Executive Summary:

Apple is a successful US multinational corporation that designs, manufactures and markets a range of mobile communication and media devices, personal computers (PCs), portable digital music players and a variety of software, services, peripherals and third party digital content and applications. Some of its products include the iPod, iPhone, iPad, Mac and Apple television (TV), in addition to a range of software applications, the IOS and Mac OS-X operating systems, and the iCloud.
Apple's Summary Apple was was founded by Steve Jobs, Steve Wozniak and Ronald Wayne in

1976 as Apple Computer.

The earlier products of Apple did not succed well until the launch of Macinstosh in 1984. The company did not do well during the period 1984 to 1998 and again returned to

profitability with the introduction of the iMac computer in 1998, which sold almost 800,000 units in its first five months. Since then the company has released a range of successful products including the MacBook, iPhone, iPod Touch and the iPad. Other revenue sources of Apple include the iTunes Store and the App Store.
After the demise of Steve Jobs in october 2011 Tim Moody was appointed as the CEO of Apple inc under his capability & leader ship Apple continued to grow and reached new heights & milestones.

For the fiscal year ending September 2011, Apple reported revenues of US$108 billion compared to US $65 billion in 2010 and nearly US$82 billion in cash reserves. Apple announced that it would again start paying a dividend of US$2.65 per quarter (beginning in the quarter that starts in July 2012) along with a US$10 billion share buyback, which would commence on 30th September 2012, the start of its fiscal 2013 year.
Analysis ROE = The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROE = Net Profit/Total Shareholder Equity ROE for 2010 is 29.3% and ROE for 2011 is around 34% This is positive and on an increase, we can say that It is a profit making firm. The ROE is useful for comparing the profitability of a company to that of other firms in the same industry.

There are several variations on the formula that investors may use: 1. Investors wishing to see the return on common equity may modify the formula above by subtracting preferred dividends from net income and subtracting preferred equity from shareholders' equity, giving the following: return on common equity (ROCE) = net income preferred dividends / common equity. 2. Return on equity may also be calculated by dividing net income by average shareholders' equity. Average shareholders' equity is calculated by adding the shareholders' equity at the beginning of a period to the shareholders' equity at period's end and dividing the result by two. 3. Investors may also calculate the change in ROE for a period by first using the shareholders' equity figure from the beginning of a period as a denominator to determine the beginning ROE. Then, the end-of-period shareholders' equity can be used as the denominator to determine the ending ROE. Calculating both beginning and ending ROEs allows an investor to determine the change in profitability over the period. PE ratio: - People look at this number more than any other, The Price to Earnings Ratio (P/E). The P/E is one of those numbers that investors throw around with great authority as if it told the whole story. Of course, it doesnt tell the whole story (if it did, we wouldnt need all the other numbers.) The P/E looks at the relationship between the stock price and the companys earnings. The P/E is the most popular metric of stock analysis, although it is far from the only one you should consider, PE = Share Price/ Earnings per Share Apple's PE ratio is 14.1 The P/E gives an idea of what the market is willing to pay for the companys earnings. The higher the P/E the more the market is willing to pay for the companys earnings. Some investors read a high P/E as an overpriced stock and that may be the case, however it can also indicate the market has high hopes for this stocks future and has bid up the price.

Conversely, a low P/E may indicate a vote of no confidence by the market or it could mean this is a sleeper that the market has overlooked. Known as value stocks, many investors made their fortunes spotting these diamonds in the rough before the rest of the market discovered their true worth

Apple is generating Cash flow has an increased pace .Assumptions which have been taken are growth at a rate of 3.5%. the rate of inflation is at 3% and a discount rate of 8% is assumed the cash flow figures for the coming 5 years are as

CASH FLOW FOR NEXT 5 YEARS-Apple (In millions of US$)

2009 Net sales 42,90 5 2010 65,22 5 2011 108,24 9 2012 146,13 6 2013 197,28 4 2014 266,33 3 2015 359,55 0 2016 485,39 2

Cost of sales Gross margin Operating expenses Research and development Selling, general and administrative Total operating expenses Operating income Other income and expense Income before provision for income taxes Provision for income taxes (35%) Net Income Discount factor 8% NPV

25,68 3 17,22 2 1,3 33 4,1 49 5,4 82 11,74 0

39,54 1 25,68 4 1,7 82 5,5 17 7,2 99 18,38 5

64,43 1 43,81 8 2,4 29 7,5 99 10,02 8 33,79 0

83,76 0 62,37 6 3,1 58 9,8 79 13,03 6 49,33 9

108,88 8 88,39 5 4,1 05 12,84 2 16,94 7 71,44 8

141,55 5 124,77 8

184,02 1 175,52 8

239,22 8 246,16 4

326 155 415 560 756 12,0 18,5 34,2 49,9 72,2 66 40 05 00 04 3,8 4,5 8,2 17,46 25,27 31 27 83 5 2 8,2 14,0 25,9 32,4 46,9 35 13 22 35 33 1 0.92593 0.85734 0.79383 0.73503 8,2 35 12,9 75 22,2 24 25,7 48 34,4 97

5,3 6,9 9,0 37 37 19 16,69 21,70 28,21 5 4 5 22,03 28,64 37,23 2 1 3 102,74 146,88 208,93 7 7 1 1,0 1,3 1,8 21 78 61 103,76 148,26 210,79 8 6 2 36,31 51,89 73,77 9 3 7 67,4 96,3 137,01 49 73 5 0.68058 0.63017 0.58349 45,9 05 60,7 31 79,9 47

References: 1. Online Course content- 612 Finance 2. http://www.reuters.com/finance/stocks/financialHighlights?symbol=GRPN.O 3. http://www.news1.co.il/uploadFiles/189403712749482.pdf