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 www.oldschoolvalue.com AAPL
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 EPV Valuation Graham Valuation DCF Valuation Current Price
Total Net Reprod. Cost $ 10.57 EPV $ 68.52 Graham Price $ 102.87 DCF Price $ 161.07 $ 183.62
Reprod. Cost of Assets BV $ 36.95 Normalized Income $ 3,692.87 Growth Rate 30% Growth Rate 20%
Tangible BV $ 30.26 Discount Rate 9% Normalized EPS $ 2.03 Discount Rate 9%
NNWC $ 7.31 Margin of Safety 0% Margin of Safety 0% Margin of Safety 0%

Key Statistics Financial Strength Margins & Profitability

Market Cap (millions) 166,040 Quick Ratio (MRQ) 2.09 Gross (TTM) 35.49 Operating (TTM) 19.98 Net Profit (TTM) 14.97
52-Week High 188.90 Current Ratio (MRQ) 2.11 Gross - 5 Yr. Avg. 31.83 Operating - 5 Yr. Avg. 15.4 Net Profit - 5 Yr. Avg. 12.15
52-Week Low 78.20 LT Debt to Equity (MRQ) 0 EBITD (TTM) 21.84 Pre-Tax (TTM) 21.2
% off 52-Week Low 137.0% Total Debt to Equity (MRQ) 0 EBITD - 5 Yr. Avg. 16.82 Pre-Tax - 5 Yr. Avg. 17.24

Valuation Ratios Growth Stats Management Effective Efficiency

P/E Ratio (TTM) 32.4 Sales (MRQ) vs Qtr. 1 Yr. Ago 11.7 ROA (TTM) 12.96 Revenue/Employee (TTM)1080063
Price to Sales (TTM) 4.8 Sales (TTM) vs TTM 1 Yr. Ago 4.8 ROA - 5 Yr. Avg. 13.96 Net Income/Employee (TTM)
161719
Price to Book (MRQ) 6.41 Sales - 5 Yr. Growth Rate 39.23 ROI (TTM) 19.18 Receivable Turnover (TTM)16.12
Price to Tangible Book (MRQ) 6.56 EPS (MRQ) vs Qtr. 1 Yr. Ago 13.89 ROI - 5 Yr Avg 21.57 Inventory Turnover (TTM) 48.21
Price to Cash Flow (TTM) 28.56 EPS (TTM) vs TTM 1 Yr. Ago 11.88 ROE (TTM) 22.74 Asset Turnover (TTM) 0.87
Price to Free Cash Flow (TTM) 16.31 EPS - 5 Yr. Growth Rate 124.7 ROE - 5 Yr. Avg. 24
Enterprise Value/Revenue (TTM) 4.1 Capital Spending - 5 Yr. Grwth 48.87
Enterprise Value/EBITDA (TTM) 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
2003-2007 2004-2008 2003-2006 2004-2007 2005-2008 2003-2005 2004-2006 2005-2007 2006-2008 Median
Shareholder Equity 36.3% 42.5% 33.6% 41.8% 40.7% 33.8% 40.3% 38.8% 44.7% 40.3%
Free Cash Flow 261.6% 102.6% 342.3% 130.9% 49.8% 734.7% 149.6% 56.7% 64.6% 130.9%
CROIC 14.7% 15.7% 9.7% 15.2% 16.3% 4.7% 14.7% 15.7% 16.9% 15.2%
FCF/Sales 8.1% 9.0% 5.5% 8.5% 10.9% 3.0% 8.1% 9.0% 12.8% 8.5%
ROA 13.6% 13.8% 8.7% 13.7% 14.4% 3.7% 13.6% 13.8% 14.9% 13.7%
ROE 21.3% 22.8% 13.6% 22.0% 25.0% 5.9% 21.3% 22.8% 27.2% 22.0%
Revenue Growth 40.2% 40.7% 46.0% 42.6% 32.6% 49.8% 52.7% 31.3% 29.7% 40.7%
Gross Margin 29.0% 29.0% 28.2% 29.0% 31.5% 27.5% 29.0% 29.0% 34.0% 29.0%
Operating Margin 11.8% 12.7% 7.9% 12.3% 15.5% 3.9% 11.8% 12.7% 18.4% 12.3%
Net Margin 9.6% 10.3% 6.5% 9.9% 12.4% 3.3% 9.6% 10.3% 14.6% 9.9%
Earnings Growth 150.4% 96.4% 183.1% 121.8% 50.9% 295.0% 151.1% 58.7% 53.7% 121.8%
Cash from Ops Growth 108.6% 79.0% 97.3% 80.3% 55.8% 196.2% 54.2% 46.9% 107.9% 80.3%
 Margin Percentages
40.00%

35.00% 34.31%
33.97%
30.00%
29.02% 28.98%
27.65% 27.13% 27.92% 27.52% 27.29%
25.00%
23.03%
20.00% 19.32%
18.37% Gross Margin
15.00% 14.56% 14.88% Operating Margin
11.84% 12.70%
Net Margin
10.00% 9.80% 9.85% 9.58% 10.30%

5.85% 6.54%
5.00%
3.94%
3.33%
1.13%
0.30% 1.11%
0.00% -0.47% -0.02%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-5.00%
-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%
$15,000.0 20.0% CROIC

FCF 15.0% FCF/Sales

$10,000.0
Shareholder Equity 10.0% ROA
$5,000.0 5.0% ROE
0.0%
$-
-5.0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
$(5,000.0) -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
$25,000.0 Last 5 yrs
Sales $2,000.0 Last 4 yrs
$20,000.0
Accts Receivable $1,500.0 Last 3 yrs
$15,000.0
Inventory Last 2 yrs
$1,000.0
$10,000.0
Last 1 yr
$5,000.0 $500.0
PPE
$- $-
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 TTM 2002 2003 2004 2005 2006 2007 2008 TTM
Company Name ticker
Apple Inc www.oldschoolvalue.com AAPL
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 $ 6,134.0 $ 7,983.0 $ 5,363.0 $ 5,742.0 $ 6,207.0 $ 8,279.0 $ 13,931.0 $ 19,315.0 $ 24,006.0 $ 32,479.0 $ 34,562.0
% change from last year 23.2% -48.9% 6.6% 7.5% 25.0% 40.6% 27.9% 19.5% 26.1% 6.0%
COGS $ 4,438.0 $ 5,817.0 $ 4,128.0 $ 4,139.0 $ 4,499.0 $ 6,020.0 $ 9,888.0 $ 13,717.0 $ 15,852.0 $ 21,334.0 $ 22,297.0
COGS (%) 72.4% 72.9% 77.0% 72.1% 72.5% 72.7% 71.0% 71.0% 66.0% 65.7% 64.5%

Gross Profit $ 1,696.0 $ 2,166.0 $ 1,235.0 $ 1,603.0 $ 1,708.0 $ 2,259.0 $ 4,043.0 $ 5,598.0 $ 8,154.0 $ 11,145.0 $ 12,265.0

