Professional Documents
Culture Documents
Liquidity Ratios1
Liquidity Ratios
2.5
2
1.5
1
0.5
0
2010
2011
Current Ratio
2012
Quick Ratio
2013
Cash Ratio
Description
The company
Curre
nt
ratio
Quick
ratio
Cash
ratio
Profitability Ratios2
Return on Investment
Return on Investment
40
35
30
25
Percentage 20
15
10
5
0
2008
2009
2010
2011
2012
2013
Year
ROA
ROE
Rati
o
ROE
Description
The company
ROA
Profit Margin3
Profitability
50
40
30
Percentage
20
10
0
2008
2009
2010
2011
2012
2013
Year
Gross Profit Margin
Ratio
Description
The company
Gross
profit
margin
Net profit
margin
An indicator of profitability,
calculated as net income divided by
revenue.
Observations
Based on the findings in the trend and common
size analysis, Apples overall performance is above
average.
Analysis of companys Balance Sheet showed that
Apples growth in Total Assets, Common Equity,
and Retained Earnings was above industry
average.
Analysis of companys Income Statement showed
that Apples growth in Net Sales, and Gross Income
was above its competitors.
Analysis of companys Cash Flow Statement
showed that Apples Net Cash Flow from Operating
Activities was above the industry average, and that
resulted in a positive Net Change in Cash.
Suggestions
For Company
Lowering the cost of products and maintaining the same quality
standards.
Can form joint ventures.
Knowledge Management.
More number of retail stores for easy access.
Continuous innovation to expand.
For Others
Do not compromise on price for quality.
Choose the products based on individual needs.
Be unique and different.
High demand of iPad mini and iPhone 5. iPad mini sales will
increase Apples market share in the tablet market and,
will strengthen firms competitive advantage.
iTV launch. iTV launch will support Apple TV sales and the
products ecosystem.
Growth of tablet and smartphone markets. Growth of
tablet and smartphone markets is a good opportunity to
expand firms share in these markets.
Provide value for the products offered-If a perception is
created that Apple is offering its customers with fine
products with premium quality in the industry, which is not
being offered by others; than Apple should be able to
differentiate themselves from their competitors in order to
still keep premium pricing for their products.
Conduct more aggressive promotion-Increasing promotional
programs never proves to be damaging for any firm, but
only proves to be beneficial, it not only helps to attract
potential customers, but also new customers boosting
customer traffic and sales. Apple should also start creating
'TV commercials', in such a way that educate the
customers about the latest technological product, making
it seem more appealing. Also, they should start focusing
on advertising all products not only new products in order
to meet the sales target for all products.
Make maximum innovations-Technology market is a highly
competitive market, its very easy for competitors to clone
your products and sell as new products by making small
STRATEGY RECOMMENDATIONS
Strategy 1
Open six computer retail stores (not just peripheral and accessories). Apple
currently has stores opened throughout the United States with only peripheral
and accessories for their computers. Adding the hardware should generate more
hands-on awareness and use already established locations. This will increase
product accessibility for those who wish to view items other than just
accessories and increase awareness of the originality of Apples products. 2
percent increase over the next 2 years in sales representatives for the computer
hardware.
Strategy 2
Contract music spokesperson to attract the upcoming generation who are
attending high school and college. This will invoke a sense of style and linking
apple with a distinctive and memorable top 10 hit. This will stay in the
Strategy 3
Add more features to current products for greater Wintel compatibility. Features
such as iTunes software compatible with windows based computers, Office
programs loadable from PC installation disk (This would require a software
agreement with Microsoft). In late October 2003 Apple released an iTunes
software package that is PC ready. It will increase the United States market
share at least 30 percent for the next 2-3 years. $50 million is the estimated cost
for Research and Development.
CONCLUSION
It is concluded from the strategic management analysis at
APPLE Inc. that technological industries are never easy to
compete with. They have a lot invest at R&D and have to be
proactive in order to compete with their competitors in the
industry. As for APPLE is concerned they have been working so
well as it is shown form their products. As Apple Inc. is
increasing also, those other businesses are increasing and
trying to do something interesting for their own good. APPLE
needs to make a drastic change. They dont need to wait for
people buy their products only when they are on sale but they
need to focus more on the customer support and improve the
areas they already have problems.
Based on the performed analysis, Apple Inc. is financially
healthy and strong. The companys growth has been
extraordinary during the past five years. Apple is able to
finance its operations by current liabilities only. Its financial
structure is outstanding with 100% Equity. Apple Inc. does not
have any long-term debt, which makes the company very
financially independent. Revenues and Net Income are
increasing each year. Retained Earnings reached $9.101 billion
in 2007, which is an indicator for the financial power of Apple.
Due to the fact that sales are constantly increasing, and backed
by $9.352 billion (2007) in Cash and equivalents, the company
can afford future acquisitions.
During the years, Apple has substantially improved in its key
measures of profitability. In terms of ROA, ROE, and profit
to
and computers.
expand
the
boundaries
of
both
media
Annexure
Annexure I Cash Flow Statement
Bibliography
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Word Count
Abstract 201 Words
Report 3800 Words (Approximate)