Apple Company Financial Analysis

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APPLE COMPANY ON EDUCATION SECTOR Apple Company on Education SectorFinancial AnalysisIn essence, the financial analysis of Apple would come in handy in efforts to assess its performance over time. Data for the analysis will be sourced from the Form 10K statements the company has filed over the last 5 years. Table 1 captures the key metrics that were used in the analysis of the performance of Apple.From the onset, it is clear from Table 1 that Apple’s net sales have been on an upward trend over the last 5 years – i.e. from $ 229,234 million in 2017 to $ 365,817 million in 2021 (Apple, 2022). This represents a 59.6% growth in net sales over the 5 year period. The company’s net income has also exhibited a similar trend – with an impressive 95.8% growth in net income having been registered between 2017 and 2021 (Apple, 2022). The company’s operating expenses over the last 5 years increased by 63.5%.The return on equity (ROE) ratio happens to be a crucial profitability ratio. This is more so the case given that as Brigham and Houston (2015) points out, it could be considered “the bottom line measure for the shareholders, measuring the profits earned for each dollar invested in the firm’s stock” (193). It is clear that Apple has been effective in the conversion of its equity financing into profits. This is more so the case given that as can be seen in table 1, this key ratio has been on an upward trend over the last 5 years – i.e. from a ROE of 0.36 in 2017 to a ROE of 1.50 in 2021. Thus, in essence, for every dollar invested by shareholders in Apple in 2017, the company was able to generate 0.36 dollars of net income. On the other hand, for every dollar invested by shareholders in Apple in 2021, the company was able to generate an impressive $1.50 of net income. When it comes to return on assets (ROA), the sustained increase in the same over the 5-year period demonstrates that Apple has further enhanced its ability to effectively utilize its assets to generate profits.Item20212020201920182017Net sales$ 365,817$ 274,515$ 260,174$ 265,595$ 229,234Operating expenses$ 43,887$ 38,668$ 34,462$ 30,941$ 26,842Net income$ 94,680$ 57,411$ 55,256$ 59,531$ 48,351Return on equity$94,680/$63,090= 1.50$57,411/ $65,339= 0.88$55,256/ $90,488= 0.

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61$59,531/ $107,147= 0.56$48,351/ $134,047= 0.36Return on assets$94,680/$351,002= 0.27$57,411/ $323,888= 0.18$55,256/…

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…Apple using the VRIO framework.Competitive advantagesValue (V)Rarity (R)Imitability (I)Organization (O)Innovativeness????Product quality????Brand recognition????Table 2When it comes to innovativeness, it should be noted that there is no doubt that Apple is a hugely innovative enterprise. This gives the company a unique competitive advantage. Podolny and Hansen (2020) indicate that the company is organized for innovation on multiple fronts and it is for this reason that it manages to maintain a high innovation rate across multiple product categories – which is in itself a rare feat.The company also strives to ensure that it offers the market premium products and services. To a large extent, this happens to be one of the most outstanding property of the company’s products. This could be viewed from the perspective of one of Porter’s generic strategies, i.e. differentiation. Essentially, Apple’s products are more exclusive in comparison to similar products from the company’s competitors. Apple’s commitment to product quality has been part and parcel of the company’s manifesto from the onset.Apple happens to be a globally recognized brand. What this means is that most people are familiar and can relate with the company’s key features such as its logo – i.e. the bitten apple. In addition….....

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