Apple company Essay Example | Topics and Well Written Essays - 2500 words

Apple company - Essay Example The following are financial ratios for APPLE INCLUSIVE for the year ending 2012, 2013, and 2014. Horizontal analysis compares how a company runs its operation across different segments in different years, and emphasizes on cash allocation and generation (Bull, 2008). While vertical analysis compares the amount allocated to an item against the total that was available in a given year. The current assets for APPLE INCLUSIVE rose by 27.1%; in 2013 and dropped to 18.8% in 2014. It was a result of decrease of short-term investments by 38.8%. Total liabilities increased by 44.2% in 2013 and rose by 107.9% in 2014. It was as a result of the abrupt increased current liabilities by 64.6%. The total stockholder’s equity rose by 5% in 2013 and decreased by 6% in 2014. The revenue for the year ending 2014 increased by 17% but the cost of production too increased by 27% making the net income to decrease by 6%. The value of current assets rose by 35% in 2013 and dropped to 32% in 2014. The value of long term investments decreased from 56% in 2012 to 52% in 2014. Current liabilities moved increased by 7%; this is because of increased account payable by 49%. Gross profit for APPLE INCLUSIVE decreased from 43.8% in 2012 to 38.5% in 2014. The reason to this can be blamed on the increased cost of goods from 56.1% in 2012 to 61.4% in 2014. The net income was impacted by the above increased in cost of production, resulting in a decrease by 5.1%. Profitability ratios are a reflection of how a company is efficient in generating income. These ratios are â€Å"seductive† to investors; an investor would like to know how profitable is the corporation before they decide to invest. Everyone expects to value for their money. From the above ratios, it might look contradicting how the two ratios give a different interpretation of the financial performance of APPLE INCLUSIVE. Profit margin shows the net