question archive Refer to Apple inc company and perform a trend analysis for the most recent 4 years (the financial statements needed for this assignment may be available at https://finance
Refer to Apple inc company and perform a trend analysis for the most recent 4 years (the financial statements needed for this assignment may be available at https://finance
Subject:AccountingPrice:2.87 Bought7
Refer to Apple inc company and perform a trend analysis for the most recent 4 years (the financial statements needed for this assignment may be available at https://finance.yahoo.com/). Analyze the trends for 3 line items you believe are most important in evaluating a company for the balance sheet and for the income statement (3 each). In your initial post, answer the following questions:
- What do you observe in the linear trends (i.e., are values increasing or decreasing)?
- What are the trends on a common-size basis?
- What would be your next steps in completing a thorough analysis of the trends?
- Your Discussion should be a minimum of 250 words in length and not more than 450 words.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer:
| Key Data of last 4 Year - Audited | ||||
| Apple Inc | ||||
| 2018($ Mio) | 2017($ Mio) | 2016($ Mio) | 2015($ Mio) | |
| Net Sales | 2,65,595 | 2,29,234 | 2,15,639 | 2,33,715 |
| Net Sales Growth | 16% | 6% | -8% | 28% |
| Cost of Sales | 1,63,756 | 1,41,048 | 1,31,376 | 1,40,089 |
| Gross Margin | 1,01,839 | 88,186 | 84,263 | 93,626 |
| Gross Margin % | 38.34% | 38.47% | 39.08% | 40.06% |
| Net Income | 59,531 | 48,351 | 45,687 | 53,394 |
| Net Income % | 22% | 21% | 21% | 23% |
| Non Current Portion of Term Debt | 93,735 | 97,207 | 75,427 | 53,329 |
| Non Current Liability increased | 76% | |||
| Balance Sheet | ||||
| Account receivable Net | 23,166 | 17,874 | 15,754 | 16,849 |
| Current Asset | 1,31,339 | 1,28,645 | 1,06,869 | 89,378 |
| Current Laibility | 1,16,866 | 1,00,814 | 79,006 | 80,610 |
| Current Ratio | 14,473 | 27,831 | 27,863 | 8,768 |
| Closing Cash and cash Equivalent | 25,913 | 20,289 | 20,484 | 21,120 |
Revenue Trend – Net Sales of Last 4 year , from the above table is quite clear that Apple made major revenue jump in 2015 ( by 28%) . Year 2016 revenue suddenly showed negative growth. Negative growth turn back in the year in 2017 and posted growth +ve 6% . Definitely in year 2108 , revenue growth close with 16% jump .
From product wise revenue chart , noticed that major revenue contributor is iphone + Service . Other product( Mac, ipad) revenue are almost flat in nature
In 2016 , Net Sales reduced sharply mainly due to slow down in iPhone sales and impact of weakness in most foreign currencies relative to US dollar
Gross Margin - $ value wise gross Margin has improved in 2018 as compared earlier year mainly due to favourable shift in mix of i Phones with higher average selling price and higer services net sales . Albeit this increase has been slightly down by higher product cost .
Also the strength foreign currencies relative to the US dollar had a favourable impact on gross margin and gross margin % in 2018
Gross margin % slightly drop mainly due higher production structure cost .
Future look out of Gross Margin – Company expect to earn Gross Margin in around 38% - 38.5% mainly due to following factor : Company expect gross margin still volatile and under pressure
- Tremendous pricing pressure
- Potential increase in the cost of components
- Outside manufacture service
- Fluctuation in exchange rate
Future alarming –
Foreign currency fluctuation as compared with $ , adversely impact company’s gross margin . Even though company adopted Derivatives ( Foreign currency forward + option contract ) to hedge certain exposure to fluctuation in foreigh currency exchange rates The use of such hedging activities may nit be effective to offset any or more than a portion , of the adverse financial effects of unfavourable movements in foreign exchange rates over the limited time the hedges are in place.
Future outlook on Quarterly revenue and operating result – Will fluctuate
The company at present generates a majority of its net sales from a single product and declined that product definitely will adversely impact on net sales and margin . Company expect material impact due to shifts in mix of product and services
Net Profit Margin – company establishing margin on YoY basis around 20%+, which is quite good under tremendous competitive Technology market .
Other Factor – Legal Compliance + Data protection
Companies business is subject to risk of international operation,
Balance Sheet – Non current portion of term debt has increased by 76% over the last 4 year as against revenue growth only 14% .
Trade Receivable – The company’s cellular network carrier accounted or 59% of total receivable as both in 2018 and 2017 . At present company has a considerable amount outstanding with its 03rd party cellular network carriers , wholesaler , retailer, reseller etc,
From current ratio analysis – it is quite clear that company maintain proper solvency ratio on YOY basis .
From cash and cash equivalent – noticed that company maintain good amount of cash balance after absorbing following factor :
- Constant payment of dividend on YOY basis ( avg payout $12000+ )
- Repurchase of common stock
- Borrowing of loan mostly set of repayment amount .
Overall company giving Basic Earning per share $ 12.01 in 2018 , $9.27 in 2017 , $ 8.35 in 2016 .. constant flow of EPS
