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The
financial ratio analysis provides a brief overview of the financial performance
of the corporation. The financial ratios provide the information about the
profitability, liquidity, financial leverage & efficiency of the
corporation. The following ratios provide detail information about the
financial performance of Apple Corporation:
Profitability
of Apple Corporation
|
Key Ratios ->
Profitability |
||||||
|
Margins % of Sales |
2014-09 |
2015-09 |
2016-09 |
2017-09 |
2018-09 |
TTM |
|
Revenue |
100 |
100 |
100 |
100 |
100 |
100 |
|
COGS |
61.41 |
59.94 |
60.92 |
61.53 |
61.66 |
61.95 |
|
Gross Margin |
38.59 |
40.06 |
39.08 |
38.47 |
38.34 |
38.05 |
|
SG&A |
6.56 |
6.13 |
6.58 |
6.66 |
6.29 |
6.8 |
|
R&D |
3.3 |
3.45 |
4.66 |
5.05 |
5.36 |
5.92 |
|
Other |
||||||
|
Operating Margin |
28.72 |
30.48 |
27.84 |
26.76 |
26.69 |
25.34 |
|
Net Int Inc &
Other |
0.54 |
0.55 |
0.63 |
1.2 |
0.75 |
0.74 |
|
EBT Margin |
29.26 |
31.03 |
28.46 |
27.96 |
27.45 |
26.08 |
|
Profitability |
2014-09 |
2015-09 |
2016-09 |
2017-09 |
2018-09 |
TTM |
|
Tax Rate % |
26.13 |
26.37 |
25.56 |
24.56 |
18.34 |
15.18 |
|
Net Margin % |
21.61 |
22.85 |
21.19 |
21.09 |
22.41 |
22.12 |
|
Asset Turnover
(Average) |
0.83 |
0.89 |
0.7 |
0.66 |
0.72 |
0.73 |
|
Return on Assets % |
18.01 |
20.45 |
14.93 |
13.87 |
16.07 |
16.12 |
|
Financial Leverage
(Average) |
2.08 |
2.43 |
2.51 |
2.8 |
3.41 |
3.23 |
|
Return on Equity % |
33.61 |
46.25 |
36.9 |
36.87 |
49.36 |
49.13 |
|
Return on Invested
Capital % |
26.2 |
31.32 |
21.95 |
19.86 |
24.41 |
23.83 |
|
Interest Coverage |
140.28 |
99.93 |
43.15 |
28.59 |
23.5 |
19.65 |
Source:
http://financials.morningstar.com/ratios/r.html?t=AAPL®ion=usa&culture=en-US
The
profitability ratios how much profit the corporation is generating in a
specific period. The profitability ratios show how efficiently the corporation
is utilizing its assets for generating profit. The profitability ratios of
Apple indicates that Apple is generating a significant amount of profit. The
ROE of Apple was 33.61 in the year 2014, which increased up to 49.36 in the
year 2018. The net profit margin in 2018 was 22.41, which indicates sufficient
profitability of the corporation
Liquidity
of Apple Corporation
|
Balance Sheet Items
(in %) |
2014-09 |
2015-09 |
2016-09 |
2017-09 |
2018-09 |
Latest Qtr |
|
Cash & Short-Term Investments |
10.82 |
14.32 |
20.88 |
19.76 |
18.13 |
23.42 |
|
Accounts Receivable |
11.74 |
10.45 |
9.11 |
9.5 |
13.4 |
7.68 |
|
Inventory |
0.91 |
0.81 |
0.66 |
1.29 |
1.08 |
1.43 |
|
Other Current Assets |
6.09 |
5.19 |
2.57 |
3.71 |
3.3 |
3.54 |
|
Total Current Assets |
29.56 |
30.77 |
33.22 |
34.28 |
35.91 |
36.07 |
|
Net PP&E |
8.9 |
7.74 |
8.4 |
9 |
11.29 |
11.33 |
|
Intangibles |
3.78 |
3.1 |
2.68 |
2.14 |
||
|
Other Long-Term Assets |
57.77 |
58.39 |
55.7 |
54.59 |
52.79 |
52.6 |
|
Total Assets |
100 |
100 |
100 |
100 |
100 |
100 |
|
Accounts Payable |
13.02 |
12.22 |
11.59 |
13.07 |
15.28 |
8.9 |
|
Short-Term Debt |
2.72 |
3.79 |
3.61 |
4.92 |
5.67 |
6.56 |
|
Taxes Payable |
