The History Of Apple Incorporation

Published Date: 02 Nov 2017

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APPLE INCORPORATION

Apple Incorporation is a multinational corporation exists in United States, established on 1st April 1976 in Cupertino, California and incorporated in 3rd January, 1977. The nature of the business is to provide the best quality computer software and personal computers. Currently the Apple has 364 retail stores in thirteen countries and an online store. It is a largest publicly traded company in all around the world by market capitalization. The core items of the apple company Development is the Apple, iPod, iPhone and the iPad as well as the application for using these items like Mac OS X, the operating system, the iTunes, the media web browser, the iLife, product to use the multimedia and creativeness application, the iWork package for efficiency of application, Aperture, a finish photography program professionally, Final Cut Facilities, a finish program for audio and film industry.

Corporate Background

The total equity of the apple company Development is $76.615 billion dollars whereas the last season revenue generated $108.249 billion dollars. The Net income of the apple company incorporation in the season 2011 was $25.922 billion dollars with the finish resources of $116.371 billion dollars. The items of the apple company Development is the Apple, iPod, iPhone and the iPad as well as the application for using these items like Mac OS X, the operating system, the iTunes, the media web browser, the iLife, product to use the multimedia and creativeness application, the iWork package for efficiency of application, Aperture, a finish photography program professionally, Final Cut Facilities, a finish program for audio and film industry. The subsidiaries of the apple company Development are Braeburn Capital, File Maker Development and Anobit.

Competitors

Commonly the IBM, Microsoft and Dell Corporation known as the competitor of the Apple Incorporation in international market but this is also fact that Microsoft boosted up in the tenure of absence of Steven Paul Jobs in Apple Incorporation. But this is also fact that Apple Incorporation captured the market much frequently than others and currently the Apple Incorporation has the largest market capitalization in all over the world through international stock exchange.

All the competitors of the Apple Incorporation are the market leader whereas the Apple Incorporation is the giant of International Market. Since 1970s the Apple was one of the highly successful companies. The rest of the highly successful firm in that era, by culture was the Southwest Airlines and the Microsoft. The Main competitors of the Apple Incorporation were the IBM and Microsoft even they thanked to Steve jobs for generating the influence of the founders. In 1984, the Apple Incorporation published TV commercials which literally changed the direction of the success of the company and differentiated it from competitors and even enlisted the Apple Incorporation in Fortune 500. The consumer of Apple products are the quite different than use of the competitors.

Company overview

Apple functions mainly in the technological innovation industry, which provides processor development, interaction techniques, and PCS for consumption. Through its technologies, the industry allows greater performance in interacting and receiving details for its customers. Technology stocks often trade at greater due to great objectives from traders and is noticeable by great competitors. The main styles that appear to be driving the industry consist of the need for greater mobility as well as faster, more power effective items. Components manufacturers, such as the apple company, also need to keep up with application manufacturers who seek to up the bet in terms of visual performance and more effective processing. Failing to keep up with application requirements will consequently lead to reduced client demand as customers will have access to fewer programs on less powerful hardware.

There also appears to be a move toward all-in-one gadgets in contrast to separate gadgets. For example, in contrast to having an separate e-reading device such as the Amazon kindle, the iPad allows the user to connect with other iPad customers through its texting abilities, functions as a gaming foundation through its App Store, while also owning studying capacity. Worldwide development is also a common theme with many companies looking to tap into growing marketplaces such as Chinese suppliers.

In inclusion to selling to marketplaces offshore, significant hardware manufacturers tend to do a majority of their development offshore to be able to take advantage of reduced work costs and to be closer to semiconductor manufacturers. Due to the advanced level of standardization and cost competitors, it is likely that the industry’s returns will feel downwards pressure and IBIS World tasks income to drop at an average amount of 6.9% through 2016.

Macro factors

Key motorists that impact the success of the hardware manufacturers consist of the cost they are able to offer computer systems at as well as company benefit and client feeling. In this area, research of the current financial condition and how these motorists are affected will be examined.

Price of Laptop or computer Components

Due to the introduction of more effective development methods and increasing competitor’s costs from offshore, the cost of the retail computer has been in a downtrend. While the hardware industry requires a lot of initial capital expense, the overall limitations to entry in the marketplace are fairly low and it is expected that costs will stay low across the industry for the future as proven in the data on the previous page (credit IBIS World). Firms could also possibly see a decrease in income if imports of foreign-made items continue to go through the U. s. Declares market.

