Analysis of the Financial Statements
Apple Inc
Introduction
Apple is known as the symbol of prestige and the company works on innovation, quality and excellence.The co-owner Steve jobs believed in the idea of innovation par excellence.
The reason why I chose Apple is because the company believes in innovation and working on it as well how ever the products of the company are superior and people are willing to pay more for their products.Moreover,the company is focusing on new and innovative products and it makes such innovations, which are not even on the mind of consumers. It has a broad product line for tech devices such as its iPhone, MacBook iPad and iPods etc.
Over here the case analyzes either to make a purchase of Apple’s stock or if I have the stock then it’s time to buy more or to maintain the same quantity or to sell that stock. I have to convince my grand parents however,before going to ask for shares I will analyze their financial conditions to justify my recommendations. In order to do the task I have selected the technique Analysis of the Financial Statement for the company since last three years.The reason behind the selection of three years is that three years are enough to analyze if the company is consistent or inconsistent.Now we go through the process of ratio analysis and discover that what decision has to be made based on the company’s financial performance.
Note: All the data pertaining to the Analysis has been collected from Apple Inc Annual Report.(EXCHANGE, 2014,2015)
Liquidity Ratios
These ratios test the company’s short term assets to meet the company short term debts or obligation in the short run.
The calculations have been made on the excel sheet and are in the sequence of 2015, 2014, 2013 respectively.
Liquidity Ratios 2015 2014 2013
Current Ratio 1.11 1.08 1.68
Quick Ratio 1.01 0.98 1.56
Cash Ratio 0.26 0.22 0.33
Net working Capital 8,768 5,083 29,628
Current Ratio (Current Assets/Current Liabilities)
This is the ratio which indicates the firm’s current assets’ capability to pay short term debt.11, which means that the company has 1.11 of current assets to pay short term debt of 1$, which is increasing as compared to 2014 which was 1.08 and it had decreased as compared to 2013 which was 1.68.This means that the company faced a slight downfall in 2014 to manage current assets and current liabilities however,it is recovering from it. Nonetheless,the current ratio is below the standards in all of the years, which is 2:1.............................
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