Gross Profit (%) 27.6% 27.1% 23.0% 27.9% 27.5% 27.3% 29.0% 29.0% 34.0% 34.3% 35.5%

Operating Expenses
SG&A $ 996.0 $ 1,166.0 $ 1,138.0 $ 1,111.0 $ 1,212.0 $ 1,421.0 $ 1,859.0 $ 2,433.0 $ 2,963.0 $ 3,761.0 $ 4,085.0
SG&A (%) 16.2% 14.6% 21.2% 19.3% 19.5% 17.2% 13.3% 12.6% 12.3% 11.6% 11.8%
R&D $ 314.0 $ 380.0 $ 441.0 $ 447.0 $ 471.0 $ 489.0 $ 534.0 $ 712.0 $ 782.0 $ 1,109.0 $ 1,273.0
R&D (%) 5.1% 4.8% 8.2% 7.8% 7.6% 5.9% 3.8% 3.7% 3.3% 3.4% 3.7%
Other $ 27.0 $ 98.0 $ - $ 28.0 $ 26.0 $ 23.0 $ - $ - $ - $ - $ -
Other (%) 0.4% 1.2% 0.0% 0.5% 0.4% 0.3% 0.0% 0.0% 0.0% 0.0% 0.0%

Operating Income $ 359.0 $ 522.0 $ (344.0) $ 17.0 $ (1.0) $ 326.0 $ 1,650.0 $ 2,453.0 $ 4,409.0 $ 6,275.0 $ 6,907.0

Operating Income (%) 5.9% 6.5% -6.4% 0.3% 0.0% 3.9% 11.8% 12.7% 18.4% 19.3% 20.0%

Other Income and Expense

Net Int Inc & Other $ 317.0 $ 570.0 $ 292.0 $ 70.0 $ 93.0 $ 57.0 $ 165.0 $ 365.0 $ 599.0 $ 620.0 $ 421.0
Earnings Before Taxes $ 676.0 $ 1,092.0 $ (52.0) $ 87.0 $ 92.0 $ 383.0 $ 1,815.0 $ 2,818.0 $ 5,008.0 $ 6,895.0 $ 7,328.0
Income Taxes $ 75.0 $ 306.0 $ (15.0) $ 22.0 $ 24.0 $ 107.0 $ 480.0 $ 829.0 $ 1,512.0 $ 2,061.0 $ 2,153.0
Tax Rate % 11.1% 28.0% 28.8% 25.3% 26.1% 27.9% 26.4% 29.4% 30.2% 29.9% 29.4%
Earnings After Taxes $ 601.0 $ 786.0 $ (37.0) $ 65.0 $ 68.0 $ 276.0 $ 1,335.0 $ 1,989.0 $ 3,496.0 $ 4,834.0 $ 5,175.0
Acctg Changes $ - $ - $ 12.0 $ - $ 1.0 $ - $ - $ - $ - $ - $ -
Disc Operations $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Ext Items $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Net Income $ 601.0 $ 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

Net Income (%) 9.8% 9.8% -0.5% 1.1% 1.1% 3.3% 9.6% 10.3% 14.6% 14.9% 15.0%
Diluted EPS, Cont Ops$ $ 0.9 $ 1.1 $ (0.1) $ 0.1 $ 0.1 $ 0.4 $ 1.6 $ 2.3 $ 3.9 $ 5.4 $ 5.7
Diluted EPS$ $ 0.9 $ 1.1 $ (0.0) $ 0.1 $ 0.1 $ 0.4 $ 1.6 $ 2.3 $ 3.9 $ 5.4 $ 5.7
Shares 696 720 691 723 726 774 856 877 889 902 904

Balance Sheet

Assets
Cash and Equiv $ 1,326.0 $ 1,191.0 $ 2,310.0 $ 2,252.0 $ 3,396.0 $ 2,969.0 $ 3,491.0 $ 6,392.0 $ 9,352.0 $ 11,875.0 $ 5,605.0
Short-Term Investments $ 1,900.0 $ 2,836.0 $ 2,026.0 $ 2,085.0 $ 1,170.0 $ 2,495.0 $ 4,770.0 $ 3,718.0 $ 6,034.0 $ 12,615.0 $ 18,617.0
Accts Rec $ 681.0 $ 953.0 $ 466.0 $ 565.0 $ 766.0 $ 774.0 $ 895.0 $ 1,252.0 $ 1,637.0 $ 2,422.0 $ 2,686.0
% change from last year 28.5% -104.5% 17.5% 26.2% 1.0% 13.5% 28.5% 23.5% 32.4% 9.8%
Inventory $ 20.0 $ 33.0 $ 11.0 $ 45.0 $ 56.0 $ 101.0 $ 165.0 $ 270.0 $ 346.0 $ 509.0 $ 380.0
% change from last year 39.4% -200.0% 75.6% 19.6% 44.6% 38.8% 38.9% 22.0% 32.0% -33.9%
Other Current Assets $ 358.0 $ 414.0 $ 330.0 $ 441.0 $ 499.0 $ 716.0 $ 979.0 $ 2,877.0 $ 4,587.0 $ 7,269.0 $ 7,882.0

Total Current Assets $ 4,285.0 $ 5,427.0 $ 5,143.0 $ 5,388.0 $ 5,887.0 $ 7,055.0 $ 10,300.0 $ 14,509.0 $ 21,956.0 $ 34,690.0 $ 35,170.0
Net PP&E $ 318.0 $ 313.0 $ 564.0 $ 621.0 $ 669.0 $ 707.0 $ 817.0 $ 1,281.0 $ 1,832.0 $ 2,455.0 $ 2,653.0
Intangibles $ - $ - $ - $ 119.0 $ 109.0 $ 97.0 $ 96.0 $ 177.0 $ 337.0 $ 492.0 $ 466.0
Other Long-Term Assets $ 558.0 $ 1,063.0 $ 314.0 $ 170.0 $ 150.0 $ 191.0 $ 338.0 $ 1,238.0 $ 1,222.0 $ 1,935.0 $ 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

Liabilities & Stockholders' Equity

Accts Payable $ 812.0 $ 1,157.0 $ 801.0 $ 911.0 $ 1,154.0 $ 1,451.0 $ 1,779.0 $ 3,390.0 $ 4,970.0 $ 5,520.0 $ 4,854.0
Short-Term Debt $ - $ - $ - $ - $ 304.0 $ - $ - $ - $ - $ - $ -
Taxes Payable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Accrued Liabilities $ 737.0 $ 776.0 $ 717.0 $ 747.0 $ 899.0 $ 1,229.0 $ 1,705.0 $ 3,081.0 $ 4,329.0 $ 8,572.0 $ 3,338.0
Other Short-Term
Liabilities $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 8,469.0

