

5.9%

1,166.0 $ 14.6% 380.0 $ 4.8% 98.0 $ 1.2% 522.0

$

6.5%

1,138.0 $ 21.2% 441.0 $ 8.2% $ 0.0% (344.0)

$

-6.4%

1,111.0 $ 19.3% 447.0 $ 7.8% 28.0 $ 0.5% 17.0

$

0.3%

1,212.0 $ 19.5% 471.0 $ 7.6% 26.0 $ 0.4% (1.0)

$

0.0%

1,421.0 $ 17.2% 489.0 $ 5.9% 23.0 $ 0.3% 326.0

$

3.9%

1,859.0 $ 13.3% 534.0 $ 3.8% $ 0.0%

2,433.0 $ 12.6% 712.0 $ 3.7% $ 0.0%

2,963.0 $ 12.3% 782.0 $ 3.3% $ 0.0%

3,761.0 $ 11.6% 1,109.0 $ 3.4% $ 0.0%

4,085.0 11.8% 1,273.0 3.7% 0.0%

1,650.0

2,453.0

4,409.0

6,275.0

6,907.0

$

11.8%

$

12.7%

$

18.4%

$

19.3%

20.0%

Other Income and Expense Net Int Inc & Other

$

317.0

Earnings Before Taxes Income Taxes Tax Rate %

$ $

676.0 $ 75.0 $ 11.1%

Earnings After Taxes Acctg Changes Disc Operations Ext Items

$ $ $ $

601.0 -

Net Income

$

601.0

Net Income (%) Diluted EPS, Cont Ops$ Diluted EPS$ Shares

$ $

$

$

292.0

93.0

$

1,092.0 306.0 28.0%

$ $

(52.0) $ (15.0) $ 28.8%

87.0 $ 22.0 $ 25.3%

92.0 24.0 26.1%

$ $

383.0 $ 107.0 $ 27.9%

1,815.0 $ 480.0 $ 26.4%

2,818.0 $ 829.0 $ 29.4%

5,008.0 $ 1,512.0 $ 30.2%

6,895.0 $ 2,061.0 $ 29.9%

7,328.0 2,153.0 29.4%

$ $ $ $

786.0 -

$ $ $ $

(37.0) $ 12.0 $ $ $

65.0 -

$ $ $ $

68.0 1.0 -

$ $ $ $

276.0 -

$ $ $ $

1,335.0 -

$ $ $ $

1,989.0 -

$ $ $ $

3,496.0 -

$ $ $ $

4,834.0 -

$ $ $ $

5,175.0 -

$

786.0

$

(25.0)

65.0

$

69.0

$

276.0

$

1,335.0

$

1,989.0

$

3,496.0

$

4,834.0

$

5,175.0

9.8% 0.9 $ 0.9 $ 696

570.0

9.8% 1.1 $ 1.1 $ 720

$

$

70.0

$

-0.5% (0.1) $ (0.0) $ 691

1.1% 0.1 $ 0.1 $ 723

1.1% 0.1 $ 0.1 $ 726

2,252.0 $ 2,085.0 $ 565.0 $ 17.5% 45.0 $ 75.6% 441.0 $

3,396.0 1,170.0 766.0 26.2% 56.0 19.6% 499.0

$ $ $

57.0

$

3.3% 0.4 $ 0.4 $ 774

165.0

9.6% 1.6 1.6 856

$

$ $

365.0

10.3% 2.3 2.3 877

$

$ $

599.0

$

14.6% 3.9 $ 3.9 $ 889

620.0

14.9% 5.4 5.4 902

$

$ $

421.0

15.0% 5.7 5.7 904

Balance Sheet Assets Cash and Equiv Short-Term Investments Accts Rec % change from last year Inventory % change from last year Other Current Assets

$ $ $

1,326.0 1,900.0 681.0

$ $ $

$

358.0

$

1,191.0 2,836.0 953.0 28.5% 33.0 39.4% 414.0

$

20.0

$

$ $ $

$

2,310.0 $ 2,026.0 $ 466.0 $ -104.5% 11.0 $ -200.0% 330.0 $

$

2,969.0 2,495.0 774.0 1.0% 101.0 44.6% 716.0

Total Current Assets Net PP&E Intangibles Other Long-Term Assets

$ $ $ $

4,285.0 318.0 558.0

$ $ $ $

5,427.0 313.0 1,063.0

$ $ $ $

5,143.0 564.0 314.0

$ $ $ $

5,388.0 621.0 119.0 170.0

$ $ $ $

5,887.0 669.0 109.0 150.0

$ $ $ $

7,055.0 707.0 97.0 191.0

$ $ $ $

10,300.0 817.0 96.0 338.0

$ $ $ $

14,509.0 1,281.0 177.0 1,238.0

$ $ $ $

21,956.0 1,832.0 337.0 1,222.0

$ $ $ $

34,690.0 2,455.0 492.0 1,935.0

$ $ $ $

35,170.0 2,653.0 466.0 9,851.0

Total Assets

$

5,161.0

$

6,803.0

$

6,021.0

$

6,298.0

$

6,815.0

$

8,050.0

$

11,551.0

$

17,205.0

$

25,347.0

$

39,572.0

$

48,140.0

$ $ $ $

1,157.0 776.0

$ $ $ $

801.0 717.0

$ $ $ $

911.0 747.0

$ $ $ $

1,154.0 304.0 899.0

$ $ $ $

1,451.0 1,229.0

$ $ $ $

1,779.0 1,705.0

$ $ $ $

3,390.0 3,081.0

$ $ $ $

4,970.0 4,329.0

$ $ $ $

5,520.0 8,572.0

$ $ $ $

4,854.0 3,338.0

$

8,469.0

14,092.0 -

$ $

16,661.0 -

$

$

$ $ $ $ $

3,491.0 4,770.0 895.0 13.5% 165.0 38.8% 979.0

$ $ $ $ $

6,392.0 3,718.0 1,252.0 28.5% 270.0 38.9% 2,877.0

$ $ $ $ $

9,352.0 6,034.0 1,637.0 23.5% 346.0 22.0% 4,587.0

$ $ $ $ $

11,875.0 12,615.0 2,422.0 32.4% 509.0 32.0% 7,269.0

$ $ $ $ $

5,605.0 18,617.0 2,686.0 9.8% 380.0 -33.9% 7,882.0

Liabilities & Stockholders' Equity Accts Payable Short-Term Debt Taxes Payable Accrued Liabilities

