...Interpreting Financial Results FIN 571 May 18th, 2015 Eric Hohl Apple Inc. Apple Inc. is one of the most reputable electronic companies on the market today. Their competitors are Samsung, Motorola, and LG. Of those three Samsung is one of their most important competitor. Looking over the financial statement from 2011 to 2014 they have been seeing a huge increase in revenue, cost of goods sold, their gross profit, and operating income. They began to see an additional expense in 2013 and 2014. Apple Inc. seen a huge loss in 2014 on sales of investments. The other areas that Apple Inc. began to see a huge trend would be EBT, Income Tax Expense, Earnings from Continuing Operations, and Net Income. According to their financial statements they are above their industry competitors in return on assets, gross margin, EBITDA Margin, Growth over Prior Year, and Diluted EPS before Extra. The areas where they were lower in industry comparison would be return on equity, return on capital, SG&A Margin, Accounts Receivable Turnover, Fixed Assets Turnover, Inventory Turnover, Current Ratio, Quick Ratio, Total Liabilities/Total Assets, Receivables, Inventory over prior year, Capital Expenditures, and Levered Free Cash Flow. In some of these area of inventory comparisons from Apple Inc. Samsung was actually holding up better in their receivables, Capital Expenditures, Inventory, and Return on Equity. Apple Inc. Financial Statement |Currency in |As...
Words: 740 - Pages: 3
...Intro: Today, my 2017 revenue forecast looks outlandish compared to the Street. I ask anyone who is dismissive based on that fact to ask themselves: What data do we have today that suggests the iPhone 7 will be far less successful than both the iPhone 5 and the iPhone 6? The iPhone 6-era produced more growth than the iPhone 5-era (trend is in the right direction), AAPL is opening more retail stores in China now than ever before, China’s middle class is growing at a rate of 10% (assuming China GDP growth of 7%) and is expected to be 1.5x the size of the US middle class in 2017, and 30% of iPhone buyers are switching from Android. Although it was arguably reasonable for analysts to sound the alarm bells from 2013 through 2014 because era-over-era growth dropped from 563.3% (iPhone 4-era) to 51.1% (iPhone 5 era), it is unfounded today given a conservative iPhone 6 era-over-era growth estimate of approximately 63% (30%+ per year). This report focuses on the iPhone because it generates nearly 70% of AAPL revenue and 100% of growth. I bought AAPL on 2/16/2016 at $95.0 because the Street’s 2017 revenue and earnings estimates are irrationally low. Thesis Summary: * The Street focuses on QoQ growth rates and next quarter guidance, which equates to comparing every iPhone release with the previous release in order to project short to medium term iPhone revenue growth. This methodology would have an investor think that iPhone growth is slowing and the iPhone 7 will produce far lower...
Words: 1555 - Pages: 7
...Company background………………………………………..….. 2 Industry analysis………………………………………………..... 2 Products and services…………………………………….…......2 Investment strategy…………………………………….……...…3 2) Market Analysis……………….………………………………................... 3 Direct competitors…………………......…………………………. 3 Financial performance comparison…………………......………3 Growth comparison…………………......…………………...…...4 Trailing total returns comparison…………………......…………4 Ratio comparison…………………......…………………………. .5 Detailed ration comparison…………………......……………5 3) Financial Performance Analysis………………………………………...... 6 Ratio analysis........................................................................... 6 Detailed analysis................................................................. 7 4) Recommendations ……………………………………………………..… ..8 5) Conclusions……………………………………………............................ ..9 6) Reference…………………………………………………………………...10 7) Appendix……………………………………………………………….....…11 Income statement....................................................................11 Balance sheet.......................................................................... 12 Cash flow.................................................................................13 1. Company Description Company background Apple Inc. (AAPL) is found by Steve Wozniak, Steve Jobs, and Ronald Wayne in 1976 to sell and develop computers. Although company’s sales stayed low for...