Total Current Liabilities $ 1,549.0 $ 1,933.0 $ 1,518.0 $ 1,658.0 $ 2,357.0 $ 2,680.0 $ 3,484.0 $ 6,471.0 $ 9,299.0 $ 14,092.0 $ 16,661.0
Long-Term Debt $ 300.0 $ 300.0 $ 317.0 $ 316.0 $ - $ - $ - $ - $ - $ - $ -
Other Long-Term
Liabilities $ 208.0 $ 463.0 $ 266.0 $ 229.0 $ 235.0 $ 294.0 $ 601.0 $ 750.0 $ 1,516.0 $ 4,450.0 $ 5,591.0

Total Liabilities $ 2,057.0 $ 2,696.0 $ 2,101.0 $ 2,203.0 $ 2,592.0 $ 2,974.0 $ 4,085.0 $ 7,221.0 $ 10,815.0 $ 18,542.0 $ 22,252.0
Total Equity $ 3,104.0 $ 4,107.0 $ 3,920.0 $ 4,095.0 $ 4,223.0 $ 5,076.0 $ 7,466.0 $ 9,984.0 $ 14,532.0 $ 21,030.0 $ 25,888.0

Total Liabilities & Equity $ 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

Cash Flows Statement

Cash Flows From Operating Activities

Net Income $ 601.0 $ 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
Depr & Amort $ 85.0 $ 84.0 $ 102.0 $ 118.0 $ 113.0 $ 150.0 $ 179.0 $ 225.0 $ 317.0 $ 473.0 $ 640.0
Deferred Taxes $ (35.0) $ 163.0 $ (36.0) $ (34.0) $ (11.0) $ 20.0 $ 52.0 $ 53.0 $ 78.0 $ - $ -
Other $ 147.0 $ (207.0) $ 144.0 $ (60.0) $ 118.0 $ 488.0 $ 969.0 $ (47.0) $ 1,579.0 $ 4,289.0 $ 5,529.0

Cash from Operations $ 798.0 $ 826.0 $ 185.0 $ 89.0 $ 289.0 $ 934.0 $ 2,535.0 $ 2,220.0 $ 5,470.0 $ 9,596.0 $ 11,344.0

Cash Flows From Investing Activities

Cap Ex $ (47.0) $ (107.0) $ (232.0) $ (174.0) $ (164.0) $ (176.0) $ (260.0) $ (657.0) $ (735.0) $ (1,091.0) $ (1,088.0)
Purchase of Business $ - $ - $ - $ (52.0) $ - $ - $ - $ - $ - $ - $ -
Other $ (917.0) $ (823.0) $ 1,124.0 $ (26.0) $ 992.0 $ (1,312.0) $ (2,296.0) $ 1,014.0 $ (2,514.0) $ (7,098.0) $ (14,568.0)

Cash from Investing $ (964.0) $ (930.0) $ 892.0 $ (252.0) $ 828.0 $ (1,488.0) $ (2,556.0) $ 357.0 $ (3,249.0) $ (8,189.0) $ (15,656.0)

Cash Flows From Financing Activities

Net Issuance of Stock $ 11.0 $ (31.0) $ 42.0 $ 105.0 $ 27.0 $ 427.0 $ 543.0 $ (37.0) $ 362.0 $ 483.0 $ 360.0
Net Issuance of Debt $ - $ - $ - $ - $ - $ (300.0) $ - $ - $ - $ - $ -
Dividends $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other $ - $ - $ - $ - $ - $ - $ - $ 361.0 $ 377.0 $ 633.0 $ 184.0

Cash from Financing $ 11.0 $ (31.0) $ 42.0 $ 105.0 $ 27.0 $ 127.0 $ 543.0 $ 324.0 $ 739.0 $ 1,116.0 $ 544.0
Currency Adj $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Change in Cash $ (155.0) $ (135.0) $ 1,119.0 $ (58.0) $ 1,144.0 $ (427.0) $ 522.0 $ 2,901.0 $ 2,960.0 $ 2,523.0 $ (3,768.0)

Free Cash Flow

Cash from Operations $ 798.0 $ 826.0 $ 185.0 $ 89.0 $ 289.0 $ 934.0 $ 2,535.0 $ 2,220.0 $ 5,470.0 $ 9,596.0 $ 11,344.0
Cap Ex $ (47.0) $ (107.0) $ (232.0) $ (174.0) $ (164.0) $ (176.0) $ (260.0) $ (657.0) $ (735.0) $ (1,091.0) $ (1,088.0)

Free Cash Flow $ 639.0 $ 763.0 $ (155.0) $ 9.0 $ 18.0 $ 250.0 $ 1,254.0 $ 1,557.0 $ 3,078.0 $ 4,216.0 $ 4,727.0
Book Value Per Share $ 4.46 $ 5.70 $ 5.67 $ 5.66 $ 5.82 $ 6.56 $ 8.72 $ 11.38 $ 16.35 $ 23.31 $ 28.64
Company Name ticker
Apple Inc AAPL
10/1/2009 User Growth www.oldschoolvalue.com Figures in Millions except per share values
20.00%
Desired MOS Growth Discount % Price Share Value Buy under Actual D/C % 52Wk High 52Wk Low
User Input Params
50% 20.0% 9.0% $ 185.35 $ 161.07 $ 80.53 0% $188.90 $78.20
Financial Data
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Income Sheet Data
Revenue $ 6,134.0 $ 7,983.0 $ 5,363.0 $ 5,742.0 $ 6,207.0 $ 8,279.0 $ 13,931.0 $ 19,315.0 $ 24,006.0 $ 32,479.0
Gross Profit $ 1,696.0 $ 2,166.0 $ 1,235.0 $ 1,603.0 $ 1,708.0 $ 2,259.0 $ 4,043.0 $ 5,598.0 $ 8,154.0 $ 11,145.0
Operating Income $ 359.0 $ 522.0 $ (344.0) $ 17.0 $ (1.0) $ 326.0 $ 1,650.0 $ 2,453.0 $ 4,409.0 $ 6,275.0
Net Income $ 601.0 $ 786.0 $ (25.0) $ 65.0 $ 69.0 $ 276.0 $ 1,335.0 $ 1,989.0 $ 3,496.0 $ 4,834.0
Diluted EPS $ 0.9 $ 1.1 $ (0.0) $ 0.1 $ 0.1 $ 0.4 $ 1.6 $ 2.3 $ 3.9 $ 5.4

Cash Flow Data

Cash from Operations $ 798.0 $ 826.0 $ 185.0 $ 89.0 $ 289.0 $ 934.0 $ 2,535.0 $ 2,220.0 $ 5,470.0 $ 9,596.0
Free Cash Flow $ 639.0 $ 763.0 $ (155.0) $ 9.0 $ 18.0 $ 250.0 $ 1,254.0 $ 1,557.0 $ 3,078.0 $ 4,216.0
Capex $ 47.0 $ 107.0 $ 232.0 $ 174.0 $ 164.0 $ 176.0 $ 260.0 $ 657.0 $ 735.0 $ 1,091.0

