Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 259.15

+1.1%

Dec 22 3:59 PM EST

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To: Jacob Snyder who wrote (40459)	12/5/2000 12:19:41 AM
From: Chien Li	Read Replies (1) of 70976

The future "variables" are projected basing on the current financial data. A company may show high EBIT but that might require substantial capital investment and working capital. The firm value, by the way, also includes the cash the firm currently has. If you take a look at NVLS, you would find that NVLS has a better free cash flow performance than AMAT. Assuming the same growth rate (16%) which decreases to 10% in year 10, NVLS has a $42.5/share firm value. Indeed, this type of analysis is not absolute but gives you some basis for comparison.

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