Brief valuation of Systems, Applications & Products (SAP) corporation

Brief valuation of Systems, Applications & Products (SAP) corporation

Yibin Liu, Andrew Gleeson, Ciaran Dowling,Julian Rene Graef


SAP is one of the largest players in the commercial software sector. Following our analysis of SAP’s history and capital structure, it is evident that the company has been able to sustain a stable growth for the past 15 years, whilst also maintaining a stable dividend payout. Barring 2015, SAP’s WACC has fallen year on year over the observed period, maximising shareholder value and equity prices. Its conservative financing policy, with a greater emphasis on equity financing than debt may on the one side foreclose potential growth acceleration, yet also indicates a long-sighted managerial conservatism that is focused on long-term value creation rather than short-term growth. One danger of conservative policies is the potential stalling of further growth. However, new partnerships such as the newly announced enlargement of SAP’s cooperation with Microsoft in the sphere of cloud services point in the right direction towards further growth in a highly saturated sector.

Keywords: Valuation of Systems, Applications & Products, SAP

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How to cite this article:
Yibin Liu, Andrew Gleeson, Ciaran Dowling,Julian Rene Graef. Brief valuation of Systems, Applications & Products (SAP) corporation. Global journal of Economics and Business Administration, 2018, 3: 7. DOI: 10.28933/gjeba-2018-03-0801


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