Historical Financial Analysis of a Listed Company

Historical Financial Analysis for Apple Inc Name Institution Company Overview Apple Inc. is an American multinational corporation (Rodriguez, 2013) whose business involves designing, developing and selling not only personal computers but also computing devices software and consumer electronics. The company has its foundation set by Steve Jobs and Steve Wozniak in 1976. Over the years, the financial performance of Apple Inc. has been impressive. There have been good times and bad times financially, but the company has been able to sail through, beat competition and remain at the top of its game. In terms of revenue, Apple scored a 170.910billion revenue mark this year, 2013. This places it second after Samsung electronics. In making mobile phones, Apple Inc is the third largest after Samsung and Nokia. The company also boasts of being the most admired company in the United States in the year 2008. From the same year 2008 to the year 2012, Apple Inc was the most admired company globally according to Fortune magazine (Colvin, 2009). In September, this year, Apple Inc beat Coca-Cola as the most valuable brand globally (Stuart, 2013). The $415 billion estimated value of Apple Inc derived in March 2013 the company became number 6 in the top ten Fortune 500 list of companies (Rodriguez, 2013). Statistics also indicate that, by market capitalization, Apple Inc is the largest publicly traded corporation on the globe. With such a remarkable reputation, it is critical to look at the financial history of Apple as a company. This paper seeks to look into the following. First, analyze the financial status of the company in the last decade, secondly, to establish trends and thirdly, to know the performance that led to the company getting to where it is today. Various ratio analysis including profitability ratios, revenue ratios, capital ratios, liquidity ratios, and shareholder ratios will be put into use for the years 2001, 2005 and 2012 Apple Inc financial history for the last decade. Financial period Net sales (Mil USD) Net profits (Mil USD) Revenue growth Return on net sales 2000 7,983 786 30% 10% 2001 5,363 -25 -33% 0% 2002 5,247 65 -2% 1% 2003 6,207 57 18% 1% 2004 8,279 266 33% 3% 2005 13,931 1,328 68% 10% 2006 19,315 1,989 39% 10% 2007 24,578 3,495 27% 14% 2008 37,491 6,119 53% 16% 2009] 42,905 8,235 14% 19% 2010 65,225 14,013 52% 21% 2011 108,249 25,922 66% 24% 2012 156,508 41,733 45% 27% (Amount is in millions except share amounts) 2002 2006 2012 Equity capital 4,095 10,038 118,210 Total Capital Employed. 6,298 17,244 202,939 Current Assets 5,388 14,509 57,653 Total Assets 6,298 17,244 176,064 Current Liabilities 1,658 6,456 38,542 Total Liabilities 2,203 7,206 57,854 Gross Profit 87 (loss) 2,819 68,662 Net Profit 65 (loss) 1,993 41,733 Total share Capital. 1,826 10,038 50,856 Sales 5,742 19,315 155,970 Market price per Share 14.79 87.72 509.79 Earnings per share. 0.18 (loss) 2.36 44.15 * Profitability ratios Profit margin ratio The profit margin ratio in the year 2002 was negative. This is attributed to the huge loss of $87 million before tax that Apple incurred in the year. Although the sales were average, the company registered a loss. By the year 2006, however, the fortunes of Apple Inc had changed. They registered a profit before tax of $2.82 billion. With sales of $19.3 billion, the profit margin ratio was 14.5%. This was a tremendous improvement from the loss that had been incurred in 2002. The increased profit and revenue can be attributed to the return of Steve Jobs to the company and the new product lines including the iPod and new concepts like the iPhone. In the year 2012, the pre-tax profit for Apple Inc was $68.7 billion. The sales for the year were $156 billion translating to a profit margin of 44%. This is a very high profit margin. Aggressive marketing, new ideas on iPhone 4 and iPhone 5 combined with iPod sales are responsible for this rapid increa...