Apple Ratio Analysis

Jul 20th, 2016
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Financial analysis of Apple company's annual data.

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Ratio AnalysisCalculation of RatiosFORMULA1. Profitability Analysisa) Profit Margin RatioNet Income/Salesb) Return on Assets (ROA)Net Income/Total Assets2. Turnover or Asset utilization ratiosa) Inventory TurnoverCost of Goods Sold/Inventoryb) Receivables TurnoverSales/Accounts Receivable3. Short Term Solvency or Liquidity RatiosCurrent Assets/Currenta) Current RatioliabilitiesQuick Assets/Currentb) Quick RatioLiabilities4. Long Term Solvency Ratiosa) Debt Equity RatioTotal Debt/Total Equityb) Equity MultiplierTotal Assets/Total Equity5. Earnings Per ShareNet Income/ No. of Commona) EPSStock6. Return on Equity(ROE)ROENet Income/Total EquityROE = (NetIncome/Sales)*(Sales/TotalAssets)*(Total Assets/ Total Equity)Sept. 27, Sept. 26,20142015RATIOS RATIOS21.61%17.04%22.85%18.38%53.1810.4759.6413.871.081.110.681.011.082.081.432.436.499.280.350.45Profit Margin RatioApples profit margin increased from 21.61% in 2014 to 22.85% in 2015. This was due primarilyto an increase in net sales year-over-year.Return on AssetsApples ROA increased from 17.04% in 2014 to 18.38% in 2015. This is indicative of increasedefficiency in the use of its assets to earn profit. This was an impressive feat, as Apples netincome increased substantially while the total assets of the company decreased proportionally.Management has done an exceptional job of making use of existing assets to earn profits.Inventory Turnover

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