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Chantania Smith Fin 571 Week 6 2/19/2024
A business case that includes a description, type of business
Financial Plan for Apple
One of the top tech firms in the world today is Apple Inc., which specializes in the marketing, creation, and manufacture of watches, computers, tablets, smartphones, and a wide range of device accessories. With over a trillion dollars in market capitalization, Apple has out performed its competitors in terms of product sales and subscription revenue. In order to satisfy the demands of every customer, they provide subscriptions for music, video, and fitness that improve the quality and experience of each product. Because of their special capacity to develop their own hardware and operating systems, Apple is able to dominate the market and generate large profits. For Apple to keep improving its goods, software, and retail spaces—including for its large workforce—funding is required. Apple is able to maintain its market leadership by investing in a variety of products and obtaining funding from a variety of sources. Additionally, they use funding for technology research and development so that their products can benefit the environment. Apple receives funding from retained earnings and equity. Equity capital demonstrates a company's ownership and how it uses its equity to run its finances. Equity determines how much of Apple's shares, stock, and retained earnings can be allocated to investments.
Every time a client purchases a product from the market, they usually look for excellent goods and services. This conduct prompts manufacturers and service providers to advance the superiority of services they give to their customers in to increase their customer base. Apple. Inc. offers quality products and services in different countries across the globe. The Company has achieved tremendous success in recent years. Effective business plan, coupled with reliable and skilled workers, has been responsible for the Company's success. This study, therefore, seeks to offer a comprehensive analysis of Apple Inc.'s financial plan.
Why the company needs funding
The Company's strategic plans depend on having enough money for them to be successful. As a result, it needs financing from several sources to guide its development. The company intends to increase the amount of sales it makes. A solid financial foundation is necessary for the company to expand its floor of operations and boost sales. Second, in order to create new product lines, the company needs money. There are too many businesses making the same products on the market today. Apple Inc. plans to start offering goods and services along new lines in order to stay solvent and competitive; thus, funding is needed (Zaefarian, Henneberg & Naudé, 2013). The organizations' activities
that call for funding include hiring new staff, putting growth strategies into action, and providing necessities like internet access and Apple products.
Sources of funding
In order to function efficiently and accomplish its goals, Apple Inc. needs funding from a variety of sources. The money is required for both the organization's development and the support of its various
initiatives. The organization's main sources of funding are its own earnings and contributions from different stakeholders. More than half of the funds of the company are funded by self-funding. On the other hand, equity and borrowing are also used sources. The company's financial situation, the project's completion status, the amount needed, and the urgency of the funding need all influence the choice of funding source.
Chantania Smith Fin 571 Week 6 2/19/2024
The company raises money from three sources: equity, borrowing, and self-funding. Different conditions are attracted to the sources, though. Risk tolerance, the company's cash flow level, adherence
to federal regulations, efficient plan administration, internal plan competition, and the creation and modification of plans are among the prerequisites for self-funding (Wilson, 2014). However, borrowing entails requirements such as fulfilling the terms and conditions set forth by the institution disbursing the funds, providing a guarantor, creating a financial plan outlining the necessary funds, and providing business statements. Venture capital firms, institutional investors, corporate investors, and angel investors are the company's primary sources of equity financing. One of their prerequisites is the selling of various equity, including shares, warrants, and common equity.
Requirements
One of the prerequisites for self-funding is having enough cash on hand to pay for the project. Collateral, a high credit score, as well as the capacity to make on-time loan payments are all possible prerequisites for borrowing. It might be necessary to sell investors company shares in order to obtain equity financing. An extensive financial projection and a business plan might be necessary to secure venture capital. When a company chooses to fund itself, it must have enough cash on hand to pay for the
project. Collateral, such as property or other assets, a decent credit score, and the capacity to make loan payments on schedule are all possible prerequisites for borrowing. Offering investors shares of the company in exchange for their becoming shareholders may be necessary for equity financing. Since venture capitalists are frequently willing to invest in high-risk companies with the potential for large returns, they will
require as well as a business plan detailed financial projection.
risks
The organization's risk assumptions, asset exposure, fiduciary responsibility, and past losses are the primary risks connected to self-funding. Borrowing money carries a significant risk because a downturn in sales could eventually prevent the company from being able to pay back the loan. Other risks associated with borrowing include missed fees and low credit scores. However, raising excessive amounts of equity can cause a business to lose control over the business and give equity investors more voting rights, which increases the risk associated with equity funding.
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