Choose a Multinational Enterprise (MNE) listed on an internationally recognised Stock Exchange (including for example, London, Dublin, New York or Paris). You are required to:

a.        Critically discuss two recent developments in the international financial environment appear to have impacted on your chosen company's recent performance and development. Analyse how these two developments are likely to impact on the company in the near future.                 

b.        Discuss the following key elements of the MNE's international financial and/or risk management strategy (and how they appear to have affected the financial performance of your chosen company):

·        Sources of finance

·        Dividend policy                                                                         

c.        With reference to your chosen Multinational Enterprise (and using the most recent annual report published), analyse the financial performance (in terms of profitability, liquidity, efficiency and investment) of the company in the two most recent consecutive financial periods( e.g. 2016/17 or 2017/18, ) using 8 different accounting ratios (prior year comparative figures will be available in the annual report). 

a) There have been plenty of developments since the time when the financial system for set up. Technology has changed the way of handling money and the risk associated with it. Some of the developments post 2008 crisis have been :

1. Indulging more regulatory bodies : Regulators are the ones who look after the market transactions. They make sure that all the transactions are carried in fair and just way and no party is able to take advantage of another by unfair means.

With more regulators, people can trust the securities which are issued by Apple Inc. If there is trust of paying interest for debt and dividends for equity then people will put their money in your company. It will generate more money which can be used for further growth and expansion.

2. Globalization : Earlier, many countries restricted foreign companies like Apple to set up businesses in their homeland. But after globalization took place, countries were able to expand their business worldwide and increase their revenue margin.

b) Apple uses many financial derivatives such as forwards, options, swaps etc. which help them to reduce the international risk. Companies need to hire specialists who can minimize the currency risks that the business faces.

Apple's source of finance :

Apple has a equity capitalization of $96.5 billion and a debt capitalization of $225.8 billion.

Apple's dividend policy :

Apple pays $2.92 per share annually to its shareholders as a dividend.

c) Excel sheet used for ratio analysis :

Apple's profitability has marginally reduced from year 2018 to 2019 but the return to the shareholders experienced a surge as many shares were bought back by the company that resulted in lower equity capitalization and high per share profit. Apple has improved its liquidity but needs to work up on its efficiency.

please see the attached file for the complete solution.