Peirce College Apple Company Financial Analysis Report

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Peirce College

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Company is Apple Inc.

FINANCIAL ANALYSIS: PART III

Refer to the annual report for the company you had selected for the Financial Analysis: Part I activity in Week 1.

Read the Chairman’s letter and any information regarding opportunities and growth; there should be some percentages mentioned, if not in the letter, then in the annual report numbers.

  • What is the level of growth experienced by the company?
  • Is the organization experiencing short- and long-term economic growth, experiencing contraction, or remaining stable?
  • Do you see potential opportunities ahead, or have they stalled? Explain.

Review the balance sheet and income statement for the most recent year for the company you had selected for the Financial Analysis: Part I activity in Week 1.

Construct a pro forma income statement for the next year, and answer the following questions:

  • What are your external financing needs for the year?
  • Do your balance sheet and income statement match the budget estimates for that year?
  • If not, why not? If so, why?
  • Is the next year projected to be a better performing year than the most recent year’s data?

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Explanation & Answer

Attached.

Running head: FINANCIAL ANALYSIS PART III

Financial Analysis Part III
Student’s Name
Institutional Affiliation

1

FINANCIAL ANALYSIS PART III

2

FINANCIAL ANALYSIS: PART III
• What

is the level of growth experienced by the company?

Although Apple had been growing steadily since its inception 13 years ago, its annual
revenue for 2019 declined by 2.04% from that of 2018 (Apple(AAPL), 2019). Apple annual
revenue for the year 2019 was $260.174B. The company’s growth in revenue for the last three
years are as follows;Year

Revenue

Growth Rate

2019

$260.174B

-2.04%

2018

$265.595B

15.86%

2017

$229.234

6.3%

Even though the company shows a slight decline in revenue in 2019, its gross profit margin is
37.82%, while the operating profit margin was at 24.57% for the year 2019. The gross profit margin
shows that the company is still in good financial health.

As per the company's annual earnings per share (EPS), Apple investors are worried about their
declining profitability, as witnessed in 2019. The annual EPS for the year 2019 was $11.89, a decline
of 0.17% from that of 2018 (Apple(AAPL), 2019). The company's EPS for the last three years are as
follows;Year

Annual EPS

Rate

2019

$11.89

-0.17%

2018

$11.91

29.32%

2017

$9.21

10.83%

FINANCIAL ANALYSIS PART III

• Is

3

the organization experiencing short- and long-term economic growth, experiencing a
contraction, or remaining stable?

Apple's increase in revenue for the last thirteen years has been growing steadily. The
steady growth in revenue is sufficient to show that the company is experiencing long term
economic growth. The company's revenue's average positive growth is an indication that the
company is continually increasing its annual sales. The decline in revenue by 2.04% and drop in
EPS by 0.17% in 2019 is a short term pain the investors have to bear.

The year

2019

2018

Revenue( in millions) $260,174

• Do

2017
$265,595

2016
$229,234

2015
$215,639

$233,715

you see potential opportunities ahead, or have they stalled? Explain.

Apple Inc is constantly launching a new product, which means there are more
opportun...


Anonymous
Really helpful material, saved me a great deal of time.

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