Financial Comparison Of Apple And Microsoft

Abstract : Analysis of financial statement of a company is an important because it is useful to obtain Information

I chose three tech companies for my financial analysis; Amazon ”AMZN”, Apple ”AAPL”, and Microsoft Corporation “MSFT”. Company data are derived from the 2016 fiscal year. I utilize services from all three companies on a daily basis. I own many Apple products, my favorite being my iPhone. On my iPhone I have access to Amazon and Microsoft apps. As an Amazon Prime subscriber, I enjoy the fast shipping and wide variety of products offered by Amazon. Microsoft office allows me to create presentations with PowerPoint, write academic papers (like this one) with Word, and organize data using Access or Excel. In order to analyze the financial health of the three companies, i’m using the debt ratio, asset turnover ratio, price/earnings ratio, current ratio, and gross profit percentage.

The purpose and goal behind researching the income statements and balance sheets then calculating the ratios is mainly to help creditors and investors make their decisions easier and faster. The way we are presenting our research results helps the investors and creditors make the decision which of the companies is more worthy to invest in or loan money too without taking a risk, and lowering the chances that they will be disappointed by the results of their investment, or in the creditors case they can be almost certain the company they are loaning the money to would be worthy enough of paying the money back without a hassle.

Understanding the finances of a company is important but knowing the significance of the financial statements is crucial to the operations as well. Reviewing the statement of financial position, operating statement and statement of cash flows serve as a guidance to management and executives on the day-to-day activities of an organization (Finkler et al., 2013). For example, the statement of financial position (balance sheet) shows the assets and

These statements can also be used to make a company look stronger, than they appear. Therefore, it is important for investors to do extra research on companies. As an investor, the information will be used to decide the true financial position of a company. If one is, a government official this information can be used to find out if a company is out of compliance. This is an important

It seems that the competition that has been brewing between Apple Inc. (NASDAQ: AAPL) and Microsoft Corp. (NASDAQ: MSFT) has never really died down from the late 1970s, even as both companies have had ups and downs in the stock market and in the consumer products market as well.

Our group decided to analyse the company Apple Inc., listed on Nasdaq Market as AAPL. The analysis was mainly based on the annual financial report of the company for the fiscal year ended on September 29th 2007. Apple Inc. is today one of the most

In this paper, I am going to bring out the similarities and differences between Microsoft and Apple. It is evident that rivalry is the mother of innovations in the contemporary world. The rivalry between Microsoft and Apple to dominate the technological industry and markets has seen major developments in the industry. Their achievements have been tremendous in the past years, and in 2012, according to the Fortune list, Apple was perched at position 17 while Microsoft was at 37 (Noga 20). Many people tend to think that the two companies are one and the same thing. However, computer addicts appreciate the fact that both companies provide software applications. They are the two most established companies as far as the production of computers are

Microsoft Corporation’s profitability ratios: Figure 2. From 2012 to 2013, Microsoft Corporations profit margin increased roughly 5%, although there was a slight decrease from 2013 to 2014, the profit margin still increased nearly 2.5% overall. Their return on assets experienced a decrease of over 1% due to a sizeable increase in inventory on the books, similar to Apple Incorporated. Microsoft Corporation’s return on equity also decreased by nearly 1% between 2012 and 2014 due to sizeable increases in the amount of equity held in the company.

The website is well organized, making it very simple to find what a person is looking for. Unlike Microsoft, it is well spaced, which helps to grab the reader’s attention. Microsoft’s homepage is setup fairly differently from Apple’s. Instead of having a main ad like Apple, its site has a set of highlights advertising their information. Highlights do not catch a reader’s attention as well as Apple’s large ad. Furthermore, Microsoft’s homepage is also packed with a lot of information in such little space. The information is broken down into bullet points, but the font is small and there are hardly any images to differentiate between the items. There is little to attract the reader to make him/her want to read through this content because it just appears to be boring. Therefore, the homepage of Apple and Microsoft differ.

The financial analysis expressed in this paper shows a comparison of two large firms in the communication and technology industry. Microsoft and Apple Inc. both deal in telecommunication gadgets and accessories within the United States and around the world. The paper focuses on the financial comparison of the two companies for two fiscal years of the year 2014 and 2015. A close analysis of the financial ratios is employed in bringing up the comparison. These rates are derived from the balance sheet and statement of income of both firms.

Microsoft’s times interest earned ratio is 87.7, showing that this firm is very successful especially before any interest or tax is deducted from its overall earnings. Apple’s times interest earned ratio could not be calculated due to the fact that their data didn’t indicate a specific interest expense to complete the equation. Another solvency ratio is the debt to equity ratio (I); taking the firms total liabilities and dividing that total by owners’ equity. Currently Microsoft’s debt to equity ratio is 0.8, showing that there is less risk among the firm’s financials. This also means that the company doesn’t rely too much on external lenders. Apple’s debt to equity ratio seems to also be within good standing because it is .5, so it doesn’t rely too much on external lenders either. Overall, both liquidity and solvency ratios represent how financially stable this company is within converting its current debt into cash as well as its long-term debt. In most cases Apple Inc. falls behind Microsoft Corp. within its short and long term debt solvency.

Balance sheets and income statements are a snapshot of a company’s stability and financial situation. Combined the statements show the income, expenses, and stockholder’s equity in the company. These statements are often analyzed by financial institutions when a company comes to them needing a loan. Stockholders and other investors also look at these statements to make sure their investment will return a profit for them. This paper will look at four different companies and their balance sheets and income statements. The companies are Eastman Chemical Company, Covenant Transportation

The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996 (Kim & Yoffie, 2010, p.1). This can be explained that Apple has become larger and more significant than other competitors put together in 1980. Because Apple failed to innovate in 1996, the company almost went bankruptcy but eventually Steve Jobs took Apple from bad situation to the company that can make billions of dollars through promoted itself as a hip alternative to other computer brands. Apple highlighted its computers as the world’s “greenest lineup of notebooks” that were energy efficient and used recyclable materials. The goal was to differentiate the Macintosh amid intense competition in the PC industry (Kim & Yoffie, p.4).

Apple Inc. has launched its iPhone in January 2007 (telegraph) as a new product in the market with latest technology and it was the first multi touch smartphone adding the feature of iPod and received an overwhelmed response by selling 270000 units. It had created a new record for a new company like apple, iPhone had laid a stepping stone for the success of Apple and till this time iPhone is the best seller product of Apple Inc. during first quarter of 2016 apple has sold over 74 million iPhones worldwide. (statista, 2016).