Apple Financial Report Essay

Background objective lens orchard apple tree Inc, an American multinational corpoproportionn that designs and markets consumer electronics, computer softw ar, and personal computers. I would like to emphasize that this report supports in order to gift a general air of bulky-term enthronisation. Strengths, Weaknesses, Opportunities and Threats (or SWOT matrix) of apple Inc will be mentioned below. Specifically, I will talk about issues which are relevant for investors in the long time. However they are concerned and depended on numbers with ratios in only financial report.StrengthsTotal additions are about $53,851 gazillion (orchard apple tree Inc proportionateness sheet in Sep-2009). When we compare with both(prenominal) other companies, apple Inc is actually one of the leaders among technology companies.Comp all(prenominal)Microsoft apple IncNokiaDellHPAssets (billion $)86,11253,85151,27630,0604,265Moreover, orchard apple trees products much(prenominal) as IPhone, IPod or IMac with hefty attribute are appeared every countries and they accommodate a large attraction with customers. For example, harmonize to Brandonweir (from orchard apple trees Quarterly EarningsReports), 2010, 33 one thousand million IPhone have sold until the end 2009(1), At the September 9, 2009 keynote presentation at the orchard apple tree Event, Phil Schiller announced kernel cumulative sales of iPods exceeded 220 million(2) gibe to Downhill Battle in 2010. It figures strong abilities and in-chief(postnominal) position of Apple Inc in the world.Established on April 1, 1976, with over 30 long time surviving, Apple Inc have experienced an increase in their growth, profit and stocks while several(prenominal) large ones else such as IBM could not survive by the time. Since beginning, Apple Inc has not only survived for 30 years but also acquired umpteen small and medium in various aspects. It proves strong ambitions to widen go with much and more. In addition, from YC HARTS in 2010, R&D (Research and Development) of fraternity is 6.58% of total assets(6), it makes fellowship independent on potential threats. Here is 7 biggest companies of 28 which are acquired by Apple Inc(3) with total investment over 1,335 million dollars, according to Alacrastore in 2010. It is argued that the company has strategy plans for sustainable breeding in the long time.TimeCompanyValue7/2/1997 succeeding(prenominal) Computer programming services$ 404,000,0002/9/1997Power Computing- ringer-MakingClone computers$ coke,000,00031/12/2001PowerSchool Online info systems services$ 62,000,0001/7/ 2002Emagic practice of medicine production software$ 30,000,00024/4/2008P.A. Semi Semiconductors$ 278,000,0005/1/2010Quattro Wireless Mobile advertising$ 275,000,00027/4/2010Intrinsity Semiconductors$ 121,000,000There are nearly 899,805,500 and 888,325,973 fortunes issued and out standing until September 2009 (From financial report, p. 56). It is clear that a large of num ber shareholders do believe in company conquest and their peachy are invested rejectly. While their profit from stocks and shares are increasing, it is stated that drop Apple stocks will earn profit more and more. And the company has more great from investors to use it for developing projects. Moreover, in fact, one positive focalize of Apple Inc is they do not pay out any dividends. and so company could re-invest the money into active capital structures. It shows a sustainable victimization with clear projects for long-term investment of shareholders.WeaknessesApple Inc has 323 stores til now 82% of them (265 by 323) only in US and UK(4), according to Wikipedia, 2010. It is stated that Apple Inc should expand company to get more profit of potential customer from other areas in the world. Moreover, it is a chance to create new contracts with various producers. Because with long-familiar trade name and quality products, it is argued that if company only wants to increase n et income in some big countries, it is a big waste.OpportunitiesGenerally, potential investors film a general view about company STOCKS and SHARES since some years ago because it would help them to be sure that basically, their money is invested in secure way or not. From 2004 to 2009, companys stocks are increasing cursorily every year although it is affected by recession in 2008 therefore their profitability is their high earnings per share. Specifically, companys stocks rose cursorily from 100$ in 2004 to 957$ in 2009.From Apple Inc financial report in 2009, p.35Meanwhile, from table below seems to suggest that a significant rate of development of Apple Inc when we compare some other index. In 5 years, this stocks in 2009 gets nearly by ten times (957$ and 100$) in 2004 (beginning). Moreover, it shows that stocks and share of Apple Inc is high than competitive companies about development therefore expend Apple Inc at this time for a long-term is a correct decision.September20 04September2005September2006September2007September2008September2009Apple Inc.