Equity Valuation in the Style of Warren Buffet Project Essay

Equity Valuation in the Style of Warren Buffet Project - Essay ExampleThe strategy is proved to be efficient over time and prevents investors from making costly and foolish investment losses. The investment strategy uses both quantitative and qualitative factors which finding a good stock. The ships company chosen for financial analysis is Apple Inc. (Ticker Symbol AAPL) which is a set 500 company whose sh bes are publicly traded. Apple Inc. is a leading ironware and software 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 gross revenue with the help of third party distribution networks. The company is best known for its innovative hardware products and next generation me dia including iPhone, iPad, iPod, Smart Phones, and so on. The companys products and services also include MAC, iCloud, App stores, Apple TV, App Stores, MAC App Stores and iBookstores. Their software services include iOS in operation(p) system, OS X, iTunes, iWork and iLife production and creativity suites. The companys customers are small and medium sized businesses, retail customers, enterprises, educational institutions, and government customers. Filter 2 Competitive Advantage Apple Inc. is the second largest company in study technology sector in the world. In landmarks of revenues, only Samsung Electronics (leading Korean company and key competitor of Apple) exceeds the consolidated revenue of Apple. In the year 2008, Fortune magazine name the company as the most admired company in United States as well as globally. Filter 3 energy and Trustworthiness of Management The company delivers innovative products and services to customers that include software, hardware, peripher al, and applications. Apple is committed to providing best user experience by leveraging its ability of producing droll 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 more customers globally in developing countries and providing them with high quality sales and support experience. Filter 4 Intrinsic Value Analysis Free-Cash Flows The free cash flows are used to measure the financial performance of the company and it is calculated by subtracting capital expenditures from operating revenues. The free cash-flow represents the companys ability to generate money required for expanding asset base and hence they are important to identify opportunities that can deepen shareholders value. Cash is very important to invest in new products, make M&A, reduce debt and pay dividends. The FC F is calculated using the following formula In order to determine the