Evaluating Financial Health
- Submitted by: laurenoetken
- Views: 892
- Category: Science
- Date Submitted: 03/10/2011 12:29 PM
- Pages: 3
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In assessing the risk associated with investment oportunities with Apple, Inc. we find the liquidity provides us with information that proves Apple to have the ability to meet their short-term obiligations with a healthy current ration of 2.74 in 2009 which is an improvement from 2008 of 2.46 with a industry standard of 2.5. This industry reflexts a low computer equipment inventory count which is why the acid test ratio is slightly below the current ratio. The acid test ratio is 2.7 for 2009 compared to 2.43 in 2008. We can compare the acid test in 2009 of 2.7 with the industry average of 2.5 (msn.com, 2010). The statement states that the risk avoider would be happy to look at the satisfactory liquidity position.
The solvency risk for Applie shows a debt equity ratio of 0.11 for 2009, showing an increase from 2008 of 0.08. Here it is important to refer to theindustry average of 0.07 (OnlyHardwareBlog.com, 2010). Proving it not alarming for Apple, Inc. to uphold more long-term risks.
Since the company exmpanded the firm due to the increase of sales, the requirement of cash increase in 2009 as well. Operations generated $1.11 billion improving 5.87% from the previous year. The company invests in marketable securities that improve their liquidity and also give the room to meet the need of raw inventory. The cash flow from Apple, Inc. shows that the company takes a tax benefit from stock base benefit and keeps sufficient cash on hand as well as not announcing any dividends in cash.
Apple, Inc’s major comepetors are Dell & HP. If we compare Apple, Inc. with these competitors, Applie, Inc. shows a higher price earning ratio (19.10) than Dell and HP. The price per share is booked at 5.71 times which is proven again to be higher than the 4.1 times Dell is producing and the 1.38 that HP is producing.
Though it is not completely pressent in the United States, the Global economic recession is showing recovery. Reasonable growth is observed in markets...
The solvency risk for Applie shows a debt equity ratio of 0.11 for 2009, showing an increase from 2008 of 0.08. Here it is important to refer to theindustry average of 0.07 (OnlyHardwareBlog.com, 2010). Proving it not alarming for Apple, Inc. to uphold more long-term risks.
Since the company exmpanded the firm due to the increase of sales, the requirement of cash increase in 2009 as well. Operations generated $1.11 billion improving 5.87% from the previous year. The company invests in marketable securities that improve their liquidity and also give the room to meet the need of raw inventory. The cash flow from Apple, Inc. shows that the company takes a tax benefit from stock base benefit and keeps sufficient cash on hand as well as not announcing any dividends in cash.
Apple, Inc’s major comepetors are Dell & HP. If we compare Apple, Inc. with these competitors, Applie, Inc. shows a higher price earning ratio (19.10) than Dell and HP. The price per share is booked at 5.71 times which is proven again to be higher than the 4.1 times Dell is producing and the 1.38 that HP is producing.
Though it is not completely pressent in the United States, the Global economic recession is showing recovery. Reasonable growth is observed in markets...