Words: 1693 - Pages: 7
...Apple Full-Year 2016 Earnings Per Share Of $8 A Distinct Possibil... http://seekingalpha.com/article/3798786-apple-full-year-2016-earn... Apple Full-Year 2016 Earnings Per Share Of $8 A Distinct Possibility Jan. 8, 2016 10:34 AM ET by: Michael Blair Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in AAPL over the next 72 hours. Summary Top down forecasts show weaker revenues from iPhones and iPads as unit volumes wane. Volatility in China's stock market suggests an economic turn-down likely in that key market. AAPL stock is breaking down below $100 per share and the trend is lower. Forecasting is always a challenge but it's essential to smart investing. Forecasting the world's most valuable company is a full-time occupation for literally dozens of analysts employed by investment firms worldwide. Getting the forecast right determines the success or failure of an investment thesis and ultimately whether risk is rewarded or punished. In the case of Apple (NASDAQ:AAPL) forecasting is made easier by the very limited portfolio of products Apple currently sells and the importance of the iPhone to its revenues. A 5% error in the number of iPhones shipped in a given year amounts to something like $6 or $7 billion in revenue and as much as $2 billion in net income depending on margins rates. Analysis who can forecast to within 5% accuracy are a rare breed, so the fact is that investors will find little certainty in forecasts...
Words: 1250 - Pages: 5
...in-depth analysis of Apple Inc. (AAPL), with necessary recommendation increasing the wealth of the company and their shareholders. The primary competitors of AAPL would include companies such as the Intel Corporation, Target Inc. and any company that sell technological products. The total revenue for the most recent fiscal year was $182,795 billion dollars on their assets and $39,510 of net income. Timothy Cook has been the CEO of Apple Inc. since 2011, and received $9,222,638 in compensation last year, primarily from non-equity compensation. AAPL maintains their social image in society by creating products for all types of consumers and uses an environmentally friendly manufacturing processes when producing products. AAPL return on equity is 48%, which is 20% higher than the Intel Corporation, one of their many competitors. AAPL operating margin is 1.0% higher than, has 0.18 higher assets turnover and a higher financial leverage than of 0.43 compared to INTC. After analyzing AAPL financial data the best approach for AAPL to increase their ROE is to use existing revenue, financial leverage and add additional services to already created products. There are a few unique risks that AAPL face which includes technological changes with the economy/environment, competitors creating new products at a faster pace and selling them at a cheaper price, as well as systematic risk related to intellectual property and the global financial market. AAPL capital structure includes equity...
Words: 3694 - Pages: 15
...Assignment: CAPM 1. If you invest 25%of your money in the stock of Citi bank (C) with an expected rate of return of -32% and 75% of your money in the stock of Apple (AAPL) with an expected rate of return of 120%, what will be the expected rate of return on this portfolio? 2. Penny Simpson has her first full-time job and is considering how to invest her savings. Her dad suggested she invest no more than 25% of her savings in the stock of her employer, Emerson Electric (EMR), so she is considering investing the remaining 75% in a combination of a risk-free investment in U.S. Treasury bills, currently paying 4%, and Starbucks (SBUX) common stock. Penny’s father has invested in the stock market for many years and suggested that Penny might expect to earn 9% on the Emerson shares and 12% from the Starbucks shares. Penny decides to put 25% in Emerson, 25% in Starbucks, and the remaining 50% in Treasury bills. Given Penny’s portfolio allocation, what rate of return should she expect to receive on her investment? 3. Evaluate the expected return for Penny’s portfolio where she places 1/4th of her money in Treasury bills, half in Starbucks stock, and the remainder in Emerson Electric stock. 4. Determine the expected return and standard deviation of the following portfolio consisting of two stocks that have a correlation coefficient of .75. Portfolio Weight Expected Return Standard Deviation Apple 0.50 0.14 0.20 Coca Cola 0.50 0.14 0.20 5. Sarah plans to...
Words: 444 - Pages: 2
...Introduction: Apple is an American multinational corporation located in Cupertino, California. The company manufactures and sells personal computers, software applications, cell phones, portable digital music devices, and networking solutions. Most importantly, it specializes in designing and producing unique products such as: iPhones, iPads, MacBooks, iPods, iCloud, and certain operating software. Apple Inc. was founded in April 1, 1976 by Steve Jobs, Steve Woznaik, and Ronald Wayne. According to the CNN Money website, Apple has about 453 retail stores and 92,600 employees in 16 different countries as of March 2015. Furthermore, Apple’s stocks are publically traded in the NASDAQ stock exchange market. The MacRumor website states that the value of Apple’s stock prices continues to rise competing with other fortune 500 companies like Exxon Mobil, Google, Wells Fargo, and General Electric. As of July 24th, 2015 at 4:08 PM EDT, Apple’s stock price closed at a value of $124.50. The company uses its core competencies which is brand power and high sales volume (Revenue of $182,795 million in the first quarter of 2015) to achieve a sustainable competitive advantage in the business market (Fortune 500, 2015). However, as Apple continues to grow and expands its product line and entry into new markets, the company has to guard against stiff competition from companies like Google and Samsung. Apple is committed towards providing the best computing experience to its customers through...
