LCBB6002 - Evaluating Apple's International Financial Management

This essay provides an evaluation of international financial management within Apple, analyzing its significance based on established theories. It discusses Apple's strategies for managing global business, including currency exchange and relationships with overseas partners. The essay also addresses the challenges Apple faces in the international market, such as competition and maintaining brand identity. Key aspects like dividend distribution policy and the efficient market hypothesis are examined in relation to Apple's financial decisions. Furthermore, the methods used for appraising projects within Apple, including economic, financial, and market analysis, are explored. The essay concludes that effective international financial management is crucial for Apple's efficiency and success in the global market. Desklib provides access to this and other solved assignments to aid students in their studies.

International
Financial
Management

Table of Contents
INTRODUCTION......................................................................................................................3
TASK.........................................................................................................................................3
Evaluate the importance of international financial management in Apple based on its
theories...................................................................................................................................3
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................7

INTRODUCTION
Rapid globalisation, economic crises, and a constantly changing company
environment have heightened the importance of current financial management difficulties.
Because international financial management (IFM) occurs in the era of worldwide company,
with financial decisions being made, the same pressures make good financial controls very
vital. The growth of international business can be seen in the mode of enormously inflated
international commerce volume (Beaudoin and et. al., 2019). In this essay, the International
financial management is discussed and how it has led to Apple and helped it in growing and
sustaining in the foreign market for long time.
TASK
Evaluate the importance of international financial management in Apple based on its theories.
It is an administration system which is used to manage the global business
environment of an organisation by merchandising and making the money through the
interchange of foreign currency. These actions help the firms to connect with overseas
business firms by suppliers, lenders, partners, customers, etc.
Importance of International financial management in APPLE
1. It helps in estimating the change rate of different currencies of countries then evaluate
each nation’s in terms of the value of its currency.
2. It benefits in discovering the pecuniary position of several republics and in arbitrating
the overseas marketplace (Duque-Grisales and Aguilera-Caracuel, 2021).
3. It assists in associating the inflation rates and the decision to invest in transnational
debt securities.
4. It supports in accepting basics of the foreign organisations, also maintains the balance
among them.
5. It helps in resolving the financial disputes between the members of different nations
by the help of the corporation such as IFM, World Bank, etc.
Challenges faced by APPLE in International Market
APPLE uses the differentiation strategy of giving innovative design and technology in
the market. It has established a brand loyalty which give it a strong competitive advantage
which helps in to stay strong in the international market. APPLE has face a new and an ever

changing competitive market. It has faced a technological challenge in the foreign market by
moving the communication devices and portable environment device such as mobile phones
to put hard rivalry from all borders (Eissa, 2020). These items took the corporation to novel
opponents, lower - cost merchandises, and potential alternatives, accordingly lowering the
apparent significance of goods and jeopardising the company's strategic success. The
company's key strengths, such as publicizing, novelty, relationship building, and brand
administration, are, on the other hand put to test. In expansion, managing with a changing
client base and a developing number of unused competitors may be a trouble. The amusement
industry, as well as its advances, is experiencing quick and nonstop changes. Apple faces
obstacles in keeping up its brand character with inventive plans and innovative
accomplishments.
As the corporation's achievement and enlargement, handling interested party’s demands has
become enormously hard. Other than that, the organization's overreliance on charisma of
direction and work, as well as the need of a well-crafted progression approach, have placed
the company at risk. With Time, the enthusiasm for race has increased, mainly when it comes
to the estimating the value of Apple's product. Most of the competitors in the market can
afford to decrease the rates in order to obtain the market share. Apart from price, other
competitive variables include product characteristics, product quality and reliability, after-
sale services or products, relative prices, market and distribution capacity, and the company's
reputation.
Dividend Distribution Policy of APPLE
Dividend policy is one of the important contents of company, it performs a critical
function in corporation operating. Stable dividend price is useful to carry the sign that the
employer has excellent improvement and might appeal to greater funding from shareholders.
However, the long-time period dividend payout can result in the growth of the company’s
leverage ratio. Share price and dividends increase are two methods for providing wealth to
shareholders (Filbeck, Holzhauer and Zhao, 2017). If all earnings are paid out as surpluses,
nothing can be reinvested to create growth. Hence, Apple must decide what fraction of
earnings should be paid out as dividends and what fraction should be kept.
Apple has comprehended a consistent escalation in sales and income, sanctioning it to boom
yearly dividends. It is additionally coped to regularly rise its bonus price to owners. In July
18, 2021, it revolved into paying a $0.22 in line with percentage of periodical disbursement,