$ $ $ $

Other Short-Term Liabilities

$

Total Current Liabilities Long-Term Debt

$ $

812.0 737.0 1,549.0 300.0

Other Long-Term Liabilities

$

208.0

Total Liabilities

$

2,057.0

Total Equity

$

3,104.0

Total Liabilities & Equity

$

5,161.0

$ $ $

-

$

1,518.0 317.0

$ $ $

1,658.0 316.0

$ $ $

2,357.0 -

$ $ $

-

1,933.0 300.0

$ $

2,680.0 -

$

463.0

$

266.0

$

229.0

$

235.0

$

294.0

$

2,696.0

$

2,101.0

$

2,203.0

$

2,592.0

$

2,974.0

$

4,107.0

$

3,920.0

$

4,095.0

$

4,223.0

$

5,076.0

$

6,803.0

$

6,021.0

$

6,298.0

$

6,815.0

$

8,050.0

69.0 $ 113.0 $ (11.0) $ 118.0 $ 289.0

$ $ $

-

$

3,484.0 -

$ $

$

601.0

$

4,085.0

$

7,466.0

$

11,551.0

276.0 150.0 20.0 488.0

$ $ $ $

1,335.0 179.0 52.0 969.0

$ $ $ $

934.0

$

2,535.0

$

-

$

9,299.0 -

$ $ $

-

6,471.0 -

$ $

$

750.0

$

1,516.0

$

4,450.0

$

5,591.0

$

7,221.0

$

10,815.0

$

18,542.0

$

22,252.0

$

9,984.0

$

14,532.0

$

21,030.0

$

25,888.0

$

17,205.0

$

25,347.0

$

39,572.0

$

48,140.0

1,989.0 225.0 53.0 (47.0)

$ $ $ $

3,496.0 317.0 78.0 1,579.0

$ $ $ $

4,834.0 473.0 4,289.0

$ $ $ $

5,175.0 640.0 5,529.0

2,220.0

$

5,470.0

$

9,596.0

$

11,344.0

Cash Flows Statement Cash Flows From Operating Activities

Net Income Depr & Amort Deferred Taxes Other

$ $ $ $

601.0 $ 85.0 $ (35.0) $ 147.0 $

786.0 $ 84.0 $ 163.0 $ (207.0) $

(25.0) $ 102.0 $ (36.0) $ 144.0 $

Cash from Operations

$

798.0

826.0

185.0

$

$

$

65.0 $ 118.0 $ (34.0) $ (60.0) $ 89.0

$

$

Cash Flows From Investing Activities Cap Ex Purchase of Business Other

$ $ $

(47.0) $ $ (917.0) $

(107.0) $ $ (823.0) $

Cash from Investing

$

(964.0)

(930.0) $

$

(232.0) $ $ 1,124.0 $

(174.0) $ (52.0) $ (26.0) $

(164.0) $ $ 992.0 $

(176.0) $ $ (1,312.0) $

(260.0) $ $ (2,296.0) $ (2,556.0) $

(657.0) $ $ 1,014.0 $

892.0

$

(252.0)

$

828.0

$

(1,488.0) $

$ $ $ $

42.0 -

$ $ $ $

105.0 -

$ $ $ $

27.0 -

$ $ $ $

427.0 $ (300.0) $ $ $

543.0 -

$ $ $ $

42.0 1,119.0

$ $ $

105.0 $ $ (58.0) $

27.0 1,144.0

$ $ $

127.0 $ $ (427.0) $

543.0 522.0

$ $ $

89.0 $ (174.0) $

289.0 $ (164.0) $

934.0 $ (176.0) $

2,535.0 $ (260.0) $

2,220.0 $ (657.0) $

250.0 6.56

1,254.0 8.72

1,557.0 11.38

(735.0) $ $ (2,514.0) $

(1,091.0) $ $ (7,098.0) $ (8,189.0)

$

(1,088.0) (14,568.0)

357.0

$

(3,249.0) $

(15,656.0)

(37.0) 361.0

$ $ $ $

362.0 377.0

$ $ $ $

483.0 633.0

$ $ $ $

$ $ $

739.0 2,960.0

$ $ $

1,116.0 2,523.0

$ $ $

544.0 (3,768.0)

5,470.0 $ (735.0) $

9,596.0 $ (1,091.0) $

11,344.0 (1,088.0)

3,078.0 16.35

4,216.0 23.31

4,727.0 28.64

Cash Flows From Financing Activities Net Issuance of Stock Net Issuance of Debt Dividends Other

$ $ $ $

Cash from Financing Currency Adj Change in Cash

$ $ $

11.0 $ $ (155.0) $

(31.0) $ $ (135.0) $

Cash from Operations Cap Ex

$ $

798.0 $ (47.0) $

826.0 $ (107.0) $

185.0 $ (232.0) $

Free Cash Flow Book Value Per Share

$ $

639.0 4.46

763.0 5.70

(155.0) 5.67

11.0 -

$ $ $ $

(31.0) -

324.0 2,901.0

360.0 184.0

Free Cash Flow

$ $

$ $

$ $

9.0 5.66

$ $

18.0 5.82

$ $

$ $

$ $

$ $

$ $

$ $

Company Name

ticker

Apple Inc

AAPL

10/1/2009

User Growth

User Input Params

www.oldschoolvalue.com

Desired MOS 50%

20.00% Growth 20.0%

Discount % 9.0%

1999

2000

2001

$

Price 185.35 2002

Figures in Millions except per share values

Share Value Buy under Actual D/C % $ 161.07 $ 80.53 0% Financial Data 2003 2004 2005

52Wk High $188.90

52Wk Low $78.20

2006

2007

$ 13,931.0 $ 4,043.0 $ 1,650.0 $ 1,335.0 $ 1.6

$ 19,315.0 $ 5,598.0 $ 2,453.0 $ 1,989.0 $ 2.3

$ 24,006.0 $ 8,154.0 $ 4,409.0 $ 3,496.0 $ 3.9

$ $ $ $ $

32,479.0 11,145.0 6,275.0 4,834.0 5.4

$ $ $

$ $ $

$ $ $

5,470.0 3,078.0 735.0

$ $ $

9,596.0 4,216.0 1,091.0

$ 21,956.0 $ 9,299.0 $ 10,815.0 $ 14,195.0

$ $ $ $

34,690.0 14,092.0 18,542.0 20,538.0

2008

Income Sheet Data Revenue Gross Profit Operating Income Net Income Diluted EPS

$ $ $ $ $

6,134.0 1,696.0 359.0 601.0 0.9

$ $ $ $ $

7,983.0 2,166.0 522.0 786.0 1.1

$ $ $ $ $

$ $ $

798.0 639.0 47.0

$ $ $

826.0 763.0 107.0

$ $ $

$ $ $ $

4,285.0 1,549.0 2,057.0 3,104.0

$ $ $ $

5,427.0 1,933.0 2,696.0 4,107.0

$ $ $ $

5,363.0 1,235.0 (344.0) (25.0) (0.0)

