Financial Reporting Problem, Part 2
The current paper focuses on the analysis of the financial state of Apple Inc., based on the company’s annual report in 2014. The information contained in the company’s balance sheet is analyzed. The financial figures are analyzed at a given date and in dynamics. Current financial results are compared to previous periods. On the basis of this information conclusions are derived concerning the company’s financial health and its attraction to the potential investors. Keywords: balance sheet, current assets, total assets, current liabilities, cash equivalents
Financial Reporting Problem, Part 2
The initial essay represents the analysis of the annual report of the public company. Apple Inc. has been chosen, as an example of the company subject to the analysis. The aim of the current paper is to analyze the financial report of Apple Inc., in particular its balance sheet, and make conclusions on its financial health and perspectives for potential investors.The paper consists of several parts. First of all, the general information on the Apple Inc. is provided. The company’s background and business strategy are presented. At the next step, its financial state is analyzed at the current date and compared to the previous periods. The company’s balance sheet forms the basis for the analysis of its financial state. The analysis of the company’s balance sheet reports the company’s current financial state. Finally, conclusions are made concerning the current financial state of the company and the perspectives of its future development.Apple Inc. operates worldwide and focuses on the design, manufacturing and sales of mobile communication devices, personal computers, digital music players and a variety of related accessories, services and software.
The Company’s innovative hardware, software and services bring the best user experience to its customers (Apple Inc. Annual Report, 2014). The last financial year has been successful for the Apple Inc. In spite of Ipod’s sales reduction, the sales of other products demonstrated strong growth. At the same time, the launch of the new products provided background for the effective financial performance of the company. In order to support this statement the analysis of the important financial indicators is to be provided.A company’s balance sheet presents a picture of its financial situation at a certain point in time. The balance sheet consists of the company’s assets on one side and its liabilities and shareholder’s equity at the other side. The total of its assets is equal to the sum of its shareholders’ equity plus its liabilities (Merrill Lynch, 2000). The Apple’s assets can be classified as the current assets and long-term assets. The current assets include cash and cash equivalents, short-term marketable securities, accounts receivable, inventories, deferred tax assets vendor non-trade receivables and other current assets. The current assets are listed in the balance sheet in the proper way, according to the order of their “liquidity”, which means the amount of time during which they can be converted into cash. First on the balance sheet are represented the most liquid asset – cash and afterwards other assets are …