Finally, due to proven reality that cost competitors is frequent within this industry, it is likely that companies like The apple company, who have a relatively smaller discuss, will need to drop costs to be able to increase company, which could possibly hurt edges in the future.

Corporate Profit

Corporations moreover to customers consist of the consumer base for computer manufacturers. Companies need to regularly upgrade their techniques due to the fast amount of technologies, but are more likely to do so during powerful financial environments when they have essential funds to upgrade their facilities.

While many industry experts project company profits to increase a little bit during 2012, many contingencies exist to this supposition. Already, the U. s. Declares, which is currently in the middle of its income periods has seen a mixed bag of company income thus far and already the nation's GDP reviews have come out as reduced than expected. As proven in the information on the remaining, company benefit is estimated to stay relatively flat, however, the industry may grow even more slowly if the issues in European countries are not amended or get worse. Hewlett-Packard Company25.0%International Business Machines Corporation15.4%Oracle Corporation3.7%Market Share Dell Inc. 21.5%Apple Inc. 13.3%

Financial Performance

I collected the latest Balance Sheet of the Apple Incorporation for the year of 2011 issued in 2012. The Apple Incorporation is a Multinational technological company which is internationally recognized and achieved many awards and ratings internationally.

 The finish equity of the apple company Development is $76.615 billion dollars whereas the last season revenue generated $108.249 billion dollars. The Net income of the The apple company incorporation in the season 2011 was $25.922 billion dollars with the finish resources of $116.371 billion dollars.

Since 1970s the Apple was one of the highly successful companies. The rest of the highly successful firm in that era, by culture was the Southwest Airlines and the Microsoft. The Main competitors of the Apple Incorporation were the IBM and Microsoft even they thanked to Steve jobs for generating the influence of the founders. In 1984, the Apple Incorporation published tv commercials which literally changed the direction of the success of the company and differentiated it from competitors and even enlisted the Apple Incorporation in Fortune 500.

The financial statements of the Apple Incorporation is consists on the assets, liabilities includes the short term and long term debts as well as the equities including the share capital and reserves. The market capitalization and the market value of the shares would be collected by using the Yahoo finance.com.

Net Tangible Assets

72,183,000  

46,708,000  

31,187,000  

 

The Short Term debts in the Balance Sheet of the Apple Incorporation include the Accounts Payable, Short / Current Long term Debt and the other current liabilities. The Long Term Debts of the Apple Incorporation includes the Long term Debts, Other long term liabilities, deferred long term liability charges, Minority Interests and the negative goodwill.

The equity at the end of year 2011 of Apple Incorporation was $76,615,000.

Stock Price Analysis

By finding the market value and the capitalization of the Apple Incorporation on advised website, the Yahoo Finance dot com, we found the current market value of the Apple Incorporation’s share is $569.05 with the volume of $19,798,500 shares outstanding in the market. The market capitalization of the Apple Incorporation is $532.12 billion dollars on the date of 29th June, 2012.

Debt Ratio = Total Liabilities / (Total Liabilities + Equities)

Debt Ratio = 39,756,000 / (39,756,000 + 76,615,000)  = 39,756,000  / 116,371,000

Apple Incorporation = 0.34:1

Debt Ratio = Total Liabilities / (Total Liabilities + Equities)

Debt Ratio = 51,621,000 / (51,621,000 + 57,083,000) = 51,621,000 / 108,704,000

Microsoft Corporation = 0.47:1

Debt Ratio = Total Liabilities / (Total Liabilities + Equities)

Debt Ratio = 25,208,000 / (25,208,000 + 45,911,000) = 25,208,000 / 71,119,000

Intel Corporation = 0.35:1

Balance Sheet

The Balance Sheet of the Apple Incorporation is consists on the assets, liabilities includes the short term and long term debts as well as the equities including the share capital and reserves. The market capitalization and the market value of the shares would be collected by using the Yahoo finance.com.

