Performance Evaluation and Ratio Analysis

of Apple Inc.
Performance Evaluation and Ratio Analysis of
Apple Inc.

Prepared for

Professor Dr. Md. Mohiuddin

Course Instructor: Financial Theory and Practices

Prepared by

Sayed Abu Sufyan (ZR 1801005)

Md. Ashequl Haque (ZR 1801007)
Masum Al Rahim (ZR 1801025)
EMBA 30th Batch

Institute of Business Administration

University of Dhaka

January 12, 2019

Executive Summary
Apple Inc. designs, manufactures, and markets mobile communication and media devices, and
personal computers. It also sells various related software, services, accessories, and third-party
digital content and applications. The company offers iPhone, a line of smartphones; iPad, a line of
multi-purpose tablets; and Mac, a line of desktop and portable personal computers, as well as iOS,
macOS, watchOS, and tvOS operating systems.

This report applies Financial Performance Evaluation of Apple Inc. It means how well the
company performs. The main data is collected from the annual financial reports of the company
from 2017 and 2018 which are provided by the company. Different financial ratios are evaluated
such as liquidity ratios, solvency ratios, profitability ratios, efficiency ratios and finally measure
the best performance of the company. The tabulated analysis and comparisons are applied for the
measurement of all types of financial ratio analysis. Liquidity ratio is conveying the ability to repay
short-term creditors and its total cash. It determines the performance of short term creditor of the
company under the two categories such as current ratio and quick ratio. Asset management ratio
is measured to know how the company is using and controlling its assets. Profitability ratio and
debt coverage ratio are also measured to know overall market position of the company in the
current market. Profitability ratio has a significant positive impact on firm performance evaluation.
The study therefore recommends that management and policy holders should see and utilize
effectively liquidity and profitability ratios as the real significant performance evaluation
indicators and also pay attention to other possible variables that might contribute to performance
evaluation through ratio analysis in further empirical work.
Table of Contents
Executive Summary ...................................................................................................................................... 2
Introduction .................................................................................................................................................. 4
Company profile ........................................................................................................................................... 4
Purpose of this report .................................................................................................................................. 6
Sources of financial information and statements ....................................................................................... 6
Data collection and Data Analysis ............................................................................................................... 6
Performance Evaluation and Ratio Analysis ............................................................................................... 7
Liquidity Ratio........................................................................................................................................... 7
Solvency ratio ........................................................................................................................................... 8
Profitability Ratio ................................................................................................................................... 10
Efficiency Ratio analysis ......................................................................................................................... 12
Horizontal Analysis ..................................................................................................................................... 14
Vertical Analysis ......................................................................................................................................... 15
Conclusion .................................................................................................................................................. 16
References .................................................................................................................................................. 17
Introduction

Performance evaluation of a company is usually related to how well a company can use it assets,
shareholder equity and liability, revenue and expenses. Financial ratio analysis is one of the best
tools of performance evaluation of any company. In order to determine the financial position of
the manufacturing company- Apple Inc. and to make a judgment of how well the manufacturing
company efficiency, its operation and management and how well the company has been able to
utilize its assets and earn profit.

We used ratio analysis for easily measurement of liquidity position, asset management condition,
profitability and market value and debt coverage situation of the manufacturing company for
performance evaluation. It analysis the company use of its assets and control of its expenses. It
determines the greater the coverage of liquid assets to short-term liabilities and it also compute
ability to pay monthly mortgage payments from the cash generate. It measures the overall
efficiency and performance. It determines of share market condition of this company. It also used
to analysis the company past financial performance and to establish the future trend of financial
position.

For the Performance Evaluation and Ratio Analysis, we have chosen Apple Inc. Apple Inc. is an
American multinational technology company headquartered in Cupertino, California, that designs,
develops, and sells consumer electronics, computer software, and online services. It is considered
one of the Big Four of technology along with Amazon, Google and Facebook.

Company profile
The Company designs, manufactures and markets mobile communication and media devices and
personal computers, and sells a variety of related software, services, accessories and third-party
digital content and applications. The Company’s products and services include iPhone® , iPad® ,
Mac® , Apple Watch® , AirPods® , Apple TV® , HomePod™, a portfolio of consumer and
professional software applications, iOS, macOS® , watchOS® and tvOS™ operating systems,
iCloud® , Apple Pay® and a variety of other accessory, service and support offerings. The
Company sells and delivers digital content and applications through the iTunes Store ® , App Store
® , Mac App Store, TV App Store, Book Store and Apple Music® (collectively “Digital Content
and Services”). The Company sells its products worldwide through its retail stores, online stores
and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers
and resellers. In addition, the Company sells a variety of third-party Apple-compatible products,
including application software and various accessories, through its retail and online stores. The
Company sells to consumers, small and mid-sized businesses and education, enterprise and
government customers. The Company’s fiscal year is the 52- or 53-week period that ends on the
last Saturday of September. The Company is a California corporation established in 1977.

