Finamce Research: Rationale For Choosing The Apple Company (Essay Sample)

FINANCIAL RESEARCH
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Institutional Affiliation
Introduction
There are several companies located in the United States of America. Among these companies, Apple Company is one of the Company’s which tops the popularity list. The Company deals in variety of devices mainly for communication devices. The most popular devices are the phones, iPad and the laptops. The goods produced by this Company are always of high quality and prices are also comparatively higher. This Company is very wide and has constructed many branches that are spread all over the continents. China, Japan, Europe and Asia Pacific hosts the main branches of the Apple Company. This company is also known for massive productions of various applications and the Apple Software.
Rationale for choosing the Apple Company
This Company is known to produce high quality goods and services. The Company made a noble decision in the year 2017 and hired a shareholder. This advancement took place in the month of August. The Institutional Shareholder Services was in the forefront to ensure that the Company was performing to its maximum. The various challenges that were expected from the government like high taxes soon reduced. When the latest research was conducted to evaluate the performance of various companies, Apple was ranked as one of best in U.S.A. This ranking was based on the Quality Scores which was 1 in this case. The Company started being very stable ranging from the financial management to other staff members. Many investors were now looking forward to various means of obtaining shares from this Company ("AAPL - Apple Inc. Company Profile - CNNMoney.com", 2018).
There are several researches being undertaken by various business entrepreneurs. The latest research that was carried out clearly indicated that Apple Company was making efforts to improve on the quality of their goods and services despite of their current position. Apple Company is making efforts to give very good discounts to its favorite customers. Very many individuals are attracted to this Company due to the value of its shares. The customers are able to receive the shares at a great discount. There is a new tax law known as the repatriation tax law which was made to target this company. This low will be of great value to this company since its branches that are located in other continents will be subjected to very low taxes. This company will be able to receive much profits from its different reserves. The profits will be allocated to the shareholders of this Company. This is done in form of buybacks and dividends. This company is being affected by the fact that other companies producing goods and services of lower prices are competing with it. These companies are offering stiff competitions to the Apple Company. However, the Apple Company has put in place several measures to deal with this crisis. The Company is offering discounts to its customers and on the same note producing high quality goods and services to attract more customers. This has made it beat the competing companies (Nicas,2018).
The Company is also making efforts to increase the number of branches it is owning in different parts of the world. This strategy was mainly suggested in order to increase the number of customers in the world. The company is putting in resources in employing financial researchers to ensure that proper research is carried out to improve its services. Advertisement both locally and internationally is being conducted to increase the number of its customers (Mubarak, 2017).
Ratio Analysis
There are several ratios that a company should put into consideration in order to attract more customers. The ratios mainly major on the financial sector of the Apple Company. The financial ratios of the Apple Company include current ratio, quick ratio, debt to equity, asset turnover and the equity to debt.
The current ration of any particular company is very important. This ratio is just the measure of the ability of a company to sell its produce to the market. The higher the ability the higher the profits and the vice versa is also true. According to a research that was currently conducted, it was observed that the Apple Company had an approximated ratio of 1.46. The main characteristics of companies with higher current ratio is the rate of their debt payment. The Apple Company is able to pay its debts and obligations without any problem. This has in turn attracted many investors who are willing to work together with this company. Current ratio is very importance as it can also be used as a tool of determining the stability of a particular company. The research indicated that when the value of the ratio exceeded 1, the Company was very stable. Many investors prefer to go for stable companies rather that new companies that are not very stable ("Liquidity Ratios (Current Ratio, Quick Ratio, and Others) - Finance Train", 2018).
The other important ratio that should not be ignored is the buyback ratio. This ratio is very important as many investors can use it to gauge the financial stability of a Company. This ratio mainly deals with the buying and selling of shares in a Company. During a period when the company has decided to buy shares that were allocated to the customers, the value will always read a positive number. This is not true during the allocation of these shares to the new customers. This will be the exact opposite and the value is always a negative. A recent research shows that the ration during buying of the shares was 5.40 and during the selling was -9.60. The median of the two values according to the research was -1.70 (Apple Buyback Ratio (AAPL), 2018).
The turnover ratio is the ability of the Company to sell its assets. This ratio is normally simple. It is just the ratio of the revenue and the total number of assets that were sold at that particular time. This ratio is simple but has great importance in the development of the Apple Company (Apple Asset Turnover (AAPL), 2018).
The other significant ratio is the cash to debt ratio. This ratio is very important as the achievements and failures of a Company is clearly shown when this ratio is calculated. Many important factors are put into consideration in order to come up with this ratio. Companies with ratios greater than one are able to pay off their debts using their cash money at hand. There was a research conducted in the last quarter that indicated that Apple Company had a ratio of 0.72. This clearly meant that the Company had less cash to settle its debts (Apple Cash to Debt (AAPL), 2018).
The Debt to Equity ratio is used to measure the financial growth of a Company and the way it is able to handle its debts. The higher the expenses, the higher the profits. There was a research conducted which indicated that Apple had a ratio of 0.96. The lowest was 0.00 and the mean of the two values was 0.15. The calculations must be done using the amount of money in local currency (Apple Debt to Equity (AAPL), 2018).
There are several diagrams that can be used to analyze the different ratios. The diagram below can be used to give a brief overview of the ratios analysis. The diagram is giving a brief overview of the various financial analysis ratios. The rations are divided into different sections. Each section contains totally different ratios from the rest of the sections. The values are approximated.
Retrieved from (Apple Inc., 2018).
Stock Analysis of the Apple Company
The Apple Company is working around the clock to ensure that its customers get good and quality products and services. They are conducting research and in the process developing superior goods as compared to other Companies. There is a movement currently being undertaken in the world of business known as robust global smartphone demand. The movement is expected to have a lot of impact of the development of the Apple Company. The movement will ensure that the Company has improved in the number of sales. The President of the United States of America known as Triumph is also making adjustments in favor of this company. The recently introduced tax plan will see to it that the Company is able to sell to its maximum. The Company has numerous plans to ensure that the customers receive discounts on various products. The Company is working towards increasing its stock due to the increasing number of customers. These are possible due to the fact that the Company has put in place new management to ensure that these measurements are implemented. The goods produced are not only of high prices but also of very high quality which are attractive to many customers ("Fundamental Analysis + Machine Intelligence | finbox.io", 2018).
The beta analysis is an important factor in stock analysis. The beta analysis will help the Company to understand the various price changes in the market. The company is now able to make decisions on the best prices to put in place. The number of goods sold daily should also be put into records. The Apple Company will now determine the type of devices that are out of stock. Those goods that flow at slow rate should be produced in low quantities to avoid wastage. This means that stock taking is core in the Apple Company. The Company may end up producing a large number of a particular type and ignoring the other. The number of customers reduce since most prefer to choose from variety of goods (Mubarak, 2017).
Risks taken by the Apple Company
The Company is being faced with various challenges in its daily activities. Some challenges are from the management while others come from the trading partners. The main challenge that was recently notice was from China. China owes the Company a lot of money which they are reluctant to pay. This is because of the numerous number of imports during their trade with the Apple Company. The products from the Apple Company are always of high prices which are n...