Apple is one of the leading technology companies in the world and a major player in the market for certain products including smart phone and tablet devices. It may not be an overstatement to claim that no other company has changed the computing technologies landscape as much as Apple over the last decade. The following financial analysis utilizes information from the company’s 10-K report for the fiscal year 2013; last year for which the annual report is available.
Apple’s total assets as of September 2013 totaled $207 billion. Total assets are important because they help support company’s operations and give valuable information about the scale of operations of the organization. The corresponding figure for September 2012 was approximately $176.06 billion which means the company did grow in size over the following year. As far as cash and cash equivalents are concerned, Apple had approximately $14.26 billion as of September 2013. This figure is important because it gives some clue about the short-term liquidity of the company as well as its ability to take advantage of investment and growth opportunities. During the same time, the company also owed approximately $22.37 billion in accounts payable. This figure was slightly higher than a year ago in September 2012 when the company’s accounts payable totaled approximately $21.18 billion. Accounts payable tells us what the company owes its suppliers and the trend over time may indicate how well the company manages relationship with suppliers.
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A study of the Apple’s income statement for the last three years reveals that the company earned approximately $108.25 billion, $156.51 billion, and $170.91 billion in net revenues during the fiscal years 2011, 2012, and 2013, respectively. It is clear that the company has been enjoying growing sales. As far as net income is concerned, Apple’s net income decreased from approximately $41.73 billion in the fiscal year 2012 to approximately $37.04 billion in the fiscal year 2013 which represents a net decline of approximately $4.69 billion during the period. This happened despite an increase in sales during the same period which may be due to one or more factors such as lower price mark-ups and higher operating expenditures such as marketing.
Apple’s total current assets as of September 2013 were approximately $73.29 billion. This figure was significantly higher than just a year ago in September 2012 when the company’s total current assets were approximately $57.65 billion. The increase primarily resulted from boost in current assets such as cash and cash equivalents, short-term marketable securities, and accounts receivables.
The information in the financial statements such as the balance sheet and income statement is valuable to a number of stakeholders including management, employees, and investors. As far as management is concerned, it will find valuable information in figures such as revenues, income, cash and cash equivalents, and accounts payable among other things. Revenue and income figures help management understand whether the company’s sales have been growing or not and if they are, whether such growth is coming at the expense of profit margin. Figures like cash and cash equivalents and accounts payable reveal valuable information about the liquidity position of the company. A continues rise in accounts payable over a particular period may point out to liquidity issues.
Employees may also look at figures like net income and total assets to determine the operating efficiency and asset utilization rates of the company. Similarly, figures like current assets may give valuable clues into the short-term liquidity of the company. Investors may be interested in figures like sales and net income to assess the growth prospects and profitability of the company which will in turn influence the return they get on their investments. Prospective investors may use these figures to determine whether they should invest or stay clear of the company stock.
