...Investment Analysis Paper on Apple Inc. Elijah Clark Walden University Investment Analysis Paper on Apple Inc. Apple Inc. (Apple) is a registered publicly traded company established in 1977 and is currently headquartered in Cupertino, California (Apple Inc., 2015a). The company’s products and services include mobile communication and media devices, portable digital music players, personal computers, software, accessories, services, networking solutions, and third-party digital content and applications. The company sells its products and digital services worldwide through online media, direct sales force, retail stores, through third-party wholesalers, and cellular network carriers. The company sells directly to consumers, small and mid-sized businesses, educational institutions, enterprises, and government agencies. The company’s operations are based in the Americas, Europe, Greater China, Japan, and retail. In 2014, the company’s direct and indirect distribution sales channels accounted for 28% and 72% of total net sales (Apple Inc., 2015a). The unit sales, which consisted of the iPhone, iPad, Mac, and iPod products, was 270,446 million units total within the company’s fiscal year (Apple Inc., 2015a). Board of Directors The 2015 proxy statement of Apple stated that the company annually selects its board of directors, which currently has 10 board members (Apple Inc., 2015a). Shareholders elect board of directors and the Board periodically reviews...
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...Apple, A Good Investment? 1. Provide a rationale for the U.S. publicly traded company that you selected, indicating the significant factors driving your decision as a financial manager. As the financial manager, I have decided to recommend to my investor that they invest heavily in the stock of Apple Incorporated. There are several reasons why I am going to advise my investor to invest in Apple Incorporated. The first of these reasons that have caused me to recommend Apple as a good investment is because at the end of 2012 according to Bernstein analyst Toni Sacconaghi Apple alone was (2012) “responsible for seventeen percent of the gains of the entire Standard and Poor’s Five hundred. The next reason for my recommendation of investment in Apple is because of its long-term performance over the previous ten years. Since 2002 Apple’s stock has soared some 7,800 percent verse 54 percent for the S&P Five hundred. (Birger, 2012) In my opinion this strength over the past ten years shows that this stock is a reliable investment now and will continue to be a reliable investment well into the future. Furthermore while in the past Apple has been considered specifically a growth stock, currently I would consider it not only a growth stock but also a value play. The reason for this consideration is because according to Birger (2012) it has seen a “66 percent earnings growth over the prior four quarters as well as a 1.8 percent yield and a price/earnings ratio of 13, lower than...
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...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...
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...served both individual and institutional investors with the investment philosophy of believing that they could get a superior return over the long run using a conservative, risk-averse and quality-oriented approach. Zeus have been measuring it’s return in an absolute basis however Abbott demanded for it to be in risk adjusted basis to be better determine if Zeus outperform the relevant indices. The main problem with the current measure is that it did not take risk into consideration. The main aim in this case study is to determine if the current performance evaluation is sufficient or a better risk adjusted measure could be form. Other than that, we would also take into consideration of the difference between Zeus with its main competitors and how different type of investors would have different investment strategy due to their different risk preference. Problem with current measure As the current fund performance measurement consist mainly of holding period and benchmark return, these return have weaknesses that does not allow it to be a sufficient measurement. As a HPR generally calculated based on determining what the total return is earned from holding the investment for a specific period of time. The advantage of it is that it is easy to calculate and understand by investors, at the same time taking into account of the income and growth. However it did not take into account of time value of money, that make the return inaccurate for a longer time period. Other than that...
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...they could do? Apple faces many competitors in the various industries it participates in, especially on the mobile side. One of the biggest problems that apple faces is the high cost of its products, such as iPhones and iPads. Competitors are constantly cutting their products prices in order to attract customers away from apple. Therefore, Apple must find a way to keep its products cost down to an affordable price range to maintain its customers happy. Apple's competitors have the ability to sell their products at little to no profit forcing apple to find a way to reduce the cost involved with producing their products in order to maintain the same profit margins it has enjoyed. One of the areas Apple has a problem with is the scarcity of materials available that are crucial to building its products. In order to stay on top of the competition, Apple is constantly introducing new and updated products to the market with superior hardware than its competitors. These new technologies come from companies with very specific hardware that is hard to come by. Therefore, Apple must lock up these companies in order to use their hardware exclusively but also aid them in their growth. The demand for Apple products is so high that supplies to Apple have a hard time keeping up with production. Apple can help itself by investing in the infrastructure and growth of these companies it depends on to get its product out in quantities to satisfy the market. Apple maintains its market...
