Business Analysis II
October 10, 2011
Hoda Bagdady-Asal PhD
The following is a business analysis of the Apple Company. This analysis has been used to determine the financial health of the Apple Company through review of its financial statements. Also, I have included a summary of Apple’s technological advantages over other companies in the same industry, as well as, a benchmarking analysis also comparing Apple to other companies.
To invest in a company or not, its economic activities gives idea of the status in the market. Financial statement gives information of financial status of the company as well as its ...view middle of the document...
It should exits balance between assets and liabilities plus owner equity, for example, in the balance sheet of 2010 of Dell Inc, the total assets was 33,652 and the total of liabilities plus stockholders equity was the same amount as assets. Balance sheet summarizes assets, liabilities, assets, and equity of the owner.
Another key for financial statement is income statement. Income statement is important because it shows the profitability of the organization. Profitability of an organization is important for managers, investors, lenders, banks, government, and competitors, for example if an organization is not able to create a profit, income statement shows net loss, so bankers or investments hesitate to extend a credit. The purpose of the income statement is to show the managers and investors if the organization makes profit or loss money in a period of time usually in a quarter or a year. Income statement helps to make managerial decision. For example, if the sale of an organization is diminished from one quarter to other, the manager looks for the source of the problem and finds the solution. According to Nickels, James McHugh, Susana McHugh (2010) income statement includes revenue, cost of goods sold, gross profit, operating expenses, net income after taxes. For example, the income statement of the first and second quarter of 2009 of Apple basis on the sales of iPhone units shows that the first quarter its net income was 2,255 dollars and in the second quarter this amount went down to 1,620 dollars. The reason for down could be the economic crisis, for that the cash flow may be reallocate to improve the profitability. The statement of cash flow is the third key of the financial statement. For many businesses running smoothly is an important focus in cash flow statement. Also observing, monitoring, and analyzing the cash flow statement. Cash flow statement show amount of money that enter and exit to the organization in a period of time, usually each three months or once a year. Also it shows short-term viability of the organization and ability to pay its bills.
Apple is an American multinational corporation; it started in 1976 in Cupertino, California. Apple is a corporate company that sales worldwide through retails stores, Internet, third-party sales, and direct sales. Even though economic crisis is affecting the world, Apple stands against its competitors IBM. The focus of the corporation is designed to market its electronics devices like personal computers, Apple TV, iPhones, iPads. Apple’s business strategy offer the best experience as a user, and innovation of their products. To offer innovation, Apple invests in researching and enhancing their technology. Apple’s target is education; it applies technology to bring tools to educators to teach and students to learn. Apple has stores in the United States and more than 81 stores worldwide. The global market is highly competitive, Apple aggressively reduced the prices...