Mark,

That's not a silly question at all, and is one I wrestled with while doing the valuation for UnitedHealth Group (UNH-NYSE).  I received some valuable help from Saj around this question, and I'm sure he wouldn't mind my passing it along.  Here's what he said, in part:

"2) the process looks allright (sic). I would recommend, however, that you
don't rely on the most recent operating income as the basis for your
valuation. Operating Incomes fluctuate from year to year, so it makes
more sense to take the average margin of the last few years and
multiply it by current sales, to get an approximation of average
operating income.

"3) Also, for your cash:debt adjustment, you should probably use the
balance sheet items from the most recent quarterly report, as the
financial positions appears to have changed. They seem to have $7
billion more debt than they do cash, which changes your valuation
about 10% downward."

Cheers.