This report discusses two recent developments in the international financial environment, global financial management strategy, and analyses the financial performance of Apple Inc. in the fiscal years 2020 and 2021 using eight different accounting ratios.
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
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