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The financial analysis of the company include many different
analysis which show its sales condition, profitability, assets
ratio, return on equity analysis, free cash flow analysis and
WACC analysis. Sale analysis: this analysis include historic
growth rate, expected growth rate, revenue study related to
company. Historic growth rate of company present that how much
company was product products in the past years and provide a
basis for the present and future estimation of products for the
production and selling sectors. (, 2015) Company analysis is very
important as to determine in what direction the company is going
to compete for the market, what are its strength and weaknesses,
what strategies they are going to utilize and what sort of
economic moats is applicable in the smooth running of the
business. Companys strengths: company is very much famous in the
customers so some of its strengths are given below as; CEO Steve
Jobs: Visionary and charismatic. Product development: it does not
invent new market but its products set high standards for the
market. Apple Computers, Inc.
Business Analysis
What have you learned about the company by reviewing each
statement?
By reviewing Apple's balance sheets, I learned that the company
has an impressive financial In general, the growth of the market
of Smartphone, the growth of the iPhone market share, or
diffusion in the China. allowing for that analysts forecast for
the sales of the iPhone are not very good for the year, and the
next year can also demonstrate unenthusiastic decline in the
value of the stock of the Apple Inc, that is also would
efficiently knock down multiple stock of the Apple Inc. As we
know that the Apple Inc very much relies on just the single
product that is the iPhone of the Apple Inc. in the last couple
of year then it seems like the Apple Inc is not likely to grow
its business and reaches the mature stage of the product and this
is the main reason that the investment in the Apple Inc is very
risky. (Neff, 2016)
At the close Financial Analysis (Submitted by) Abstract The following paper aims at discussing the financial position of the American multinational corporation, Apple inc. , which designs and markets consumer electronics, computers and personal computers mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions. Apple Inc. together with subsidiaries sells its products worldwide through its online. Companys strategies: apple generic strategy and intensive growth strategies are the main strategies that belong to pricing, marketing and many other areas of business. The generic strategy of apple shows a major advantage over other firms and its intensive strategy for growth that help it maintain its strong position in the global market by supporting the firms ability. Due to the high emphasis on excellence in the product design and high rate of innovation, it can sell its products at very high prices. Ans. Apple is most renowned and famous company in the international market. It provides all sorts of devices and application and program which become part of life of every person.
It gives attention on different variation of profit margin between different industries according to their performance and structure. This analysis give a starting point to implementing the strategies and help in understanding the competitive environment in which company is going to operate its operations. The Porters five-force analysis include the following competitive forces: bargaining power of buyer: strong buyers have powerful impact on the prices of products. (FERGUSON, 2017) A reading of Apples balance sheet certainly suggests that it is a well-managed company. It presents its information in a reader-friendly format and does not have any significant exposure to off-the-balance-sheet items that might obfuscate its true situation. However, investors should note that a companys balance sheet could deteriorate as its earnings situation and industry position change. Thus, it is important to look at its most recent balance sheet before investing. The better than expected ascent of Apples income plus benefit are the aftereffect of its interests in item advancements which have addressed the requirements as well as needs of the objective markets.
Market fragmentation is very important in the Apple Company as it
provides more opportunities for the company and different
suppliers to prepare a flow of orders. It creates a more
competitive environment for the flow of orders and introduces new
innovative ways to trade securities in the marketplace. () Cash
and current ratios are profitable in 2016 of Apple Company. Gross
margin is high in 2015 but going to increase in coming next two
years. Operating profit margin is also following the pattern of
gross margin. Net profit margin is low and same in 2017 and 2016
but high in 2015. Return on asset and return on equity both low
in 2017 but high in 2016 and 2015 of Apple Company. Total asset
turnover is also low in 2017. Debt ratio and time interest earned
high in 2017 present that in 2017 company is taking more debt and
do less production and sales. Apple Stakeholder Performance
Analysis
Apple Inc. (AAPL) is one of the most profitable and continually
innovative manufacturers of MP3 players, cell phones, laptop
computers and handheld tablets.
