INVESTMENT PROPOSAL

Investment Proposal

Investment Proposal

1. Business Strategy Analysis

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. 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, 2010).

2. Accounting Analysis

According to the company's 8K filings with the SEC, Apple announced financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter's revenue.

The Company sold 20.34 million iPhones in the quarter, representing 142 percent unit growth over the year-ago quarter. Apple sold 9.25 million iPads during the quarter, a 183 percent unit increase over the year-ago quarter. The Company sold 3.95 million Macs during the quarter, a 14 percent unit increase over the year-ago quarter. Apple sold 7.54 million iPods, a 20 percent unit decline from the year-ago quarter.

3. Financial Analysis

For the purpose of measuring the financial performance of Apple Inc. the financial ratios have been calculated for past two 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?

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. They are widely used to assess the financial - economic activity of enterprises of all industries (Vandyck, 2006). This is one of the most important indicators in assessing the activity of the enterprise that reflect the profitability of the ...