Financial analysis of Apple inc
Apple 's financial performance continued to strengthen over the last several quarters. In the most recent earnings announcement, Apple reported significant growth in net revenues driven by the strong performance of its iPod product line. Net sales for the 2nd quarter grew to $4.36 billion, which is a 34% increase over 2nd quarter 2005 results. Net income increased by 41% to $410 million. (Apple Reports)The iPod product line continues to drive the financial performance of the company. In the 2nd quarter alone, Apple sold 8.5 million iPods, representing a 61% increase over the 5.3 million units sold in the 2nd quarter of the prior year. Mac sales showed slight growth of only 4%. (Apple Reports)Apple 's year-to-date revenues total just over $10 billion and earnings total just under $1 billion. For the 3rd quarter, CFO Peter Oppenheimer stated, "…we expect revenue of about $4.2 to $4.4 billion" which will push total sales above last term 's annual numbers. (Apple Reports)Historical PerformanceAlthough sales remained stagnant during 1998-2002, sales more than doubled since (see graph below). This dramatic shift in performance is primarily due to the increase in sales from the iPod product line.
(Apple Computer, 2005)Stock Price PerformanceAnother interesting way to consider the financial performance is to evaluate how Apple 's stock price performed against the market and against its main competitors. As we see from the chart above, Apple 's performance has been inconsistent over the last 20 years compared to the S&P 500. It also has not performed at the same level as its main competitors, Dell and Microsoft. However, performance improved since 2003.
Profitability MeasuresApple substantially improved in its key measures of profitability in the last few fiscal years. In terms of return on assets, return on equity and profit margin, Apple strengthened financially and now has similar ratios to that of its competitors and the overall computer hardware industry (see table
(Apple Computer, 2005)Stock Price PerformanceAnother interesting way to consider the financial performance is to evaluate how Apple 's stock price performed against the market and against its main competitors. As we see from the chart above, Apple 's performance has been inconsistent over the last 20 years compared to the S&P 500. It also has not performed at the same level as its main competitors, Dell and Microsoft. However, performance improved since 2003.
Profitability MeasuresApple substantially improved in its key measures of profitability in the last few fiscal years. In terms of return on assets, return on equity and profit margin, Apple strengthened financially and now has similar ratios to that of its competitors and the overall computer hardware industry (see table
References: pple Computer (2006). Corporate Web Site retrieved 29 March 2006 fromhttp://www.apple.com/macmini/Apple Computer, Inc 1st Quarter 10Q. Retrieved March 19, 2006 fromhttp://www.apple.com.htmlApple Computer Inc. Q2 2006 Unaudited Summary Data. Retrieved from http://images.apple.com/pr/pdf/q206data_sum.pdf on 5/6/06. Apple Reports Second Quarter Results. Retrieved April 23, 2006 fromhttp://www.apple.com.htmlAssociated Press (March 29, 2006). Apple, Beatles Face Off Over iTunes Music Store. Wall Street Journal Online. Retrieved 4 April 2006 from http://online.wsj.com/article_print/SB114355415653810027.htmlBarney, J. (2002). Gaining and Sustaining Competitive Advantage. Upper SaddleRiver: Prentice Hall. Bartiromo, Maria. (2/8/2006). Apple Computer Analysis. Transcribed interview retrieved from LexisNexis Academic database on 4/17/2006. Boddie, John. (August 29, 2005). Behind Apple 's Strategy: Be Second to Market. Retrieved 8 March, 2006 fromhttp://hbswk.hbs.edu/item.jhtml?id=4970&t=technology