$100$277$397$792$587$957S&P 500 Composite business leader$100$112$124$145$113$105S&P Computer Hardware Index$100$115$123$181$152$180GROSS MARGIN PERCENTAGE of Apple Inc also rose from 2007 to 2009 with about 35% each year. Profit allowance measures the performance of the company in generating profits from sales therefore from this ratio, Apple Inc figures a rapid development with positive effect. This is a percentage present the relationship between a businesss profits onwards overheads are taken away (gross profit), and the total amount of income from sales. It is claimed that investors could believe in the company financial situation nowadays completely.200920082007Net sales$36,537$32,479$24,006 greet of sales23,39721,33415,852Gross margin$13,140$11,145$ 8,154Gross margin percentage36.0%34.3%34.0%GEARING, which is outlined DEBT divide EQUITY, is important because the level of risk increases as the pr oportion of debt increases and impartiality shareholders are paid after the demands of loan capital providers have been met. check to financial report, Companys long-term debt is zero while legality is $ 1743 therefore gearing = 0 is enough low to invest with pretty refuge. Apple Inc has a very good financial standing and is not in any immediate danger of bankruptcy. When we have a drawing look, gearing and debt of others competitive companies like HP, Dell or Microsoft are higher so much than Apple Inc. Therefore shareholders could believe the safety of their capital in the long time. On the other hand, ASSET TURNOVER, which is defined fit SALES divide ASSETS (36537 / 53851 = 67.85%) is used to measure the performance of the company in generating sales from the assets at its disposal. Asset turnover is one of two important ratios for shareholders to return on capital employed therefore it helps investors identify the safety of their capital. With 67.85%, it shows a positive number of efficiency for long-term investment.CURRENT ratio which is defined CURRENT ASSETS divide CURRENT LIABILITIES relates the ongoing assets of the company to its electric current liabilities. It is a measure of a companys ability to discover its short-term solvency. These assets should at least be sufficient to meet the any short-term liabilities generally that is taken to mean a ratio of 21 or better because many State Securities Bureaus will occupy this ratio for stocks and make investors believe financial situation of company. When we compare among some large technology companies, apple is the best of them (table above). This ratio shows that Apple Inc would be considered to have good short-term financial strength. If we have a look QUICK RATIO, which is defined (CURRENT ASSETS minus INVENTORY) divide CURRENT LIABILITIES, excludes inventory from the current assets figure because it may be difficult to convert inventory to bullion spryly. This ratio assumes that inve ntory is not available as part of the asset base available to meet the demands of immediate liabilities. 11 ratio or higher is considered good because it proves financial strengths of company to meet any sudden accident. Apple Incis better able to meet their current liability obligations by using their liquid assets when the company is compared to the industry. With 1.86, Apple Inc defeated primary(prenominal) competitive companies to pay its short-term debt and made customer confidence for company success.ThreatsApple is still a successful modern company nowadays however actually, according to Ben McClure (Investopedia), 2010 when Apple Inc spends too much money with 1.109 billion dollars (2008) on R&D (Research and Development)(5) while some other aspects such as architecture of agents around the world need more capital to invest although it is a positive point which made a good position of Apple Inc nowadays.Another view that we need to consider carefully is recession. Actuall y, from the stocks chart above, Apple Inc was affected by this in 2008 (decreased from $792 in 2007 to $587 in 2008). Therefore when recession has not gone out completely, shareholders should examine their investment for sustainable future.ConclusionsFrom SWOT matrix above, with rapid grow speed of stocks & company and also developing strategies in the long-term, I want to recommend that Apple Inc is a good choice to invest in the long time. Although the company has some threats and weaknesses, Apple Inc has every confidence from investors who have invested in the long time before. When we analysed SWOT above, financial ratios and numbers show a quick increase with stable development therefore it is claimed that investing Apple Inc for a long-term is a right decision.NotesAnyway, this report only analyses some conspicuous features and predictions above can be not sure 100% in the future. Because companys success is affected by many contrary aspects such as demand of customers in t he long time however some of them are not mentioned in this report. Although the ratios and the financial numbers of Apple Inc are fairly good, nothing is impossible in thelong-term.References(1) Brandonweir, 2010, how many iphone have been sold, accessed 29 November 2010, available at http//www.mahalo.com/answers/how-many-iphones-have-been-sold. (2) Downhill Battle, 2010, Are all those iPods drop off?, accessed 29 November 2010, available at http//www.itunesperipod.com/. (3) Alacrastore, 2010, Apple Inc Mergers and Acquisitions, accessed 29 November 2010, available at http//www.alacrastore.com/mergers-acquisitions/Apple_Inc-1001101. (4) Wikipedia, 2010, Apple store, accessed 29 November 2010, available at http//en.wikipedia.org/wiki/Apple_Store. (5) Ben McClure (Investopedia), 2010, R&D consumption And Profitability Whats The Link?, accessed 29 November 2010, available at http//www.investopedia.com/articles/fundamental-analysis/10/research-development-rorc.asp (6) YCHARTS, 2010, AAPL, accessed 3 December 2010, available at http//ycharts.com/companies/AAPL