The Company is committed to bringing the best user experience to its customers through its
innovative hardware, software and services. The Company’s business strategy leverages its unique
ability to design and develop its own operating systems, hardware, application software and
services to provide its customers products and solutions with innovative design, superior ease-of-
use and seamless integration. As part of its strategy, the Company continues to expand its platform
for the discovery and delivery of digital content and applications through its Digital Content and
Services, which allows customers to discover and download or stream digital content, iOS, Mac,
Apple Watch and Apple TV applications, and books through either a Mac or Windows personal
computer or through iPhone, iPad and iPod touch® devices (“iOS devices”), Apple TV, Apple
Watch and HomePod. The Company also supports a community for the development of third-party
software and hardware products and digital content that complement the Company’s offerings.
The Company believes a high-quality buying experience with knowledgeable salespersons who
can convey the value of the Company’s products and services greatly enhances its ability to attract
and retain customers. Therefore, the Company’s strategy also includes building and expanding its
own retail and online stores and its third-party distribution network to effectively reach more
customers and provide them with a high-quality sales and post-sales support experience. The
Company believes ongoing investment in research and development (“R&D”), marketing and
advertising is critical to the development and sale of innovative products, services and
technologies.
Purpose of this report
The purpose of this study is a performance evaluation of a manufacturing company named Apple
Inc. which is well-renowned all over the world. We will analysis the financial conditions of this
company using the reported financial statement of this company.

Sources of financial information and statements

The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the Securities
and Exchange Commission (the “SEC”). The Company is subject to the informational
requirements of the Exchange Act and files or furnishes reports, proxy statements and other
information with the SEC. Such reports and other information filed by the Company with the SEC
are available free of charge at investor.apple.com/investor-relations/sec-filings/default.aspx when
such reports are available on the SEC’s website. The SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC at www.sec.gov.The Company periodically provides other
information for investors on its corporate website, www.apple.com, and its investor relations
website, investor.apple.com. This includes press releases and other information about financial
performance, information on corporate governance and details related to the Company’s annual
meeting of shareholders. The information contained on the websites referenced in this Form 10-K
is not incorporated by reference into this filing. Further, the Company’s references to website
URLs are intended to be inactive textual references only.

Data collection and Data Analysis

Main data for this report are the annual financial reports on Apple Inc. for the fiscal year ended
September 29, 2017 and 2018. In case of measurement of the ratio analysis for any company, we
should use in annual financial report otherwise we don’t evaluate the financial performance of the
company. We have also used four main financial statements for ratio analysis of Apple Inc. such
as; balance sheets, an income statement, cash flow statement; statement of shareholder’s equity.
All those financial statements and supplementary data that have used in this report for calculation
purposes are attached in the appendix section.

We have used different financial analysis and ratio analysis for performance evaluation of this
company. It is briefly discusses in the following sections. It indicates the different steps such
Selection of financial report, Identification of balance sheet, income statement and cash flow
statement, ratio analysis, mathematical calculation, horizontal analysis, vertical analysis, and
statistical analysis of the company.

Performance Evaluation and Ratio Analysis

Liquidity Ratio

Liquidity ratio refers to the ability of a company to interact its assets that is most readily converted
into cash. Assets are converted into cash in a short period of time that are concerns to liquidity
position. However, the ratio made the relationship between cash and current liability. The
Liquidity ratio can satisfy on the two ratios, those are: 1) Current ratio 2) Quick ratio or acid test

Current ratio

The current ratio is calculated by dividing current assets by current liabilities. Current asset
includes inventory, trade debtors, advances, deposits and repayment, investment in marketable
securities in short term loan, cash and cash equivalents, and current liabilities are comprised short
term banks loan, long term loans-current portion, trade creditors liabilities for other finance etc.
Generally current ratio are acceptable of short term creditors for any company.

The formula is shown as below:

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Table 1: Current Ratio Analysis of Apple Inc. (values are in million USD)

Year Current Asset Current Current Ratio

Liabilities
2017 128,645 100,814 1.276
2018 131,339 116,866 1.124
In this analysis, we can view that in 2017 the current ratios were 1.276 times in Apple Inc. It was
decreasing the next year which is 1.124 in 2018. So we can conclude that Apple Inc. is not good
performing for current ratio because their figure also showing that situation.

