Financial Analysis of Apple, Inc. - 2114 Words

Company Background Apple, Inc. (formerly known as Apple Computer, Inc.) was incorporated in the State of California in 1977. Apple currently designs, manufactures, and markets a variety of computer and personal electronic products, including Macintosh computers, and the iPod digital music player. AppleÕs key markets are consumers, creative professionals, educational institutions, and business users. For nearly twenty years, Apple computers have been the industry standard for creative industries such as publishing, advertising, digital music and video editing, and graphic design. Apple computer and peripheral products include Macbook and Macbook Pro laptops, iMac and Mac Pro desktops, as well a line of flat-panel displays and the†¦show more content†¦By examining the long-term debt to equity ratio, as well as the remaining debt ratios, we can assume that Apple carries a relatively small amount of debt, as do most firms in the industry. This means that Apple has a proportionately large equity base, and a high amount of unused borrowing capacity. Profitability Ratios Apple has a gross profit margin ratio of 31.53, which is higher than the industry average of 27.63. This indicates that Apple is either more efficient at reducing production costs than the average firm in the industry, or has more efficient pricing policies and/or sale techniques than the average firm in the industry. The fact that Apple owns 165 retail stores may help increases this ratio by allowing more sales that arenÕt discounted to wholesalers or distributors. This ratio is well below the SP 500 average for both Apple and the entire industry. AppleÕs net profit margin is 12.92, compared to the industry average of 8.46. AppleÕs computer products are priced higher than most in the industry, and a combination of these higher prices and efficient cost controls could be a factor. Management Effectiveness AppleÕs inventory turnover ratio is 71.75, while the industry average is 58.61. AppleÕs high inventory turn can be attributed to a period of high growth and increasing sales during FY2006, which will be discussed in the next section. The higher than averageShow MoreRelatedFinancial Analysis of Apple Inc.795 Words   |  4 PagesFinancial Analysis (Submitted by) Abstract The following paper aims at discussing the financial position of the American multinational corporation, Apple inc., which designs and markets consumer electronics, computers and personal computers mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions. Apple Inc. together with subsidiaries sells its products worldwide through its onlineRead MoreMicrosoft And Apple Inc. 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