MBA 520- Milestone 3.docx - Running Head FINANCIAL PERFORMANCE AND HEALTH OF APPLE INC Financial Performance and Health of an Organization Report Apple

MBA 520- Milestone 3.docx - Running Head FINANCIAL...

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Running Head: FINANCIAL PERFORMANCE AND HEALTH OF APPLE INC. 1 Financial Performance and Health of an Organization Report Apple Inc. Alex Carpenter MBA 520 Accounting & Financial Analysis September 27 th , 2019
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3 FINANCIAL PERFORMANCE AND HEALTH OF APPLE INC. Final Project Milestone Three- Module Seven Projections Likely Performance Although Apple has been at the top of the technology industry for the past several years, what lies ahead of the technology guru is mostly unknown. One can assume that the company who just recently reached a net worth of $1 trillion will remain atop the technology industry, however, future forecasting can predict otherwise. Assumptions about Apple’s future performance can be made, as is shown below, but it is important to remember that these predictions are just simply that. These predictions are based on historical data and calculations and are not always guaranteed to be one hundred percent correct. Apple’s current consolidated financial performance can be seen in Appendix A, and future projections are explored below (Apple Annual Report, 2018). Apple’s likely consolidated financial performance for the next three years shows that the company is unlikely to see any drastic increases or decreases in any category relating to net sales, operating income, and net income. As mentioned before, Apple has seen extraordinary success over the years. It seems as if this success will continue into 2021 and beyond, however, on a much smaller scale. In reference to Appendix B, which details both the past and forecasted net income projection, Apple saw a net income of $59,531 million in 2018, a drastic 23.12% increase from 2017 (Apple Annual Report, 2018). With success as such, it would seem that this would continue into the future, especially with the release of two new models of the iPhone in 2019, the company’s most popular product. From 2018 to 2019 (year plus one), my projections show that Apple will see approximately a -9% decrease in net income, from $59,531 to $54,165. With the recent political issues involving the U.S. and China, these projections seem to line up
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4 FINANCIAL PERFORMANCE AND HEALTH OF APPLE INC. with the projected financial performance of Apple. As seen in Appendix D, net sales are also projected to decrease by -2.53% in year plus one, which correlates with the projected decrease in net income. My projection for net sales of Apple in year plus one is that they will decrease because of the lack of product being exported back into the U.S., due to the increased tariffs on Chinese-made exports. One interesting item to note, shown in Appendix C, is that Apple’s operating income is projected to increase by 6% in year plus one. This could be because operating income is earnings before income and taxes (EBIT), which excludes the tariffs on exporting products back into the U.S. The projections for year plus one seems to show that the current political turmoil will have a profound effect on the projected consolidated financial performance of Apple.
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