The public-owned manufacturing company selected for this exercise is Apple Inc. The company is one of the largest telecommunication firms across the globe dealing in both hardware and software products. The recent financial statement of the company offers great insights into various disclosure related issues. Apple Inc. The account receivable of the company offers insight on whether its stands on high grounds of getting into bad debts. Based on the financial data fund on the company’s site, it is noted that Apple Inc. is safe and faces low risk of getting into bad debts. This decision is based on Ben Graham’s calculation which presents Apple’s Account Receivable as follows:
| Days Sales Outstanding | |||||
| = | Accounts Receivable | / | Revenue | * | Days in Period |
| = | 22926 | / | 64040 | * | 91 |
| = | 32.67 |
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It is through these calculations that makes one conclude that it faces less risks of bad debts. Moreover, with respect to inventories, it is informed to conclude that Apple Inc. the company’ witnessed a decline between the periods 2017 and 2018 but went higher from 2018 to 2019. The company’s positive inventory management has been attributed to its innovative production which has facilitated its growth over the past years. The overall increased valuation has come from various practices such as continuous innovative production, great sales strategy and enhanced customer service.
In the last three years, Apple financial performance has remained high despite the intensified competition in the industry in which it operates. With regards to the financial data in the past three years, the expectation is that Apple’s performance will continue to grow in the next, at least, five years. However, several other unforeseen challenges may disrupt this expected increase in performance.
