Question Details

(solution) 5 pages, APA format. Prompt: In this milestone, you will submit a


5 pages, APA format.

Prompt: In this milestone, you will submit a draft of the Risk Analysis section (III) and the Risk Management Strategies section (IV) of the final project. You will analyze the different risks that APPLE INC. faces and classify the risks (e.g., stand-alone risk, corporate risk, or market risk), which were discussed in Module One and more specifically in Module Five. You will also analyze the impact of these risks in regards to the company?s internal and external environments. Lastly, you will recommend risk management strategies that minimize the risk and maximize the return for APPLE INC. For example, you might think about whether the company should reduce its use of debt or seek short-term or long-term financing options instead. 
Running Head: INTRODUCTION AND FEASIBILITY OF APPLE INC. Final Project Milestone 1: Introduction and Feasibility of Apple Inc.

 

FIN 685: Risk Management

 

Emily Wong Yien San Prof. Scott Gillman

 

Southern New Hampshire University

 

August 28, 2016 INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

Introduction

 

Apple Inc. was founded on January 3,1977, by Steve Jobs and Steve Wozniak.

 

Together they have a strong vision towards the company, which is to change the way of

 

people perceived computers; they have successfully evolved computers to the size that is

 

small enough for people to be able to use them in their homes or offices. Today, the

 

company offers a wide range of mobile communication and media devices, computing

 

products and portable digital music players, and software products (Rawlinson, 2016).

 

A. Apple Inc. Size of Operation and Major Competitors

 

Direct Competitor Comparison 2015

 

AAPL HPQ GOOG Industry Market Cap: 576.24B 24.62B 528.88B 512.00M Employees: 110,000 287,000 66,575 895.00 -0.15 -0.53 0.21 0.16 220.29B 99.88B 81.76B 497.70M 0.39 0.24 0.62 0.30 73.96B 9.36B 26.90B 41.72M 0.29 0.08 0.26 0.06 47.80B 4.50B 17.99B N/A EPS (ttm): 8.58 1.88 25.81 0.37 P/E (ttm): 12.47 7.66 29.82 17.03 PEG (5 yr expected): 1.66 4.40 1.22 1.67 P/S (ttm): 2.63 0.25 6.47 1.00 Qtrly Rev Growth (yoy):

 

Revenue (ttm):

 

Gross Margin (ttm):

 

EBITDA (ttm):

 

Operating Margin (ttm):

 

Net Income (ttm): AAPL= Apple Inc. HPQ= Hewlett Packard GOOG= Google Alphabet Inc. INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

A1. Historical Data

 

APPLE

 

In Millions of USD

 

(except for per share

 

items)

 

Revenue

 

Other Revenue, Total

 

Total Revenue

 

Cost of Revenue, Total

 

Gross Profit 52 weeks ending

 

2015-09-26 52 weeks ending

 

2013-09-28 52 weeks ending

 

2012-09-29 233,715.00 170,910.00 156,508.00 - - - 233,715.00

 

140,089.00 170,910.00

 

106,606.00 156,508.00

 

87,846.00 93,626.00 64,304.00 68,662.00 HPQ

 

In Millions of USD

 

(except for per share

 

items)

 

Revenue 12 months ending

 

2015-10-31 12 months ending 12 months ending

 

2013-10-31

 

2012-10-31 103,355.00 112,298.00 120,357.00 - - - 103,355.00 112,298.00 120,357.00 Cost of Revenue, Total 78,596.00 86,380.00 92,385.00 Gross Profit 24,759.00 25,918.00 27,972.00 Other Revenue, Total

 

Total Revenue GOOGLE

 

In Millions of USD

 

(except for per share

 

items)

 

Revenue 12 months ending

 

2015-12-31 12 months ending 12 months ending

 

2013-12-31

 

2012-12-31 74,989.00 55,519.00 46,039.00 - - - Total Revenue 74,989.00 55,519.00 46,039.00 Cost of Revenue, Total 28,164.00 21,993.00 17,176.00 Gross Profit 46,825.00 33,526.00 28,863.00 Other Revenue, Total INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

B. Leadership Position

 

Apple Inc. has a strong leadership position in the market presently and historically. Apple Inc. owns retail stores in 18 countries and online stores in 120 countries. The company generates over 500 billion revenue per year as compared to 497 competitors in the industry. It owns the market capitalization of $576 billion (Reuters, 2016).

 

C. Current Financial position

 

AAPL

 

Market Cap: 576.24B Employees: 110,000 Qtrly Rev Growth (yoy): -0.15 Revenue (ttm): 220.29B Gross Margin (ttm): 0.39 EBITDA (ttm): 73.96B Operating Margin (ttm): 0.29 Net Income (ttm): 47.80B EPS (ttm): 8.58 P/E (ttm): 12.47 PEG (5 yr expected): 1.66 P/S (ttm):

 

Historical Financial Position 2.63 In Millions of USD

 

(except for per share

 

items)

 

Revenue 52 months ending

 

2015-09-26 52 months ending 12 months ending

 

2013-09-28

 

2012-09-29 233,715.00 170,910.00 156,508.00 - - - Total Revenue 233,715.00 170,910.00 156,508.00 Cost of Revenue, Total 140,089.00 106,606.00 87,846.00 93,626.00 64,304.00 68,662.00 Other Revenue, Total Gross Profit INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

C. Product Line

 

Apple Inc. engages in designs, manufactures and promotes mobile communication

 

and media devices, personal computers and portable digital music players and sells a

 

wide range of related software, services, networking solutions and third-party digital

 

content and applications. The company main products are IPhone, IPad, Mac, Apple TV

 

and IPod; but most of all, Mac is an essential part of Apple Inc., its music related

 

products, IPod and iTunes are the company?s most profitable segment (Reuters, 2016).

