Investing in Apple Inc

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INVESTING IN APPLE INCORPORATION FIN 534-Financial Management 3 March 2015 Abstract In my paper, I will provide the rationale for selecting Apple Incorporation for which to invest. I will also determine the profile of the investor for which this company may fit. I will then use five financial ratios to analyze the past three years of the company’s financial data. Based on my review I will determine the risk level of the company indicating key strategies they may use in order to minimize the perceived risk. Finally, I will provide my recommendations of Apple Incorporation as a potential investment opportunity. Investing in Apple Incorporation Rationale for Investment Consideration of several…show more content…
For instance, Craig Federighi, the software engineering vice president is an expert in spearheading innovations. Stock buybacks and big dividends Stock buybacks refer to the decision by a company to acquire back the shares it had sold to the investors. Stock buybacks are necessary since they reduce the number of the company’s shareholders. Buybacks are imperative in lifting the earnings per share. Apple continues to use its financial strength to reward investors by allowing buybacks (Linden et al., 2009). Moreover, the financial strength helps Apple to pay big dividends to its investors. Big dividends act as a primary motivator to the investors. Ratio analysis Financial and non- financial ratios forms a key consideration when making investment decisions. Financial ratios reveal the financial viability of investing in the firm. The ratios specify the financial position of the company. The ratios can either explain the liquidity, profitability, or efficiency levels of the firm. They assist in comparing the economic performance of enterprises in the same industry. Therefore, investors rely on the ratios in making feasible investment decisions. Operating Margins The sales growth rate has continued to fall over the years. The iPhone can explain the fall in sales and iPad products market saturation. The products, which are the primary sales contributor, continue to face significant competition from products from other technology
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