StudentShare solutions
Triangle menu

Ratio Analysis - Case Study Example

Not dowloaded yet

Extract of sample
Ratio Analysis

This paper will shed light upon the financial ratios of Apple, how the company will fare in the future will also be comprehensively analyzed. ROI stands for return on investment, Apple’s ROI matches DELL which is great news for the company, return on investment goes to show that the products have been selling very well in the market. The sales growth of Apple has also seen a significant rise in the last quarter, all these are indicators that the company is performing very well. Steve Jobs, the CEO of Apple has been coming up with strategies to promote the products, even though he has had severe health issues, he has been very successful in building the brand name of Apple. Apple has also managed to diversify which is again very good for the business, the company is not dependent on only one product but they have a plethora of products which can be relied upon, this has reduced the risk for the company. Apple operates on a much higher gross margin than other companies, Gross margin of 29.02% is the margin that the company operates at, this goes to show that the company has adopted a higher selling price mix. Products like iMac and Ipads have really given Apple an edge and this is why the company can afford to set higher prices for their products. Apple spends 3.8% on research which is very good for the company, perhaps this percentage can be improved so that they can find new and better products. The operating expenses are about 13.38% which goes to show that the company is very stable and investors can invest in this company. The working capital of the company is very healthy; it is again because of the profits. The current ratio of the company stands at 2.96 (Million) which means the company can easily pay off short term debt not once, not twice but thrice. This is a very strong position to be in; Apple has no need to take loans because it can easily pay off debt. Acid-test ratio goes to show how quickly assets can be converted into liquid cash, Apple has an edge once again and this is hardly surprising. The acid-ratio of the company stands at 2.63 which signify the operating efficiencies of the company give it a huge edge over other companies. Assets turnover ratio stands at 1.42, this means the sales of the company has been picking up, and this ratio is derived by dividing the sales by assets. The ratio is also an indicator of how assets are used to generate profits. Apple has been doing it very successfully thus far. “This tells us something about Apple’s pricing strategy. The Profit Margin for a product is the net of sales deduct the cost of goods sold. Therefore, Apple has higher pricing charged to its products offering as compared to that of Dell’s, even though Dell’s Inventory Turnover Ratio is much higher in this case. But looking at Dell’s turnover ratio on Net Sales; it is close to that of Cost of Goods Sold, therefore this also explained that Dell has lower pricing charged to its products offerings.” (Inventory Turnover Ratio) Debt ratio of the company stands at 0.35 which means that there are still some debts which should be cleared; this is not a problem especially when the company is performing so well in the market. The company can easily clear this debt off whenever they want to, this is not an issue for them. The debt/equity ratio of the company is extremely healthy, it stands at 0.55, this goes to show that the equity has been well managed to pay off short term ...Show more

Summary

Ratio Analysis In APA Format Technology has improved by leaps and bounds; the last typewriter store has closed down very recently. There are newer products which are being made available by leading companies and these products have been faring very well in the market…
Author : alexieschamberg
Ratio Analysis essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"Ratio Analysis"
with a personal 20% discount.
Grab the best paper

Related Essays

Financial Ratios Analysis of IBM 2005-2006
These changes can be attributed mainly to the implementation of “The Pension Protection Act of 2006 (the Act) was enacted into law in 2006”(IBM 2006) where IBM has to meet its contractual obligations. In addition, its current assets decreased by $1,001 million ($45,661 - $44,660 million) due to “Decline of $3,030 million, net of a favorable $202 million currency impact, in Cash and cash equivalents and Marketable Securities due to current-year requirements in pension funding, share repurchase, dividend payments, tax payments, acquisitions and capital spending”(IBM, 2006).
5 pages (1250 words) Case Study
Investment Decision: Goofys / Plutos
Goofy’s has a gross margin of 47.09% which is better than Pluto’s by 2.74%. In comparison with the industry standard gross margin of 46% Goofy’s gross margin is better than the industry, while Pluto’s is below the industry standard.
2 pages (500 words) Case Study
Analysis of Accounts
The wet weather in the summer of 2012 has affected sales. High Dean plc is considering making a substantial, long-term investment in Margate plc. High Dean plc operates across Europe in the leisure and hospitality industries. They are in a strong financial position with cash available to invest.
8 pages (2000 words) Case Study
The necessary analysis to decide whether to invest in Target
The study provides the details financial analysis of the company. In the case study the financial and operational evaluation of the company in questions has been undertaken. For the purpose of operational capability of the company, its corporate strategy has been analyzed in addition to the competitive environment and other risks to which it is being exposed.
10 pages (2500 words) Case Study
Financial Ratio Analysis for BAE Systems Plc
In order to get a better view of its financial health, its results will be compared to its close competitor, Cobham Plc. In the end, future outlook will also be presented according to the historic and other available information. The threats of terrorism have significantly boost defense systems spending especially for countries like United States.
9 pages (2250 words) Case Study
Whole Foods Market, Inc. Ratio Analysis Of Whole Foods
I have chosen Whole Foods Market, Inc. because it is a big name in the natural and organic food industry. Company currently operates in 11 different geographical locations along with 275 stores. Whole Foods Market offers different product lines to its valuable customers like meat, poultry, cereal, seafood, cheese, beers, wines, household products, etc.
6 pages (1500 words) Case Study
Financial Analysis for Ipplepen Plc
Ipplepen's financial strengths lie in its profitability, liquidity, stable capital structure, and generation of stockholder value. However, these are eroded by its primarily by its inefficiency in managing its inventory. The utmost aim of a prospective investor is to derive maximum gains from his money.
6 pages (1500 words) Case Study
Internal analysis
ision have served in attracting the investors while also maintaining the customer base; consequently, serving to strengthen the distinctive competencies. Adoption of farming methods that guarantees great taste, value and nutrition, make this resource valuable. Exhibit 2 shows
2 pages (500 words) Case Study
Using financial reports and accounts of your chosen 'WPP' analyse the results of the organisation highlighting trends in performance using appropriate and relevant ratios and analysis techniques
the results of an organization’s performance, financial ratios are some of the most significant elements that an analyst needs to consider so as to create the best financial reports. WPP is a group of companies that operate various individual companies across the world. In
6 pages (1500 words) Case Study
FINANCIAL STATEMENT RATIO ANALYSIS CASE
These materials include nuts, screws and other fasteners such as hydraulics, power tools and cutting tools. The company also takes part in the
7 pages (1750 words) Case Study
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation