Equity Valuation in the Style of Warren Buffet Project Essay

Equity Valuation in the agency of Warren Buffet Project - Essay ExampleThe strategy is proved to be effective oer time and prevents investors from making costly and foolish investment losses. The investment strategy uses both quantitative and soft factors which finding a good stock. The corporation chosen for financial analysis is apple Inc. (Ticker Symbol AAPL) which is a Fortune 500 telephoner whose shares are publicly traded. Apple Inc. is a leading hardware and package company which has headquarters in Cupertino, California, U.S. The company has over 400 global retail stores spread in over 14 countries and it is listed in NASDAQ as a publicly traded company. The Four Filters Approach Filter 1 Understanding of a company and its products The company sells its products globally through retail outlets, online stores and direct sales with the booster of third party distribution networks. The company is best known for its advance(a) hardware products and next contemporaries m edia including iPhone, iPad, iPod, Smart Phones, and so on. The companys products and services also embarrass MAC, iCloud, App stores, Apple TV, App Stores, MAC App Stores and iBookstores. Their software system services include iOS operating system, OS X, iTunes, iWork and iLife production and creativity suites. The companys customers are low-spirited and medium sized businesses, retail customers, enterprises, educational institutions, and government customers. Filter 2 Competitive Advantage Apple Inc. is the second largest company in information technology sector in the world. In terms of revenues, hardly Samsung Electronics (leading Korean company and key competitor of Apple) exceeds the consolidated revenue of Apple. In the year 2008, Fortune clipping name the company as the most admired company in United States as hearty as globally. Filter 3 Ability and Trustworthiness of Management The company delivers innovative products and services to customers that include software , hardware, peripheral, and applications. Apple is committed to providing best user experience by leveraging its ability of producing unique design. The company continuously invests in marketing, advertising, research and development in order to boost sales and produce innovative products and technologies. The companys long term strategy includes expansion of distribution network for reaching much customers globally in developing countries and providing them with high quality sales and support experience. Filter 4 indispensable Value Analysis Free- hard currency Flows The free cash flows are used to measure the financial performance of the company and it is metrical by subtracting capital expenditures from operating revenues. The free cash-flow represents the companys ability to generate cash required for expanding asset base and hence they are important to identify opportunities that can enhance shareholders value. Cash is very important to invest in new products, make M&A, re duce debt and pay dividends. The FCF is calculated using the following formula In order to determine the