Apple, Inc.: Stock Analysis
Below is a chart of Apple, Inc.'s (NasdaqGS: AAPL) cash dividends for the last 3 decades.
|
Year
|
Cash Dividends
|
|
2014
|
$ 1.84571
|
|
2013
|
$ 1.68570
|
|
2012
|
$ 0.75714
|
|
1995
|
$ 0.01716
|
|
1994
|
$ 0.01716
|
|
1993
|
$ 0.01716
|
|
1992
|
$ 0.01716
|
|
1991
|
$ 0.01716
|
|
1990
|
$ 0.01608
|
|
1989
|
$ 0.01464
|
|
1988
|
0.01215
|
|
1987
|
$ 0.00714
|
Source: Yahoo! Finance
Apple, Inc.'s stock prices:
September 27, 2014 $100.32 (Yahoo! Finance)
September 28, 2013 $67.15 (Yahoo! Finance)
September 29, 2012 $90.63 (Yahoo! Finance)
In light of Yahoo! Account, Apple, Inc. together with Blackberry, Google, and Hewlett-Packard has a place with the Electronic Equipment industry. Industry information was sourced from Yahoo's industry focus. Just an industry's couples of measurements relating to the proportions are accessible.
Apple, Inc., advantage pay is much bigger than the organization's advantage cost coming about to a positive other pay. Additionally, in registering for the organization's EBITDA scope, since the deterioration and amortization costs were not reported even with the salary articulation, I utilized the organization's working pay rather than its EBITDA. At the point when registering the organization's value/money streams proportion, the money streams gave by the organization's working exercises was utilized.
|
2014
|
2013
|
2012
|
Industry
|
|
Liquidity ratios:
|
|
|
|
|
|
Current
|
0.57
|
0.88
|
1.00
|
|
|
Quick
|
0.67
|
1.23
|
1.04
|
|
|
Asset management ratios:
|
|
|
|
|
|
Inventory turnover
|
53.18
|
60.43
|
111.06
|
|
|
Total assets turnover
|
0.79
|
0.83
|
0.89
|
|
|
Fixed assets turnover
|
8.86
|
10.30
|
10.13
|
|
|
Days sales outstanding
|
34.86
|
27.98
|
25.49
|
|
|
Debt Management ratios:
|
|
|
|
|
|
EBITDA coverage
|
0.55
|
0.35
|
-
|
|
|
Times-interest-earned
|
NA
|
NA
|
NA
|
|
|
Total debt to total assets
|
0.52
|
0.40
|
0.33
|
|
|
Profitability ratios:
|
|
|
|
|
|
Return on common equity
|
35.42%
|
29.98%
|
35.30%
|
21.50%
|
|
Return on total assets
|
17.04%
|
17.89%
|
23.70%
|
|
|
Basic earning power
|
22.65%
|
23.67%
|
31.38%
|
|
|
Profit margin on sales
|
21.61%
|
21.67%
|
26.67%
|
13.50%
|
|
Market Value ratios:
|
|
|
|
|
|
Market/book
|
2.63
|
2.10
|
3.37
|
5.7
|
|
Price/earnings
|
15.46
|
11.74
|
14.21
|
36.9
|
|
Price/cash flow
|
10.22
|
8.10
|
11.66
|
|
(Author computation)
Liquidity ratios
From 2012 to 2014, the company liquidity ratios, in general have been deteriorating with its current ratio decreasing from 1.00 times to just 0.57 times and its quick ratio from 1.04 times to 0.67 times.
Asset management ratios
These falling apart examples can likewise be seen in the organization's advantage management ratios. Stock turnover turned out to be slower from 111.06 times to a little more than 53 times showing the organization has turned out to be slower in changing over its stock to deals. Its aggregate resources turnover additionally diminished from 0.89 to 0.79 and its altered resources turnover declining from 10.13 times to 8.86 times demonstrating that the organization has turned out to be less productive in utilizing its benefits, when all is said in done, and settled resources, specifically to create deals. The organization is additionally having a more drawn out time changing over its deals into money with days deals extraordinary expanding from 25 days to around 35 days.
