Free Paper with the Financial Statement Analysis of Apple Inc.

Published: 2022-06-15
Free Paper with the Financial Statement Analysis of Apple Inc.
Type of paper:  Report
Categories:  Financial analysis
Pages: 3
Wordcount: 603 words
6 min read

Apple Inc. is one of the blue-chip technological companies that have dominated Silicon Valley. The company has enjoyed a positive financial performance for the past five years as can be seen from the trend in its annual financial statements. A clear indication of this positive financial performance can be seen in the company sales that stood at $170.87 billion back in 2013. This figure has substantially increased to $228.57 billion in 2017 backed by market dominance and a constant demand for the company's superior smart gadgets that include mobile phones and portable computing devices. At hand to sustain this impressive financial performance is has been a moderate rise in the cost of goods sold that have been increasing moderately compared to the rise in sales revenue. The relative low increase in the cost of goods sold means that Apple Inc. has been at a position to report massive profits as can be seen by the increase in the gross revenue from $63.63 billion in 2013 to the current figure of $86.87 billion in 2017.

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The other indicators of a positive financial performance from Apple Inc. include the company's earnings before interest, tax, dividends, and amortization (EBITDA) and the net profit after all the expenses have been taken into consideration. The EBITDA in 2013 was $55.08 billion that has been gradually rising up to $70.19 billion reported in the 2017 financial period. From this EBITDA, the interest, tax, dividends, and amortization of the company are accounted for to arrive at the company's net profitability. It is this net income that eventually underlines the company's overall profitability for the five-year period stretching from 2013 to 2017 financial years. Apple Inc. reported a $37.04 billion in net profit, with the company's impressive financial performance denoted by the rise in this figure to a net profit of $48.35 billion in 2017.

The financial report for Apple Inc. is crucial in helping the shareholders to pinpoint the trends that make them remain keen in investing in the entity. This information touches on the liquidity, profitability, efficiency, gearing, and market value as denoted by the various ratio analysis of Apple Inc.'s financial statements. Shareholders will be interested in the profitability of the company in terms of its financial performance. This is given by the various profitability ratios, especially the net profit margin that has grown from 6.68% to a healthy 21.15% over the five year period. Shareholders will also look at the liquidity ratios that indicate the company's ability to meet its short term obligations as they fall due. The 19.59% to 19.76% current ratio from 2013 to 2017 respectively shows a constant state of the company in which it has been able to offset any short-term obligations that are due to its short-term creditors and suppliers. The company is liquid enough to meet its working capital requirements.

The shareholders will also be interested in the efficiency of Apple Inc. in its revenue generating activities. Efficiency ratios enable the shareholders to ascertain how the company is able to optimize its assets and manage its various liabilities. There has been a growth in the company's assets from a 12% change in 2013 to the present 16.67% in 2017. This is an indication of optimal use of assets to generate a higher sales volume. It is also prudent for the shareholders to know the proportion of the company operations that are financed through their funds and through borrowed funds as represented by the gearing or debt ratios. The current gearing ratio of 59.69% shows that the company has been successful in utilizing the shareholders' funds to finance its daily operations as opposed to external borrowing.


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