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Incorporated in 1997, Apple Inc. was co-founded by Steven Wozniak and marketed by Steven Jobs. The first product of the company was well ahead of its incorporation, in 1976, the company introduced the first Apple I computer. Unfortunately, Apple I was a failure but 1980 was the year of success for the company with the launch of Apple II. The company came to the public through its Initial Public Offering in 1980. Then the time of competition led by the entry of IBM and so the early eighties were not pleasant for the company. The failure of Apple III in 1983 was a big shock. The company introduced first mouse based computer in the year 1984 named as Macintosh. The time of cheap personal computer came in the early nineties and Microsoft introduced Windows based operating system. By 1997, company has lost a huge sum of money. This was the time changes, when Steven Jobs, the original co-founder of the company, joined back as the interim Chief Executive Office. The company underwent a lot of changes and modifications for improvement. The company came up with an agreement with Microsoft, and resulted MS Office on Mac PCs. In the meantime the company also acquired Next, PowerSchool, Prismo Graphics, Silicon Grail, selected assets of Zayante, Emagic, Nothing Real, the German Apple Computer, Inc. and Spruce Technologies.

ITunes was launched in 2003 which has its own success story. Apple launches improved versions of iPhones and iPads regularly to provide better technologies to its customers.
Analysis of Financial Statements
There are many tools available for analysis of financial statements of a company. Review of financial statements and comparison with its previous period performance, forecasted financial statements, ratio analysis, economic value analysis, Du-Pont analysis, vertical analysis and horizontal analysis are few among these. Reading the financial policies of the company also help in understanding the performance of the company.
Review of financial statements
While reviewing the income statement of Apple Inc., we find a continuous growth in the sales of the company. While the sales in the year 2011 was $108 billion, it increased by 45% in 2012 to $157 billion and by 9% to $171 billion in 2013.The net income figure of the company during the year 2012 is showing a growth of 62% compared with 2011 however the figure for the year 2013 is 10% lower compared with 2012 which is on account of growth in cost of sales. Cost of sales in the year 2013 is increased by 17% however sales during the same period is recording a net growth of only 9%.
Balance sheet of the company is quite impressive with a total assets base of $207 billion, an increase from $176 billion in 2012. The shareholders ‘equity of the company is increased by 6 billion and company has taken long term debt amounting to $17 billion and an increase in short term debt can also be seen to the extent of $4 billion. Overall the balance sheet is showing a quite stable position with growth in its current assets and current liabilities in line with its improvement in operations and increase in equity & debt are for the purpose of expansion of the business.
Cash flow statement of the company also establishes that the company is performing very well. Cash generated from operations is showing a continuous growth, while the figure was $38 billion in 2011, it increased to $51 billion and $53 billion in the years 2012 and 2013 respectively. Sale and purchases of marketable securities are showing that the company is trying to maintain an optimum cash balance and it parks remaining cash in short term and long term funds for generating extra revenue.
Ratio Analysis
Among several tools available for analysis of financial statement, ratio analysis is most widely used because of its unique features and suitability (Block, 2011). Ratios are broadly classified in five categories, viz. liquidity, asset management, financial leverage, profitability and market value. Liquidity ratio tells about the short term liquidity position of the company. Asset management ratios tell about how effectively the assets of the company are utilized (zenwealth.com). Financial leverage ratios shows the financing pattern or the equity and debt proportion in the capital structure of the company (readyratios.com). Profitability ratios tell about the operational performance of the company and market value shows about the ratios that are directly related with the equity market. All the ratios are calculated based on the most recent figures (September 28, 2013) of the company.
Liquidity Ratio
Ratio Formula Calculation Ratio
Liquidity Ratios
Current Ratio Current Assets 73,286 1.68
Current Liabilities 43,658

Quick Ratio Quick Assets 71,522 1.64
Current Liabilities 43,658

The current ratio of Apple Inc. is 1.68 which happens to be lesser than the optimum ratio of 2.00 however the quick ratio of the company is very good at 1.64. As the company keeps minimum inventory, which is one of the requirements of the technology companies as these may become obsolete quickly, the two liquidity ratios of the company are very similar. The company may not find any difficulty in meeting its short term obligations as it maintains almost 1.68 times money in its current assets and company might be very comfortable in meeting its very short term obligations as well, as it has $1.64 in quick assets for paying $1.00 of current liabilities.

Asset Management Ratios
Ratio Formula Calculation Ratio
Asset Management Ratios
Fixed Assets Turnover Sales 170,910 10.30
Fixed Assets 16,597

Inventory Turnover Cost of Goods Sold 106,606 60.43
Inventory 1,764

The fixed assets turnover ratio of the company is above 10 and the inventory turnover ratio of the company is 60.43. A fixed asset turnover ratio of ten is quite good as in several industries, especially in capital intensive industries, the ratio may be as low as 1 and still these companies are treated as outperformers. Both the turnover ratios of the company are very strong and shows how best the resources of the company are maintained.

Financial Leverage Ratios
Ratio Formula Calculation Ratio
Financial Leverage Ratios
Debt Equity Ratio Total Debt 16,960 0.14
Shareholders’ Equity 123,549

Equity Multiplier Total Assets 207,000 1.68
Shareholders’ Equity 123,549

The debt equity ratio of the company is merely 0.14, that shows that for every $1 invested by the shareholders, the company has taken a loan of only $0.14 from the lenders. A low debt equity ratio shows that the company has enough scope for taking loan for its expansion plans in future. The equity multiplier shows that compared with $1 invested by the shareholders, how much worth of total assets company own. An equity multiplier of 1.68 is definitely very good and it gives a very high degree of comfort to the shareholders.

Profitability Ratios
Ratio Formula Calculation Ratio
Profitability Ratios
Gross Profit Ratio Gross Profit 64,304 37.6%
Sales 170,910

Net Profit Ratio Net Profit 37,037 21.7%
Sales 170,910

The gross margin ratio of the company is 37.6% and net profit margin ratio of the company is 21.7%. This high tech company knows very well that how it should market its products in order to get the maximum benefit from its sales and it is very clear from a very high gross margin and net profit ratios of this company.
Conclusion
We find that company is one the best managed technology company with improving financial performance in this highly competitive world. The company could also successfully create one of the best brand names in its segment and the Apple customers always feel proud to own Apple gadgets. Based on our complete analysis, we may conclude very positively that the company has very strong balance sheet, improving cash flows and a very appealing income statement showing its growth stories.