$ $ $ $ $

5,742.0 1,603.0 17.0 65.0 0.1

$ $ $ $ $

6,207.0 1,708.0 (1.0) 69.0 0.1

$ $ $ $ $

8,279.0 2,259.0 326.0 276.0 0.4

185.0 $ (155.0) $ 232.0 $

89.0 9.0 174.0

$ $ $

289.0 18.0 164.0

$ $ $

934.0 250.0 176.0

5,388.0 1,658.0 2,203.0 3,976.0

$ $ $ $

5,887.0 2,357.0 2,592.0 4,114.0

$ $ $ $

7,055.0 2,680.0 2,974.0 4,979.0

Cash Flow Data Cash from Operations Free Cash Flow Capex

2,535.0 1,254.0 260.0

2,220.0 1,557.0 657.0

Balance Sheet Data Current Assets Current Liabilities Total Liabilities Tangible Shareholder Equity

5,143.0 1,518.0 2,101.0 3,920.0

$ $ $ $

$ 10,300.0 $ 3,484.0 $ 4,085.0 $ 7,370.0

$ 14,509.0 $ 6,471.0 $ 7,221.0 $ 9,807.0

Margins Gross Margin Operating Margin Net Margin Current Assets>1.5 times

27.65% 5.85% 9.80% 276.6%

27.13% 6.54% 9.85% 280.8%

23.03% -6.41% -0.47% 338.8%

27.92% 0.30% 1.13% 325.0%

27.52% -0.02% 1.11% 249.8%

27.29% 3.94% 3.33% 263.2%

29.02% 11.84% 9.58% 295.6%

28.98% 12.70% 10.30% 224.2%

33.97% 18.37% 14.56% 236.1%

34.31% 19.32% 14.88% 246.2%

17.7% 10.4% 221.9 12.72% 27.04%

15.7% 9.6% 176.3 13.14% 22.51%

-3.4% -2.9% 375.3 -0.39% -0.63%

0.2% 0.2% 92.0 1.06% 1.62%

0.4% 0.3% 80.3 1.05% 1.66%

4.7% 3.0% 59.6 3.71% 5.94%

15.7% 9.0% 59.9 13.62% 21.29%

14.7% 8.1% 50.8 13.83% 22.80%

19.6% 12.8% 45.8 16.43% 28.52%

16.9% 13.0% 41.9 14.89% 27.19%

66.3% 8.8% 31.1%

65.6% 6.8% 28.3%

53.6% 7.5% -7.4%

53.8% 7.2% 0.4%

61.4% 0.0% 0.7%

58.6% 0.0% 8.4%

54.7% 0.0% 30.7%

72.3% 0.0% 21.6%

74.4% 0.0% 28.5%

88.2% 0.0% 22.7%

2003-2007 36.3% 261.6% 14.7% 8.1% 13.6% 21.3% 40.2% 29.0% 11.8% 9.6% 150.4% 108.6%

2004-2008 42.5% 102.6% 15.7% 9.0% 13.8% 22.8% 40.7% 29.0% 12.7% 10.3% 96.4% 79.0%

2003-2006 33.6% 342.3% 9.7% 5.5% 8.7% 13.6% 46.0% 28.2% 7.9% 6.5% 183.1% 97.3%

2003-2005 33.8% 734.7% 4.7% 3.0% 3.7% 5.9% 49.8% 27.5% 3.9% 3.3% 295.0% 196.2%

2004-2006 40.3% 149.6% 14.7% 8.1% 13.6% 21.3% 52.7% 29.0% 11.8% 9.6% 151.1% 54.2%

2005-2007 38.8% 56.7% 15.7% 9.0% 13.8% 22.8% 31.3% 29.0% 12.7% 10.3% 58.7% 46.9%

2006-2008 44.7% 64.6% 16.9% 12.8% 14.9% 27.2% 29.7% 34.0% 18.4% 14.6% 53.7% 107.9%

Median

2015 $13,429.96 2025 $ 23,271.40

2016 $14,013.60 2026 $ 23,969.54

2017 $16,283.80 2027 $ 24,688.63

2018 $18,921.78 2028 $ 25,429.28

Efficiency & Profitability CROIC FCF/Sales Inventory Turnover Return On Assets (ROA) Retun On Equity (ROE)

Debt Related Debt to Equity Capitalization Ratio FCF to Debt

Multi-Year Performance Shareholder Equity Free Cash Flow CROIC FCF/Sales ROA ROE Revenue Growth Gross Margin Operating Margin Net Margin Earnings Growth Cash from Ops Growth

2004-2007 41.8% 130.9% 15.2% 8.5% 13.7% 22.0% 42.6% 29.0% 12.3% 9.9% 121.8% 80.3%

2005-2008 40.7% 49.8% 16.3% 10.9% 14.4% 25.0% 32.6% 31.5% 15.5% 12.4% 50.9% 55.8%

40.3% 130.9% 15.2% 8.5% 13.7% 22.0% 40.7% 29.0% 12.3% 9.9% 121.8% 80.3%

Projection of future Free Cash Flow Growing at 20%

$ $

2009 5,059 2019 19,489.43

2010 $ 6,071 2020 $ 20,074.11

2011 7,285 2021 $ 20,676.33 $

2012 $8,173.89 2022 $ 21,296.62

Company Valuation Total Value Shares Outstanding Per Share Value Margin of Safety Purchase Price Current Price Actual Discount Enterprise Value Enterprise Value/EBITDA

$ $ $ $ $

2013 $9,645.19 2023 $ 21,935.52

2014 $11,381.32 2024 $ 22,593.59

Free Cash Flow and Tangible Shareholder Equity Trend 143,948 893.71 893.71 161.07 50% 80.53 185.35 0% 141,840.00 18.859

