Financial Analysis

Financial Analysis

Introduction

This paper discusses the financial aspects of the US publicly traded company. For this purpose, the company chosen for the analysis is Apple Inc. It explores the financial ratios of the company and conducts a detailed analysis. Further, it analyzes the stock price over the past year and over 5 years. This paper provides an in depth analysis of the company current performance.

Discussion

Apple Inc - Overview of the Company

Apple Inc. is an information technology U.S. company, was first established by Steve Jobs and Stephen Wozniak on 1st April, 1976. Jobs and Wozniak were high school friends. Earlier Wozniak used to work for Hewlett Packard and offered to propose the idea of making personal computers. However, his offer was rejected. Thus, jobs and Wozniak both decided to start their own business together. They built the first computer Apple I, which was a Kit computer. It was made to sell it to hobbyists only. Jobs named it as Apple.

The company officially named it to be Apple Computers Inc. in 1977. It made expansionary plans and within few months introduced Apple II computer. Further, in 1980 the company went public. In the 5 years span from 2006 to 2010, its net sales considerably increased from $19,315 to $65,225 (in million). The company grew rapidly and faced some fierce competition, such as IBM who created IBM's first computer. IT captured the young market making Steve Jobs realize that he must take a quick action to remain in main stream market. Jobs hired John Sculley as the CEO and President of Apple, who was previously CEO in Pepsi Cola. Jobs had a hope that this will restructure the company. Consequently, Apple achieved another milestone and created Macintosh (Mac) (hoovers.com, 2012).

In addition to the computers, Apple now sells many other products and services as well, such as iTunes, iPhone, iPad, iPod and Apple TV. This is core competency of Apple that it has catered the variety of market developing a wide range of products. iTunes and iPod is developed for the music lovers, which further has many kinds such as iPod touch, iPod shuffle, iPod classic, iPod nano. Later in 2007, Apple developed the cell phone, which was a revolutionary product of apple, known as iPhone. It has three amazing combined features of a wide screen I pod, mobile phone and internet. Further, there is Apple TV. This is supposed to revolutionize the internet video industry. By the end of 2007 iTunes was able to make contracts with the major recording brands, Universal, Sony BMG, EMI and Warner Bros, along with many other independent brands. This way iTunes is paid each time when any music consumer downloads the song. It was like Apple is buying content from these brands in whole sale and then re selling those music to the public. In addition to this, Apple opened up an App store in 2008. This is an online store which offers a variety of application software for IPad, iPod Touch and iPhone, which are ...