Quick Ratio

Quick ratio or acid test ratio is estimating the current assets minus inventories then divide by
current liabilities. It is easily converted into cash at turn to their book values and it also indicates
the ability of a company to use its near cash.

The formula of quick ratio or acid test ratio is as follow as:

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 − (𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 + 𝑃𝑟𝑒𝑝𝑎𝑖𝑑 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠)

𝑄𝑢𝑖𝑐𝑘 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Table 2: Quick or Acid test Ratio Analysis of Apple Inc. (values are in million USD)

Year Current Current Inventories Prepaid Quick

Asset Liabilities Expenses Ratio
2017 128,645 100,814 4,855 - 1.228
2018 131,339 116,866 3,956 - 1.089

Analysis of this ratio, it is the same position of current ratio. In 2017, the quick ratio was 1.228 for
Apple Inc. which has decreased quietly as resulted in the quick ratio of 2018 which is 1.089. Both
of these ratios represent the idea that Apple Inc. has so far an almost constant liquidity position
which is good at some point, however, their profit margin may not so high.

Solvency ratio

The solvency ratio is only one of the metrics used to determine whether a company can stay
solvent. Other solvency ratios include debt to equity, total debt to total assets, and interest coverage
ratios. However, the solvency ratio is a comprehensive measure of solvency, as it measures cash
flow – rather than net income – by including depreciation to assess a company’s capacity to stay
afloat. It measures this cash flow capacity in relation to all liabilities, rather than only short-term
debt. This way, solvency ratios assesses a company's long-term health by evaluating its long-term
debt and the interest on that debt.
Debt-equity ratio

The Debt/Equity (D/E) Ratio is calculated by dividing a company’s total liabilities by its
shareholder equity. These numbers are available on the balance sheet of a company’s financial
statements. The ratio is used to evaluate a company's financial leverage. The debt/equity ratio is
also referred to as a risk or gearing ratio.

The formula of Debt/Equity is as follow as:

𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝐷𝑒𝑏𝑡 − 𝑒𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =
𝑇𝑜𝑡𝑎𝑙 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝑒𝑞𝑢𝑖𝑡𝑦

Table 3: Debt-equity Ratio Analysis of Apple Inc. (values are in million USD)

Year Total Liabilities Total Shareholders’ Debt-equity

Equity ratio
2017 241,272 134,047 1.799
2018 258,578 107,147 2.413

From the analysis, it is evident that debt-equity ratio has been increased from 1.799 in 2017 to
2.413 in 2018. A high debt/equity ratio is often associated with high risk; it means that Apple Inc.
has been aggressive in financing its growth with debt. On the surface, it appears that Apple Inc.’s
higher debt-equity ratio indicates higher risk. However, this may be too generalized to be helpful
at this stage and further investigation would be needed.

Debt-total asset ratio

Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.
This metric enables comparisons of leverage to be made across different companies. The higher
the ratio, the higher the degree of leverage and, consequently, financial risk. The total debt to total
assets is a broad ratio that includes long-term and short-term debt (borrowings maturing within
one year), as well as all assets – tangible and intangible.

Total debt to total assets is a measure of the company's assets that are financed by debt, rather than
equity. This leverage ratio shows how a company has grown and acquired its assets over time.
Investors use the ratio to not only evaluate whether the company has enough funds to meet its
current debt obligations, but to also assess whether the company can pay a return on their
investment. Creditors use the ratio to see how much debt the company already has and if the
company has the ability to repay its debt, which will determine whether additional loans will be
extended to the firm.

The formula of Debt-total asset ratio is as follow as:

𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝐷𝑒𝑏𝑡 − 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡 𝑟𝑎𝑡𝑖𝑜 =
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

Table 4: Debt-total asset Ratio Analysis of Apple Inc. (values are in million USD)

Year Total Liabilities Total Assets Debt-total asset

ratio
2017 241,272 375,319 0.643
2018 258,578 365,725 0.707

In this problem analysis we see that the percentage of ratio has increased from 2017 to 2018 in the
Apple Inc. because their asset was decreased at a higher rate than from the last year. If any
company debt ratio increases day by day it is not a good position for those for the company. A
high ratio also indicates that a company may be putting itself at a risk of default on its loans if
interest rates were to rise suddenly. A ratio below 1 translates to the fact that a greater portion of
a company's assets is funded by equity.

Profitability Ratio

Profitability ratios are a class of financial metrics that are used to assess a business's ability to
generate earnings relative to its associated expenses. For most of these ratios, having a higher value
relative to a competitor's ratio or relative to the same ratio from a previous period indicates that
the company is doing well.