which resulted in giving an inventory yield of 0.6%. Apple's dividends remunerated a total of
$14.1 billion for the monetary year 2020. The remaining profits of 2020 turned into $57.4
billion, which placed the dividend payout ratio at 25% for the year. In 2018 and 2019, the
surplus payout ratio turned into 26% and 23%, respectively. For the past 3 years, Apple's
dividend payout ratio has continued fairly regular. In each 2020 and 2019, the organization
paid out $14.1 billion in bonuses, and in 2018 it compensated $13.7 billion. For maximum
corporations, an additional decrement is an exclusion, instead of the standard. If possible,
businesses grow their surpluses over time, supposing their earnings and revenue increase can
support it. Apple's quarterly bonus paid amid the second quarter of 2021 got to be $0.22, a
7% upsurge from the $0.205 paid during the initial quarter of the year. During the second
sector of 2016, Apple paid a split-adjusted quarterly share of $0.1425, signifying a 9.1%
annualized development rate in Apple's quarterly dividend over the last 5 years.
Efficient Market Hypothesis Theory of APPLE
Market effectiveness alludes how appropriately costs reflect all accessible insights.
The effective markets hypothesis (EMH) argues that markets are productive, taking off no
room to create additional earnings by making an investment on the grounds that the whole
thing is appropriately priced (Kirton, 2019). This means that there's little desire of thrashing
the marketplace, even though you may in shape marketplace returns via passive index making
an investment. It is a hypothesis that states that share prices replicate all facts and constant
dominant generation is impossible. Conferring to the EMH, shares exchange constantly at
their fair price on board, making it not possible for traders to buy undervalued shares or
promote shares for inflated costs. Subsequently, it need to be not conceivable to outdo the
general commercial centre by means of specialized inventory choice or timing of
marketplace, and the most excellent way a financial specialist can pick up way improved
yields is by buying riskier investments.
Accepting it in its sturdy system can stay hard because it articulates that everyone facts in a
marketplace, whether or not private or public, is accounted for an inventory's price. Still,
adjustments of exists to emulate the credential to which it is able to be carried out to
marketplaces:
 Quasi- strong performance: It implies wholly public (however now no longer non-
public) facts is calculated right into an inventory's contemporary-day proportion

value. Neither essential nor practical evaluation is used to attain advanced
improvements (McGinley and et. al., 2020).
 Weak performance: This sort of EMH claims that everyone beyond costs of an
inventory are meditated in ultra-modern inventory price of Apple. Therefore,
technical evaluation can't be used to expect and beat the marketplace.
Methods of Appraising projects in APPLE
1. Economic Appraisal: It is the challenge factors highlighted consist of necessities for
raw material, stage of capability utilization, expected sales, expected charges and the
probable profits. It is stated that Apple must have usually a volume of earnings clearly
in view which will govern different financial variables like sales, purchases, charges
and alike (Newman, and et. al., 2017). Festering marginalised people income in some
developed nations, which includes the United States, may want to diminish the
capacity of marketplace for luxuriant client merchandises including those who are
advertised through APPLE. A U.S. dollar might growth rate of exchange, by doing it
costlier for Apple.
2. Financial Analysis: It is finance most effective that allows an entrepreneur to convey
together the labour of one, system of any other and raw material of but another to
combine them to provide items. The activity level of APPLE expressed as capability
utilization, desires to be properly spelt out in the marketing strategy. However,
APPLE sometimes fails to acquire the targeted level of potential because of numerous
businesses like unexpected scarcity of raw material, sudden disruption in strength
supply, incapability to penetrate the marketplace mechanism, etc.
3. Market Analysis: Before the manufacturing absolutely starts, the entrepreneur
desires to expect the possible marketplace for the product. Apple anticipates that who
will be the possible consumer for the product and wherein and when the goods could
be sold (Rungcharoenkitkul, 2021). This is due to the fact production has no cost for
the manufacturer unless it is sold. In fact, the capacity of the market constitutes the
determinant of probable rewards from entrepreneurial career.

CONCLUSION
It can be concluded from the report that by comparing the national monetary markets,
the international financial markets have a diverse profile and analytics. Suitable supervision
of universal finances helps the corporation’s in gaining the efficiency and effectiveness in the
market. To grow the business internationally, the company must know the conditions and
norms of the international financial market. The project appraisal method evaluates that the
deficiency of managerial competence may drive down the organisation.

REFERENCES
Books and Journals
Beaudoin, C.A. and et. al., 2019. Bolstering managers’ resistance to temptation via the firm’s
commitment to corporate social responsibility. Journal of Business Ethics. 157(2).
pp.303-318.
Duque-Grisales, E. and Aguilera-Caracuel, J., 2021. Environmental, social and governance
(ESG) scores and financial performance of multilatinas: Moderating effects of
geographic international diversification and financial slack. Journal of Business
Ethics. 168(2). pp.315-334.
Eissa, G., 2020. Individual initiative and burnout as antecedents of employee expediency and
the moderating role of conscientiousness. Journal of Business Research. 110.
pp.202-212.
Filbeck, G., Holzhauer, H.M. and Zhao, X., 2017. Dividend-yield strategies: A new breed of
dogs. The Journal of Investing. 26(2). pp.26-47.
Kirton, J.J., 2019. The dynamics of G7 leadership in crisis response and system
reconstruction. In Shaping a New International Financial System. (pp. 65-93).
Routledge.
McGinley, B. and et. al., 2020. Police recruit training programmes: A systematic map of
research literature. Policing: A Journal of Policy and Practice. 14(1). pp.52-75.
Newman, W. and et. al., 2017. An evaluation of the effectiveness of Financial Statements in
disclosing true business performance to stakeholders in hospitality industry (A case
of Lester-Lesley Limited). Academy of Accounting and Financial Studies
Journal. 21(3). pp.1-22.
Rungcharoenkitkul, P., 2021. Macroeconomic effects of COVID‐19: A mid‐term
review. Pacific Economic Review. 26(4). pp.439-458.