Apple's IFM: Theories, Market Efficiency, and Project Evaluation

This report provides an in-depth analysis of Apple's international financial management (IFM) practices. It begins with an introduction to IFM and its significance in the context of globalization. The main body explores the importance of IFM for Apple, discussing exchange rates, inflation, and the management of foreign businesses. It then delves into Apple's dividend policies, including relevance and irrelevance theories, and calculates the effective interest rate. The report also examines the efficient market theory as it applies to Apple, differentiating between strong, semi-strong, and weak forms. Finally, it evaluates project assessment techniques used by Apple, including economic, financial, and market analyses. The report concludes by highlighting the importance of a strong understanding of foreign financial markets for international business success.

International
Financial
Management

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1.Compute the importance of IFM of Apple on the basis of its theories.....................................1
2.Efficient market theory of Apple..............................................................................................3
3.Techniques of evaluating projects in Apple.............................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Fastest globalisation, economic issues and subsequently dynamical organization
scenario has enhanced the value of present corporate management obstacles. Due to occurring
the International financial management in the period of worldwide organization, financial
decision being made and same pressure helps to making the good corporate activity (Armijo,
Tirone and Chey, 2020). The international business's growth might be observed in the manner of
tremendously exaggerated worldwide commerce volume. This paragraph helps to focusing on
the tough or critical view of IFM strategy of the company (Apple) and analyse that how it will
help in growing the business at international level.
MAIN BODY
1.Compute the importance of IFM of Apple on the basis of its theories.
It is an establishment system that is used to succeed the global business scenario of the
company with the help of commercialising and making money by the exchange of international
currency. To maintain the connection with the overseas organization firms, these actions are
helpful.
Importance of IFM in Apple:
1. It aids to figure out the exchange rate of various currencies of the nations and calculate
each country's currency value in monetary terms.
2. It has many advantages like it assists in screening the positions of various republics.
3. It aids to subordinate the inflation rates and determine the decision to invest in debt
securities of transnational.
4. It assists to accept the foreign business's basics and manages the balance among them
(Brigham and Houston, 2021).
5. It supports in resolving the corporate issues b/w the different various nation's members
with the aids of the corporation like world bank, IFM and many more.
There are many challenges which has been faced by Apple:
This organisation (Apple) uses number of different – 2 strategies to furnishing innovation
design, method and technology that are exist in the market. These have implanted a brand
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strategy that helps to furnish strong competitive benefits which helps in to stay positive in the
worldwide market.
Apple has faced dynamic competitive market. It has been suffering with technological
challenges in the international market through switching the communication devices and portable
scenario device or system like mobile phones and etc.
As per the business firm's success and achievements, managing interested party's demands
has become hugely hard. On the other hand, the company's reliance on interest of inclination and
work, the sprightliness for the race has been increased with the time whenever it comes to the
examining the value of its product (Gkillas, Tsagkanos and Vortelinos, 2019). Mostly
competitive companies which exist in the market are able to decrease the rate in order to achieve
the market share. Besides price, another competitors involves product peculiar, quality and
availability as well as reliability after sale of the goods and services, relatively prices, reputation
of the organisation, market and distribution capacity and etc.
Policies of dividend distribution of Apple:
It is one of the necessary contents of the organisation. It presents a captious function in
financial operations. Dividend price should be useful because it is useful to lift the sign that the
worker or employer has best transformation and might request to huge financing from
stakeholders.
However, the payment of long term dividend can be useful to company's growth of
leverage ratio. There are two methods of presenting wealth to stakeholders which is increase in
price of shares and dividends. If all the earning of an organisation has paid out in order to surplus
so there is nothing to reinvested to maximizing the company's growth. So, Apple must have to
decide what fraction of growth or earning should be pay in the form of dividends and how much
should be kept (Jermakowicz, Chen, and Donker, 2018).
This company has appreciated a consistent increment in revenues and income. It is
additionally managed to rise its bonus price on regular basis to owners. In 18 July, 2021 it turned
into paying $0.22 in line with periodical payments in percentage which gave an inventory yield
of 6% in results. Its dividend compensated total $14.1 billion in monetary term year 2020. The
left amount of profit of 2020 changed into $57.4 billion, it has been placed the dividend Payout
ratio which is 25% for the year. The surplus Payout ratio of 2018 and 2019 has been converted
into 26% and 23% as well.
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Effective Interest Rate is calculated by the following formula:
R = (1 + (i/n))^n – 1
By calculating the interest rate with the above formula, the effective financing rate of apple is
approximately 2.25 %.
Relevance and irrelevance theory:
 Relevance theory: It refers that companies full-fledged dividend policy can impact
favourably in company position in share market. Company who is paying higher dividend