Return on Assets

Profitability is assessed relative to costs and expenses, and it is analyzed in comparison to assets
to see how effective a company is in deploying assets to generate sales and eventually profits. The
term return in the ROA ratio customarily refers to net profit or net income, the amount of earnings
from sales after all costs, expenses and taxes. The more assets a company has amassed, the more
sales and potentially more profits the company may generate. As economies of scale help lower
costs and improve margins, return may grow at a faster rate than assets, ultimately increasing return
on assets.

Return on Assets is calculated as follows:

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝑎𝑠𝑠𝑒𝑡𝑠 (𝑅𝑂𝐴) = 𝑥 100%
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

Table 5: Return on assets Analysis of Apple Inc. (values are in million USD)

Year Net Income Total Assets ROA

2017 48350.85 375,319 12.88%
2018 59530.88 365,725 16.277%

From 2018 years data we see that net income has continuously increased to 2017 in Apple Inc. For
this reason return on total asset ratio has increased significantly and it may considered as a best
position for this company. The best choice will ideally increase productivity and income as well
as reduce asset costs, resulting in an improved ROA ratio.

Return on equity

Return on equity (ROE) is a measure of financial performance calculated by dividing net income
by shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its debt,
ROE could be thought of as the return on net assets.

ROE is expressed as a percentage and can be calculated for any company if net income and equity
are both positive numbers. Net income is calculated before dividends paid to common shareholders
and after dividends to preferred shareholders and interest to lenders. Relatively high or low ROE
ratios will vary significantly from one industry group or sector to another. When used to evaluate
one company to another similar company the comparison will be more meaningful. Even within
the same industry group, comparing the ROE of a company that pays a large dividend with a firm
that doesn’t can also be misleading.

Return on equity is calculated as follows:

 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝑒𝑞𝑢𝑖𝑡𝑦 (𝑅𝑂𝐸) = 𝑥 100%
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑜𝑤𝑒𝑛𝑒𝑟𝑠 𝑒𝑞𝑢𝑖𝑡𝑦

Table 6: Return on equity Analysis of Apple Inc. (values are in million USD)

Year Net Income Average ROE

owners’ equity
2017 48350.85 134047.3 36.07%
2018 59530.88 107147 55.56%

For the same problem of the return on equity has increased in the year 2018 compare with 2017 in
Apple Inc. It means the company is gaining efficiency in production process and also this increases
in return on equity has a good affect in common stock holder. Therefore, a rising ROE for Apple
Inc. suggests that Apple Inc. is increasing its ability to generate profit without needing as much
capital.

Efficiency Ratio analysis

Efficiency Ratio ratios are most notable ratio of the financial ratio analysis. It measure how
effectively a company uses and controls its assets. It is analysis how a company quickly converted
to cash or sale on their resources. It is also called Turnover ratio because it indicates the asset
converted or turnover into sales. Finally, we can recognize the company can easily measurement
their asset because this ratio made up between assets and sales.

Inventory turnover ratio

The inventory turnover ratio measures the number of times on average the inventory was sold
during the period. The ratio is calculate the cost of goods sold by divide into average inventory.
The measurement of average inventory is; at first we are add to year’s inventory after that we
divide in to two. Inventory turnover ratio is also known as inventory turns ratio and stock turnover
ratio.

The formula of Inventory turnover ratio is as follow as:

𝐶𝑜𝑠𝑡𝑠 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
Table 7: Inventory Turnover Ratio Analysis of Apple Inc. (values are in million USD)

Year Costs of goods sold Average Inventory

(COGS) Inventories turnover ratio
2017 141047.94 4,855 29.0521
2018 163755.85 3,956 41.3943

In this analysis we identify that the continuous improvement of inventory turnover ratio through
the years from 2017 to 2018 in Apple Inc. Here we understand that the cost of goods sold is
increasing day by day as well as the turnover is also increasing because the increasing rate of sales
is higher than average inventory. Generally it is important that they are holding much more
inventory, which has make up the cash balance. So we are confirms that Apple Inc. captures much
more inventory and it is the best position for Apple Inc.

Total asset turnover ratio

The total asset turnover ratio measures the ability of a company to use its assets to generate sales.
It considers all assets including property ,plant and equipment, capital working in process,
investment –long term, inventories, trade debtors, advances, deposit and prepayment, investment
in market securities, short term loan, cash and cash equivalents etc. In these criteria a high ratio
means the company is achieving more profit.

