Finance Apple

Topics: Financial ratio, Revenue, Financial ratios Pages: 9 (2935 words) Published: February 3, 2013
APPLE – A view in the near Future
Apple Inc, an American multinational company founded in 1976 is the second biggest company in the information technology industry and third largest in revenues sold for cell phone devices after Samsung and Nokia. Apple headquarters in California, US and their stocks are held in Nasdaq Stock Market. Apple is known for bringing innovative products to the market, every year millions are awaiting to see their bran new idea products and wait on lists in order to get new released IPhones. Apple has a brand reputation and investors have their eye on them daily, especially nowadays that they are seeing a decrease on stock value after 4 years of constant raise. After reviewing Apples’ ratios and numbers, I noticed that it is not very valuable for me to compare them against all of the major competitors in the service communication and computer services industry (technology) since Apple’s numbers have in my opinion, nothing to envy Samsungs or Dell’s (in terms of profitability ratios, efficiency and value -Exh. III -IV). By comparing them, I believe its better to judge apple against themselves in history since their stock continues to decrease and news are overwhelming in comments about Iphone 5 main competitor the Samsungs Galaxy S3 which has sold over 18million items against the 16.2 Iphones sold in a period of three months. Samsung is continuing to follow the Apple –like approach by managing its own destiny and investing in a product that could be seen as the next best thing in term of sales, accessibility and mainly because accessibility thanks to its Android OS that provides a vast amount of applications from any develops against the Apple OS that has a more difficult application developer approach. This is seen as a good and bad thing since many customers expect to have more accessibility to all possible applications. Currently Apple has sued Samsung for the replication of certain Smartphone design, store features, and functionalities. Apple is part of the technology sector which encompass many industries categories where Apple’s number play a big role, i.e.; like business software, computer and peripherals, but mainly the communication electronic industry where items like the I phones and Ipads fit right in. In regards to the Smartphone market, and based on Porters Five Forces (porter, 2008), where one analyzes the Smartphone market, many factors should be consider specially the barriers of entry since innovation is of the essence, R&D costs are very high and the amount of players that count with patents and technological limitations. [ (PR Newswire, 2012) ]. The Smartphone’s market has reached saturation rates of above 60%, this due to the many options and alternatives provided allowing a high bargaining power. [ (Lampel, 2013) ] . If we compare Samsung to Apple, we notice how the Samsung sells more in terms of revenues only because they sell a wide range of products against only a few Apple sells. The wide arrange of products allows Samsung to take over emergent markets like China, India and all over Latin America with their lower their products costs.

Changes in Financial Statements:
(From Table III)
Change in Cash: Notice 2012 was the only year after three years apple has a positive Cash flow balance, this is a good sign for investors (Good Sign)
Cash Flow: We see how there is a -94% and -112% decrease change, They invested highly on the Iphone5 and Apple TV during 2010 and 2011, we notice how they are increasing the expenditures which could mean they are definitely working on a new item coming up. (Good sign)

Dividends paid: As per the Apple website, the first common dividends were valued at 2.65 and were paid in Feb 2012.Notice they have not paid dividends in 2011 nor 2010. They will remain paying the next dividends on February 2013

Other Cash flows from investing Investments spending is also going up , from articles on BBC , they said how Apple will be partnering with...
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