Financial summary of Apple Inc with all the key numbers
The picture of the organization was reinforced through its great deals execution, which was compelling for the ascent of profit per share. The colossal increment for Apples expenses of merchandise sold outcome from the improvement with creation of the iPad, which resolve likewise be obvious in the consequence of the financial year finishing September 2011, and additionally the advancement and generation of a new arrival of an iPhone. Apple generic strategy: its generic strategy give more focus on the on the differentiate of the company and its different products as compare to its competitors. Its differentiation generic strategy means that Apple makes itself different from its competitors not in the case of prices but also in the beneficial features of customers. Its main features include its product design, which supports the market, innovative aesthetic in designs and seamless connectivity between the devices. Apple intensive strategies: these include product development, market development and market penetration. When looking at the financial performance of a company, it is important to examine the financial ratios. There are several different classifications of financial ratios.
Profitability ratios show the profitability of the company. Liquidity ratios deal with the current assets and current liabilities of the company, and they determine how the company is performing with their liquid finances. Leverage ratios deal with the companys debt, and how they affect performance. Activity ratios deal with a companys. Threats of substitutes: different availability of substitutes which also a hurdle in increasing of prices. Bargaining power of suppliers: strong suppliers want premium prices and minimize the profit limit. Barriers to entry: work as hurdle in the ways of new competitors and try to less their profit margin. Industry rivalry: in the same industry, different companies have less potential to generate profits in high competitive environment. (, 2014) The demand of Apple products is going to increase day by day because they provide more advance and smooth features to all its customers and with this, they offer a great variety of applications and all the necessary items that required by the customer at high quality. Although its prices are high its customers are satisfied with the provided features and can pay any amount to facilitate with excellent features.
Apple financial analysis paper - As per given data, in 2015 apple company has high ratio of revenue as compare to 2016 and 2017. But the cost of goods sold of 2015 is higher than 2016 but low as compare to 2017. In 2015 net profit of company also higher as compare to 2016 and 2017 because high revenue incurred in that year. So 2015 is highest profit generate year for Apple Inc. But in 2017 a visible improvement we can seen in the revenue and net profit.
The key management of company include Ms. Angela J. Ahrendts (Sr. VP of retail), Mr. Daniel J. Riccio (Sr VP of hardware Engineering), Mr. Timothy D. Cook (CEO and Director), Mr. Ron Okamoto (Head of developer relations) and Mr. Luca Maestri (CFO & Sr,VP). Current assets of Apple Company are going to increase year by year and in 2017 it has highest value of current assets. In total assets, a drastic change can be observe as compare to previous year and in current year 2017. According to total liabilities, normal increment is happen in the values according to current condition of company. Equity also increases in 2017 of Apple Company as compare to previous years. At the maturity stage, the product gets maximum aptitude related to its consumption. At this stage, it focuses to compete based on prices. But at this time its profit margin is going to low and companys work as cash cows at this stage. At the stage of relative decline, profit becomes the challenge for the production, costs become counter optimal, profitability becomes diminish due to low prices and sales volume become decline or stabilize. (Nigudkar, 2018) Porters five force analysis also consider as best industry analysis in the different business strategies.
Due to international competition, Apple gives more focus on its quality of products and try to satisfy the requirements of the customers in all ways. Due to tough competition, it is difficult to maintain its profit margin as many other companies also producing the same products and offer to customers the same features so the company has to face difficulties to capture its profit margin and maintain its profitability. Quantitative moat analysis work on the stability of profit and its extent. As its return on invested capital more than its WACC then it consider that it has moat. Apple ROIC was almost 25.5 at the March 2016 end, which is going down as compare to previous, which was 42. WACC of company was with the interest of , beta 1.5, equity risk premium is and debt to capital ratio was show a wide moat in the company. Its gross margin of March 2016 was 39.8 which was fall between the below five year high of 43.9 and above the five year low of 37.6. With the operating margin of 29.4. Therefore, the apple economic moats are evident with quantitative threats. (Downie, 2016) For investors in Apple, Inc.(AAPL), the investment has certainly been fruitful. For those who are late to the party and are considering investing in the Cupertino-based consumer products giant, a good place to start gauging the company is its balance sheet. A companys balance sheet presents a picture of its financial situation at a certain point in time. For an investor who wants to understand a company and its potential, the balance sheet is a good guide.