Apple Inc.: Brief Summary

Apple Inc. is currently located at One Apple Park Way in Cupertino, CA. the organization competes in the consumer electronics industry.  Currently, the firm employs over 150,000 individuals.  Their CEO is Tim Cook.  As for CFO, this would be Luca Maestri. Finally, their chief operating officer is Jeffrey Williams.

Apple Inc. designs, manufacture, and sells iPhones, Macs, iPods, watches, and complementary accessories the world over.  Apple Inc. also sells various related services like Apple TV and iPads, AppleCare support services, and cloud services store services. 

Currently, our Apple financial analysis has found that the company has a market capitalization of approximately $2.6T.  The company’s beta is 1.20.  This indicates that the firm is slightly riskier as compared to the overall market.  As for earnings, the firm has current earnings per share of 5.61 (1/22).

Apple Financial Report Sources

“A Beginner's Guide to Analyzing Apple's Financial Statements and Financial Ratios” and "Apple Inc. Financial Report" were written by, Paul Borosky, MBA., and owner of Quality Business Plan.  In this report, I used Apple’s 2017 10k, Apple’s 2018 10k annual report, Apple’s 2019 10k annual report, Apple’s 2020 10k annual report, and Apple’s 2021 10k annual report as the basis for information gathering. 

Snipits From Apple Inc. Financial Report by Paul Borosky, MBA.

Section 1: Apple Inc. Income Statement Analyzed

In this section, I walk through a broad definition as to what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Apple’s important income statement line item trends.

Revenue Growth for Apple:

Apple’s revenues increased at an impressive 15.9% growth rate from 2017 to 2018.  Also, the organization’s revenue growth rate decreased in 2019 by approximately 2%.  Finally, in the last five years, Apple’s annual average growth rate for revenues was approximately 13.1%, which is an impressive annual revenue growth rate for a mature company.

SG&A:    

Apple’s cost of goods sold as compared to revenues increased from 61.5% in 2017 to 62.2% in 2019.  This increase may indicate that the firm had lowered the prices of their products or their cost of goods increased, but the company was not able to pass on the increased prices to consumers through higher-priced products.

From 2019 to 2021, the organization was able to reduce its cost of goods as compared to revenues from 62.2% to 58.2%.  This indicates that the company either did a better job with negotiating raw material prices or the firm increased product prices to cover the elevated raw material costs.

Section 2: Apple Inc. Balance Sheet Analyzed

For Apple Inc. balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define Apple’s balance sheet line item, such as cash, property, plant and equipment, and liabilities.  Next, I then offer a summary analysis of Apple’s important balance sheet line items.

Cash.

Apple’s cash position grew substantially between 2017 and 2019.  The substantial cash position increase, well above previous years’ trends, may indicate that the firm mismanaged this balance sheet line item.  A better strategy would have been to allocate excessive cash funds to short-term investments.

Analyst Grade: A

Section 3: Apple Inc. Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for Apple Inc.  In reviewing each of Apple’s financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of Apple’s Important Financial ratios.

Apple's Current Ratio:

Apple’s current ratio was 1.07 as of 2021.  This indicates that the organization has sufficient short-term assets to cover short-term liabilities—an excellent position for the organization.

Analyst Grade: A

Apple's Return on Assets:

Apple’s return on assets ended 2017 at 12.88%.  Over the next five years, the organization would substantially improve its return on assets ending 2021 at 26.97%.  This shows that the firm is doing an excellent job not only with growing sales with fewer assets but also in controlling asset growth as well.

Analyst Grade: A