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FM-CCP7
Throughout this course, you have been working on your research paper on a company you have chosen. For this assignment, you will consolidate the parts of the assignment you wrote in Units II, V, and VI. In addition, you will add a new section that comprises content you have learned in this unit.
First, combine Parts I-III of your paper. Be sure to make any changes necessary based on feedback you have received. Make sure that you include an introduction and transitions so that these three parts read as one cohesive document.
Then, you will need to examine your firm’s working capital management. Look at the firm’s annual report and answer the following questions:
· What is the firm’s cash position? Does the firm reflect positive cash balances for the last three years?
· What methods does the firm use to ensure and maintain positive cash flows?
· What methods of short-term financing does the firm use?
Conclude your paper with a final recommendation about whether or not this company would be a good investment for potential investors. Your finished paper must be a minimum of seven pages long, and you must use at least five sources (most of which were likely used in other units). At least one source must come from the CSU Online Library. Adhere to APA Style when creating citations and references for this assignment.
Running Head: APPLE INC. 2
APPLE INC. 2
Apple Inc.
Financial Management (FIN 3301)
July 10, 2021
Apple Inc. is one of the biggest companies in the United States. The founders’ Steve Jobs and Steve Wozniak established it in 1976 (Lockamy III, 2017). The main line of business was the sale of personal computers. However, the company bringing the first smartphone that attracted incredible growth and diversity in the market. Therefore, the company engages in manufacturing and selling consumer electronics, computer software, and online services. The vision of the company is to provide the customers with user-friendly and non-intimidating technology at affordable prices. This is to ensure the computer users are comfortable with the interface. Therefore, the company’s mission is to bring the best personal computing experience to all people. The company boasts of being the most successful company in the designing, manufacturing, and marketing of smartphones, personal computers, and other products such as iPad and home accessories. The company has been increasing its profitability with a high return on the stock of 331% in 2019 (Moon & Phillips, 2021). The increased growth in the company has been due to the increased capitalization in the technological dependence areas. The company also improves the existing technology to create demand for new products through the transformation of innovation. Apple Inc. enjoys dominance in the United States, but more growth due to the improved technologies that fit the emerging markets.
Apple Inc. had grown to a trillion-dollar company from a small beginning in 1976. The company capital structure shows the equity or the debt that in financing the operations. Apple total stockholder’s equity as of 2019 was $96.5 billion (Lockamy III, 2017). The second component of the company’s capital structure is the debt, which is the accumulation of how much the company owes to the creditor. The current liabilities in the company are those that mature in one year. In 2019, Apple Inc. had current liabilities of $89.6 billion. The long-term debt amounted to $136 billion and a total liability of $225.8 billion (Lockamy III, 2017). The capital structure of Apple Inc. is a significant point of discussion for the shareholders. This is because it affects the company firm value. With the company being the most valuable and overcoming others such as Google and Microsoft, the shareholders need to understand the performance over time. A valuable capital market by the changes in the capital structure. When a company uses a combination of debt and equity, it should remain the same.
Apple Inc. debt-to-equity ratio has grown over the years. This is because the company has been expanding its operations to various parts of the world. Comparing the d
Running Head: APPLE INC. 2
APPLE INC. 2
Apple Inc.
Financial Management (FIN 3301)
July 27, 2021
Apple Inc. is listed in the National Association of Securities Dealers Automated
Quotation (Nasdaq Global Select Market), and its ticker symbol is AAPL. According to Friedman et al. (2021), Apple Inc. listed stocks in the Nasdaq in the 1980s and has been on the list to date. According to Yahoo Finance (2021), Apple Inc. recorded the lowest stock price at 39.44 on December 1, 2018, and the highest stock price at 149.15 on July 14, 2021. The average stock price during the three years was 63.54. The company has registered an increase in stock performance in the three years, generating an increase in revenue. Apple Inc. recorded its last stock split on August 30, 2020, with a split factor of 4:1 (Yahoo Finance, 2021). The split stock boosted the stock liquidity. The company recorded outstanding shares of 16.67 billion in December 2020, 17.54 billion in December 2019, and 18.92 billion in December 2018, according to YCharts (2020), and in August 2018, Apple Inc. filed an amendment that led to an increase in the number of common shares authorized to issue from 12.6 billion to 50.4 billion.
