Financial Analysis of Apple Inc. Company Wk6 - Running head FINANCIAL ANALYSIS 1 Financial Analysis of Apple Inc Company Financial Accounting Acct556

Financial Analysis of Apple Inc. Company Wk6 - Running head...

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Running head: FINANCIAL ANALYSIS 1 Financial Analysis of Apple Inc. Company Financial Accounting Acct556 Strayer University Financial Analysis of Apple Inc. Company The report concerns Apple Inc. Company financial analysis, providing annual reports. Financial analysis tools are used in the evaluation of Apple performance i.e. profitability, liquidity and solvency, and assists in providing the investment reasons from an investor’s point of view. Also discussed are three non-financial factors to aid the investor in company investing. Ratio Analysis Liquidity Ratios Current ratio is liquidity ratio that assist an investor analyze an organization’s ability to meet its short-term financial debts from the current assets[ CITATION Wil11 \l 2057 ]. The formula for current ratio can be given as current ratio divided by the current liabilities and has been
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FINANCIAL ANALYSIS 2 determined to 1.08 in 2014 and 1.68 in 2013. The ratio implies that Apple Inc. was able to meet its short term obligations in 2014, but investors were better off in 2013 compared to 2014. Acid – test – ratio seeks to highlight the ability of a company to meet short –term obligations from its current assets that can be converted into cash within a short notice. The formula of acid- test –ratio can be given as [Cash + Receivables + Short term investments] divided by the current liabilities[ CITATION Mel09 \l 2057 ]. It has been determined to be 0.67 in 2014 and 1.23 in 2013. The ratio is lower than 1, implying that Apple Inc. was not able to pay its current
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