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...Executive Summary Apple Inc., formerly Apple Computer, Inc., is a multinational corporation that creates consumer electronics, smart phones, tablets, personal computers, computer software, and commercial servers, and is a digital distributor of media content. Apple's core product lines are the iPhone smartphone, iPad tablet computer, iPod portable media players, and Macintosh computer line. Founders, Steve Jobs and Steve Wozniak effectively created Apple Computer on April 1, 1976, with the release of the Apple I, and incorporated the company on January 3, 1977, in Cupertino, California. Apple experienced modest, but above average growth from its founding until the mid-2000s when the popularity of its iPods and iTunes Store were joined by Apple’s release of the first iPhones. This combination, along with then-CEO Steve Jobs’ iconic leadership, catapulted Apple to successes rarely seen as it became the largest publicly traded company in the world by 2012. Our financial analysis of Apple revealed many things, not the least of which is the simple fact that Apple is a well-run, efficient, innovative company. Over the last three years, Apple realized a consistent positive trend in well over half of the twenty-two key financial ratios analyzed, highlighted by improvements in all profitability and inventory management ratios. It kept pace with the growth experienced in the technology and consumer electronics industries, despite significant gains in market share by giants...
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...Reviewing a company’s financial health and conducting a benchmark analysis are two key components for any investor when considering a potential company to invest in. We will be comparing Motorola Mobility, Apple Inc., and Nokia Corporation to specifically find where Motorola Mobility falls in line with its competition in the cellular manufacturing industry. In addition to comparing the income statements, balance sheets, and cash flow of each company we will also be looking at how Motorola Mobility compares to the competition in the realm of technology and how globalization has impacted the company. Finally, we will take a look at conducting a benchmark analysis regarding Motorola Mobility’s best practices, its operational processes and procedures, and its products in comparison to Apple Inc. and Nokia. It is important to note while Business Analysis II reviewing the financial health of Motorola Mobility and Nokia that these two companies focus primarily on cellular phone manufacturing while Apple Inc. also includes the sales of its computers. However because of the Apple iPhone and iPad, Apple is a major competitor and leader in the cellular phone industry, and should be included. In the context of corporate financial reporting, the income statement summarizes a company's revenues and expenses quarterly and annually for its fiscal year. The final net figures, as well as various others in this statement, are of major interest to the investment community. Investors must...
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...FINANCIAL MANAGEMENT Chapter 1 The Corporation Financial Management 2 How people in corporations make financial decisions? Financial decisions? Where, when, what, how much, how…etc. Mostly concern with three decisions: _______decisions, _________ decisions and _________decisions. Chapter Outline 1.1 The Four Types of Firms 1.2 Ownership Versus Control of Corporations 1.3 The Stock Market 3 1.1 The Four Types of Firms Sole Proprietorship Partnership Limited Liability Company Corporation 4 Legal forms of business organisation Sole proprietorship A business owned by a single individual, unlimited liability, limited access to capital, lack of continuity, constraints of various skills. Advantages Easy to create Disadvantages Unlimited personal liability Limited life 5 Legal forms of business organisation Partnership An association of two or more individuals joining together as co-owners to operate a business for profit, joint responsibility, involves partnership agreement, better access of capital/skills, continuity of business? partners are personally liable for all of the firm’s debts. A lender can require any partner to repay all of the firm’s outstanding debts. partnership ends with the death or withdrawal of any single partner. All The 6 1.1 The Four Types of Firms (cont'd) Partnership Limited Partnership has two types of owners. Partners ...
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...linshan-li@uiowa.edu Apple Inc. (NSDQ: AAPL) April 17, 2012 Current Price $609.60 Target Price $765-790 Apple Bytes Its Way To The Top The iPad has revolutionized the booming tablet industry and is dominating a 61% market share with a unit sales increase of 111% over the year ago quarter. A yearly increase of 334% in sales volume during FY2011 makes the iPad the most popular product in the tablet industry. Apple shattered analysts’ expectations for Q1 of its FY2012 with 37.04 million iPhones sold representing 128% unit growth over the year ago quarter. The iPhone is penetrating emerging markets in China, Asia-Pacific, and Europe targeting global growth. Future product innovation in the iPhone fifth generation and iPad fourth generation will capture more market share while sustaining high levels of growth. Apple’s potential for penetrating the television market will again affirm its position as the top producer in consumer electronics. CEO Tim Cook announced dividends to be paid to shareholders beginning next quarter at a yield of 1.8% or $2.65 per share. He also announced a $10 billion buyback starting in fiscal year 2013, and continuing through 2014 and 2015; signaling an undervalued company. On January 25, 2012, Apple topped Exxon Mobile as the largest company in the world by market capitalization; currently at $568.5 billion. Share price has consistently grown with a 48.26% increase YTD and a five year increase of 570.22%. Company Overview Apple Inc. was established...
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...Introduction Microsoft and Apple are in the electronic equipment industry, and have a NAICS code of 334111. Microsoft participates in the provision of developing and marketing software and hardware services. These products include, computers, phones, and intelligent devices. They also specialize in everyday software products such as Excel, Word, and PowerPoint. Microsoft’s target market is expansive. The Microsoft Suite is aimed for anyone that can use a computer. According to Yahoo Finance, Apple is considered to be one of Microsoft’s main competitors and allies in this industry. Apple engages in the design and manufacture of cell phones, media devices and computers. Some of the products designed and manufactured by Apple includes the iPhone, iPad, Mac and Apple watch.They also have consumer and professional software applications under the iOS, OS, and X brands. However, Apple also implements many of Microsoft’s software like Word and Excel in their products. Apple’s target market is very broad. They make their products for people of all ages that are consumer involved with simple innovative technology. As a business, not only is Apple Inc. (AAPL) significantly bigger than Microsoft Corporation (MSFT), but also has been growing at a fast pace. However, looking into investment opportunities, Microsoft has been outstanding. While the forecasts mention increase in growth for Microsoft Corporation over the next few years as indicated below, Apple Inc. is forecasted to decrease...
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...customers and $69.8 billion dollars of revenue. Within AT&T the Wireless division represents the largest area of growth, compensating for customers abandoning traditional Wireline telephone service. AT&T landed a major coup in 2007 when it signed a deal with Apple to be the exclusive U.S. carrier for the iPhone. Not only did AT&T add new customers, it added more profitable customers. AT&T reports that an iPhone customer’s average revenue per user (ARPU) is $105 per month versus $60 for non-iPhone customers. AT&T’s corporate strategy for securing these profitable customers is to align itself with innovative technology, such as the iPhone, and pay a subsidy of $325 to Apple to make the iPhone more affordable for mainstream America, its target market. AT&T recoups the subsidy by locking iPhone customers into a two-year contract averaging $100 per month and maintaining this customer base through an exclusive contract with Apple. Problem Statement: Despite attracting and capturing high revenue subscribers, AT&T is experiencing high customer dissatisfaction due to congested wireless networks. The greatest threat to AT&T Wireless is that iPhone customers will defect in droves if and when AT&T loses its exclusivity contract with Apple. Our analysis will focus on the root of this issue and provide marketing, strategic, operational and...