$25,000.0

FCF

$20,538.0

Shareholder Equity

$20,000.0 $14,195.0 $15,000.0 $10,000.0 $5,000.0

$9,807.0 $7,370.0 $4,979.0 $4,216.0 $3,104.0 $4,107.0 $3,920.0 $3,976.0 $4,114.0 $3,078.0 $1,254.0 $1,557.0 $639.0 $763.0 $(155.0) $9.0 $18.0 $250.0

$-

$(5,000.0)

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Multi-Year Performance Graph 400.0%

Gross Margin

Operating Margin

Net Margin

Earnings Growth

ROA

ROE

350.0% 5.9% 3.7% 300.0%

250.0%

13.6% 8.7%

21.3% 13.6%

200.0%

22.8% 13.8%

150.0%

21.3% 13.6%

22.0% 13.7%

295.0%

25.0% 14.4%

183.1%

150.4% 100.0%

121.8%

96.4%

50.9% 50.0%

9.6% 11.8% 29.0%

10.3% 12.7% 29.0%

6.5% 7.9% 28.2%

2003-2007

2004-2008

2003-2006

0.0%

9.9% 12.3%

12.4% 15.5%

29.0% 2004-2007

27.2%

22.8% 13.8%

151.1%

14.9% 53.7%

58.7%

14.6% 18.4%

9.6% 11.8% 29.0%

10.3% 12.7%

31.5%

3.3% 3.9% 27.5%

29.0%

34.0%

2005-2008

2003-2005

2004-2006

2005-2007

2006-2008

Margin Percentages 40.00% 35.00% 30.00%

27.65%

27.92%

27.13%

27.52%

27.29%

29.02%

20.00%

10.00%

9.85% 6.54%

9.80% 5.85%

5.00% 0.00% -5.00%

34.31%

18.37% 14.56%

19.32%

2007

2008

23.03%

25.00%

15.00%

33.97% 28.98%

1999

2000

-0.47%

1.13% 0.30%

1.11% -0.02%

-6.41% 2001

2002

2003

11.84% 9.58%

12.70% 10.30%

2005

2006

Gross Margin Operating Margin

14.88%

Net Margin

3.94% 3.33%

2004

-10.00%

Efficiency & Profitability 35.0%

CROIC

FCF/Sales

Debt

ROA

100.0%

ROE

30.0%

Debt to Equity

Capitalization Ratio

FCF to Debt

80.0%

25.0% 60.0%

20.0% 15.0%

40.0%

10.0%

20.0%

5.0% 0.0%

0.0% -5.0%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

-10.0%

Sales, Receivables, Inventory $40,000.0

Sales

Accts Receivable

Inventory

$35,000.0 $30,000.0

$25,000.0 $20,000.0 $15,000.0 $10,000.0 $5,000.0 $1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

TTM

1999 -20.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

Company Name

ticker

Apple Inc

AAPL

www.oldschoolvalue.com

10/1/2009

Figures in Millions except per share values Desired MOS

Growth

Discount %

Price

50%

20.0%

9%

$ 185.35

Share Value $

161.07

Buy under $

80.53

Actual D/C % 52Wk High 0%

$

188.90

52Wk Low $

78.20

Historical Stock Price Vs Intrinsic Value Per Share 250 Historical Price

Intrinsic Value

Buy Price

Linear (Historical Price)

200

150

100

50

0 1/21/2003

-50

7/21/2003

1/21/2004

7/21/2004

1/21/2005

7/21/2005

1/21/2006

7/21/2006

1/21/2007

7/21/2007

1/21/2008

7/21/2008

1/21/2009

7/21/2009

Company Name

ticker

Apple Inc

AAPL

10/1/2009

User Growth

Figures in Millions except per share values

30.00% User Input Params

www.oldschoolvalue.com

Desired MOS

Growth

Price

Actual DC%

66%

30.0%

$ 183.62

0%

1999 0.90 2009 $ 2.99 $

Diluted EPS

Earnings Growth EPS Weighted Average

2000 1.09 2010 $ 3.92 $

Share Value $

2001 2002 (0.04) $ 0.09 2011 2012 $ 5.13 $ 5.56

$

102.87

Buy under

P/B Ratio

$

34.97

Earnings 2003 $ 0.10 $

2004 0.36

$

Net Net Working Capital 9

7.95

$

2005 1.56

$

4.67 2006 2.27

$

2007 3.93

Multi-Year Performance 2003-2007 2004-2008 2003-2006 2004-2007 2005-2008 2003-2005 2004-2006 2005-2007 2006-2008 150.4% 96.4% 183.1% 121.8% 50.9% 295.0% 151.1% 58.7% 53.7% $ 1.64 $ 2.70 $ 1.07 $ 2.03 $ 3.28 $ 0.67 $ 1.40 $ 2.59 $ 3.85

Company Stats Normal Earnings Expected 5 Year Growth 20 yr A Corp Bond Rate Book Value Per Share Price to Book Ratio Enterprise Value Per Share

$

$

2.03 30.00% 6.26 23.31 7.95 158.71

Company Valuation

$6.00

Per Share Value

$

Desired MOS Purchase Price Current Price Actual Discount

$ $

102.87 66.00% 34.97 185.35 0%

2008 5.36

Median 121.8% $2.0

$5.36

EPS

Linear (EPS)

$5.00

$3.93

$4.00

$3.92 $2.99

$3.00

$2.27 $1.56

$2.00 $1.00

$

$0.90

$1.09 $0.09

$0.10

$(0.04) 2001 2002

2003

$0.36

$$(1.00)

1999

2000

2004

2005

2006

2007

2008

2009

2010

Old School Value | http://www.oldschoolvalue.com Company Name

ticker

Apple Inc

AAPL

10/1/2009

User Discount %

Figures in Millions except per share values

9% Discount Rate %

Net Reprod. Cost

EPV

$

9%

68.52

$10.57

Current Price

$

MOS %

185.35

Tangible BV

0%

$

30.26

NNWC

$

7.31

Reproduction Asset Value Quarterly numbers based on: 2009 Q3 Statement Source Date: 22-Jul-09

Assets Cash & Equivalents Marketable Securities Accounts Receivable - Gross Other Receivable

Receivables Inventories: Raw Materials Inventories: Work in Progress Inventories: Purchased Components Inventories: Finished Goods Inventories: Other Inventories -- Total Prepaid Expenses Current Defered Income Taxes Other Current Assets