The formula of Total asset turnover ratio is as follow as:

𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

Table 8: Total Asset Turnover Ratio Analysis of Apple Inc. (values are in million USD)

Year Net sales Average Total Total Asset

assets Turnover ratio
2017 229244.8452 375,319 0.6108
2018 265589.495 365,725 0.7262

In this Analysis we see that a gradual increase of Apple Inc.’s total asset turnover in 2018 from
2017, it was 0.6108 in 2017, increased to 0.7262 in 2018. It may be an indicator of company’s
pricing strategy as company with low profit margins tends to have high asset turnover and vice
versa. Other than investment in marketable securities, every other asset especially long-term
investments, inventories, short-term loans and cash balance had gone up substantially profit
margin may not be the actual reason for the turnover to go down. It is in fact might be one of the
reasons for why the assets turnover has been increasing in the year 2018 from 2017.

Horizontal Analysis

An analysis of percentage financial statements where all balance sheet or income statement figures
for a base year equal 100.00 (percent) and subsequent financial statement items are expressed as
percentages of their values in the base year is called horizontal analysis or trend/index analysis. In
the following case of Apple Inc., base year has been taken of the financials of 2016.

Table 9: Horizontal Analysis

Horizontal Analysis
Statement of Comprehensive Income Indexed
Description 9/30/2016 9/30/2017 9/30/2018
Turnover 100% 106% 123%
Cost of Goods Sold 100% 107% 125%
Gross Profit 100% 105% 121%
Profit after Tax 100% 104% 119%
Total Comprehensive Income 100% 106% 130%
Earnings per Share 100% 111% 143%
Statement of Financial Position Indexed
Net Current Assets 100% 120% 123%
Total Assets 100% 117% 114%
Shareholder's Equity 100% 105% 84%
Net Asset Value per Share 100% 109% 92%
Total Liabilities 100% 125% 134%

In the past twelve months, Apple’s revenue increased to USD. 36,361 million, a 16% increase.
From the trend of three years analysis we find from Income statement that turnover, Costs, profit
and EPS has increased significantly. On the other hand in the statement of financial position
analysis we find that NAV and Shareholder’s Equity has decreased and liabilities increased.
Vertical Analysis

An analysis of percentage financial statements where all balance sheet items are divided by total
assets and all income statement items are divided by net sales or revenues is called vertical analysis
or common size analysis. In the following case of Apple Inc., vertical analysis have been computed
for 02 (two) years i.e. 2017 and 2018.

Table 10: Vertical Analysis

Vertical Analysis for the Year

Statement of Comprehensive Income
2017 2018
Description Indexed Indexed
Total Comprehensive Income 21% 22%
Cost of Goods Sold 62% 62%
Gross Profit 38% 38%
Profit after Tax 28% 22%
Turnover 100% 100%
Statement of Financial Position
Description Indexed Indexed
Net Current Assets 34% 36%
Total Liabilities 64% 71%
Shareholder's Equity 36% 29%
Total Assets 100% 100%

The vertical analysis indicates that almost 36% of the total assets is current assets whereas non-
current asset is 64% (approx.) though current asset has been increased and non-current asset has
been decreased as compared to previous year (2017).

In this table we observe that Apple Inc. has faced 6% & 7% reduction in profit and Shareholders
Equity respectively with respect to turnover. But Liabilities has increased by 7%.
Conclusion

It has been already mentioned that the ratio helps to evaluated financial strengths and weaknesses
of Apple Inc. throughout the report it is shown that why ratio have different pattern and why ratio
marked by negative meaning and why ratio ratios was satisfactory value. This report was about
performance evaluation using financial ratio analysis of Apple Inc.

The finding suggests that the Apple Inc. must be responsible to develop their liquidity position
because the liquidity maintains their healthy position and also try to improve their liquidity
position Moreover, asset management condition is frequently improved because their some sectors
are improved and some are not. So Apple Inc. must be focused to improve their asset. Furthermore,
the profitability of Apple Inc. has increased over the year from 2017 to 2018. But nevertheless,
debt coverage and debt to total asset of Apple Inc. is in a good position from the last year and they
must continue this good financial condition.

After analyzing the last two years financial data of Apple Inc., the conclusion, therefore, to be
made is that Apple Inc.is one of the leading manufacturing company of the world with a variety
of product which have an export quality and it is a self-solvent company with a strong position in
the manufacturing sector. Almost all of the ratios of Apple Inc.’s show that they are solvent enough
and they have the efficiency. However there liquidity ratio and turnover ratios needed to be
improved as early as possible so that the company can reduce their liabilities. In the last it is
recommended that Apple Inc.’s financial management practice needed to be improved and they
need to take some effective solution so that Apple Inc. can hold their reputation as a business icon
in the manufacturing sector.
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