Comparison of Financial Ratios of Apple Inc. with Technology Industry


Added on  2019-09-21

4 Pages1182 Words240 Views
PART- III TECHNOLOGY INDUSTRYA.The four industry primary industry code SICO code is 7372 and industry which it belongsis Technology industry. B.The comparison of financial ratios of company Apple Inc. with the Technology industryratios so as to analyze the performance of the company.C. S. No.ParticularsApple Inc.Industry Averageratio1.Current Ratio1.122.242.Gross Profit Margin38.4436.553.Times Interest Earned23.530.444.Accounts Receivable Turnover5.426.485.Inventory Turnover41.3920.26.Return on Assets16.2710.257.Asset Turnover0.720.598.Leverage ratio0.871.27The above comparison shows the comparison of Company Apple Inc. ratios withIndustry average ratios so that the company performance can be analyzed. In the presentcase the company SICO code is 7372 which has been used for the purpose of collectingindustry averages to which it belongs which is technology industry which has beencalculated by taking the average of the ratio of all the companies in the industry so that itcan be standard benchmark which can be utilized to compare with the industry data.In the present case the comparison of current ratio states that while the company ratio is1.12 and the industry average ratio is 2.24 which involves the following company like

Microsoft Corp., Oracle Corp, Adobe System Corp. etc. which shows that the companyratio is weaker than the industry average which tells us that the liquidity position ofApple Inc. is less than Industry average and have to focus on increasing the liquidityposition of the company. The other ratio which is Gross Profit margin which states thatthe profitability of the company from the Sale of Product / Services which in the presentcase has been 38.44 of the company while the industry average is 36.22 which shows thatthe performance of the company with respect to Industry Average is better. The Timeinterest earned ratio tells us that the no. of times the profits are available to cover theinterest expense which is 23.5 in case of company and industry average is around 30.44which shows the company ratio is weaker as compared to industry averages and have towork more in future in order to improve its position in order to increase its profits.The ratio which is Accounts receivable Turnover ratio tells us the no. of times thecompany collects its average account receivable in a period which tell us that the higherthe ratio the more favorable it is for company which is 5.42 in case of company and 6.48in case of industry average which shows that the efficiency of the company in collectingits receivable is weak in comparison to industry but the highest of the ratio among theindustry the company has is Intuit Inc. which is 49.07.Inventory turnover ratio is efficiency ratio which tells us that the no. of times of thecompany is able to sell its inventory during a period and higher ratio implies morefavorable to the company which in the present case is 41.39 of the company and 20.2 isthe industry average which shows that the company performance is better than those ofthe industry and other companies also within the industry which have higher inventoryturnover ratio is Activision Blizzard Inc. which has 52.65 that is the one among the

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