Evaluating Apple Computer’s Annual Report
Axia College of University of Phoenix

Apple Computer Financial Report On November 5, 2008 Apple Computer filed the company’s 10-K report with the Securities and Exchange Commission (SEC). Although the company is required to file yearly reports with the SEC financial managers and investors use this information to help make sound financial judgments when deciding to invest in Apple Computer. In the report financial ratios, including liquidity, asset management, financial leverage, profitability, and market-based, will be discussed based on the last two years of data. The report also analyses Apple’s working capital management, long-term debt, types of stock, stock selling prices, the weighted average cost of capital, and an evaluation of the data and how the company compares to industry averages. The report will conclude with a recommendation of whether an investor should buy Apple stock.
Financial Ratios According to Moyer, McGuigan, and Rao (2007), “Management uses financial ratios for analysis, monitoring, and planning purposes.” Financial ratios assist management in indentifying the strengths and weaknesses of the company, aid management in the monitoring the company, which may uncover a problem in a certain area of the firm’s operations and institute remedial action, and aids in planning. Analyst must keep in mind that while financial ratios are important that one ratio alone should not be used to make financial decisions. Financial managers must remember that the ratios only represent a sample of possible ratios, ratios serve only as flags, ratios must be dissected to discover its true meaning, ratios are only useful when compared with some standard, and accounting techniques must be taken into consideration when comparing one company in an industry to another (Moyer, McGuigan, and Rao, 2007, p.