【精品】ppt equity valuation and analysis with eval.ppt

Equity Valuation and Analysis with eVal Apple and the iFad Case Overview Comprehensive analysis of a growth company employing conservative accounting Assessment of company involves: Evaluation of future growth opportunities Sustainability of current profitability Impact of conservative accounting on future earnings Overview of Business Apple designs, manufactures and markets personal computers, mobile communication devices, portable digital players and a variety of related software and services Introduction of new products, particularly the iPhone, drives strong growth from 2007-2009 Business Strategy Analysis (1) Sources of competitive advantage Integrate its own hardware, operating system and applications to provide best-of-class products and services Focus on innovative new products through aggressive investment in RD Expand distribution network via Apple Stores Business Strategy Analysis (2) Key Risks Competitors imitate products Better 3rd party operating systems Lack of Apps for custom operating system Run out of ideas for new products Business Strategy Analysis (3) Apple Integrated consumer products IBM Integrated IT solutions for enterprise clients Accounting Analysis (4) Revenue Recognition for iPhone and Apple TV: For both iPhone and Apple TV, the Company has indicated it may from time?to?time provide future unspecified features and additional software products free of charge to customers. Accordingly, iPhone handsets and Apple TV sales are accounted for under subscription accounting in accordance with GAAP. As such, the revenue and associated cost of sales are deferred at the time of sale, and are both recognized on a straight?line basis over the currently estimated 24?month economic life of these products, with any loss recognized at the time of sale. Costs incurred by the Company for engineering, sales, marketing and warranty are expensed as incurred. Accounting Analysis (5) To restate revenues, we add back the net deferred revenue and to restate