Balance Sheet Data

Current Assets $ 4,285.0 $ 5,427.0 $ 5,143.0 $ 5,388.0 $ 5,887.0 $ 7,055.0 $ 10,300.0 $ 14,509.0 $ 21,956.0 $ 34,690.0
Current Liabilities $ 1,549.0 $ 1,933.0 $ 1,518.0 $ 1,658.0 $ 2,357.0 $ 2,680.0 $ 3,484.0 $ 6,471.0 $ 9,299.0 $ 14,092.0
Total Liabilities $ 2,057.0 $ 2,696.0 $ 2,101.0 $ 2,203.0 $ 2,592.0 $ 2,974.0 $ 4,085.0 $ 7,221.0 $ 10,815.0 $ 18,542.0
Tangible Shareholder Equity $ 3,104.0 $ 4,107.0 $ 3,920.0 $ 3,976.0 $ 4,114.0 $ 4,979.0 $ 7,370.0 $ 9,807.0 $ 14,195.0 $ 20,538.0

Margins
Gross Margin 27.65% 27.13% 23.03% 27.92% 27.52% 27.29% 29.02% 28.98% 33.97% 34.31%
Operating Margin 5.85% 6.54% -6.41% 0.30% -0.02% 3.94% 11.84% 12.70% 18.37% 19.32%
Net Margin 9.80% 9.85% -0.47% 1.13% 1.11% 3.33% 9.58% 10.30% 14.56% 14.88%
Current Assets>1.5 times 276.6% 280.8% 338.8% 325.0% 249.8% 263.2% 295.6% 224.2% 236.1% 246.2%

Efficiency & Profitability

CROIC 17.7% 15.7% -3.4% 0.2% 0.4% 4.7% 15.7% 14.7% 19.6% 16.9%
FCF/Sales 10.4% 9.6% -2.9% 0.2% 0.3% 3.0% 9.0% 8.1% 12.8% 13.0%
Inventory Turnover 221.9 176.3 375.3 92.0 80.3 59.6 59.9 50.8 45.8 41.9
Return On Assets (ROA) 12.72% 13.14% -0.39% 1.06% 1.05% 3.71% 13.62% 13.83% 16.43% 14.89%
Retun On Equity (ROE) 27.04% 22.51% -0.63% 1.62% 1.66% 5.94% 21.29% 22.80% 28.52% 27.19%

Debt Related
Debt to Equity 66.3% 65.6% 53.6% 53.8% 61.4% 58.6% 54.7% 72.3% 74.4% 88.2%
Capitalization Ratio 8.8% 6.8% 7.5% 7.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
FCF to Debt 31.1% 28.3% -7.4% 0.4% 0.7% 8.4% 30.7% 21.6% 28.5% 22.7%

Multi-Year Performance
2003-2007 2004-2008 2003-2006 2004-2007 2005-2008 2003-2005 2004-2006 2005-2007 2006-2008 Median
Shareholder Equity 36.3% 42.5% 33.6% 41.8% 40.7% 33.8% 40.3% 38.8% 44.7% 40.3%
Free Cash Flow 261.6% 102.6% 342.3% 130.9% 49.8% 734.7% 149.6% 56.7% 64.6% 130.9%
CROIC 14.7% 15.7% 9.7% 15.2% 16.3% 4.7% 14.7% 15.7% 16.9% 15.2%
FCF/Sales 8.1% 9.0% 5.5% 8.5% 10.9% 3.0% 8.1% 9.0% 12.8% 8.5%
ROA 13.6% 13.8% 8.7% 13.7% 14.4% 3.7% 13.6% 13.8% 14.9% 13.7%
ROE 21.3% 22.8% 13.6% 22.0% 25.0% 5.9% 21.3% 22.8% 27.2% 22.0%
Revenue Growth 40.2% 40.7% 46.0% 42.6% 32.6% 49.8% 52.7% 31.3% 29.7% 40.7%
Gross Margin 29.0% 29.0% 28.2% 29.0% 31.5% 27.5% 29.0% 29.0% 34.0% 29.0%
Operating Margin 11.8% 12.7% 7.9% 12.3% 15.5% 3.9% 11.8% 12.7% 18.4% 12.3%
Net Margin 9.6% 10.3% 6.5% 9.9% 12.4% 3.3% 9.6% 10.3% 14.6% 9.9%
Earnings Growth 150.4% 96.4% 183.1% 121.8% 50.9% 295.0% 151.1% 58.7% 53.7% 121.8%
Cash from Ops Growth 108.6% 79.0% 97.3% 80.3% 55.8% 196.2% 54.2% 46.9% 107.9% 80.3%

Projection of future Free Cash Flow

Growing at 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
20% $ 5,059 $ 6,071 $ 7,285 $8,173.89 $9,645.19 $11,381.32 $13,429.96 $14,013.60 $16,283.80 $18,921.78
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
$ 19,489.43 $ 20,074.11 $ 20,676.33 $ 21,296.62 $ 21,935.52 $ 22,593.59 $ 23,271.40 $ 23,969.54 $ 24,688.63 $ 25,429.28

Company Valuation Free Cash Flow and Tangible Shareholder Equity Trend
Total Value $ 143,948 $25,000.0
$20,538.0
FCF Shareholder Equity
Shares Outstanding 893.71 893.71
$20,000.0
Per Share Value $ 161.07 $14,195.0
Margin of Safety 50% $15,000.0
$9,807.0
Purchase Price $ 80.53 $7,370.0
$10,000.0
Current Price $ 185.35 $4,979.0 $4,216.0
$3,104.0 $4,107.0 $3,920.0 $3,976.0 $4,114.0 $3,078.0
Actual Discount 0% $5,000.0
$639.0 $763.0 $(155.0) $9.0 $1,254.0 $1,557.0
$18.0 $250.0
Enterprise Value $ 141,840.00
$-
Enterprise Value/EBITDA 18.859
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
$(5,000.0)
 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%
21.3% 8.7% 21.3%
13.6% 13.6%
200.0% 22.0%
13.7% 295.0%
22.8%
150.0% 13.8% 27.2%
183.1% 25.0% 22.8%
150.4% 151.1% 14.9%
121.8% 14.4% 13.8%
100.0% 96.4% 53.7%
50.9% 58.7%

12.4% 14.6%
50.0% 9.6% 10.3% 9.9% 9.6% 10.3%
6.5% 15.5% 18.4%
11.8% 12.7% 7.9% 12.3% 3.3%
3.9% 11.8% 12.7%
29.0% 29.0% 28.2% 29.0% 31.5% 27.5% 29.0% 29.0% 34.0%
0.0%
2003-2007 2004-2008 2003-2006 2004-2007 2005-2008 2003-2005 2004-2006 2005-2007 2006-2008

Margin Percentages
40.00%
33.97% 34.31%
35.00%
27.65% 27.92% 29.02% 28.98%
30.00% 27.13% 27.52% 27.29%
23.03%
25.00% Gross Margin
18.37% 19.32%
Operating Margin
20.00% 14.88%
14.56%
11.84% 12.70% Net Margin
15.00% 9.80% 9.85% 10.30%
9.58%
10.00% 5.85% 6.54%
3.94%
3.33%
5.00% 1.13%
0.30% 1.11%
-0.02%
-0.47%
0.00%
-6.41%
-5.00% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-10.00%

