Operations of Finance for a Publicly Traded Company

Corporate Finance (Apple Incorporation)
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CORPORATE FINANCE (APPLE INCORPORATION)
Introduction
When it comes to investing in international markets, investors are embedded with several challenges of multinational Companies; therefore they require strategies to compete favorably. Some of these strategies include financial and investment strategies. It is important for professionals to know on how to manage the corporate finance of the company, the implementation of the portfolio theory, financial risks and some of the ethical issues that the organization might face in the international set-up.
Apple Incorporation
Apple incorporation is an American Multinational company. The company was founded in 1976 and some of the founders were Steve Jobs, Ronald Wayne, and Steve Wozniak. Its headquarters are located in Cupertino and California. Apple Inc designs develop and sell electronics; computer software’s and provides online services to its customers. Apple Incorporation is ranked as one of the big four technology together with Facebook, Amazon, and Google (Quanta Computer Inc, 2019). Some of its well-known products include the Apple iPad family, Phone, Macintosh and Apple watch. It is one of the world’s biggest information technology companies by revenue after Samsung and Huawei. The macOS and iOS operating systems are some of Apple's software (Amusement parks & arcades - quarterly update, 2012). The current CEO of Apple Inc is Tim Cook. The company has operated in technology over the past decades and it has been a success. The company has also made imperative strides in the music industry with the development of iTunes and iPods.
Corporate Finance Analysis and Decision Making
In 1980 Apple incorporation went public through an Initial Public Offer. The company made sales worth 4.6 million shares at US$22 and was highly subscribed. The IPO generated approximately US$100 million. The capital structure of the company is made up of US$128.249 billion and US$193.437 billion in equity and dept respectively. In 2016 the total assets of the company amounted to US$321.686. This means that the capital structure of Apple Incorporation comprises 39.86% and 960.13% of equity and debt respectively. The company is highly geared according to the financial analysis. This means that the company uses more debt in its capital structure compared to equity. The company takes the ninth position in the world when it comes to the assets it owns.
Over the past few years, the company has been increasing its expenditure on capital investment. $12.8 billion was made in expenditure in the year 2016. According to the top management of the company this figure is bound to intensify in the next few years. Additionally, Apple incorporation has been investing in infrastructure and has acquired more plants, retail stores, data centers, and equipment. In 2016 fiscal year the company made profits worth US$45.687 billion thought this was a decrease because it had made profits worth US$53.394 billion in 2015. Additionally, the dividends of the company decreased from US$2.18 to US$1.98 in 2015. The financial corporate of the company shows that the Apple incorporation has decided to use other methods of financing like equity and debt instead of using some of the retained earnings to finance some of its operations. Some of the subsidiaries owned by Apple company are Apple Energy, Filemaker Inc, Anobit and Beats Electronics.
Evaluation of Financial Risks
Some of the risks that are associated with the capital structure decision of Apple Inc are financial risks. The company is more geared is riskier compared to a company that is less geared. Apple Company uses more of its debt than equity. The implication of this decision taken by the top management is that the company is leveraged and riskier, the company has also capitalized some of its assets and suck risks s are offset of the company’s financial obligations (Quanta Computer Inc, 2019). Since Apple incorporation is a public company the shares of this company are subject to the shock on the market performance. The prices of the shares have been increasing constantly in value and earning good returns from stakeholders since the IPO in 1980.
Assessment of Risk and Ethics in the International Setting Relative to Finance and Investment
In an international setting, one of the major risks that the company is likely to experience is risk associated with economic factors. The changes in the global economy have the possibility of effects the company in a lot of ways. This is because some of the products of Apple Inc depend on the availability of disposable income. When there are tough economic conditions like the recession the revenue of the company is normally affected as well. When there is a recession the investor returns of the company decrease adversely (Amusement parks & arcades - quarterly update, 2011). According to the balance sheet s of the company, the majority of the company’s operations depend on debt; therefore some of the conditions that might be affecting other financial institutions have an adverse effect on the Inc. For example, if there are fluctuations in the interest rate.
Another risk that Apple incorporations face with is competition. Some of the major competitors of Apple Inc are Samsung and Huawei. In the International marker setting, Samsung is the major competitor of Apple Company. The manufacturing of some of the products of Apple like the iPhone is done in China (Hon Hai Precision Industry Co., Ltd, 2019). The reason as to why the company made this decision of manufacturing its products in China is to ensure the company is able to benefit from cheap human resources. The company is exposed to greater risk because of basing its major operations in a foreign country (Quanta Computer Inc, 2019). In case the United States promotes manufacturing companies with such kind of operations the company is likely to be locked out form all kinds of incentives from the Federal Government.
Another kind of risk that the company is likely to experience in the international setting is the fluctuations in the foreign currency. This is because the company sells a bigger percentage of its products overseas. Therefore the movement of the currency determines the expansion and contraction of the business. In case the foreign currencies have weakened against the United States Dollar, their products will become moiré expensive (Amusement parks & arcades - quarterly update, 2012). Since Apple is a monopoly in the music industry, this is bound to attract a lot of competition from foreign markets. Some of the arising businesses will target the iTune business of the company and thus will assert a lot of pressure to share the market as well.
Over the past few years, Apple Incorporation has diversified its financial sectors and automobile industry. An example of online services of the company id the Apple pay and this can pose a potential risk to the company within itself (Hon Hai Precision Industry Co., Ltd, 2019). Diversification needs a lot of measurements to ensure that the investments laid ...