Financial Policy at Apple Case writeup Essay

On September 29, 2012 Apple had a 12% increase in cash, cash equivalents, and short-term marketable securities combined from the previous year. At the end of the September 24, 2011 accounting period Apple reported $9,815,000 in cash and cash equivalents, and the sum of 16,137,000 in short-term marketable securities. Apple reported at the end of the September 29, 2012 accounting period the sum of $10,746,000 for cash and cash equivalents, and the total of $18,383,000 for short-term marketable securities

In a press release given by Apple it addressed the risk and uncertainties as well as the normal cost of keeping the organization competitive and innovative. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis (Apple, 2011). Looking at the accounts payable for the last two reporting years Apple shows $12,015.00 for 2010 and $5601.00 for 2009 giving an increase of $6,414.00 in the one year period.

We are providing below the assumptions and other calculations we used while computing the WACC and the cash flows.

The stock that I have analyzed is Apple (AAPPL), which it falls under the technology sector and trades under the NASDAQ. This sector holds the biggest companies around the world. A lot of these companies are well known such as: Amazon, Google, LinkedIn, and etc. The technology sector is an undeniably investment opportunity for every investor around the world. Lets face it technology keeps improving and we have only seen the beginning of it. These companies, such as Apple, are associated with constant innovation and invention. Our modern economy relies upon the technology sector to improve quality, productivity, and profitability.

Steve Wozniak and the late Steven Jobs founded a computer company in April 1, 1976, Apple Computers Inc. becomes a global leader in the sector of computer and mobile technology (Rawlinson, 2016). Today, the company specializes in a range of products including computer hardware and software, consumer electronics, and provides digital distribution. With over 120 online stores, as well as worldwide retail stores in different countries, Apple continues to portray commendable features of financial stability. The firm remains highly competitive relative to key rivals as Samsung, Dell, and Acer. The study analyzes the financial position of Apple in the last three years in terms of sustainable growth rate (SGR).

Apple, Inc. currently has a Price-to-Earnings ratio of 43.70, compared to the industry standard of 36.50, and the S&P 500 average of 20.73. This indicates that Apple has a lower amount of risk than other firms in the computer manufacturing industry and other firms in

Based on the solvency ratios that have been calculated, it can be realized that Apple has a stable, normal and acceptable position in terms of its allocation of debts, as compared with the proportions of its shareholders’ equity. With debt ratios at .5891 for FY 2015 and

Analyzing Apple’s stock price movement for the past three years, there has been a steady upward trend in the past one and a half years, from August 2007 to December 2008. The MACD began to move erratically from April 2008 onwards which suggests that the trading environment is growing more unpredictable with investors’ confidence changing momentum more drastically. This could be due to the looming global economic crisis. From the graphs below, one positive note is that Apple’s stock price consistently outperforms the market indices—the Dow Jones Industrial Average, S&P 500 and NASDAQ. In the long run, Apple’s stock is expected to rise tentatively in this volatile trading environment. Should this trend hold strong, we would recommend a buy option as the prices are on an upward sloping trend.

Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.

It is quite obvious from the case that Apple is facing many obstacles. It has way more competitors today than it had two or three decades back. Part of it has to with the highly globalized environment that companies are operating in these days. Another major obstacle is the technological environment which is rapidly changing compared to the one that Apple experienced when it first emerged on the global scene. But the most important of it all seems to be a mental thing. It appears that Apple, over a period of time, developed a rigid mental model that related success of Apple with sheer innovation. This same mental model has lead to demise of many companies in the past, Xerox Corporation being the prime example of that.

From being at the verge of bankruptcy to downplaying its financial success before the quarterly profit announcements, Apple does this to surprise analysts and investors.

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

The figure above shows Apple Inc, the Market cap lead, and Dell, the Market cap last, corporations and their market share compared to the industry and the technology sector. As you can see above Apple Inc. is almost as close to the market cap for the Personal Computers industry. Although, it does have a smaller P/E ratio compared to the industry it still is the highest among the top leaders within the industry. Compared to the industry Apple’s does not have a debt to equity ratio, which is excellent. Apple’s net profit is also the highest within the top competitors and the industry. The price to free cash flow exceeds the industry as well as the technology sector.

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).

Apple’s annual report, as submitted to the United States Securities and Exchange Commission (SEC) on Form 10-K, lists its total assets as $47,501 for fiscal year 2009 and $75,183 for fiscal year 2010. Its largest asset for the same two years was $18,201 in short-term marketable securities in 2009 and $25,391 in long-term marketable securities in 2010. Accounts payable listed as $5,601 in 2009 and $12,015 in 2010. All figures are noted in millions (Apple, Inc. Annual Report). Apple does not report taxes collected from its customers that are paid to governmental authorities. Apple’s 2010 annual report lists cash, cash equivalents, and marketable securities valued in 2010 as $51,011 million and in 2009 as $33,992 million. Total current assets in the year of 2010 were $41,678 million and for the year ending 2009 were $31,555 million. Current assets are listed in the order