Evaluation of Corporate Performance
BUS650: Managerial Finance
Instructor Stanley Atkinson
July 06, 2015
In this paper, the author will give an introduction of the company chosen and include background information. The author will present a review of the financial statement of the company and pro forma financial statements for the company for the next two years assuming there is a 10% growth rate in sales and the Cost of Goods Sold for each of the next two years (2015 and 2016). The author will present a ratio analysis for the last fiscal year using two ratios from the liquidity, financial leverage, asset management, profitability, market value, return on equity (ROE) using the DuPont system, assess management performance by calculating economic value added (EVA), and evaluate the soundness of the company’s financial policies. Lastly, the author will give a synopsis of the findings and make a recommendation of whether or not to purchase stock from this company. History
Apple, Inc. is a company that has become a preeminent leader in the business of producing personal computers and personal electronics items. Apple, Inc. came into being in 1976 and was the brainchild of Steven Wozniac. Wozniac developed the “Apple I personal computing system and Apple Computer, Inc. was incorporated in 1977 by Wozniac, Steve Jobs, and Ronald Wayne” (Berger, 2011, para. 1). By 1980, Apple Computer, Inc. had released the Apple II, Apple II+, and the Apple III personal computers (Berger, 2011). The Apple III personal computer was developed to compete with IBM and Microsoft who had entered the corporate computing market but, the sales of the Apple III computer were poor (Berger, 2011). Later that year, Wozniac, Jobs, and Wayne took Apple, Inc. “public with an offering of 4.6 million shares of stock” (Berger, 2011, para. 5). In 1982, Apple recorded $1billion in sales (Berger, 2011).
In 1983, Apple Computer, Inc. was the first company to market and sell a personal computer with a graphic user interface to the public but “its high price and limited software capabilities made it a commercial failure” (Berger, 2011, para. 8). In 1984, the Macintosh computer was developed, Steve Jobs is dismissed from his position, Steven Wozniac leaves the company, the Macintosh Plus, Mac II, and Mac SE computers are developed are released, and the company sues Microsoft (Berger, 2011). From 1984 to 1990, Apple Computer, Inc. went through several managerial changes as well as developmental changes. In 1991, Apple Computer, Inc. introduced the forerunner to the laptop computer, the PowerBook 100 and two years later releases the first hand held device, which was not successful (Berger, 2011). Also during 1993 through 1997, Apple reported its first $2 billion-revenue quarter (Berger, 2011). Apple continued to enjoy success with the sales of its PowerBook as its sales surpassed the 1million mark, introduced the Power Mac 6100/60, the Mac computer was in its tenth year of production, Apples’ fourth quarter earnings reached $25 million in profits, and Steve Jobs returns to the company as the interim CEO (Berger, 2011).
Apple Computer, Inc. continued to enjoy success in the personal computer world; in 2001, Apple ventured into the world of personal music devices by introducing the iPod, and in 2003 opened iTunes stores where customers could download music selections and books directly to the device (Berger, 2011). In “early 2003 and 2006, the price of Apple’s stock increased more than tenfold, from $6.00 to over $80.00” (Berger, 2011, para. 30). Apple lead the way in the release of personal music player and video devices by releasing the Video iPod and the Ipod Nano from 2005-2007(Berger, 2011) and in 2007 removed the word Computer from its name because the company no longer dealt solely in the computer business (Berger, 2011). Apple, Inc. had not only become the supplier of personal music and video...
References: Apple, INC., 2014 Annual Report., Mergent., (n.d.). Mergent Online Quick Tips., Mergent Online. Retrieved from Online Ashford Library.
Apple Inc. Real Time Stock Quotes., Retrieved from:http://www.nasdaq.com/symbol/aapl/real- time
Berger, M., (2011)., An illustrated history of Apple’s products and executives, retrieved from:
Gupta, A., & Prinzinger, J. (2013). Apple, inc.: Where is it going from here? Journal of Business Case Studies (Online), 9(3), 215-n/a. Retrieved from http://search.proquest.com/docview/1418712125?accountid=32521
In from the cold
Koch, J. V., Fenili, R. N., & Cebula, R. J. (2011). Do investors care if Steve Jobs is healthy? Atlantic Economic Journal, 39(1), 59-70. doi:http://dx.doi.org/10.1007/s11293-010-9261-z
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