Apple Inc. is an American multinational organization established in April 1st 1976. Headquartered in Cupertino, California, Apple Inc. is the leading information technology organization by revenue and by assets, besides being the world's second largest mobile phone manufacturer. Majorly trading in consumer electronics, designs, computer software, hardware products and online services, Apple Inc. has established itself in web browsing, creativity and productivity in the ever-changing technology industry. In the fiscal year of November 2014, Apple Inc. was valued as the first US Company with over $700 billion in revenues in addition to registering as the largest publicly traded company in the world by market capitalization. As of March 2016, Apple Company has maintained over 478 retail stores in 17 countries, operating online Apple stores and iTunes Stores.
The financial status of Apple Inc. for the fiscal years 2007 to 2012 shows a competitive profitability and liquidity ratios that has maintained an upward growth rate. The company has achieved enormous sales growth ever since Steve Job's transformational agenda of the innovation and enhancing of human resource management and expertise in the interface design. Having once threatened by bankruptcy in profitability in 1998, Apple has since developed from old packaging of personal computers to software and hardware devices such as iPhone as the major thriving apple sales. Among other Apple sales include Apple TV, MacBook Pro, and Apple Remote, iPod touch, iPad Mini, and Mac Desktop and Apple Monitor devices.
Furthermore, Apple has achieved more product differentiation through its large sales, thereby maintaining the efficiency of assets and capital sources in the market. The profit margin of Apple Inc. has increased tremendously for the fiscal years 2007-2012 indicating that the liquidity ratios are paid below other competing companies in the industry. Ideally, Apple holds much of its cash in its accounts that is why it has not allocated a wide variance of write off to credit sales. In this paper, therefore, seeks to analyze the financial statements of Apple Inc. from the year 2007 to 2012 explaining the profitability, asset utilization, debt utilization, market value and liquidity ratios.
Analysis Overview of the Financial Statements
The financial statement of Apple Inc. indicates a very healthy and stable organization. Evidence from the ratios computed in the subsequent chapters indicates the profitability and liquidity ratios that have been collected from the account receivables. For instance, Apple reported sales growth rate that had grown more than 30% annually and which was above other competitors such as Google and Oracle. In addition, Apple Inc. does not have long-term debt, therefore, indicating that the company is free from financial debt. Furthermore, the company is in a position to effectively finance its operations using the shares reinvested basis that is at its disposal. However, some factors contribute to the rapid sales growth that the company has continued to enjoy over time.
To begin with, the sales are stimulated by a collective agreement to multiple carriers all over the world. Secondly, the sales are boosted by the ability of the company to attract more customers through its initiatives of interactive advertisement that entails product features differentiation. Additionally, the company has incorporated a recasting analysis technique in its performance thereby increasing the number of sales on one hand as it reduces the asset turnover ratio. The Net Profit Margin for Apple Inc. shows that the company's percentage of revenue is kept as profit after accounting for its fixed and variable costs. In this regard, Apple Inc. uses its computed profit margin for internal comparisons. Therefore, the increased profit margin for Apple Inc. tends to reduce the risks involved with a decline in sales that causes losses in net profit.
Muhammad Irka Irfa Darojat. (2013, May 6). Apple Financial Statement Analysis. Faculty of Economics and Business-Gadjah Mada University, 2-29.
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