Apple Ratios - this is just a document PDF

Preview

Summary

this is just a document...

Description

Short-term Solvency

2016

2015

2014

Current Ratio

1.353

1.109

1.080

Quick Ratio Cash Ratio NWC to TA Interval measure

1.326 0.259 0.087 649.860

1.080 0.262 0.030 457.995

1.047 0.218 0.022 476.426

From this table, we can see that the short term solvency ratios slightly increased in 2014, 2015 and 2016. The company’s ability to pay its short-term debt is pretty good. Additionally, they keep the cash in the company at acceptable rate, which is a positive sign. To sum up, their liquidity is still excellent in 2014, 2015 and 2016 Long-term Solvency Debt ratio Debt to Equity Equity multiplier

2016 0.601 1.508 2.508

2015 0.589 1.433 2.433

2014 0.519 1.078 2.078

Profitability

2016

2015

2014

Profit margin ROA ROE

0.212 0.142 0.356

0.228 0.184 0.447

0.216 0.170 0.354

Asset management Inventory turnover Days sales in inventory Receivable turnover Days sales in receivables NWC turnover Fixed asset turnover

2016 61.621 5.923 7.360 49.593 7.739 1.803

2015 59.638 6.120 7.702 47.388 26.655 2.118

2014 53.178 6.864 5.796 62.972 35.962 1.778

The data in the table illustrated the long-term solvency, profitability and asset management of Apple. Inc. All ratios are showing good signs of their business. The long-term solvency ratios, profitability ratios and asset management increased thorough times. Combine

with table 1, we can clearly see that Apple ability to pay long term debt is improving through time. However, there was a difference between 2015 and 2016, in the profitability and asset management ratios. All profit margin, ROA, ROE decreased in 2016, compare to 2015, which means that the ability to generate income in 2016 is reduced. However, it is too soon to talk about the future because Apple’s CEO are planning to expand the business. All are at good ratios, compare to other company and industry average. To compare Apple Inc. with other companies and the industry average, we use the following table. We decided to choose Hewlett-Packyard company (HPQ), Dell Technologies Inc. (DVMT), International Business Machine Corporation (IBM).

Short term Solvency

Long-term Solvency

Profitabilit y

Current Ratio Debt Ratio Debt to Equity Equity multiplie r ROE ROA Profit Margin

APPLE

HPQ

DVMT

IBM

1.353

0.982

1.010

1.210

Industry average 1.980

0.601

1.134

0.965

0.845

0.348

1.508

-8.460

29.707

5.438

0.533

2.508

-7.460

30.779

6.438

1.533

0.356 0.142 0.212

-0.642 0.086 0.052

-0.753 -0.024 -0.022

0.651 0.101 0.149

0.313 0.151 0.170

Compared with other companies in the Technology industry, we can see that 2016 is still a good year for Apple, profit margin and ROE is higher than the industry average, which means better opportunities for investors in short run. However, the long-term solvency ratios are higher than industry average, but still lower than to competitors. Apple kept it at a very suitable rate, in

order to balance the debt and the prosperity. This can be explained that CEOs are planning to expand the business, so that their more debt than the industry average....