0.52 |
|||||
|
Accrued Liabilities |
2.8 |
8.67 |
6.85 |
6.86 |
||
|
Other Short-Term
Liabilities |
8.31 |
3.08 |
2.51 |
2.01 |
11 |
11.96 |
|
Total Current
Liabilities |
27.37 |
27.75 |
24.56 |
26.86 |
31.95 |
27.42 |
|
Long-Term Debt |
12.5 |
18.41 |
23.45 |
25.9 |
25.63 |
26.37 |
|
Other Long-Term
Liabilities |
12.02 |
12.76 |
12.12 |
11.52 |
13.12 |
15.25 |
|
Total Liabilities |
51.89 |
58.91 |
60.13 |
64.28 |
70.7 |
69.05 |
|
Total Stockholders'
Equity |
48.11 |
41.09 |
39.87 |
35.72 |
29.3 |
30.95 |
|
Total Liabilities
& Equity |
100 |
100 |
100 |
100 |
100 |
100 |
|
Liquidity/Financial
Health |
2014-09 |
2015-09 |
2016-09 |
2017-09 |
2018-09 |
Latest Qtr |
|
Current Ratio |
1.08 |
1.11 |
1.35 |
1.28 |
1.12 |
1.32 |
|
Quick Ratio |
0.82 |
0.89 |
1.22 |
1.09 |
0.99 |
1.13 |
|
Financial Leverage |
2.08 |
2.43 |
2.51 |
2.8 |
3.41 |
3.23 |
|
Debt/Equity |
0.26 |
0.45 |
0.59 |
0.73 |
0.87 |
0.85 |
Source:
http://financials.morningstar.com/ratios/r.html?t=AAPL®ion=usa&culture=en-US
The
liquidity ratios of the Apple corporation indicates that the organization have
enough cash to pay its short term obligation. The current ratio I the year 2014
was 1.08, which increased over the years and became 1.12 in the year 2018
Financial
Leverage of
Apple Corporation
The
financial leverage ratios show how much debt the corporation has taken in a
specific period. In other words, the financial leverage ratios investigate
whether the corporation is in the position to pay its long term debts or not.
The debt to equity ratio of Apple Corporation is showing an increasing trend,
which means the debt of the company has increased in the 5 year period
Asset
Management of
Apple Corporation
|
Key Ratios ->
Efficiency Ratios |
||||||
|
Efficiency |
2014-09 |
2015-09 |
2016-09 |
2017-09 |
2018-09 |
TTM |
|
Days Sales Outstanding |
30.51 |
26.79 |
27.59 |
26.77 |
28.21 |
20.76 |
|
Days Inventory |
6.3 |
5.81 |
6.22 |
9.04 |
9.82 |
14.3 |
|
Payables Period |
85.45 |
85.57 |
101.11 |
111.72 |
116.95 |
73.8 |
|
Cash Conversion Cycle |
-48.64 |
-52.97 |
-67.29 |
-75.91 |
-78.92 |
-38.74 |
|
Receivables Turnover |
11.96 |
13.62 |
13.23 |
13.63 |
12.94 |
17.58 |
|
Inventory Turnover |
57.94 |
62.82 |
58.64 |
40.37 |
37.17 |
25.53 |
|
Fixed Assets Turnover |
9.82 |
10.85 |
8.71 |
7.54 |
7.07 |
7 |
|
Asset Turnover |
0.83 |
0.89 |
0.7 |
0.66 |
0.72 |
0.73 |
Source:
http://financials.morningstar.com/ratios/r.html?t=AAPL®ion=usa&culture=en-US
The
efficiency ratios of Apple corporation are showing a sign of decline, which
means that the organization is not utilizing its assets efficiently to generate
sales. In simple words, the efficiency of the corporation has declined in the 5
year period
Higgins. (2007). Analysis for Financial Management.
Tata McGraw-Hill Education.
Melville, A., (2017). International Financial Reporting: A
Practical Guide (6 ed.). Pearson Higher Ed.
Pandey, I. (2015). Financial Management. Vikas
Publishing House.
SINHA, G., (2012). FINANCIAL STATEMENT ANALYSIS . PHI
Learning Pvt. Ltd.
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