Efficiency & Profitability Debt

35.0% 100.0%
CROIC FCF/Sales ROA ROE Debt to Equity Capitalization Ratio FCF to Debt
30.0%
80.0%
25.0%
60.0%
20.0%

15.0% 40.0%

10.0%
20.0%
5.0%
0.0%
0.0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-5.0% -20.0%
-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
Company Name ticker
Apple Inc www.oldschoolvalue.com AAPL
10/1/2009 Figures in Millions except per share values
Desired MOS Growth Discount % Price Share Value Buy under Actual D/C % 52Wk High 52Wk Low
50% 20.0% 9% $ 185.35 $ 161.07 $ 80.53 0% $ 188.90 $ 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 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

-50
Company Name ticker
Apple Inc AAPL
10/1/2009 User Growth Figures in Millions except per share values
30.00% www.oldschoolvalue.com
Desired MOS Growth Price Actual DC% Share Value Buy under P/B Ratio Net Net Working Capital 9
User Input Params
66% 30.0% $ 183.62 0% $ 102.87 $ 34.97 7.95 $ 4.67

Earnings
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
$ 0.90 $ 1.09 $ (0.04) $ 0.09 $ 0.10 $ 0.36 $ 1.56 $ 2.27 $ 3.93 $ 5.36
Diluted EPS
2009 2010 2011 2012
$ 2.99 $ 3.92 $ 5.13 $ 5.56

Multi-Year Performance Median

2003-2007 2004-2008 2003-2006 2004-2007 2005-2008 2003-2005 2004-2006 2005-2007 2006-2008
Earnings Growth 150.4% 96.4% 183.1% 121.8% 50.9% 295.0% 151.1% 58.7% 53.7% 121.8%
EPS Weighted Average $ 1.64 $ 2.70 $ 1.07 $ 2.03 $ 3.28 $ 0.67 $ 1.40 $ 2.59 $ 3.85 $2.0

Company Stats $6.00 $5.36

Normal Earnings $ 2.03 EPS

$5.00 Linear (EPS)

Expected 5 Year Growth 30.00%
20 yr A Corp Bond Rate 6.26 $3.93 $3.92
$4.00
Book Value Per Share 23.31 $2.99
Price to Book Ratio 7.95 $3.00
$2.27
Enterprise Value Per Share $ 158.71
$2.00 $1.56
$0.90 $1.09
Company Valuation $1.00 $0.36
Per Share Value $ 102.87 $0.09 $0.10
$-
Desired MOS 66.00%
1999 2000 $(0.04)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Purchase Price $ 34.97 $(1.00)
Current Price $ 185.35
Actual Discount 0%
 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 % EPV Net Reprod. Cost Current Price MOS % Tangible BV NNWC
9% $ 68.52 $10.57 $ 185.35 0% $ 30.26 $ 7.31
Reproduction Asset Value
Quarterly numbers based on: 2009 Q3 Data Source
Statement Source Date: 22-Jul-09 MSN
Adjust Reproduction
Assets Book Value +/- Multiplier Asset Value 2002 2003 2004 2005 2006 2007 2008 TTM
CAPEX
Cash & Equivalents $ 24,222.0 $ 24,222.0 (statements) $ 174.0 $ 164.0 $ 176.0 $ 260.0 $ 657.0 $ 735.0 $ 1,091.0 $ 1,088.0
Marketable Securities $ 18,617.0 $ 18,617.0 Last 6 yrs
Accounts Receivable - Gross $ 2,686.0 $ 2,686.0 Last 5 yrs
Other Receivable $ 1,494.0 $ 1,494.0 Last 4 yrs
Receivables $ 4,180.0 $ 4,180.0 Last 3 yrs $ 513.0 $ 570.0 $ 514.0 $ 600.0 $ 1,093.0 $ 1,652.0 $ 2,483.0 $ 2,914.0
Inventories: Raw Materials $ - Last 2 yrs $ 406.0 $ 338.0 $ 340.0 $ 436.0 $ 917.0 $ 1,392.0 $ 1,826.0 $ 2,179.0
Inventories: Work in Progress $ - Last 1 yr $ 174.0 $ 164.0 $ 176.0 $ 260.0 $ 657.0 $ 735.0 $ 1,091.0 $ 1,088.0
Inventories: Purchased
Components $ - PPE $ 621.0 $ 669.0 $ 707.0 $ 817.0 $ 1,281.0 $ 1,832.0 $ 2,455.0 $ 2,653.0
Inventories: Finished Goods $ - Sales $ 5,742.0 $ 6,207.0 $ 8,279.0 $ 13,931.0 $ 19,315.0 $ 24,006.0 $ 32,479.0 $ 34,562.0
Inventories: Other $ 380.0 R&D $ 447.0 $ 471.0 $ 489.0 $ 534.0 $ 712.0 $ 782.0 $ 1,109.0 $ 1,273.0
Inventories -- Total $ 380.0 $ 380.0 $3,500.0
Prepaid Expenses $ - $ -
Current Defered Income Taxes $ 1,731.0 $ 1,731.0
$3,000.0
Other Current Assets $ 6,388.0 $ 6,388.0
Total Current Assets $ 36,901.0 $ 36,901.0
$2,500.0 Last 6 yrs
Goodwill, Net $ 207.0 0% $ 0.0
Intangibles, Net $ 370.0 0% $ 0.0 Last 5 yrs
Intangibles $ 577.0 $ 0.0 $2,000.0
Last 4 yrs
Property/Plant/Equipment - Net $ 2,653.0 $ 2,653.0 Last 3 yrs
Long Term Investments $ 6,899.0 $ 6,899.0 $1,500.0
Note Receivable - Long Term $ - $ - Last 2 yrs
Other Long Term Assets, Total $ 2,841.0 $ 2,841.0 $1,000.0 Last 1 yr
Total Assets $ 49,871.0 $ 49,294.0
PPE
$500.0
Reproduction
Liabilities & Equity Book Value Corrected BV Multiplier Asset Value $-
Accounts Payable $ 4,854.0 $ 4,854.0 2002 2003 2004 2005 2006 2007 2008 TTM
Accrued Expenses $ 933.0 $ 933.0
Accrued Liabilities $ - $ - Asset Valuation Asset Valuation Data
Notes Payable/Short Term Debt $ - $ - Total Per Share Shares Outstanding 893.7 893.71
Current Port. of LT Debt/Capital Tangible BV $ 27,042 $ 30.26
Leases $ - $ - Balance Sheet Assets $ 49,871.0
Other Current Liabilities $ 10,874.0 $ 10,874.0 Adjusted BV $ 27,042 $ 30.26 Adjusted Assets $ 49,294.0
Total Current Liabilities $ 16,661.0 $ 16,661.0 NNWC $ 6,530 $ 7.31 Total Liabilities $ 22,252.0
Reprod. Cost of
Long-Term Debt $ - $ - Assets $ 55,270 $ 61.84 Total Equity $ 27,619.0
Reprod. Cost of
Capital Lease Obligations $ - $ - Assets BV $ 33,018 $ 36.95
Total Net
Deferred Income Taxes $ 970.0 $ 970.0 Reprod. Cost $ 9,446 $ 10.57 Marketing/Brand Value $ 4,354.0
Minority Interest $ - $ - R&D Value $ 1,622.4
Total Other Liabilities $ 4,621.0 $ 4,621.0
Total Liabilities $ 22,252.0 $ 22,252.0 Cash Needed for Business $ 345.6
Common Stock Equity $ 25,888.0 $ 25,888.0 Interest Bearing Debt $ -
Retained Earnings $ 17,878.0 $ 17,878.0 Non Interest Bearing Debt $ 22,252.0
Total Capitalization $ 25,888.0 $ 25,888.0 Excess Cash $ 23,572.4
Total Equity $ 25,888.0 $ 27,619.0
Total Liabilities & Stock Equity $ 48,140.0 $ 48,140.0
 Old School Value | http://www.oldschoolvalue.com