Total Current Assets Goodwill, Net Intangibles, Net

Intangibles Property/Plant/Equipment - Net Long Term Investments Note Receivable - Long Term Other Long Term Assets, Total

Total Assets

Data Source

Book Value

Adjust +/-

Multiplier

$ 24,222.0 $ 18,617.0 $ 2,686.0 $ 1,494.0 $ 4,180.0 $ $ $ $ $ 380.0 $ 380.0 $ $ 1,731.0 $ 6,388.0 $ 36,901.0 $ 207.0 $ 370.0 $ 577.0

MSN Reproduction Asset Value

$

24,222.0

$ $ $

18,617.0 2,686.0 1,494.0

$

4,180.0

2002 CAPEX (statements) Last 6 yrs Last 5 yrs Last 4 yrs Last 3 yrs Last 2 yrs Last 1 yr PPE Sales R&D

0% 0%

$ 2,653.0 $ 6,899.0 $ $ 2,841.0 $ 49,871.0

$

380.0

$ $ $

1,731.0 6,388.0

$

36,901.0

$ $

0.0 0.0

$

0.0

$ $ $ $

2,653.0 6,899.0 2,841.0

$

49,294.0

2003

2004

2005

2006

2007

2008

$

174.0

$

164.0

$

176.0

$

260.0

$

657.0

$

735.0

$

1,091.0

$

1,088.0

$ $ $

513.0 406.0 174.0

$ $ $

570.0 338.0 164.0

$ $ $

514.0 340.0 176.0

$ $ $

600.0 436.0 260.0

$ $ $

1,093.0 917.0 657.0

$ $ $

1,652.0 1,392.0 735.0

$ $ $

2,483.0 1,826.0 1,091.0

$ $ $

2,914.0 2,179.0 1,088.0

$ $ $

621.0 5,742.0 447.0

$ $ $

669.0 6,207.0 471.0

$ $ $

707.0 8,279.0 489.0

$ $ $

817.0 13,931.0 534.0

$ $ $

1,281.0 19,315.0 712.0

$ 1,832.0 $ 24,006.0 $ 782.0

$ $ $

2,455.0 32,479.0 1,109.0

$ $ $

2,653.0 34,562.0 1,273.0

$3,500.0 $3,000.0

Last 6 yrs

$2,500.0

Last 5 yrs $2,000.0

Last 4 yrs Last 3 yrs

$1,500.0

Last 2 yrs $1,000.0

Last 1 yr

PPE

$500.0

Reproduction Asset Value

Liabilities & Equity

Book Value Corrected BV

Accounts Payable

$

4,854.0

$

4,854.0

Accrued Expenses Accrued Liabilities Notes Payable/Short Term Debt Current Port. of LT Debt/Capital Leases Other Current Liabilities

$ $ $

933.0 -

$ $ $

933.0 -

$ $

10,874.0

Total Current Liabilities

$ $ 10,874.0 $ 16,661.0

$

16,661.0

Long-Term Debt

$

-

$

-

Capital Lease Obligations

$

-

$

-

Deferred Income Taxes

$ $ $

970.0 4,621.0

$

22,252.0

Common Stock Equity Retained Earnings

$ 970.0 $ $ 4,621.0 $ 22,252.0 $ 25,888.0 $ 17,878.0

$ $

Total Capitalization Total Equity Total Liabilities & Stock Equity

$ 25,888.0 $ 25,888.0 $ 48,140.0

Minority Interest Total Other Liabilities

Total Liabilities

Multiplier

TTM

$-

2002

2003

2004

Asset Valuation Tangible BV

Total $

2005

2006

2007

2008

TTM

Asset Valuation Data

Per Share 27,042 $ 30.26

Shares Outstanding

893.7

$ $

27,042 6,530

$ $

30.26 7.31

Balance Sheet Assets Adjusted Assets Total Liabilities

$

55,270

$

61.84

Total Equity

$

27,619.0

$

33,018

$

36.95

$

9,446

$

10.57

Marketing/Brand Value R&D Value

$ $

4,354.0 1,622.4

25,888.0 17,878.0

Cash Needed for Business Interest Bearing Debt Non Interest Bearing Debt

$ $ $

345.6 22,252.0

$

25,888.0

Excess Cash

$

23,572.4

$ $

27,619.0 48,140.0

Adjusted BV NNWC Reprod. Cost of Assets Reprod. Cost of Assets BV Total Net Reprod. Cost

$ $ $

49,871.0 49,294.0 22,252.0

893.71

Old School Value | http://www.oldschoolvalue.com

Earnings Power Value (EPV) 5 Year Annual Data Period End Date Period Length Statement Source Income Statement Sales EBIT EBIT Margin EBIT at user defined % of sales EBIT User Defined % Margin Normalized EBITDA Normalized EBIT SG&A R&D