have market share price of the stock as comparison to low market share company. This
will also affect the goodwill of the entity (Jones and et.al, 2018).
 Irrelevance theory: This theory denotes that organization share price will not be
affected by the dividends. It refers that organisation proclamation of dividend and
dividend payment will have minimum impact in shares cost price. Company thinks that
money should be reinvested in the company instead of giving dividend.
2.Efficient market theory of Apple.
This theory states that stock prices indicate all data. It hypothesizes that shares traded in the
stock exchanges at fair market amount. Share price of apple company showcase the true values
of entity. It is ascertained by how data moves speedily in the marketplace and impact the prices
of the shares. In context to apple there are three types of efficient market theory:
1. Strong form: It is the most important type of market efficiency. This states that it
provides both past and present information of the share price. It comprises internal and
external information. It proposes that price related information is accessible only to board
of directors or the senior members of the organisation. It is difficult to form money in the
marketplace for longer period of time. Investors are affected by any positive or negative
news of share price (Khan and et.al 2019).
2. Semi strong form: According to this company can't predicted any short term movements
of the price. In this future factors are also considered to calculate share price. This form
states that all public data is gathered to measure the company current share price.
Company can't use fundamental or technical measurement for taking any undue gains.
3. Weak efficiency: This form implies that all the past information of the stock prices is
analysed in the current price of the stock so technical analysis is not utilized to beat the
market.
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3.Techniques of evaluating projects in Apple.
1. Economic Appraisal: It is the most challenging factors faced by the company and
includes the essentials of raw materials, sales, resources, capital and the expected profit.
Apple has become the biggest seller of luxury phones and have high mass of earnings
which will determine several monetary variables such as sales, purchases (Marqués,
García and Sánchez, 2020). Apple pays 3 billion corporate tax and becomes one of
highest tax payer country in the world. Apple provides wide range of employment
includes scientists, manufacturing, wholesale, customer support, hardware and software
engineers. Through this the exchange rate of US has increased and the value of dollar
also increased due to the dominance of apple.
2. Financial analysis: Finance is said to be the life blood of the organisation. It allows a
business man to convey the business idea and arrange the funds for raw materials,
systems. It is the procedure of assessing the entity performance, budgets, it is the reading
of financial statements of the apple company to analysis the strength and weakness of the
organisation. The debt to equity ratio of apple is rising since past five years it means
organisation have more debt to buy back the shares, raise the dividend. It is the report
which is prepared by high professionals and using the ratios for analysis of the company.
3. Market analysis: The company decides to anticipate the market before manufacturing
the product. Apple analyse the potential consumers that company will be target them and
what the consumers is expecting from the apple product. The importance of market
analysis is to cut down the risk and informing the business decisions of the organisation
(Pinckney, Cohen and Leonard, 2019). The USP of apple company is the safety of the
information and this company keep ahead of itself in comparison to its competitors in
terms of innovation as well as in the prices. Company has high negotiation power so
always matters the price while deciding the products.
CONCLUSION
It is extracted from the report that foreign markets have a wide image and analytics as
compared to national financial market. It helps the organisation to groom with efficiency and
effectiveness by close supervision on the international finances. For expanding the market, the
entity must have full-fledged knowledge of the foreign financial market. The project assessment
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technique measure that how the negligence of managerial competency may put down the
company performance.
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REFERENCES
Books and Journals
Armijo, Tirone, and Chey, 2020. The monetary and financial powers of states: theory, dataset,
and observations on the trajectory of American dominance. New Political Economy,
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Brigham, and Houston, 2021.Fundamentals of financial management: Concise. Cengage
Learning.
Gkillas, Tsagkanos, and Vortelinos, 2019. Integration and risk contagion in financial crises:
Evidence from international stock markets.J ournal of Business Research,104.pp.350-
365.
Jermakowicz, Chen, and Donker, 2018. Financial statement effects of adopting IFRS: The
Canadian experience. International Journal of Accounting & Information Management.
Jones and et.al, 2018. Financial Management for Nurse Managers and Executives-E-Book.
Elsevier Health Sciences.
Khan,and et.al Tourism logistics management through financial and regulatory measures:
evidence from a panel of countries. Asia Pacific Journal of Tourism Research,24(5).
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Marqués, García, and Sánchez, 2020. Ranking-based MCDM models in financial management
applications: analysis and emerging challenges. Progress in Artificial Intelligence,9(3),
pp.171-193.
Pinckney, Cohen and Leonard, 2019. Kenya’s introduction of microcomputers to improve
budgeting and financial management in the Ministry of Agriculture. In Microcomputers
in Public Policy. (pp 67-93). Routledge.
Rugman, 2019. From globalisation to regionalism: The foreign direct investment dimension of
international finance. In Shaping a new international financial system (pp. 203-219).
Routledge.
Zhu, Jin, and Mbroh, 2020. Green financial behaviour and green development strategy of
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