Apple Inc Group Analysis

Group Project: Apple Inc. Analysis

Submitted 10/13/2013

Financial Management

Executive Summary

Apple Inc., formerly Apple Computer, Inc., is a multinational corporation that creates consumer electronics, smart phones, tablets, personal computers, computer software, and commercial servers, and is a digital distributor of media content. Apple's core product lines are the iPhone smartphone, iPad tablet computer, iPod portable media players, and Macintosh computer line. Founders, Steve Jobs and Steve Wozniak effectively created Apple Computer on April 1, 1976, with the release of the Apple I, and incorporated the company on January 3, 1977, in Cupertino, California.

Apple experienced modest, but above average growth from it’s founding until the mid-2000s when the popularity of its iPods and iTunes Store were joined by Apple’s release of the first iPhones.  This combination, along with then-CEO Steve Jobs’ iconic leadership, catapulted Apple to successes rarely seen as it became the largest publicly traded company in the world by 2012.

Our financial analysis of Apple revealed many things, not the least of which is the simple fact that Apple is a well-run, efficient, innovative company.  Over the last three years, Apple realized a consistent positive trend in well over half of the twenty-two key financial ratios analyzed, highlighted by improvements in all profitability and inventory management ratios.  It kept pace with the growth experienced in the technology and consumer electronics industries, despite significant gains in market share by giants such as Microsoft, Samsung, Motorola, Nokia, and multiple emerging players from China and India.  Despite having a slightly below average P/E ratio and return on equity, other historical performance indicators give the impression that the company remains strong.

There are two significant, but conflicting, items that were noted during our analysis that should be considered when discussing Apple’s...