FINANCIAL ACCOUNTING

Financial Accounting and Reporting

Executive Summary

The main purpose of this paper is to make financial statement analysis of a US based company Apple Inc. This paper discusses that how financially stable is Apple Inc. and whether it is feasible for the investor to invest in Apple Inc. or not. The financial analysis will be interpreted by taking out the result from different tools like the ratio analysis through which we will calculate the profitability analysis, the debtors and creditor's analysis and the liquidity ratios. Also through the beta analysis the stock of the company will be evaluated. In this paper the comparison of Apple Inc. will also be made to check the position of the company.

In the end the conclusion will be made that whether Apple is a good company for the investors to invest in or not?

Financial Accounting and Reporting

Introduction

Apple was founded in the first of April 1976 at the hands of Steve Jobs and Steve Wozniak and Ronald Wayne for the sale of personal computers called "Apple-1". These computers are sold as pallets or (Motherboard): central processing unit (CPU) and memory for random access (RAM) chips and video - script core, these parts of course were less than which we consider to be personal computer in the present day.

Apple runs different businesses and is engaged in offering several products and services like the computer designs, servers, network solutions and software and services. The company is running business in USA mainly having the headquarters in different cities like California and Cupertino. The company is currently having 34,300 employees and the financial results show that the revenue of the company has increased by 14.4% from 2008 to 2009. The main reason behind a huge increase in the revenue is the increased sales of iPhone handsets and applications from the iTunes Store.

Mission statement

Apple is selling its products to almost whole world and almost all the country's can avail the products of Apple Inc. through several sources that include the online delivery, sales through the retailers and etc. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Analysis of Performance based on Ratio

For the purpose of measuring the financial performance of Apple Inc. the financial ratios have been calculated for the five years. These financial ratios provide a clears picture of the financial stability of Apple Inc. and gives the proper result that whether the investors should invest in the company or not? Following are the calculations of the key ratios for Apple Inc. See the appendices for the calculations of the ratios:

Profitability ratios

Profitability ratios are those ratios that cover all the ratios that compare the profits of a period with certain items of Income Statement and Balance.

Their results materialize efficiency in the management of the company, i.e. how managers have used the resources of the company. For these reasons, the address of the entity must ensure that the ...