 

Apple Inc. Feasibility

 

A. Financial Ratio of Apple Inc.

 

Leverage Total Debt / Equity ratio Profitability Profit Margin 21.70% Operation Operating Margin 28.55% Solvency Current Ratio 67.12 1.31 B. Financial Ratio of Competitors

 

HPQ

 

Total Debt / Equity ratio N/A Profit Margin 3.33% Operating Margin 8.11% Current Ratio GOOGLE 0.96 INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

Total Debt / Equity ratio 4.90 Profit Margin 22% Operating Margin

 

Current Ratio 26.17%

 

5.43 C. Ratio Discrepancies between Apple Inc. and Competitors

 

From the data above we can see that the markets for Apple Inc. products and services

 

are highly competitive and challenged by its competitors in all areas of its business. This

 

is due to a large number of product introductions lately and rapid technological advances

 

that significantly increased the capabilities and use of mobile communication and media

 

devices, computers, and other electronic devices. Moreover, Apple Inc.?s competitors

 

who are also highly depend on the mobile device and computer sectors have aggressively

 

cut prices and lowered their product margins in order to increase or sustain market share.

 

As a result, the company?s financial condition and operating results can be undesirably

 

affected by all these factors mentioned above in the long run (CSI Market, 2016).

 

Being the lead player of the industry, Apple Inc. continues focusing on increasing its

 

market opportunities related to personal computers and mobile communication and media

 

devices. These markets are extremely competitive especially competitors are well funded

 

and experienced in the industry. The company also expects competition in these markets

 

to be more aggressive as competitors tend to replicate the features of many of their major

 

products and applications within their own products or, on the other hand, cooperate with

 

other players in the industry to the extend that they can fully compete with Apple Inc.

 

(CSI Market, 2016). INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

Apple Inc.?s future financial condition and operating results greatly depend on the

 

company?s ability to continue to promote and offer new innovative products and services

 

in each of the markets. The company believes that with its superior innovation including

 

IPhone, IPad, Mac and IPod, software like IOS, OS X and ITunes, online services, and

 

distribution of digital content and applications, the company will continue to have a great

 

potential in competing its competitors (Rosoff, 2015).

 

D. Strengths and Weaknesses of Apple Inc.

 

Considering from the ratios above, one of the major weaknesses of the company has

 

that high leverage and low solvency. Comparing to Google Inc., Apple Inc. is heavily

 

capitalized with debt and it has comparatively lower solvency in terms of current assets to

 

pay for its debts (Yoshikami, 2016).

 

Overall, Apple Inc. is a good company for investment since it is a lead player in all

 

the markets that it competes in and it has always been dominating the industry. Looking

 

at the performance of the company, Apple Inc. has showed a strong growth in the near

 

future. One of the biggest strengths of the company is has a strong marketing and

 

advertising capabilities, excellent brand reputation, vertical integration and massive line

 

of products in one ecosystem (Yoshikami, 2016).

 

Apple Inc.?s earnings growth in year 2015 signifies that these strengths balance out

 

the company?s competitive advantages, such as those weaknesses that I mentioned above.

 

Hence, new IPhone releases are always popular and it guarantees good sales by offering

 

substantial new features. For instance the latest product IPhone 6, it offers much larger

 

displays than previous models and a well-designed fingerprint reader that provides easy INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

access from the lock screen. As a result, the device has made it into record-breaking sales

 

for the company in the first few quarters of its release (Price, 2016).

 

In near future, Apple Inc. will focus in producing new innovative products and have

 

some interesting opportunities to expand its product lines into IoT market and health

 

related gadgets. At least for another cycle, these factors are what investors should focus

 

on (Price, 2016). References

 

CSI Market. (2016). Apple Inc. Retrieved from

 

http://csimarket.com/stocks/compet_glance.php?code=AAPL

 

Price, C. (2016). Is Apple A Good Investment For Dividend Growth Investors? Retrieved

 

from http://seekingalpha.com/article/3980776-apple-good-investment-dividend

 

growth-investors INTRODUCTION AND FEASIBILITY OF APPLE INC.

 

Rosoff, M. (2015). Apple's iPhone revenue is bigger than any other tech company's total

 

revenue. Retrieved from http://www.businessinsider.com/apple-iphone-revenue

 

vs-competitors-total-revenue-2015-9

 

Rawlinson, N. (2016). History of Apple, 1976-2016: The story of Steve Jobs and the

 

company he founded. Retrieved from

 

http://www.macworld.co.uk/feature/apple/history-of-apple-steve-jobs-what

 

happened-mac-computer-3606104/

 

Reuters. (2016). Apple Inc. Retrieved from

 

http://www.reuters.com/finance/stocks/companyProfile?symbol=AAPL.O

 

Yahoo Finance. Apple. Retrieved from: https://finance.yahoo.com/quote/AAPL/key

 

statistics?p=AAPL

 

Yahoo Finance. Google. Retrieved from: https://finance.yahoo.com/quote/GOOG/key

 

statistics?p=GOOG

 

Yahoo Finance. HP. Retrieved from: https://finance.yahoo.com/quote/HPQ/key

 

statistics?p=HPQ

 

Yoshikami, M. (2016). 7 reasons Apple is a buy. Retrieved from

 

http://www.cnbc.com/2016/01/07/7-reasons-apple-is-a-buy-commentary.html INTRODUCTION AND FEASIBILITY OF APPLE INC.

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Jan 30, 2021

PRICE: $15

Solution~0001000053.zip (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free solution (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Jan 30, 2021

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now