Debt management ratios
Then again, the organization's net wage is high to the point that about portion of it can be utilized to pay the organization's aggregate long haul debt in 2014. On the other hand, the organization's aggregate liabilities as financing for its aggregate resources has been expanding from only 0.33 to 0.52 which implies that in 2014, 52 pennies of each dollar of Apple, Inc., advantages was financed by liabilities.
Profitability ratios
The organization demonstrated preferred profitability over the business. Besides, this profitability shows to be making strides. The organization's arrival on regular value expanded from 35.30% to 35.42% contrasted with the business' 21.50%. In any case, the organization's arrival on aggregate resources has been diminishing from 23.70% to 17.04%, which could be an organization's aftereffect expanding debt. It is net revenue on deals;however, twice as much as the business has additionally been declining from 26.67% to 21.62%.
Market value ratios
The organization's normal stocks give off an impression of being offering a ton less expensive than the business. With a market to book value of 2.63 contrasted with the business' 5.70. It is likewise offering at a lower cost to income at 15.46 in 2014 which expanded from 14.21 in 2012 contrasted with the 36.9 times for the business.
Conclusion
Yes, I would even now purchase the organization's shares. It is offering much less expensive that the normal organization in the hardware gear industry. As such, Apple is a take. Then again, I would in any case purchase the organization's bonds on the off chance that I am a bond financial specialist. The organization's money related wellbeing is sufficiently strong that the danger of Apple not having the capacity to pay its advantage commitments and important on its long haul debt is impossible.
References
2013 and 2014 Apple's financial data: Retrieved September 21, 2015, From https://www.sec.gov/Archives/edgar/data/320193/000119312514383437/d783162d10k.htm#toc783162_11
2012 Apple's financial data:Retrieved September 21, 2015, From https://www.sec.gov/Archives/edgar/data/320193/000119312512444068/d411355d10k.htm
Yahoo! Finance (2014). Apple Inc (AAPL): Historical prices. Retrieved on November 24, 2014, from https://finance.yahoo.com/q/hp?s=AAPL&a=11&b=12&c=1980&d=10&e=24&f=2014&g=v.
Yahoo! Industry Center (2014).Electronic Equipment.Retrieved on November 24, 2014, from https://biz.yahoo.com/ic/314.html.
Bond Valuation
This assignment contains two parts: Part I and Part II.
Part I
Answer these questions and show your work:
- Assume that the company that you selected for the Module 1 SLP has a bond outstanding that matures in 20 years and has a coupon rate of 6.5%. The par value of the bond is $1,000.
- If the yield to maturity is 8% and the bond pays interest on an annual basis, what's the current price of the bond? Is the bond selling for a premium or discount? How can you tell?
- If the yield to maturity is 8% but the bond pays interest on a semi-annual basis instead of an annual basis, what's the current price of the bond? Is it different from the value when using annual compounding? Explain.
- Now, assume that the economy enters into a recession and interest rates fall. The bond's yield to maturity is now 5%. What's the bond's new price? How does the price compare with your answer in part a? Why did the bond's value change?
- A bond matures in ten years and is currently selling for $1,125. The bond pay interest annually, has a par value of $1,000, and a yield to maturity of 10.75%. What's the bond's current yield?
Part II:
Write a 2-page essay comparing reinvestment risk and interest rate risk and how an investor can protect his or her portfolio from those risks. Please be sure to discuss duration in your paper.
SLP Assignment Expectations
You are expected to:
- Describe the purpose of the report and provide a conclusion. An introduction and a conclusion are important because many busy individuals in the business environment may only read the first and the last paragraph. If those paragraphs are not interesting, they never read the body of the paper.
- Answer the SLP Assignment question(s) clearly and provide necessary details.
- Write clearly and correctly-that is, no poor sentence structure, no spelling and grammar mistakes, and no run-on sentences.
- Provide citations to support your argument and references on a separate page. (All the sources that you listed in the references section must be cited in the paper.) Use APA format to provide citations and references.
- Type and double-space the paper
Whenever appropriate, please use Excel to show supporting computations in an appendix, present financial information in tables, and use the data computed to answer follow-up questions. In finance, in addition to being able to write well, it's important to present information in a professional manner and to analyze financial information.