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Apple Performance Evaluation - Essay Example
Apple Performance Evaluation
For the purpose of this assignment, I have chosen Apple Inc, which ranks 17 amongst the Fortune 500 companies. Apple is one of the well recognised IT brands in the world…
The net profit ratio has reached 26.67% in comparison to 23.95% in 2011 and 21.48 in 2010. Similar is the situation with the gross profit ratio which has increased by 4.49% since 2010. The management has made efforts in controlling the cost as well as the company is able to achieve economies of scale due to higher levels of production. Return on capital employed has also improved by 3.07% and 8.7% as compared to 2011 and 2010 respectively, due to the increase in operating profit. Further, earnings per share have risen in line with the increased net profit. The current EPS is $ 27.68 as compared to $15.41 in 2011 and $9.08 in 2010. Efficiency In all three years Apple has a very high inventory turnover. It reached 111.06 times in 2012 from 83.03 times in 2011 and 62.06 times in 2010. This extraordinary turnover is due to the reason that Apple is holding minimum amount of inventories at year end and there is a much higher cost of sales in comparison. Trade receivable collection days have increased to 25.49 days from 18.1 days in 2011. Currently, the receivable collection period is higher than last year, but still it is better than 2010 in which its collection period reached almost 31 days. The company is trying to attract more customers through extended credit terms. It is good to see that the trade payable payment period has decreased to 82.89 days from 110.91 days in 2010. ...