Earnings Power Value (EPV)

5 Year Annual Data Past 4 Quarterly Data

Period End Date 25-Sep-04 24-Sep-05 30-Sep-06 29-Sep-07 27-Sep-08 27-Sep-08 27-Dec-08 28-Mar-09 27-Jun-09
Period Length 52 Weeks 52 Weeks 53 Weeks 52 Weeks 52 Weeks 13 Weeks 13 Weeks 13 Weeks 13 Weeks
Statement Source 10-K 10-K 10-K 10-K 10-K 10-K 10-Q 10-Q 10-Q

Income Statement 2004 2005 2006 2007 2008 2008 Q4 2009 Q1 2009 Q2 2009 Q3 TTM User Input
Sales $ 8,279 $ 13,931 $ 19,315 $ 24,006 $ 32,479 $7,895.0 $ 10,167.0 $ 8,163.0 $ 8,337.0 $ 34,562.0
EBIT $ 383.0 $ 1,815.0 $ 2,818.0 $ 5,008.0 $ 6,895.0 $1,582.0 $2,284.0 $1,730.0 $1,732.0
$ 7,328.0
EBIT Margin 4.6% 13.0% 14.6% 20.9% 21.2% 20.0% 22.5% 21.2% 20.8% 21.2%
EBIT at user defined % of sales $ -
EBIT User Defined % Margin 4.6% 13.0% 14.6% 20.9% 21.2% 20.0% 22.5% 21.2% 20.8% 21.2%
Normalized EBITDA $ 486.0 $ 1,822.0 $ 2,678.0 $ 4,726.0 $ 6,794.0 $1,576.0 $ 2,284.0 $ 1,839.0 $ 1,848.0 $ 7,547.0
Normalized EBIT $ 336.0 $ 1,643.0 $ 2,453.0 $ 4,409.0 $ 6,275.0 $1,442.0 $ 2,126.0 $ 1,667.0 $ 1,672.0 $ 6,907.0
SG&A $ 500.5 $ 652.4 $ 851.6 $ 1,037.1 $ 1,316.4 $349.7 $ 349.7 $ 381.9 $ 344.8 $ 1,425.9 35%
R&D $ 122.8 $ 133.8 $ 178.0 $ 195.5 $ 277.3 $74.5 $ 74.5 $ 78.8 $ 79.8 $ 307.5

Adjusted EBIT $ 1,006.3 $ 2,601.2 $ 3,847.6 $ 6,240.6 $ 8,488.6 $2,006.2 $ 2,708.2 $ 2,190.6 $ 2,156.5 $ 9,061.4
Adjusted EBIT % 12.2% 18.7% 19.9% 26.0% 26.1% 25.4% 26.6% 26.8% 25.9% 26.2%

Income Before Tax $ 370.0 $ 1,808.0 $ 2,818.0 $ 5,008.0 $ 6,895.0 $1,582.0 $ 2,284.0 $ 1,730.0 $ 1,732.0 $ 7,328.0
Income Tax - Total $ 104.0 $ 480.0 $ 829.0 $ 1,512.0 $ 2,061.0 $446.0 $ 679.0 $ 525.0 $ 503.0 $ 2,153.0
Tax Rate 28.1% 26.5% 29.4% 30.2% 29.9% 28.2% 29.7% 30.3% 29.0% 29.4%

Adjusted Earnings After tax $ 723.4 $ 1,910.6 $ 2,715.7 $ 4,356.4 $ 5,951.3 $1,440.6 $ 1,903.06 $ 1,525.82 $ 1,530.22 $ 6,399.7
Depreciation & Amortization $ 150.0 $ 179.0 $ 225.0 $ 317.0 $ 519.0 $134.0 $ 158.0 $ 172.0 $ 176.0 $ 640.0
Add user defined % of D&A $ 30.0 $ 35.8 $ 45.0 $ 63.4 $ 103.8 $26.8 $ 31.6 $ 34.4 $ 35.2 $ 128.0

Income as Adjusted $ 753.4 $ 1,946.4 $ 2,760.7 $ 4,419.8 $ 6,055.1 $1,467.4 $ 1,934.7 $ 1,560.2 $ 1,565.4 $ 6,527.7
Income as Adjusted % 9.1% 14.0% 14.3% 18.4% 18.6% $0.2 $0.2 $0.2 $0.2 18.9%
Operating Income as Reported $ 326.0 $ 1,650.0 $ 2,453.0 $ 4,409.0 $ 6,275.0 $1,442.0 $ 2,126.0 $ 1,667.0 $ 1,672.0 $ 6,907.0

2004 2005 2006 2007 2008 TTM Average

PPE as a % of Sales 8.5% 5.9% 6.6% 7.6% 7.6% 7.7%
Sales Growth (decrease) to Prior
Year $ 2,072.0 $ 5,652.0 $ 5,384.0 $ 4,691.0 $ 8,473.0 $ 2,083.0
Capex $ 176.0 $ 260.0 $ 657.0 $ 735.0 $ 1,091.0 $ 1,088.0 $ 583.8
Maintenance Capex $ (0.9) $ (71.5) $ 299.9 $ 377.0 $ 450.5 $ 928.1 $ 330.5
Depr & Amort $ 150.0 $ 179.0 $ 225.0 $ 317.0 $ 473.0 $ 640.0 $ 330.7

2004-2005 2005-2006 2006-2007 2007-2008 2008-TTM Normalized Adjusted Income Possible Values for Override Box
158.3% 41.8% 60.1% 37.0% 7.8% Normalized Income $ 3,692.9
$ 1,349.9 $ 2,353.5 $ 3,590.2 $ 5,237.4 $ 6,291.4 Avg Adj. Income 5 yrs $ 3,187.1
TTM Adjusted Income $ 6,527.7
$3,692.9
2004-2006 2005-2007 2006-2008 2007-TTM
91.4% 50.7% 48.1% 21.5% EPV Data
Multiyear Timeframe Adjusted $ 1,820.2 $ 3,042.3 $ 4,411.9 $ 5,667.5 Cost of Capital 9%
Income & Growth Normalized Adjusted Income $ 3,692.9
2004-2007 2005-2008 2006-TTM Normal. Adj. Income Growth Average Maintenance Capex $ 330.5
31.4% 29.9% 13.9% 39.4% Interest Bearing Debt $ -
$ 2,470.1 $ 3,795.5 $ 4,940.8 1% of sales $ 345.62
Cash & Equiv $ 24,222
2004-2008 2005-TTM Cash - Debt $ 23,876.38
68.4% 35.3% Shares 894
$ 3,187.1 $ 4,341.9

+Cash-Debt
Cost of Capital Rates EPV Per Share Adjustment Per Share
5% $ 67,246.7 $ 75.24 $ 91,123.1 $ 101.96
7% $ 48,033.4 $ 53.75 $ 71,909.8 $ 80.46
9% $ 37,359.3 $ 41.80 $ 61,235.7 $ 68.52
11% $ 30,566.7 $ 34.20 $ 54,443.1 $ 60.92
13% $ 25,864.1 $ 28.94 $ 49,740.5 $ 55.66
Company Name ticker
Apple Inc AAPL
10/1/2009 www.oldschoolvalue.com
AAPL MSFT IBM HPQ PALM RIMM Industry Ranking
Stock Price 185.35 24.95 118.66 46.33 16.92 67.81 NA NA
Market Cap (millions) 166,040 222,760 155,550 109,850 2,410 38,580 NA NA
52-Week High 188.90 27.47 122.88 48.00 $18.09 Error NA NA
52-Week Low 78.20 14.87 69.50 25.39 1.14 Error NA NA
% off 52-Week Low 137.0% 73.0% 72.1% 85.9% 1431.6% #VALUE! NA NA
Valuation Ratios
P/E Ratio (TTM) 32.4 15.88 12.79 15.9 0 19.07 17.84 1
Price to Sales (TTM) 4.8 3.93 1.61 0.96 5.69 2.92 0.62 2
Price to Book (MRQ) 6.41 5.79 10.19 2.71 0 5.49 2.38 2
Price to Tangible Book (MRQ) 6.56 9.08 0 82.55 0 6.93 4.15 4
Price to Cash Flow (TTM) 28.56 13.4 8.8 9.36 0 16.81 10.01 1
Price to Free Cash Flow (TTM) 16.31 20.06 12.44 12.9 0 86.02 30.92 3
Enterprise Value/Revenue (TTM) 4.1 3.51 1.79 0.99 6.1 Error NA NA
Enterprise Value/EBITDA (TTM) 18.862 8.812 7.468 7.481 -8.445 Error NA NA
Dividends
Dividend Yield NA 2.01 1.84 0.68 NA NA 0.01
Dividend Yield - 5 Year Avg. 0 3.96 1.27 0.91 0 0 1.71 4
Dividend 5 Year Growth Rate 0 26.58 24.7 0 0 0 7.28 3
Payout Ratio (TTM) 0 31.71 21.53 10.46 0 0 29.02 4
Growth Rates
Sales (MRQ) vs Qtr. 1 Yr. Ago 11.7 -17.29 -13.31 -2.07 -81.46 36.8 -4.99 2
Sales (TTM) vs TTM 1 Yr. Ago 4.8 3.93 1.61 0.96 5.69 2.92 0.62 2
Sales - 5 Yr. Growth Rate 39.23 9.67 3.06 10.13 -4.97 79.45 29.2 2
EPS (MRQ) vs Qtr. 1 Yr. Ago 13.89 -25.55 17.61 -15.77 -201.62 -3.81 -102.49 2
EPS (TTM) vs TTM 1 Yr. Ago 11.88 -13.36 15.54 -7.71 -427.44 15.67 0 3
EPS - 5 Yr. Growth Rate 124.7 16.65 18.93 31.39 0 99.92 11.65 1
Capital Spending - 5 Yr. Growth Rate 48.87 22.98 -0.35 8.43 18.42 94.92 21.1 2
Financial Strength
Quick Ratio (MRQ) 2.09 1.8 1.15 1.03 0.58 2.14 1.45 2
Current Ratio (MRQ) 2.11 1.82 1.22 1.17 0.62 2.41 1.85 2
LT Debt to Equity (MRQ) 0 9.47 135.68 33.45 0 0 18.24 4
Total Debt to Equity (MRQ) 0 14.53 190.98 41.36 0 0 30.11 4
Profitability
Gross Margin (TTM) 35.49 79.2 45.14 23.35 13.65 43.19 8.35 4
Gross Margin - 5 Yr. Avg. 31.83 81.06 41.09 24 31.69 49.69 18.85 4
EBITD Margin (TTM) 21.84 37.94 21.79 12.23 -83.11 22.52 0 3
EBITD - 5 Yr. Avg. 16.82 38.98 17.89 9.65 -1.13 27.58 7.92 4
Operating Margin (TTM) 19.98 33.56 16.48 8.27 -90 20.58 2.58 3
Operating Margin - 5 Yr. Avg. 15.4 36.03 12.54 6.92 -3.19 24.25 5.34 3
Pre-Tax Margin (TTM) 21.2 33.92 17.57 7.69 -102.25 21.03 2.67 2
Pre-Tax Margin - 5 Yr. Avg. 17.24 38.82 14.01 7.19 -3.04 25.58 5.87 3
Net Profit Margin (TTM) 14.97 24.93 13 6.25 -195.37 15.41 2 3
Net Profit Margin - 5 Yr. Avg. 12.15 28.01 9.9 5.76 -5.86 18.69 4.09 3
Management Effectiveness
Return On Assets (TTM) 12.96 19.34 11.26 7.08 -87.72 25.23 3.45 3
Return On Assets - 5 Yr. Avg. 13.96 19.63 8.71 6.62 -6.44 23.7 6.9 3
Return On Investment (TTM) 19.18 31.08 17.64 11.88 -204.16 33.6 7.23 3
Return On Investment - 5 Yr Avg 21.57 28.63 13.69 11.36 -9.79 30.42 13.65 3
Return On Equity (TTM) 22.74 38.42 57.96 18.3 0 34.07 8.38 4
Return On Equity - 5 Yr. Avg. 24 33.44 33.46 14.59 -14.6 30.99 14.6 4
Efficiency
Revenue/Employee (TTM) 1080063 628355 244112 365125 464914 1030820 8635093 NA
Net Income/Employee (TTM) 161719 156656 31745 22816 -908304 158844 169986 NA
Receivable Turnover (TTM) 16.12 4.72 3.81 6.97 4 6.39 5.72 NA
Inventory Turnover (TTM) 48.21 14.28 19.04 12.82 11.98 13.81 8.77 NA
Asset Turnover (TTM) 0.87 0.78 0.87 1.13 0.45 1.64 1.28 3
Company Name ticker
Apple Inc www.oldschoolvalue.com AAPL
10/1/2009 Figures in Millions except per share values