The overall trend in the stock activities of the company indicates that the company has continuously performed well in the stock market. According to Hernandez-Alvarez et al. (2019), the historically positive baseline drift and the historical values of the last 250 trading sessions of Apple Inc. present a superior performance. The company recorded its lowest stock price in 2018 and has continuously improved to make its highest stock price in 2021, showing that it is performing significantly well in the last three years (Yahoo Finance, 2021). Apple has recorded positive stock and dividends factors making it a favorable investment for any investor. Tashanova et al. (2020) support this argument by explaining that the company was slightly affected by the COVID-19 pandemic lowering its stock price, and this made an opportune moment for investors to buy stocks since the company has positive stock and dividends factors. This suggests that the highest likeliness is that any investments made on the stocks during this time may yield a high later.
Would invest in Apple Inc. based on the stock activities evaluations because it has recorded continuous improvements in the stock activities performances in the last three years, and this suggests that the company has a higher probability of reliable performance. Hernandez-Alvarez et al. (2019) has supported the positive performance of Apple, illustrating that the company has had superior performance in stock activities for the past 250 trade activities it has participated in. Additionally, the company has depicted steady and reliable positive st
Running Head: APPLE INC. 2
APPLE INC. 2
Apple Inc.
Financial Management (FIN 3301)
July 27, 2021
Financial analysis is the process of evaluating a business organization’s finance-related information to determine the performance and suitability of the organization and involves analyzing whether the company is financially stable, solvent, liquid, or profitable for investment. Purba and Bimantara (2020) explain that financial analysis illustrates the varied characteristics of companies and gives their financial position and health. Financial ratios such as Liquidity, Solvency, and Profitability are evaluated to determine a company’s general financial position. According to Tian and Yu (2017), financial ratios are essential tools for financial analysts to ascertain a company’s financial position, which can be used to make crucial decisions in business investment. Apple Inc. has a vast record of financial information because it has been in existence for a long time, and therefore, financial ratios for 2018 to 2020 will be used to determine its financial position and health.
Reflection of Apples’ Financial Ratios
The liquidity ratios are essential in measuring the company’s ability to meet its short-term obligations. According to Yahoo Finance (2020), Apple Inc.’s liquidity ratios depict a current ratio of 1.13 in 2018, 1.54 in 2019, and 1.36 in 2020. The current ratio indicates the ability of the company to meet its short-term obligation of less than one year and is calculated by dividing current assets by current liabilities. From the record above, Apple had improvements in the current ratio from 2018 to 2019 but slightly declined in 2020. The company also registered a quick ratio of 1.10 in 2018, 1.50 in 2019, and 1.33 in 2020. The quick ratio indicates the ability of the company to pay its current liabilities without selling its inventory (Jun 2018). Apple Inc. quick ratio improved from 2018 to 2019 but declined from 2019 to 2020.
Solvency is also referred to as long-term debt ratios and is used to determine the company’s ability to meet long-term obligations. Apple Inc. registered debt to equity ratio of 1.06 in 2018, 1.19 in 2019, and 1.72 in 2020 (Yahoo Finance, 2020). The debt to equity is calculated by dividing total debt by total shareholders’ equity. Apple Inc. depicts a decline of dept to equity from 2018 to 2019 and from 2019 to 2020. On the other hand, the debt to capital ratio for Apple Inc. was 0.47 in 2018, 0.50 in 2019, and 0.60 in 2020. The debt to capital ratio is calculated by dividing total debt by total debt plus shareholders’ equity (Jun 2018). The company’s debt to capital ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Profitability ratios determine the ability of the company to generate profitable sales from its assets. Appl
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