Balance Sheet of Apple Incorporation

Apple Incorporation

Balance Sheet

Period Ending

9/23/2011

9/24/2010

9/25/2009

Assets

Current Assets

Cash And Cash Equivalents

9,815,000  

11,261,000  

5,263,000  

Short Term Investments

16,137,000  

14,359,000  

18,201,000  

Net Receivables

13,731,000  

11,560,000  

6,192,000  

Inventory

776,000  

1,051,000  

455,000  

Other Current Assets

4,529,000  

3,447,000  

1,444,000  

 

Total Current Assets

44,988,000  

41,678,000  

31,555,000  

Long Term Investments

55,618,000  

25,391,000  

10,528,000  

Property Plant and Equipment

7,777,000  

4,768,000  

2,954,000  

Goodwill

896,000  

741,000  

206,000  

Intangible Assets

3,536,000  

342,000  

247,000  

Accumulated Amortization

-  

-  

-  

Other Assets

3,556,000  

2,263,000  

2,011,000  

Deferred Long Term Asset Charges

-  

-  

1,727,000  

 

Total Assets

116,371,000  

75,183,000  

47,501,000  

Liabilities

Current Liabilities

Accounts Payable

23,879,000  

17,738,000  

9,453,000  

Short/Current Long Term Debt

-  

-  

-  

Other Current Liabilities

4,091,000  

2,984,000  

2,053,000  

 

Total Current Liabilities

27,970,000  

20,722,000  

11,506,000  

Long Term Debt

-  

-  

-  

Other Liabilities

10,100,000  

5,531,000  

3,502,000  

Deferred Long Term Liability Charges

1,686,000  

1,139,000  

853,000  

Minority Interest

-  

-  

-  

Negative Goodwill

-  

-  

-  

 

Total Liabilities

39,756,000  

27,392,000  

15,861,000  

Stockholders' Equity

Misc Stocks Options Warrants

-  

-  

-  

Redeemable Preferred Stock

-  

-  

-  

Preferred Stock

-  

-  

-  

Common Stock

13,331,000  

10,668,000  

8,210,000  

Retained Earnings

62,841,000  

37,169,000  

23,353,000  

Treasury Stock

-  

-  

-  

Capital Surplus

-  

-  

-  

Other Stockholder Equity

443,000  

-46,000

77,000  

 

Total Stockholder Equity

76,615,000  

47,791,000  

31,640,000  

 

Net Tangible Assets

72,183,000  

46,708,000  

31,187,000 

 

 

 

 

 

Horizontal Analysis

Horizontal Analysis Apple reflects that sales increased steeply by 52% and 66% between 2009 to 2010 and 2010 to 2011. COGS increased 54% in 2010 leading to lower gross margin due to higher cost structure for new product (iPad). Gross margin in 2011 was improved due to lower commodity price and return from new product line. Opex increased in 2010 by 33% and 30% in 2011. It is classified into two main heads: R&D expenses and SG&A expenses. EBITDA increased by 53% between 2009 and 2010, and by 85% between 2010 and 2011. EBIT and NPBT were almost the same due to Apple did not incur interest exp. NPAT increased 70% between 2009 and 2010 and 85% in 2010 to 2011.

Horizontal Analysis The growth of total asset by 58% between ‘09 & ‘10 and 55% between ‘10 & ‘11 was mainly driven by the increase in investment and fixed assets. Current assets grew 32% between ‘09 & ‘10 and only 8% between ‘10 & ‘11. However, it can be seen the decrease in stocks and debtors in the last period. Apple usually maintained low level of inventory to mitigate risks of obsolescence. Net fixed assets increased by 61% in ‘09 & ‘10, and 63% growing in ‘10 & ‘11. Long-term investment jumped 141% in ‘09 & ‘10 and 119% in ‘10 & ‘11. 6

Horizontal Analysis Total Assets and Total Liabilities & Equity: Apple does not have any short-term or long-term debt at their financial year-ends. Total liabilities increased by 73% and 45% between these 3 years while total equity increased by 51% and 60%. The increase in total equity was mainly driven by the increase in retained earnings which increased 58% and 69% in ‘10 and ’11, respectively. Retained earnings occupied about 74%, 77%, and 82% of total equity in these 3 years, respectively. 7

Horizontal Analysis Trade debtor increased by 64% 2010, but decreased by 3% in 2011. Inventory dramatically increased by 131% in 2010; however, it was not high in proportion compared to their net sales. However, in 2011, inventory decreased by 26% even sales rapidly increased. Trade creditors increased sharply by 115% in 2010 and only 22% in 2011. It can be seen that trade creditors alone can finance the working capital requirements (inventory and debtors)

The Short Term debts in the Balance Sheet of the Apple Incorporation include the Accounts Payable, Short / Current Long term Debt and the other current liabilities. The Long Term Debts of the Apple Incorporation includes the Long term Debts, Other long term liabilities, deferred long term liability charges, Minority Interests and the negative goodwill. 

The equity at the end of year 2011 of Apple Incorporation was $76,615,000.