Words: 2106 - Pages: 9
...value at risk. The VaR model does allow managers to limit the likelihood of incurring losses caused by certain types of risk - but not all risks. The problem with relying solely on the VaR model is that the scope of risk assessed is limited, since the tail end of the distribution of loss is not typically assessed. Therefore, if losses are incurred, the amount of the losses will be substantial in value. Conditional value at risk does a better job at assessing the tail VaR and hence is a very useful tool for risk managers. Answer 2) NAV as of Nov 1, 2013 is $169,018 Gross Leverage is 1.744 and Net Leverage is 0.7017 The latest 1 month values are as below Ann Cash Rate 0.2% Portfolio Cash GOOG AAPL SPY 50,413 100 200 -500 Date Cash GOOG AAPL SPY Gross leverage Net leverage NAV (Const. Number of shares) 11/1/2013 $ 50,413.00 $ 102,704.00 $ 104,006.00 $ (88,105.00) 1.744 0.7017 $ 169,018.00 10/31/2013 $ 50,412.72 $ 103,058.00 $ 104,540.00 $...
Words: 2942 - Pages: 12
...Project 4: Finding Your 401(k) Beta The following report will evaluate and compare the systematic risk of the stocks within a 401(k) investment portfolio. The time period for which the stocks in this investment portfolio have been analyzed is January 1, 2004 through December 31, 2014. Each stock has had a beta test and corresponding regression analysis performed. A portfolio-wide beta test has also been completed to make further detailed conclusions. The beta of each stock will be compared to that of its standard. Any observations made from the betas will also be reported. The below table represents the stock breakdown of the 401(k) investment portfolio. The portfolio consists of twelve stocks, representing seven of the major industry categories. Six of the twelve stocks come from the consumer goods industry, with half being cyclical and the other half being non-cyclical. The remaining industry categories included in this portfolio are two from industrials and one of each from the following categories: energy, telecommunications, technology, and healthcare. A further analysis shows that 60% of the portfolio is made up of consumer goods, while the remaining percents are as follows: 15% energy, 10% industrials, 5% telecommunications, 5% technology, and 5% healthcare. The below table represents the portfolio beta and the beta for the individual stocks within the portfolio. The total beta represents the portfolio beta amount for each stock as of the weighted percentage....
Words: 650 - Pages: 3
... Table of Contents Abstract 3 Company History 4 Current Financial Health 5 Stock Performance 7 Bonds 11 Conclusions 12 Works Cited 13 APPENDIX I: APPLE’S SELECTED FINANCIAL DATA 15 APPENDIX II: APPLE’S CONSOLIDATED STATEMENTS OF OPERATIONS 16 Abstract Apple Inc. (Apple) is an American corporation that specializes in consumer electronics and software. Founded in 1976, it is difficult not to see their products anywhere in the world; they have revolutionized customer purchasing with chic products, outstanding customer service and phenomenal marketing. In August 2011, Apple surpassed Exxon Mobile as the largest company in the U.S. As a leader in its industry, Apple has had many successes that present excellent investment opportunities in the short, medium and long term. While impossible to predict future pop culture and trends, Apple has been leading the way for the past decade and shows no immediate signs of slowing down. Keywords: Apple, electronics, financial analysis, stocks Company History Founded in Cupertino, CA in 1976, and incorporated in 1977, Apple has a storied history in the computer industry. Though founded by three entrepreneurs, Steve Jobs stands out as the most famous and currently asks as CEO. In the first fours years, Apple’s goal was to break into the personal computer market; though successful, it was difficult to compete with nationally known brands as a start up. In December of 1980, Apple went public which provided the...