25-Sep-04 52 Weeks 10-K

$ $

24-Sep-05 52 Weeks 10-K

2004 8,279 $ 383.0 $

30-Sep-06 53 Weeks 10-K

Past 4 Quarterly Data 29-Sep-07 52 Weeks 10-K

27-Sep-08 52 Weeks 10-K

2005 13,931 $ 1,815.0 $

2006 19,315 $ 2,818.0 $

2007 24,006 $ 5,008.0 $

4.6%

13.0%

14.6%

20.9%

4.6% 486.0 336.0 500.5 122.8

13.0% 1,822.0 1,643.0 652.4 133.8

14.6% 2,678.0 2,453.0 851.6 178.0

20.9% 4,726.0 4,409.0 1,037.1 195.5

27-Sep-08 13 Weeks 10-K

2008 32,479 6,895.0

27-Dec-08 13 Weeks 10-Q

28-Mar-09 13 Weeks 10-Q

27-Jun-09 13 Weeks 10-Q

2008 Q4 $7,895.0 $ $1,582.0

2009 Q1 10,167.0 $ $2,284.0

2009 Q2 8,163.0 $ $1,730.0

2009 Q3 8,337.0 $ $1,732.0 $

TTM 34,562.0

21.2%

20.0%

22.5%

21.2%

20.8%

$ $ $ $

21.2% 6,794.0 6,275.0 1,316.4 277.3

20.0% $1,576.0 $1,442.0 $349.7 $74.5

22.5% 2,284.0 2,126.0 349.7 74.5

21.2% 1,839.0 1,667.0 381.9 78.8

20.8% 1,848.0 1,672.0 344.8 79.8

$ $ $ $

21.2% 21.2% 7,547.0 6,907.0 1,425.9 307.5

$ $ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

7,328.0

Adjusted EBIT Adjusted EBIT %

$

1,006.3 $ 12.2%

2,601.2 $ 18.7%

3,847.6 $ 19.9%

6,240.6 $ 26.0%

8,488.6 26.1%

$2,006.2 $ 25.4%

2,708.2 $ 26.6%

2,190.6 $ 26.8%

2,156.5 $ 25.9%

9,061.4 26.2%

Income Before Tax Income Tax - Total Tax Rate

$ $

370.0 $ 104.0 $ 28.1%

1,808.0 $ 480.0 $ 26.5%

2,818.0 $ 829.0 $ 29.4%

5,008.0 $ 1,512.0 $ 30.2%

6,895.0 2,061.0 29.9%

$1,582.0 $ $446.0 $ 28.2%

2,284.0 $ 679.0 $ 29.7%

1,730.0 $ 525.0 $ 30.3%

1,732.0 $ 503.0 $ 29.0%

7,328.0 2,153.0 29.4%

Adjusted Earnings After tax Depreciation & Amortization Add user defined % of D&A

$ $ $

723.4 150.0 30.0

1,910.6 179.0 35.8

2,715.7 225.0 45.0

4,356.4 317.0 63.4

5,951.3 519.0 103.8

$1,440.6 $134.0 $26.8

$ $ $

1,903.06 158.0 31.6

$ $ $

1,525.82 172.0 34.4

$ $ $

1,530.22 176.0 35.2

$ $ $

6,399.7 640.0 128.0

Income as Adjusted Income as Adjusted % Operating Income as Reported

$

753.4 $ 9.1% 326.0 $

6,055.1 18.6% 6,275.0

$1,467.4 $0.2 $1,442.0

$

1,934.7 $0.2 2,126.0

$

1,560.2 $0.2 1,667.0

$

1,565.4 $0.2 1,672.0

$

6,527.7 18.9% 6,907.0

PPE as a % of Sales Sales Growth (decrease) to Prior Year Capex Maintenance Capex Depr & Amort

$

$ $ $

2004 8.5% $ $ $ $

2,072.0 176.0 (0.9) 150.0

$ $ $ $

$ $ $

$ $ $

$ $ $

1,946.4 $ 14.0% 1,650.0 $

2,760.7 $ 14.3% 2,453.0 $

4,419.8 $ 18.4% 4,409.0 $

2005 5.9%

2006 6.6%

2007 7.6%

5,652.0 260.0 (71.5) 179.0

$ $ $ $

5,384.0 657.0 299.9 225.0

$ $ $ $

4,691.0 735.0 377.0 317.0

2008 7.6% $ $ $ $

8,473.0 1,091.0 450.5 473.0

2004-2005 2005-2006 2006-2007 2007-2008 2008-TTM 158.3% 41.8% 60.1% 37.0% 7.8% $ 1,349.9 $ 2,353.5 $ 3,590.2 $ 5,237.4 $ 6,291.4

Multiyear Timeframe Adjusted Income & Growth

$

TTM 7.7% $ $ $ $

2,083.0 1,088.0 928.1 640.0

$

$ $ $

583.8 330.5 330.7 Possible Values for Override Box Normalized Income $ 3,692.9 Avg Adj. Income 5 yrs $ 3,187.1 TTM Adjusted Income $ 6,527.7

$3,692.9

EPV Data Cost of Capital Normalized Adjusted Income Average Maintenance Capex Interest Bearing Debt 1% of sales Cash & Equiv Cash - Debt Shares

Normal. Adj. Income Growth

2004-2007 2005-2008 2006-TTM 31.4% 29.9% 13.9% $ 2,470.1 $ 3,795.5 $ 4,940.8

39.4%

2004-2008 2005-TTM 68.4% 35.3% $ 3,187.1 $ 4,341.9

Cost of Capital Rates 5% 7%

Per Share $ 75.24 $ 53.75

$

Average

Normalized Adjusted Income

2004-2006 2005-2007 2006-2008 2007-TTM 91.4% 50.7% 48.1% 21.5% $ 1,820.2 $ 3,042.3 $ 4,411.9 $ 5,667.5

$

+Cash-Debt Adjustment $ 91,123.1 $ 71,909.8

$ $

EPV 67,246.7 48,033.4

9%

$

37,359.3

$

41.80

$

11% 13%

$ $

30,566.7 25,864.1

$ $

34.20 28.94

$ $

$ $

Per Share 101.96 80.46

61,235.7

$

68.52

54,443.1 49,740.5

$ $

60.92 55.66

$ $ $ $ $ $

User Input

9% 3,692.9 330.5 345.62 24,222 23,876.38 894

35%

Company Name

ticker

Apple Inc

AAPL

10/1/2009

www.oldschoolvalue.com Stock Price Market Cap (millions) 52-Week High 52-Week Low % off 52-Week Low

AAPL 185.35 166,040 188.90 78.20 137.0%

MSFT 24.95 222,760 27.47 14.87 73.0%

IBM 118.66 155,550 122.88 69.50 72.1%

HPQ 46.33 109,850 48.00 25.39 85.9%

PALM 16.92 2,410 $18.09 1.14 1431.6%

RIMM

Industry

Ranking

67.81 38,580 Error Error #VALUE!

