5 Aug 2022

124

How to Analyze Apple Inc.'s Financial Statements

Format: APA

Academic level: College

Paper type: Q&A

Words: 300

Pages: 1

Downloads: 0

The DuPont equation is a relatively fast and straightforward way to evaluate the general condition of an organization. The analytic methodology was first used by the DuPont Corporation in the 1920s to assess their company's component section of the return on equity ( Lockamy III, 2017 ). The analytic tool will as a result of this be used to compute the financial statements of Apple Inc. to determine its health. 

Thus, 

DuPont = A. Turnover x NP Margin x Equity M. 

But, 

Turnover = Rev ÷ Av. T. Assets 

NP Margin = N. Income ÷ Rev 

Equity M. = Av. T. Assets ÷ Av. S. Equity 

In 2016, 

Turnover = 215,639,000/321,686,000 = 0.670340021014281 

Apple Inc. has been using its assets effectively in producing sales in as much as it has a large asset base. 

It’s time to jumpstart your paper!

Delegate your assignment to our experts and they will do the rest.

Get custom essay

NP Margin = 45,687,000/215,639,000 = 0.211867983064288 

The company managed to produce profits in the last quarter of the year equivalent to 21 cents for each sale in the dollar. 

Equity M. = 321,686,000/119,629,000 = 2.689030251862007 

Apple Inc. has demonstrated a good asset to debt ratio. 

DuPont =2.689030251862007x0.211867983064288x0.670340021014281=0.3819057252004113 

From the results, the company is efficient in using shareholders resources in generating profits. 

2017, 

Turnover = 229,234,000/375,319,000 = 0.6107711040474903 

The effectiveness of the use of company assets in generating sales is still evident. 

NP Margin = 48,351,000/229,234,000 = 0.2109242084507534 

In the last quarter of the year the company made profits equivalent to 21 cents for every sale made. 

Equity M. = 375,319,000/134,047,000 = 2.799906003118309 

The debt to equity ratio is still very strong. 

DuPont = 0.6107711040474903 x 0.2109242084507534 x2.799906003118309= 0.360701843383291 

The company continues to show its ability in turning shareholder’s money into profits. 

2018, 

Turnover = 265,595,000/365,725,000 = 0.0727185726980655 

The company has become more efficient compared to the previous two years in the use of its assets to generate sales. 

NP Margin = 59,531,000/265,595,000 = 0.2241420207458725 

There was a slight increase in profits equivalent from 21 to 22 cents for each sale in dollar. 

Equity M. = 365,725,000/107,147,000 = 3.413301352347709 

The debts are more than covered by the asset base and in case of default can be repaid three times over ( Etzioni, 2018) . 

DuPont = 0.0727185726980655x0.2241420207458725x3.413301352347709=0.0556343811934677 

The use of shareholders equity is not as strong compared to the two previous years. 

References 

Etzioni, A. (2018). Apple: Good business, poor citizen?.  Journal of Business Ethics 151 (1), 1-11. 

Lockamy III, A. (2017, July). An examination of external risk factors in Apple Inc.’s supply chain. In  Supply Chain Forum: An International Journal  (Vol. 18, No. 3, pp. 177-188). Taylor & Francis. 

Illustration
Cite this page

Select style:

Reference

StudyBounty. (2023, September 14). How to Analyze Apple Inc.'s Financial Statements.
https://studybounty.com/how-to-analyze-apple-incs-financial-statements-question-and-answer

illustration

Related essays

We post free essay examples for college on a regular basis. Stay in the know!

Texas Roadhouse: The Best Steakhouse in Town

Running Head: TEXAS ROADHOUSE 1 Texas Roadhouse Prospective analysis is often used to determine specific challenges within systems used in operating different organizations. Thereafter, the leadership of that...

Words: 282

Pages: 1

Views: 93

The Benefits of an Accounting Analysis Strategy

Running head: AT & T FINANCE ANALLYSIS 1 AT & T Financial Analysis Accounting Analysis strategy and Disclosure Quality Accounting strategy is brought about by management flexibility where they can use...

Words: 1458

Pages: 6

Views: 81

Employee Benefits: Fringe Benefits

_De Minimis Fringe Benefits _ _Why are De Minimis Fringe Benefits excluded under Internal Revenue Code section 132(a)(4)? _ De minimis fringe benefits are excluded under Internal Revenue Code section 132(a)(4)...

Words: 1748

Pages: 8

Views: 196

Standard Costs and Variance Analysis

As the business firms embark on production, the stakeholders have to plan the cost of offering the services sufficiently. Therefore, firms have to come up with a standard cost and cumulatively a budget, which they...

Words: 1103

Pages: 4

Views: 179

The Best Boat Marinas in the United Kingdom

I. Analyzing Information Needs The types of information that Molly Mackenzie Boat Marina requires in its business operations and decision making include basic customer information, information about the rates,...

Words: 627

Pages: 4

Views: 97

Spies v. United States: The Supreme Court's Landmark Ruling on Espionage

This is a case which dealt with the issue of income tax evasion. The case determined that for income tax evasion to be found to have transpired, one must willfully disregard their duty to pay tax and engage in ways...

Words: 277

Pages: 1

Views: 120

illustration

Running out of time?

Entrust your assignment to proficient writers and receive TOP-quality paper before the deadline is over.

Illustration