Words: 2792 - Pages: 12
...Apple Inc (AAPL) is an American company that manufactures and designs mobile phones, tablets, personal computers, and media devices. The company, based out of Cupertino, CA, has a credit rating of AA+ by Standard & Poor’s while Moody’s gives them an equivalent rating of Aa1. The credit rating agencies argue that Apple wasn’t worth a better rating (AAA) because of the high risks that any technology company is exposed to. Technology is always evolving making products obsolete. However, Microsoft received a better rating at AAA. These ratings are better than the ones given to the US government. Apart from a rapidly changing market, Apple faces intense competition from Samsung, especially in the mobile market. Although there is no indication that Apple would file for chapter 11 at anytime, a company in their market could use Patents as collateral as well as inventory and their large amount of land. Apple’s goodwill is currently valued at 1.1 billion. It is also important to note that Apple has over 145 billion in cash according to analyst estimates, which makes them an extremely liquid company. Apple has experienced a growth in sales for the last 5 years. This increase in revenues is a good indicator that the company is experiencing growth. Apple’s Debt/Equity ratio shows that Apple is primarily financed by equity. Apple raised 17 billion in debt as of April 2013 making the company’s capital structure change from purely equity to 87% equity. This is well below the industry...
Words: 391 - Pages: 2
...David Rossi & Dhiraj Thakker Investments – Professor Flaherty Stock- Trak Portfolio Report The stock trak game was a great opportunity to gain first-hand experience with making trades in the stock market. The experience we gained through the game gave us the ability to manage large sums of money, giving us the opportunity to recognize the importance of preparing and utilizing portfolios in the career development process, to be aware of the component parts that make your portfolio effective, and to understand how to compile and present your portfolio in a professional manner. The initial round of investments to our portfolio was comprised of seven domestic stocks. The main goal was to acquire stable, well-known companies that would pose low risk. These stocks were selected with minimal analysis due to their market capitalizations and the associated company’s reputations. We selected several Blue chip stocks, because they appeared to match our goals of stability and minimizing risk. Since these companies are very large, well established corporations, we understood that the possibility of significant growth in equity is unlikely due to the established maturity of the companies. For this reason, we did not expect to earn our largest return in this area of our portfolio, but instead we were hoping for small growth, while collecting dividends. The first stock purchased was Microsoft (MSFT). Microsoft is a large cap computer software...
Words: 3952 - Pages: 16
... too, determined which is, from the perspective of a student, better suited for course work. Ultimately, I believe the Apple MacBook, which has served as my primary laptop, is the standout choice. I’ve found that, notably, it syncs effortlessly and smoothly without other Apple products. For instance, by using the cloud, I can easily browse through documents which I have created on my laptop when I was using either my iPhone or iPad. Additionally, the internet is, at all times, readily at my fingertips on each of these products. Given my positive experience with this brand, I am electing to focus my analysis on Apple, the multinational corporation, headquartered in Cupertino, California, which trades on the NASDAQ with the ticker symbol AAPL. Of course, not everyone heartedly embraces this company. Many do not share my enthusiasm and there is therefore some competition with which to contend. Samsung is, perhaps, the fiercest rival. In fact,...
Words: 1328 - Pages: 6
...FBE-529 FINANCIAL ANALYSIS AND VALUATION Final Valuation Project Apple Inc. (AAPL) Jeffrey Bullock Zefu Chen Xiangyu Shi Xuezhou Xiao 4/24/2012 Company Analysis Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include the iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a variety of accessory, service and support offerings. It also sells and delivers digital content and applications through the iTunes Store, App Store, iBookstore, and Mac App Store. The Company sells its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products and various other accessories and peripherals through its online and retail stores. The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software, and services to provide its customers new products and solutions with superior ease-of-use, seamless integration, and innovative...
Words: 8583 - Pages: 35
...2011, Apple incorporation has no long term debt in their balance sheet. Company is funded by its own cash and the equity capital that company has strengthened over the years. The market portfolio of the company has seen huge success and this has been the reason for company utilizing its cash for both shareholders wealth and also for keeping the increased investment and innovation going. It is very interesting to have a look at the patterns in which the company has managed its capital budgeting. Capital budgeting is an important decision for any corporation and same is the case with Apple Inc. Organization now needs to evaluate its future strategy on the basis of capital budgeting decision that it makes. Introduction to Capital Budgeting: The exercise conducted by business enterprises to determine whether projects like construction of a new plant or investment in a long-term venture would result in profitable gains is called capital budgeting. Projects which have long gestation periods are evaluated based on their future returns, unless, the project is purely for social welfare. Thus, businesses would make their investment decisions based on the future viability and capacity of a project to earn profits. It is advisable to calculate the estimated returns of the project, so that the business enterprise can weigh it other options (like making a fixed deposit and earning...
Words: 4283 - Pages: 18