NA NA NA NA NA

NA NA NA NA NA

32.4 4.8 6.41 6.56 28.56 16.31 4.1 18.862

15.88 3.93 5.79 9.08 13.4 20.06 3.51 8.812

12.79 1.61 10.19 0 8.8 12.44 1.79 7.468

15.9 0.96 2.71 82.55 9.36 12.9 0.99 7.481

0 5.69 0 0 0 0 6.1 -8.445

19.07 2.92 5.49 6.93 16.81 86.02 Error Error

17.84 0.62 2.38 4.15 10.01 30.92 NA NA

1 2 2 4 1 3 NA NA

NA 0 0 0

2.01 3.96 26.58 31.71

1.84 1.27 24.7 21.53

0.68 0.91 0 10.46

NA 0 0 0

NA 0 0 0

0.01 1.71 7.28 29.02

4 3 4

11.7 4.8 39.23 13.89 11.88 124.7 48.87

-17.29 3.93 9.67 -25.55 -13.36 16.65 22.98

-13.31 1.61 3.06 17.61 15.54 18.93 -0.35

-2.07 0.96 10.13 -15.77 -7.71 31.39 8.43

-81.46 5.69 -4.97 -201.62 -427.44 0 18.42

36.8 2.92 79.45 -3.81 15.67 99.92 94.92

-4.99 0.62 29.2 -102.49 0 11.65 21.1

2 2 2 2 3 1 2

2.09 2.11 0 0

1.8 1.82 9.47 14.53

1.15 1.22 135.68 190.98

1.03 1.17 33.45 41.36

0.58 0.62 0 0

2.14 2.41 0 0

1.45 1.85 18.24 30.11

2 2 4 4

35.49 31.83 21.84 16.82 19.98 15.4 21.2 17.24 14.97 12.15

79.2 81.06 37.94 38.98 33.56 36.03 33.92 38.82 24.93 28.01

45.14 41.09 21.79 17.89 16.48 12.54 17.57 14.01 13 9.9

23.35 24 12.23 9.65 8.27 6.92 7.69 7.19 6.25 5.76

13.65 31.69 -83.11 -1.13 -90 -3.19 -102.25 -3.04 -195.37 -5.86

43.19 49.69 22.52 27.58 20.58 24.25 21.03 25.58 15.41 18.69

8.35 18.85 0 7.92 2.58 5.34 2.67 5.87 2 4.09

4 4 3 4 3 3 2 3

12.96 13.96 19.18 21.57 22.74 24

19.34 19.63 31.08 28.63 38.42 33.44

11.26 8.71 17.64 13.69 57.96 33.46

7.08 6.62 11.88 11.36 18.3 14.59

-87.72 -6.44 -204.16 -9.79 0 -14.6

25.23 23.7 33.6 30.42 34.07 30.99

3.45 6.9 7.23 13.65 8.38 14.6

3 3 3 3 4 4

1080063 161719 16.12 48.21 0.87

628355 156656 4.72 14.28 0.78

244112 31745 3.81 19.04 0.87

365125 22816 6.97 12.82 1.13

464914 -908304 4 11.98 0.45

1030820 158844 6.39 13.81 1.64

8635093 169986 5.72 8.77 1.28

NA NA NA NA 3

Valuation Ratios P/E Ratio (TTM) Price to Sales (TTM) Price to Book (MRQ) Price to Tangible Book (MRQ) Price to Cash Flow (TTM) Price to Free Cash Flow (TTM) Enterprise Value/Revenue (TTM) Enterprise Value/EBITDA (TTM)

Dividends Dividend Yield Dividend Yield - 5 Year Avg. Dividend 5 Year Growth Rate Payout Ratio (TTM)

Growth Rates Sales (MRQ) vs Qtr. 1 Yr. Ago Sales (TTM) vs TTM 1 Yr. Ago Sales - 5 Yr. Growth Rate EPS (MRQ) vs Qtr. 1 Yr. Ago EPS (TTM) vs TTM 1 Yr. Ago EPS - 5 Yr. Growth Rate Capital Spending - 5 Yr. Growth Rate

Financial Strength Quick Ratio (MRQ) Current Ratio (MRQ) LT Debt to Equity (MRQ) Total Debt to Equity (MRQ)

Profitability Gross Margin (TTM) Gross Margin - 5 Yr. Avg. EBITD Margin (TTM) EBITD - 5 Yr. Avg. Operating Margin (TTM) Operating Margin - 5 Yr. Avg. Pre-Tax Margin (TTM) Pre-Tax Margin - 5 Yr. Avg. Net Profit Margin (TTM) Net Profit Margin - 5 Yr. Avg.

3 3

Management Effectiveness Return Return Return Return Return Return

On On On On On On

Assets (TTM) Assets - 5 Yr. Avg. Investment (TTM) Investment - 5 Yr Avg Equity (TTM) Equity - 5 Yr. Avg.

Efficiency Revenue/Employee (TTM) Net Income/Employee (TTM) Receivable Turnover (TTM) Inventory Turnover (TTM) Asset Turnover (TTM)

