Financial Ratio Analysis Report
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Running head: FINANCIAL RATIO ANALYSIS REPORT
Financial Ratio Analysis Report
University of Phoenix
FIN/540
Due: March 5, 2012
According to First Research, “US shipments of personal computers (PCs) account for roughly 20 percent of the worldwide market. Hewlett-Packard (HP), Dell, Apple, and the US-based subsidiaries of Acer and Toshiba are the largest US PC vendors” (First Research, 2011). The PC market is competitive and manufacturers operate on slim margins. Cash flow for the industry is somewhat seasonal due to the buying patterns of both the consumer and business markets. Higher sales are typically seen during the third and fourth quarter (back-to-school and holiday season, respectively). The PC market is “driven by technological advances, disposable income in the consumer market and corporate spending cycles” (First Research, 2011).
Apple, Inc. was incorporated n January 1977, in California. As of September 24, 2011, Apple and its wholly-owned subsidiaries designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players and sells a range of related software, services, peripherals, networking applications, and third-party digital content and applications” (Mergent online – Apple, 2012, p. 1). Apple, Inc. is listed on the stock exchange and ticker as AAPL. Apple has approximately 60,400 full-time employees.
Dell Inc, was incorporated in May 1984, in Texas. As of September 24, 2011, Apple is a holding company that provides a range of technology product categories through its subsidiaries. The products range from mobility products to desktop computers, to software. (Mergent online – Dell, 2012, p. 1). Dell, Inc. is listed on the stock exchange and ticker as NMS: DELL. Apple has approximately 100,300 full-time employees.
Information was obtained for Apple Inc. and Dell Inc, which are Fortune 500 companies, to complete a Financial Ratio Analysis Report that consists of a chart with a 3 year trend table analyzing 12 financial ratios that are important to Apple and Dell, Inc. Each ratio is discussed in a comparison of both companies. The strengths and weaknesses of the companies are discussed as well as the financial condition and health of the companies. Through my analysis I will determine if the shareholders are receiving accurate information, pursuant to the Sarbanes-Oxley Act, 2002. Identification of any threats or potential problems will be assessed. New management initiatives will be reviewed to determine the viability of same. Finally, this paper will determine if the company is financially prepared for such new endeavor – financially and non-financially.
APPLE, INC.
Profitability Ratios
06/30/2011
06/30/2010
06/30/2009
ROA – Return on Assets
27.14
21.78
12.24
ROE – Return on Equity
41.79
37.16
23.41
ROI (Return on investment)
54.47
48.76
31.43
EBITA
33.27
29.52
22.66
Calculated Tax Rate
24.22
24.42
28.56
Liquidity Ratios
06/30/2011
06/30/2010
06/30/2009
Current ratio
Debt Management
06/30/2011
06/30/2010
06/30/2009
Total Debt to Equity
Asset Management
06/30/2011
06/30/2010
06/30/2009
Total Asset Turnover
Receivables Turnover
10.03
Inventory Turnover
70.53
52.51
48.54
Accounts Payable Turnover
Property Plant & Equipment Turnover
17.31
16.94
13.55
Per Share
06/30/2011
06/30/2010
06/30/2009
Cash Flow per Share
40.72
11.41
DELL, INC.
Profitability Ratios
06/30/2011
06/30/2010
06/30/2009
ROA – Return on Assets
ROE – Return on Equity
39.42
28.99
61.35
ROI (Return on investment)
29.32
27.22
EBITA
Calculated Tax Rate
21.34
25.45
Liquidity Ratios
06/30/2011
06/30/2010
06/30/2009
Current ratio
Debt Management
06/30/2011
06/30/2010
06/30/2009
Total Debt to Equity
Asset Management
06/30/2011
06/30/2010
06/30/2009
Total Asset Turnover
Receivables Turnover
Inventory Turnover
45.51
48.99
Accounts Payable Turnover
Property Plant & Equipment Turnover
29.83
24.78
Per Share
06/30/2011
06/30/2010
06/30/2009
Cash Flow per Share
INDUSTRY MEDIAN
Profitability Ratios
ROA – Return on Assets
ROE – Return on Equity
ROI (Return on investment)
EBITA
Calculated Tax Rate
Liquidity Ratios
Current ratio
Debt Management
Total Debt to Equity
Asset Management
Total Asset Turnover
Receivables Turnover
Inventory Turnover
Accounts Payable Turnover
Property Plant & Equipment Turnover