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...Executive Summary Google AdWords, Google Chrome, Google Books, Google+, Google Earth, 88 successful acquisitions (including Youtube and Motorola), Android and now Google self-driving cars. This list is far not exhaustive and seems to be endless. Although Google AdWords accounts for 97% of the company’s revenues, whose market capitalization now tops $192 billion, the company is investing heavily in new innovative projects to diversify itself and enter new markets. One of the more recent ones is Google’s development of self-driving cars and even though CEO Larry Page tried to play down the company’s new project in Google’s Q2 earnings call in July, the team enjoys a staffing of 50 people. By way of comparison, the Android team had about 100 people working on it when the first Android phone was shipped in 2008. To determine an appropriate discount rate for the project, we will first define the project’s characteristics and will, based on those definitions, derive reasonable input factors for the CAPM. To show the sensitivity of the discount rate to those factors, we additionally provide sensitivity analyses. Product characteristics Google is a highly innovative company which has already gained a lot of experience to market new products. To make sure that the introduction of the self-driving car is consistent with Google’s overall business strategy, we decided that its characteristics should be similar to a related product: Android, the operating system for mobile devices. To...
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...ANALYSIS OF APPLE CORPORATION AND ITS PRODUCTS” [pic] |Submitted to: |Submitted by: | |Mr.Sandeep Vyas | Neha Singh | |Mr.Rahul Sharma |MBA/11/2065 | | | | CERTIFICATE This is to certify that the project work of market research and analysis in the report entitled “Strategy analysis of apple corporation and its product” is a bonafide work carried out by Ms. Neha singh under my supervision and guidance. The project is submitted for the partial fulfillment of the requirement for the award of Masters of Business Administration. The project is the original work carried out by the Student herself. Date:26/04/2012 Faculty Mentor: Mr.Sandeep Vyas Mr.Rahul Sharma PREFACE This project has been undertaken to understand the strategy of Apple Incorporation. This project is a written presentation with observation and references derived from secondary data. The report starts by giving a brief profile, background of the Apple Incorporation...
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...important factors that will contribute to the completion of our intended service. It is important to understand our mission, in order to understand the importance of our new service. We have gathered all of the relevant information which starts from describing our product to describing the necessary tools to properly implement and create this new service for Apple, Inc. Executive Summary Apple Inc. is an American multinational corporation headquartered in Cupertino, California, that designs, develops and sells consumer electronics, computer software, online services, and personal computers. We will be focusing on Apple, Inc. to create a new service that will not only impact Apple's reputation in a positive way, but it will also promote more success. Apple, Inc. has many innovated products that have been popular in our industry, we have decided to incorporate a system in this particular company as popularity, and business success is part of it. We have decided to launch a service to customers with disabilities, this will be intended to help them get the best of information, and training to use the products that Apple, Inc. offers. We have designed a system to be promoted in the stores, online, and via customer service hotline, and also to be delivered via mail. People with disabilities can obtain one visit per year from an Apple's Technician to go and help them get familiar with the product they bought, and the technician will also answer...
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...A Tutorial on Discounted Cash Flow, Fall 2015 Notes prepared by John Tsagarelis, jtsagare@uwo.ca DRAFT: Comments, Suggestions Welcome 9/20/2015 Preamble As we walk through life we develop mental maps of situational settings. These are not sight patterns, but rather decision patterns among choices available to us in any given circumstance. For example, we take familiar roads to our summer cottage or accept return-on-equity is an unbiased stock return predictor. Once we form a map, it is hard for us to realize it may be incorrect and/or to imagine alternative scenarios. This lack of flexibility in decision making is as dangerous as following maps on our satellite-based navigation devices that fails to account for new roads. We could call this a blind spot, but it is more sinister—it is a false picture of reality. It is for this reason, during creative problem solving and brainstorming sessions groups often strive to suspend judgement until they have entertained ranges of plausible scenarios and responses to them. The initial scenario we envision may be woefully inadequate and our initial responses significantly inferior to others we can imagine. As part of our inherent capacity to memorize, we should always strive to challenge our beliefs through a feedback mechanism. To test our existing constructs with new potentially better ones. It is with this in mind that we explore the classic or naive discounted cash flow modelling techniques. 1 Introduction The...
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