Net Profit Margin Cash Flow (Continuing Operations)

15.0% 14.9% 14.6% 11344.0
10.3% 9596.0
9.6% 9.8% 9.8%

3.3% 5470.0
1.1% 1.1%
2220.0 2535.0
934.0 289.0 826.0 798.0
89.0 185.0
-0.5%
TTM 2008/09 2007/09 2006/09 2005/09 2004/09 2003/09 2002/09 2001/09 2000/09 1999/09 TTM 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 1998/12
15.0% 14.9% 14.6% 10.3% 9.6% 3.3% 1.1% 1.1% -0.5% 9.8% 9.8% 11344.0 9596.0 5470.0 2220.0 2535.0 934.0 289.0 89.0 185.0 826.0 798.0
% Change 2.2% 41.4% 7.5% 187.5% 199.9% -1.8% 342.8% -104.7% 0.5% -- % Change 75.4% 146.4% -12.4% 171.4% 223.2% 224.7% -51.9% -77.6% 3.5% --

Magic Formula Investing -- Return on Capital Magic Formula Investing -- Earnings Yield
28.1% 25.0% 27.4% 23.5% 25.0%
20.1%
16.2% 15.8%
13.3% 11.0%
8.1% 5.3% 4.7% 5.0% 5.2%
3.2% 4.1% 3.2%
2.6% 3.3%

-4.7% -6.6%
Now 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 1998/12 Now 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 1998/12
28.1% 25.0% 27.4% 23.5% 20.1% 8.1% 2.6% 3.3% -4.7% 16.2% 13.3% 5.3% 11.0% 3.2% 4.7% 5.0% 4.1% 3.2% 15.8% -6.6% 25.0% 5.2%
% Change -8.8% 16.8% 16.7% 149.2% 206.7% -20.3% 170.2% -129.1% 22.1% -- % Change 241.0% -31.0% -7.3% 22.4% 26.9% -79.5% 340.1% -126.3% 380.5% --

Return on Assets (ROA) Return on Equity (ROE)

12.2% 13.8% 11.6% 11.6% 11.6% 11.6% 24.1%
10.7% 23.0%
20.0% 19.9% 19.5% 20.3%
17.9%

3.4%
1.0% 1.0%
5.4%
1.6% 1.6%
-0.6% 0.0%

2009/06 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 1998/12 2009/06 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 1998/12
10.7% 12.2% 13.8% 11.6% 11.6% 3.4% 1.0% 1.0% -0.6% 11.6% 11.6% 20.0% 23.0% 24.1% 19.9% 17.9% 5.4% 1.6% 1.6% 0.0% 19.5% 20.3%
% Change -11.6% 19.0% 0.0% 241.2% 240.0% 0.0% 266.7% -105.2% 0.0% -- % Change -4.6% 21.1% 11.2% 231.5% 237.5% 0.0% #DIV/0! -100.0% -3.9% --

Current Ratio Quick Ratio

3.4 3.2 3.4
3.2 2.9
3.0 2.8 2.8 2.8
2.6 2.8 2.4 2.6 2.5
2.5 2.4 2.5 2.3 2.2
2.1 2.2 2.1

2009/06 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 1998/12 2009/06 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 1998/12
2.1 2.5 2.4 2.2 3.0 2.6 2.5 3.2 3.4 2.8 2.8 2.1 2.4 2.3 2.2 2.9 2.6 2.5 3.2 3.4 2.8 2.8
% Change 4.3% 5.3% -24.2% 12.3% 5.4% -23.1% -4.1% 20.7% 1.5% -- % Change 4.4% 5.6% -24.4% 12.1% 4.9% -23.2% -4.7% 21.2% 1.3% --
Company Name ticker
Apple Inc AAPL
10/1/2009 www.oldschoolvalue.com Figures in Millions except per share values

Company Assessment: Quantitative

Valuation Criteria over 5yrs Value User Points

> 25% or 50% depending on
DCF Valuation Discount 0% 0
moat
Graham Intrinsic Value Discount > 66% 0% 0

Margins, Profit and Growth Criteria over 5yrs Value Points User Points
Median Revenue growth 10% 40.7% 2
Median Gross Margin 30% 29.0% 0
Median Operating Margin 15% 12.3% 0
Median Net Margin 10% 9.9% 0
Median EPS growth 10% 121.8% 2

Business and Management Performance Criteria over 5yrs Value Points User Points
Cash growth from Operations 15% 80.3% 2
CROIC is postive and capable of paying off financing 13% 15.2% 1
Median FCF growth positive and consistent 10% 130.9% 2
Median FCF/Sales 7% 8.5% 1
Consistent ROE (manually check) Consistent over 10yrs N/A N/A
Consistent ROA (manually check) Consistent over 10yrs N/A N/A

Balance Sheet Criteria for TTM Value Points User Points

Current assets > 1.5 x current liabilities > 1.5 x current liabilities 2.5 1
Price to Book ratio < 2 N/A 7.95 N/A N/A
Debt to Equity < 100% 88.2% 1
FCF to Debt > 10% 22.7% 2
Capitalization Ratio < 30% 0% 2
Intangibles % of assets < 15% of assets 1.0% 2

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 Comment User Points Max Points

Stable market share? max 2
Dominant company in industry, segment? max 2
Low barriers to entry and exit? max 2
Experience goods (brand effect, trademarks) max 2
High switching costs? max 2
Network effect? E.g. eBay max 2

Business Model Comment User Points Max Points

Growth due to:

a) Yes
a) existing product / existing market (yes/no)
b) No
b) existing product / new market (yes/no) max 2
c) No
c) new product / existing market (yes/no)
d) NO
d) new product / new market (yes/no)

Able to increase prices and retain customers? max 1

Compete on price? (1 for no, 0 for yes) max 1
Barriers of entry to the business? max 1
Diverse customers? (1 for diverse, 0 for concentrated) max 1
Involved in competition? Monopoly, duopoly, crowded max 2
Company has a recurring revenue stream? max 1
Capital intensive company? (1 for no, 0 for yes) max 1
Management Comment User Points Max Points
High insider ownership? max 1
Candid management on positives and negatives? max 1
Management performance at previous jobs? max 1
Compensation levels compared to sales? max 1

Industry Comment User Points Max Points

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

Psychological Factors to Consider. Not Weighted. Comment

Recency bias? No
Hindsight bias? No
Framing issues correctly and in different manners? Yes
Is there a data framing bias? No
Am I too overconfident on the situation? No
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 0.0
Margins, Profit and Growth 2.0
Business and Management Performance 3.0
Balance Sheet 4.0
Competitive Advantage 0.0
Business Model 0.0
Management 0.0

Low Risk High Growth Under Valued Well Managed Good Financial Health Strong Moat
2.5 5.0 0.0 4.5 5.0 4.0
2.5 5.0 4.5 5.0 4.0

Low Risk
5.0
4.0
3.0
Strong Moat High Growth
2.0
1.0
0.0

Good Financial Health Under Valued

Well Managed