A case study based on Apple, Inc. should be analyzed in this paper to acquire information related to the company’s financial performance and health that affect the company’s economic and marketable value. How the key products offered by the organization helped to set boundaries for business decisions. Furthermore, the current financial situation of Apple, Inc. has been defined and the financial health of company has also been analyzed in this particular paper.
Organizational ContextApple, Inc. is viewed as a US-based global organization, which is renowned for offering communication and technologically digitalized and computational gadgets and devices which incorporate cell phones, iPods, and PC. Apple, Inc.’s key idea and the executives will in general maintain an attention on the exceptional specialized highlights that empower the company to remain protuberant and aggressive in the business. Also, it is viewed as that the key idea of Apple, Inc. depends on the advancement of the computational gadget with successful specialized highlights.
Along these lines, Apple, Inc.’s the board procedure is grounded on the appraisal and improvement of the dissemination procedure, and profiling highlights. The company is inclined to entail individuals for the technological advancement so as to comply with the growing concepts of communication. In this way, the reviews and experiences of customers helped the organization to set the boundaries for decision making. However, the company is organized on functions instead of relying on the divisions; as a result Command and Control structure has been implicated on the management of Apple, Inc. These features helped to set the boundaries for decision making process with the help of setting goals and objectives as per the requirement of the customers and market. Also, these entities can impact the financial instances of the organization directly. This is because profitability is one of the major criteria that is merely depending on the sales of the products and customer satisfaction as well.
Recent Financial Performance
Apple Inc. is as of now viewed as the biggest innovation firm regarding its all-out resources. In the year 2011, Apple, Inc. earned around $108 billion approximately, following two years, the organization in the year experienced enormous development and along these lines earned around $170 billion. As such, the organization figured out how to make its place in the “Fortune 500 list of organizations.” However, currently, the organization is viewed as the greatest traded on an open market firm on the planet dependent on its market capitalization. On the second of August 2018, the organization additionally effectively achieved a market estimation of $1 trillion.
The three year income statement can be seen in the table displayed below, in which, it can be seen clearly that the total revenue founded to be raised from 2016 to 2018 and same goes with the cost of revenue. Also, the gross profit founded to be raised from 2016 to 2018 and there is a great difference between the cost revenue observed in the year 2017 and 2018. Similarly, in table 2, it can be seen in the cash flow that the net cash flow of the operating activities founded to be raised within the time period of 2016 to 2018. In order to assess the total operating expenses, this can be seen in the income statement of Apple, Inc. which was found to be raised drastically and this indicates that the organizational expenses tended to be increased with time.Table SEQ Table * ARABIC 1: Income Statement. Source: Apple (2019)Table SEQ Table * ARABIC 2: Cash flow, source: NASDAQ (2019)
It has been seen that Apple’s financial results are a good indicator for the economy’s progressing recovery from the financial crises of the recent years. The above-average rise of Apple’s revenue and profit are the result of its investments in product developments which have met the needs and wants of the target markets. The image of the company was strengthened by its very good sales performance which was influential for the rise of earnings per share. The great increase for Apple’s costs of goods sold result from the development and production of the iPad, which will also be visible in the result of the financial year ending September 2011, as well as the development and production of the new release of the iPhone.Current Financial HealthThe size of Apple Inc., which has a large capital of 715 USD, regularly pulls in financial specialists within the stock markets, looking for a dependable interest therein.
One of the foremost purposes of Apple’s too big to fail atmosphere is that this would provide it the presence of stable and a solid venture. Notwithstanding, it has been assessed that the financial health of Apple, Inc. should remain the same, regardless of proceeding with the progress. Apple, Inc. has supported its level of debts by about 114 USD in the course of the most recent a year ” this incorporates long haul debt. At this steady dimension of debt, the present money and momentary venture levels remains at 66 USD for utilizing the amount in any business. Also, with the help of certain operations adopted by the firm, Apple, Inc. created money of approx. 77 USD over the most recent a year. This should prompt a working money to add up to the net debt proportion of 68%, flagging that Apple, Inc.’s working money is adequate to cover the entire debts. This proportion can likewise be deciphered as a proportion of productivity as a choice to Return on Assets (ROE).
However, here in the case of Apple, Inc., the organization can create money by 0.68 times with the help of company’s debts capital. Nonetheless, as noticed by Mannan (2018), Apple, Inc. has sustained its debt level by about US$114b over the last 12 months ” this includes long-term debt. At this stable level of debt, the current cash and short-term investment levels stands at US$66b for investing into the business. Looking at Apple, Inc.’s financial health, on the assessment of the current liabilities, it appears that the business has had the option to meet these debts given the dimension of current resources of 131 USD, with a present proportion of 1:12.
Ordinarily, for organizations working within tech industry, it is an appropriate proportion since there is an adequate money paid regardless of leaving a lot of capital inert or in low-acquiring ventures. Since value is littler than overall levels of debts of the organization; therefore, the organization founded to be having a higher influence or leverage. Nevertheless, this is not a phenomenal aspect for larger enterprises or organizations this is because interest payments on debt are tax deductible, which means obligation can be a less expensive origin of capital than value. Appropriately, larger organizations regularly have a bit of leeway over small caps through lower cost of capital because of less expensive financing.ConclusionThis particular study is based on the analysis of financial condition of the Apple, Inc. with the help of assessing previous three years income statement and cash flow.
Apple, Inc. is viewed as a US-based global organization, which is renowned for offering communication and technologically digitalized and computational gadgets and devices which incorporate cell phones, iPods, and PC. Apple, Inc.’s key idea and the executives will in general maintain an attention on the exceptional specialized highlights that empower the company to remain protuberant and aggressive in the business. It has been found that the total revenue founded to be raised from 2016 to 2018 and same goes with the cost of revenue. Also, the gross profit founded to be raised from 2016 to 2018 and there is a great difference between the cost revenue observed in the year 2017 and 2018.
- Apple, A. (2019). Apple (AAPL) Income Statement. Retrieved from L., & Papachroni, A. (2016). Strategic Leadership and Innovation at Apple Inc. SAGE Publications Ltd.
- Mannan, A., (2018). Apple Inc. (NASDAQ:AAPL): Time For A Financial Health Check. Retrieved from (2019). AAPL Company Financials.
Cite this essay
Financial Performance of Apple Inc. (2019, Aug 20). Retrieved from https://studymoose.com/financial-performance-of-apple-inc-essay