International Finance BMG704 Assessment on Apple Inc.
Prepared By-
Sabbir Ahmed
B00891494
i
,Table of Contents
Introduction ..................................................................................................................... 1
Company Profile .............................................................................................................. 1
1.0 Recent Developments ........................................................................................... 1
1.1 Development one: Covid19 pandemic ............................................................... 1
1.1.1 Effect of Covid19 on the financial performance of Apple Inc. ...................... 1
1.1.2 Strategies implemented by Apple to mitigate the effects of Covid19 ........... 2
1.2 Development two: Semiconductor chip shortage ............................................... 2
1.2.1 Effects of semiconductor shortage on the financial performance of Apple
Inc. ……. .................................................................................................................. 2
1.2.2 Strategies implemented by Apple to mitigate the effects of semiconductor
shortage ................................................................................................................... 3
2.0 Discussion about Elements of Financial Management Strategy ............................ 3
2.1 Sources of Finance ............................................................................................ 3
2.1.1 Interpretation of ‘Sources of Finance.’ ......................................................... 3
2.1.2 Apple Inc.’s Sources of Finance .................................................................. 3
2.1.3 Equity........................................................................................................... 4
2.1.4 Debt ............................................................................................................. 5
2.1.5 Gearing Ratio .............................................................................................. 6
2.1.6 Working Capital Management ..................................................................... 7
2.1.7 Conclusion ................................................................................................... 7
2.2 Dividend Policy................................................................................................... 7
2.2.1 Apple’s dividend Policy ................................................................................ 7
2.2.2 Influences on Apple’s dividend policy .......................................................... 9
2.2.3 Dividend Relevance, Bird-in-Hand, and Dividend Signalling Theory ........... 9
3.0 Financial Ratio Analysis ........................................................................................ 9
3.1 Profitability Ratios .............................................................................................. 9
3.1.1 Return on Capital Employed (ROCE) .......................................................... 9
3.1.2 Operating Profit Margin.............................................................................. 10
3.1.3 Return on Equity ........................................................................................ 11
3.2 Liquidity Ratios ................................................................................................. 11
3.2.1 Current Ratio ............................................................................................. 11
3.2.2 Quick Ratio ................................................................................................ 12
ii
, 3.3 Efficiency Ratios............................................................................................... 12
3.3.1 Inventory Turnover Period ......................................................................... 12
3.3.2 Trade Receivables Period ......................................................................... 13
3.4 Investment Ratios ............................................................................................ 13
3.4.1 Earnings Per Share (EPS) ......................................................................... 13
Conclusion .................................................................................................................... 14
References .................................................................................................................... 15
Appendices ................................................................................................................... 20
iii
Prepared By-
Sabbir Ahmed
B00891494
i
,Table of Contents
Introduction ..................................................................................................................... 1
Company Profile .............................................................................................................. 1
1.0 Recent Developments ........................................................................................... 1
1.1 Development one: Covid19 pandemic ............................................................... 1
1.1.1 Effect of Covid19 on the financial performance of Apple Inc. ...................... 1
1.1.2 Strategies implemented by Apple to mitigate the effects of Covid19 ........... 2
1.2 Development two: Semiconductor chip shortage ............................................... 2
1.2.1 Effects of semiconductor shortage on the financial performance of Apple
Inc. ……. .................................................................................................................. 2
1.2.2 Strategies implemented by Apple to mitigate the effects of semiconductor
shortage ................................................................................................................... 3
2.0 Discussion about Elements of Financial Management Strategy ............................ 3
2.1 Sources of Finance ............................................................................................ 3
2.1.1 Interpretation of ‘Sources of Finance.’ ......................................................... 3
2.1.2 Apple Inc.’s Sources of Finance .................................................................. 3
2.1.3 Equity........................................................................................................... 4
2.1.4 Debt ............................................................................................................. 5
2.1.5 Gearing Ratio .............................................................................................. 6
2.1.6 Working Capital Management ..................................................................... 7
2.1.7 Conclusion ................................................................................................... 7
2.2 Dividend Policy................................................................................................... 7
2.2.1 Apple’s dividend Policy ................................................................................ 7
2.2.2 Influences on Apple’s dividend policy .......................................................... 9
2.2.3 Dividend Relevance, Bird-in-Hand, and Dividend Signalling Theory ........... 9
3.0 Financial Ratio Analysis ........................................................................................ 9
3.1 Profitability Ratios .............................................................................................. 9
3.1.1 Return on Capital Employed (ROCE) .......................................................... 9
3.1.2 Operating Profit Margin.............................................................................. 10
3.1.3 Return on Equity ........................................................................................ 11
3.2 Liquidity Ratios ................................................................................................. 11
3.2.1 Current Ratio ............................................................................................. 11
3.2.2 Quick Ratio ................................................................................................ 12
ii
, 3.3 Efficiency Ratios............................................................................................... 12
3.3.1 Inventory Turnover Period ......................................................................... 12
3.3.2 Trade Receivables Period ......................................................................... 13
3.4 Investment Ratios ............................................................................................ 13
3.4.1 Earnings Per Share (EPS) ......................................................................... 13
Conclusion .................................................................................................................... 14
References .................................................................................................................... 15
Appendices ................................................................................................................... 20
iii
