Regarding Apple Inc Imagine that you are a financial manager researching investments for your client. Use...

Regarding Apple Inc

Imagine that you are a financial manager researching investments for your client. Use the Strayer Learning Resource Center to research the stock of any U.S. publicly traded company that you may consider as an investment opportunity for your client. Your investment should align with your client’s investment goals. (Note: Please ensure that you are able to find enough information about this company in order to complete this assignment. You will create an appendix, in which you will insert related information.)

Select any five (5) financial ratios that you have learned about in the text. Analyze the past three (3) years of the selected financial ratios for the company; you may obtain this information from the company’s financial statements. Determine the company’s financial health. (Note: Suggested ratios include, but are not limited to, current ratio, quick ratio, earnings per share, and price earnings ratio.)

Solutions

Expert Solution

Studying the stock Apple Inc (symbol: AAPL) listed on Nasdaq.

Attached is the excel sheet with the below ratios for the last three years. Calculated the below ratios:

Current ratio
Quick ratio = (Current assets - Inventories)/Current liabilities
Net profit margin = Net income/Sales
Return on Assets (ROA) = Sales/Total Assets
Return on Equity (ROE) = Total Assets/Total Shareholder's equity

Observation:

All ratios decrease except the ROE. There is no major or huge % change in the ratios. Also its beta is 1.2 (source: yahoo finance) which is a good parameter for risky investors who look potential returns in the bull market.

Analysis:

The ratios NPM, ROA, ROE of Apple Inc., are above than that of industry average, which are 9.49%, 10.04%, 14.07% respectively

Other information:

With increasing demand for the Apple products, Sales growth is seen positive in the coming years
Market leader in the mobile phone industry

jeff jeffy answered 1 year ago

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