The Apple Company

Project Part 2 – Apple
Name Course Instructor Date
History of the company
Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple Computers INC in 1976. The co-founders first created the Apple I, which had a MOS 6502 microprocessor, and only sold hundreds of them, and in 1977 they came up with the Apple II. In 1980, they launched Apple III, but this was a commercial failure, as was the Apple Lisa. In the late 1980s, the company created the Macintosh SE and the Macintosh II, while the first portable Mac was sold in 1989 and the notebook in 1991. There was also the Macintosh Classic II (Performa 2000). Later they created the iMac.  In the 2000s, Apple s developed other products such as the iPod for music and photos and first marketed the iPhone in 2007. The iPhone runs on the iOS operating system, and the iPhone is the main product. In 2010, the company launched the iPad. Steve Jobs has been the longest-serving CEO of the company, and after his death, Tim Cook assumed leadership at the company. Apple now has various products, including the Apple Watch. Still, the iPhone is the main product. The same year Steve Jobs launched the iPhone and expanded the company’s products from the Macintosh (Mac) and iPhone (Rawlinson, 2017). 
Excel 
The liquidity ratios reflect the company’s ability to meet short-term obligations, and the current ratio is the most commonly used liquidity ratio. The current ratio is determined as the current assets divided by the current liabilities and the current ratios were 1.13 in 2018, then 1.54 in 2019, but decreased to 1.36 in 2020. A current ratio above 1 indicates that there are no concerns about Apple’s ability to meet the short-term obligations. The quick ratio was also above 1 in 2019 and 2020.
 The debt to equity ratio increased from 1.07 to 11072 in 2020, indicating that the company was relying on debt financing operations. The debt to capital ratio was 0.52 in 2018, then 0.54 in 2019 and 0.63 in 2020. The two debt ratios have increased over the past three years, and creditors prefer low debt management ratios as there is a lower risk of default in case of liquidation. Apple has increased its cash holdings over time, and even as the debt levels have increased, this has mainly been to fund operations, expansion, and research. Debt financing allows shareholders to maintain control of a firm without increasing their investment, but there are increased interest payments, and creditors evaluate the risk of default. 
 The current assets accounted for 48.1% of the total assets in 2019 and dropped to 44.73% in 2020, while there was an 11.73% decline in the current assets in 2019 to 2020. However, one of the biggest reductions in the balance sheet balance was the retained earnings that declined by 67.39%.
Short-term debt decreased by 15.21%, while long-term debt increased by 7.47%, but since the long-term debt was the largest share of the debt, the overall debt levels increased. For the Shareholders’ Equity, the outstanding shares have declined over the past 4 years from 20,537. 25 million in 2017 to 17,001.8 million in 2020. The total of the Shareholders’ Equity declined by $ 25,149 million in 2020 compared to the previous year 
The revenue increased from $260,174 billion in 2019 to $274,515 billion in the year ended September 202 0, but the effects of covid-19 started to take effect from the 2nd quarter of 2020. On the other hand, the cost of revenue was 62.18% of the sales in the 2019 financial year and decreased to 61.77% in 2020. The gross profit increased by $6,564 million, accounting for 6.67% of the growth as the revenue grew faster at 5.51% compared to the cost of revenue, which increased by 4.81%. For the income statement, there was an increase in the items except for earnings before interest and tax income tax, which declined 
 The operating income was 24.15% of the sales revenue in 2020 compared to 24.57% in 2019, a slight change in the margin levels. On the other hand, the net income to sales was 21.245 in 2019 and 20.91 %. However, the net income increased as the revenue had increased, and this explains why raised the dividend from $ 2.99 in 2019 to $ 3.31 in 2020. 
Conclusion 
Despite the effects of covid-19 (coronavirus), Apple remains a financially stable company, but there are concerns about supply chain disruptions in China and sluggish sales. Apple is a reputable brand, and the company focuses on innovative products and good customer services as they are willing to pay for premium prices. The company has operations in the domestic U.S. and international markets, meaning sales revenue is closely linked to the national, regional, and global macroeconomic conditions.
 
References
Apple. (2020). Form 10-K.
Rawlinson, N. (2017, April 25). Macworld. History of Apple: The story of Steve Jobs and the company he founded. Retrieved from /feature/history-of-apple-steve-jobs-mac-3606104/
Yahoo Finance. (2021). Apple, -AAPL. Retrieved from
https://finance.yahoo.com/quote/AAPL?p=AAPL&.tsrc=fin-srch
Appendix
Apple Inc.


CONSOLIDATED BALANCE SHEETS


(In millions, except number of shares which are reflected in thousands and par


value)






September 26,

September 28,


2020

2019

ASSETS:



Current assets:



Cash and cash equivalents

$ 38,016

$ 48,844

Marketable securities

52,927

51,713

Accounts receivable, net

16,120

22,926

Inventories

4,061

4,106

Vendor non-trade receivables

21,325

22,878

Other current assets

11,264

12,352

Total current assets

143,713

162,819




Non-current assets:



Marketable securities

100,887

105,341

Property, plant and equipment, net

36,766

37,378

Other non-current assets

42,522

32,978

Total non-current assets

180,175

175,697

Total assets