APPLE INC.

Apple Inc.

Apple Inc.

Summary of Apple's Financial Condition

Gross profit was reduced slightly because company offered most of its products at the cheaper rate to encourage sales. With sales revenue increased due to this marketing strategy, relationship is bound to be inferior. However, gross profit has also shown an increase due to increased sales which is understandable since they have the direct relationship. But increase in revenue is more than increase in gross profit thus shifting balance towards denominator. When analyzed also with the net profit, net profit has also shown the decline.

Net profit declined marginally in year. This marginal difference can be attributed to an increase in administrative costs, increased taxes due to new guidelines for fiscal policy and financial expenses (interest paid). As gross profit, increased revenue exceeds increase in net profits and therefore proportion has decreased. However, it can be assumed that new sales strategy that helps not only to increase sales in future, but also improve profits by the good margin.

Profitability Ratios

03/31/2010

03/31/2009

03/31/2008

03/31/2007

03/31/2006

ROA % (Net)

(1.07)

(1.24)

2.45

1.74

1.69

ROE % (Net)

(2.64)

(2.82)

5.1

2.68

2.13

ROI % (Operating)

1.27

(0.37)

4.61

3.31

2.42

EBITDA Margin %

0.31

1.22

8.49

7.47

6.69

Calculated Tax Rate %

EBT<0

EBT<0

34.36

38.43

36.74

Liquidity Ratios

03/31/2010

03/31/2009

03/31/2008

03/31/2007

03/31/2006

Quick Ratio

1.03

0.79

0.66

0.61

0.66

Current Ratio

1.55

1.37

1.11

1.02

1.14

Net Current Assets % TA

9.19

6.6

1.94

0.27

1.95

Debt Management

03/31/2010

03/31/2009

03/31/2008

03/31/2007

03/31/2006

LT Debt to Equity

0.6

0.67

0.3

0.22

0.14

Total Debt to Equity

0.71

0.8

0.37

0.3

0.18

Asset Management

03/31/2010

03/31/2009

03/31/2008

03/31/2007

03/31/2006

Total Asset Turnover

0.56

0.6

0.61

0.55

0.54

Receivables Turnover

8.7

7.97

8.43

8.74

8.16

Inventory Turnover

12.54

12.25

13.68

14.09

12.86

Accounts Payable Turnover

11.18

9.94

9.52

9.69

8.79

Property Plant & Equip Turnover

2.46

2.61

3.25

3.32

3.06

Cash & Equivalents Turnover

6.02

11.11

17.65

18.33

16.79

Per Share

03/31/2010

03/31/2009

03/31/2008

03/31/2007

03/31/2006

Cash Flow per Share

1,199.45

484.83

1,312.95

1,198.26

902.82

Book Value per Share

3,546.32

3,137.8

4,666.38

5,801.44

5,200.11

Major Factors which Apple should Consider for Future Investments

Company has improved its efficiency in use of shareholder funds, compared with 2009. This increase is justified and is expected, due to increase in profits arising from sales, thanks to new pricing strategy. Increase in revenue means increased profits and dividends excellent returns for shareholders. This also makes it an excellent option in capital markets.

Return on capital has shown an increase over previous year. This involves company's earnings before interest and taxes have increased over previous year. Since capital employed has increased in 2009, sales have increased over year due to high level of investment and this has translated into increased profitability.

EBIT fell from 6.47 to essentially to increased administrative expenses and cost of sales of 6.28. These contribute significantly to earnings before interest and taxes for company. All this has the direct hand in decline in EBIT.

Company's liquidity has declined in 2010 compared to 2009. Current assets have increased during year at all factors and showed steady growth. Short-term debt was rising short-term loans and pulling multiple current ratio to 0.52. Apple should make sure that your current relationship should be as close as possible to two to maintain an ideal balance between their assets and liabilities. This would help maintain adequate liquidity for company.

Liquidity ratio has also gone over years. Increase in inventories during year has contributed greatly to increase in working capital. And therefore, relationship has planted only the marginal decrease. However, value must go to one to maintain the high level of liquidity sans inventories.

Will I be Interested in Investment in Apple?

Apple has the high level of debt is not good especially for the retail organization. It is necessary to keep financing its debts ...