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Apple Evaluation Report

Satisfactory Essays

Evaluation of the financial performance of Apple Inc. from 31 Dec 2006 to 31 Dec 2010

1.0 Terms of Reference:
This research report, addressed to the Board of Directors is a method of offering clear perception over the financial evolution of Apple Inc. (APPL) from 2006-10. APPL is a designer, manufacturer and marketer in a range of personal computers, media devices, mobile communication and portable digital music players. It also sells a range of related software, services and applications. Apple Inc. a total of 317 stores, from which 233 stores in United States and 84 stores internationally. The aim of this report is to analyse the company’s financial position regarding liquidity, efficiency and profitability.
2.0 Findings
The …show more content…

Generally, there was a slight fall in the Apple’s Inventory Turnover. Thirdly, Average Age of Inventory is a measurement which estimates the average time it takes a company to sell a given product. A high Average Age of Inventory may display that a company is not effectively managing its inventory or it has a substantial quantity of goods which are proving difficult to sell. Between 2007 and 2010 it took Apple about 7 days to sell its stock. Finally, Debtor Turnover ratio indicates the average time that debtors take to pay a firm for their purchases. As presented in the table below, the pattern in debtor collection was so varied in the last five years. To conclude, it is evident on all four of the efficiency measures that Apple’s efficiency has clearly improved over the five-year period.
Ratio (formula) 2010 ($m) 2009 ($m) 2008 ($m) 2007 ($m) 2006 ($m)
Asset Turnover (Revenue/Total Assets) 65,067/41,67= 1.56 42,603/31,555= 1.35 32,479/34,690= 0.93 24,006/21,956= 1.09 19,315/14,509= 1.33
Inventory Turnover (Cost of Goods Sold/Inventor) 38,471/753= 51.09 times 25,017/482= 51.90 times 20,861/427.47= 48.80 times 15,535/307.98= 50.44 times 13,492/217.51= 62.03 times
Average Age of Inventory (365/Inventory Turnover) 365/51.09= 7.14 days 365/51.90= 7.03 days 365/48.80= 7.47 days

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