Financial Analysis of Apple Inc.
Added on 2019-09-22
2 Pages1019 Words417 Views
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PART –BD. In the present case the company that is selected for the purpose of analyzing is Apple Inc. byanalyzing the data through different ratios which will able to comment whether the companyperformance over the year has improved or not, profitability has increased or not and also onother factors like liquidity etc. The different ratios that are prepared for the purpose of analysis iscurrent ratio which has decreased as compared to previous year and affects the firm liquidityposition other ratio that is chosen is Debt ratio which tells us the proportion of Debt on Totalassets and which has increased over the years from 0.6428 to 0.7070 which tell us that theproportion of debt has increased more as compared to increase in proportion of Debt and it isriskier for the company.The profitability ratio tells us the company performance over the year which tells us that thecompany has maintained on an average the same amount of profit in both the years and Timeinterest earned ratio tells us that the how many times earnings are available to cover the interestexpense and from the analysis of two years it can be said that it has decreased over the yearswhich is riskier for the company.The account receivable turnover ratio tell us the proportion of days in which the credit sales ofthe company is recovered and from the analysis it can be seen that the no. of days to recover theamount has decreased which is good for the company and should work more in order to improvethe liquidity of the company. The average Inventory turnover ratio tells us how many times thecompany is able to sold its average Inventory over the years which has been increasedconsiderably by analyzing the data of past two years from 29.0521 to 41.3943 which tell us thatthe company performance has increased and high ratio implies good for the company. The otherratio that is taken for the purpose of evaluation is Return on sales which tell us the Net incomethat is earned on the sales of the company and are able to analyze the performance by comparingthe return with some other company so as to able to compare and find out ways to improve thecompany performance and optimum return that should be earned by the company in the samefield.Asset turnover ratio means ratio which shows us that how effectively the company uses it assetsto generate the sales of the company and higher ratio is always favorable for the company whichshows us that the company has utilized its asset more efficiently and whereas on the other handlower ratio implies the utilization of asset not so efficiently and has to take steps so as to increasethe utilization of the asset and enhance the company performance which in the present case hasincrease from 0.6108 to 0.7262 which shows that the utilization of asset has increased by thecompany over the years and it is favorable for the company. Return on assets which the returnwhich the company has earned on the average assets that is employed in the company and higherratio means favorable for the company and whereas the lower ratio implies that the company isearning optimum return on its asset and have to work in order to increase the return on the assetsemployed in the company and which in the present case has increased from 12.8826 to 16.2775which is favorable for the company and has tells us that the company performance has increasedover the years. The above ratio tells us the company position in terms of solvency, liquidity and performance interms of return that is earned by the company whether it is reasonable or not. The companysolvency is analyzed by finding out ratio which is known as financial leverage which tells us the
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