Company Name

ticker

Apple Inc

AAPL

www.oldschoolvalue.com

10/1/2009

Figures in Millions except per share values

Net Profit Margin 15.0%

14.9%

Cash Flow (Continuing Operations) 14.6%

11344.0 10.3%

9.8%

9.6% 3.3%

9596.0

9.8%

5470.0 1.1%

1.1%

2220.0

2535.0 934.0

289.0

826.0

798.0

2006/12 5470.0

2005/12 2220.0

2004/12 2535.0

2003/12 934.0

2002/12 289.0

2001/12 89.0

2000/12 185.0

1999/12 826.0

1998/12 798.0

146.4%

-12.4%

171.4%

223.2%

224.7%

-51.9%

-77.6%

3.5%

--

-0.5% TTM 2008/09 15.0% 14.9% 2.2% % Change

2007/09 14.6%

2006/09 10.3%

2005/09 9.6%

2004/09 3.3%

2003/09 1.1%

2002/09 1.1%

2001/09 -0.5%

2000/09 9.8%

1999/09 9.8%

41.4%

7.5%

187.5%

199.9%

-1.8%

342.8%

-104.7%

0.5%

--

Magic Formula Investing -- Return on Capital 28.1%

25.0%

27.4%

23.5%

25.0%

2.6%

3.3%

2006/12 27.4%

2005/12 23.5%

2004/12 20.1%

2003/12 8.1%

2002/12 2.6%

2001/12 3.3%

-4.7% 2000/12 -4.7%

1999/12 16.2%

1998/12 13.3%

16.8%

16.7%

149.2%

206.7%

-20.3%

170.2%

-129.1%

22.1%

--

11.6%

11.6%

11.6%

11.6%

13.8%

11.0%

5.3%

Return on Assets (ROA) 12.2%

185.0

15.8% 13.3%

8.1%

10.7%

89.0

Magic Formula Investing -- Earnings Yield

20.1% 16.2%

Now 2007/12 28.1% 25.0% -8.8% % Change

TTM 2007/12 11344.0 9596.0 % Change 75.4%

Now 2007/12 5.3% 11.0% % Change 241.0%

5.2%

3.2%

4.7%

5.0%

4.1%

3.2%

2006/12 3.2%

2005/12 4.7%

2004/12 5.0%

2003/12 4.1%

2002/12 3.2%

2001/12 15.8%

-6.6% 2000/12 -6.6%

1999/12 25.0%

1998/12 5.2%

-31.0%

-7.3%

22.4%

26.9%

-79.5%

340.1%

-126.3%

380.5%

--

Return on Equity (ROE) 23.0%

24.1%

20.0%

19.9%

17.9%

19.5%

20.3%

3.4% 1.0%

1.0%

5.4% 1.6%

-0.6% 2009/06 2007/12 10.7% 12.2% % Change -11.6%

2006/12 13.8%

2005/12 11.6%

2004/12 11.6%

2003/12 3.4%

2002/12 1.0%

2001/12 1.0%

2000/12 -0.6%

1999/12 11.6%

1998/12 11.6%

19.0%

0.0%

241.2%

240.0%

0.0%

266.7%

-105.2%

0.0%

--

3.2

3.4

Current Ratio

2.1

2009/06 2007/12 2.1 2.5 4.3% % Change

1.6%

0.0%

2006/12 24.1%

2005/12 19.9%

2004/12 17.9%

2003/12 5.4%

2002/12 1.6%

2001/12 1.6%

2000/12 0.0%

1999/12 19.5%

1998/12 20.3%

21.1%

11.2%

231.5%

237.5%

0.0%

#DIV/0!

-100.0%

-3.9%

--

2.3

2.6

2.2

2.5

2006/12 2.3

2005/12 2.2

2004/12 2.9

2003/12 2.6

2002/12 2.5

2001/12 3.2

2000/12 3.4

1999/12 2.8

1998/12 2.8

5.6%

-24.4%

12.1%

4.9%

-23.2%

-4.7%

21.2%

1.3%

--

Quick Ratio 3.0

2.5

2009/06 2007/12 20.0% 23.0% -4.6% % Change

2.4

2.6

2.5

2.2

2.8

2.9

2.8 2.1

2006/12 2.4

2005/12 2.2

2004/12 3.0

2003/12 2.6

2002/12 2.5

2001/12 3.2

2000/12 3.4

1999/12 2.8

1998/12 2.8

5.3%

-24.2%

12.3%

5.4%

-23.1%

-4.1%

20.7%

1.5%

--

2.4

2009/06 2007/12 2.1 2.4 4.4% % Change

3.2

3.4 2.8

2.8

Company Name

ticker

Apple Inc

AAPL

10/1/2009

Figures in Millions except per share values

www.oldschoolvalue.com

Company Assessment: Quantitative Valuation

Criteria over 5yrs

DCF Valuation Discount

> 25% or 50% depending on moat

0%

0

Graham Intrinsic Value Discount

> 66%

0%

0

Criteria over 5yrs

Margins, Profit and Growth Median Revenue growth Median Gross Margin Median Operating Margin Median Net Margin Median EPS growth

30% 15% 10% 10%

Criteria over 5yrs

Cash growth from Operations CROIC is postive and capable of paying off financing Median FCF growth positive and consistent Median FCF/Sales Consistent ROE (manually check) Consistent ROA (manually check)

15% 13% 10% 7% Consistent over 10yrs Consistent over 10yrs

Criteria for TTM

Balance Sheet Current assets > 1.5 x current liabilities Price to Book ratio < 2 Debt to Equity FCF to Debt Capitalization Ratio Intangibles % of assets

User Points

Points

Value 40.7% 29.0% 12.3% 9.9% 121.8%

10%

Business and Management Performance

Value

Points

Value 80.3% 15.2% 130.9% 8.5% N/A N/A

N/A

2.5 7.95

< 100%

88.2%

> 10%

22.7%

< 30%

0%

< 15% of assets

1.0%

User Points

2 1 2 1 N/A N/A Points

Value

> 1.5 x current liabilities

User Points

2 0 0 0 2

1 N/A 1 2 2 2

User Points N/A

Company Assessment: Qualitative

Apple Inc.designs, manufactures, and markets personal computers, portable digital music players, and mobile communication devices and sells a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. In addition, the Company sells a variety of third-party Macintosh (Mac), iPod and iPhone compatible products, including application software, printers, storage devices, speakers, headphones, and various other accessories and peripherals through its online and retail stores, , and digital content through the iTunes Store. It sells to consumer, small and mid-sized business (SMB), education, enterprise, government, and creative customers.

Competitive Advantage Stable market share? Dominant company in industry, segment? Low barriers to entry and exit? Experience goods (brand effect, trademarks) High switching costs? Network effect? E.g. eBay

Comment

User Points

Max Points max 2 max 2 max 2 max 2 max 2 max 2

Business Model

Comment

User Points

Max Points

Growth due to: a) existing product / existing market (yes/no) b) existing product / new market (yes/no) c) new product / existing market (yes/no) d) new product / new market (yes/no) Able to increase prices and retain customers? Compete on price? (1 for no, 0 for yes) Barriers of entry to the business? Diverse customers? (1 for diverse, 0 for concentrated) Involved in competition? Monopoly, duopoly, crowded Company has a recurring revenue stream? Capital intensive company? (1 for no, 0 for yes)

a) Yes b) No c) No d) NO

max 2

max 1 max 1 max 1 max 1 max 2 max 1 max 1

Management High insider ownership? Candid management on positives and negatives? Management performance at previous jobs? Compensation levels compared to sales?

Comment

User Points

Max Points max 1 max 1 max 1 max 1

Industry Boring industry? (1 for slow, 0 for fast industry) Can company adapt to changing industry environment? Industry leader or lagger? (1 for leader, 0 for lagger)

Comment

User Points

Max Points max 1 max 1 max 1

Psychological Factors to Consider. Not Weighted.

Comment No No Yes No No

Recency bias? Hindsight bias? Framing issues correctly and in different manners? Is there a data framing bias? Am I too overconfident on the situation? Performed probability analysis for -ve factors? Too much loss aversion? Sunk cost mentality? Slow in changing opinion? Psychological denial ? Bias from commitment and consistency tendency? Pavlovian association? Social proof bias? Status quo bias? False consensus bias? st Category

Total Points out of 5

Valuation Margins, Profit and Growth Business and Management Performance Balance Sheet Competitive Advantage Business Model Management

Low Risk 2.5 2.5

High Growth 5.0 5.0

Under Valued 0.0

0.0 2.0 3.0 4.0 0.0 0.0 0.0

Well Managed 4.5 4.5

Good Financial Health 5.0 5.0

Low Risk 5.0 4.0 Strong Moat

3.0

High Growth

2.0 1.0 0.0

Good Financial Health

Under Valued

Well Managed

Strong Moat 4.0 4.0