Ratio analysis

Current Ratio

(Million)

Current Assets 10,300

Current Liabilities 3,484

Current Ratios 2.96

Add-on to Working Investment research, the apple company has a very powerful present rate of almost 3 times to protect its short-term responsibilities. This also described why The apple company did not take up additional short- or long-term loans to fund its development, or for debts payment; because Apple is so full of cash and its short-term investment strategies that it could pay back its current obligations for almost 3 times

Acid-Test Ratio/ liquidity ratio

(Million)

Cash & Cash Equivalent 3,491

Accounts Receivable 895

Short-Term Investments 4,770

Current Liabilities 3,484

Liquidity Ratio 2.63

The present resources that are easily transformed to money are detailed above, and the apple company still has a very powerful rate for this. Mainly due to Apple’s functional performance to sustain manageable records due and accumulated cost low in evaluation to its current assets products. Apple’s money and money comparative products are produced from operating activities ($2,535 mil from money moves statement) and additional inventory issuance of $543 impartially balanced out for its long-term resources buys of flower, residence, and devices (Notes in Yearly Report).

Financial Leverage

i) Debt Ratio

(Million)

Total Liabilities 4,085

Total Liabilities and Owners' Equity 11,551

Debt Ratio 0.35

Apple has compensated up its long-term debts during the FY 2004, since then it has not taken up any long-term debts to finance its function, mainly due to its cash wealthy and powerful owners ’equity and big maintained income. The debts rate of 0.35 came from its records due, accumulated costs (supplier contracts, the assurance and related costs), and non-current obligations (deferred tax obligations, postponed income – non-current).

ii) Debt/Equity Ratio

(Million)

Total Liabilities 4,085

Total Owners' Equity 7,466

Debt/Equity Ratio 0.55

Apple has a very healthier debt-equity rate of 0.55; this highlighted that the company has been good in handling its complete Owners’ Value to transaction its short- and long-term transaction responsibilities.

iii) Times Interest Earned

There are no passions due to be measured for the organization, this means that Apple organization did not make use of the economical make use of to help in funding their development. An intelligent use in economical make use of could help organization to obtain benefits over taxation conditions and even greater the watered down income per discuss. However, evaluating from the economical strong points of Apple organization the organization had more than adequate cash and owners’ value to fund its development, and therefore the choices of taking up financial loans or long-term financial debt are not taken into account especially for the case of Apple organization.

Recommendation

Apple Pc Inc. is one of the first elements manufacturers that control over the product by development both PCS and their operation system. It is known that the apple company has a high Quality product which makes the apple company different than its competitors. Apple creates its product with unique designs to attract the consumer vision and increase its business because Apple success is based on fulfilling customer desires. The apple company has one of the top brand headings within the engineering industry all over the planet, and 54% of their incomes are from international market segments. The apple company is dedicated to make new products which will make the use of engineering easier and more effective. The apple company always provides easy-use product to the hand of the clients. Most of its products are light, small, and portable around which make them more competitive. One of the great things about The apple company is product diversification; The apple company has a lot of product collections to pay attention to everyone on the planet. In addition, there are many clients who are dedicated to The apple company even though the prices of The apple company products are higher analyzing to its competitors. The benefit Apple products has created a brand of difference in the pc industry. In 2005, the apple company had reported a net income of 1,335,000,000 which means an increase of almost 400% from its net income in2004. So far, the company has done quite well in 2006. There was an increase in every one fourth income growth of 41.4%. Its stock price is the greatest in the personal pc industry. The apple company is financed mostly by its value. In fact Apple does not have any debt, so investors would keep less risk by having Apple stocks. The company is loaded with extra cash that is ready to obtain any firm that could help improve the value of the company. Completing up the research analysis of Apple organization economical health and its upcoming durability, these were the strength of the company the risk I have seen the increased competition on mobile products, economic crisis, product sustainability, leadership gap.

I strongly suggest traders to purchase Apple organization Computer Inc. Apple organization not only has strong financial balance, but also is constantly on the purchase research and development to gain sustainable growth later on. This research review also proven that Apple organization has powerful function groups to manage its costs and income generation. Further to its function performance, Apple organization is currently rich in cash and short-term investment strategies of $8,261 mil as of 24 Sept 2005. Last but not least, Apple organization is well handled in terms of its debt to value actions. This organization has sufficient Owners’ Equity, maintained income to invest in its upcoming development and Apple organization has managed to keep its obligations in a comfortable level. Operation performance is one of the key success factors in assisting the business's business strategies. Therefore, this organization will still go strong for at least another two to three economical times.