Apple Inc Financial Statements Examination

Financial Statement


The selected company is Apple Inc. The Apple Inc. Fiscal Year ends on September and thus, the available information for this year is only the half year report. In this regard, the report will be based on the current available Fiscal year report 2015.

Net Income

Apple net income for 2015 was 53,394 million dollars. This was far more than the 2015 net income which was 39,510 million dollar. The 2015 net income exceeded that of 2014 with a total of 13,884 million dollars (Morningstar, 2016). Net income history can assist investors in assessing the company investment risk. The increase in the Apple’s net income demonstrates low risk for investors who wish to invest in the company. It demonstrates a higher chance of earning more returns in the future (Horngren & Gary, 1990).

Ending Balance in Shareholders’ Equity

The ending balance in shareholders’ equity for Apple Inc. in 2015 was 119, 255 million dollar (Morningstar, 2016). Shareholders’ equity is of interest to the labor union since it can guide in sponsoring proposals which would increase their leverage of negotiation against the corporate management. This leverage provides the labor union with aptitude to negotiate for more benefits and higher wages for unionized workers (Anthony & Leslie, 1999).

Total Value of Assets

The Apple Inc. total value of assets in 2015 was 290, 479 million dollars (Morningstar, 2016). Assets provide a company with the means to pay the debt during the uncertain times or when business profit is volatile. Creditors always focus on the availability of something of value which can be liquidated to debt payment in case the company experiences financial crisis. Thus, a company with a high total asset value gives a higher guarantee of credit repayment to the creditors in the future (Horngren & Gary, 1990).

Total Cash Flow from the Operation

The Apple Inc. total cash flow for 2015 was 41,601 million dollars (Morningstar, 2016). The total cash flow refers to the net cash-equivalents and cash amount moving out and into a business. A  positive value shows that the liquid assets of a company are increasing, allowing it to pay for its expenses, to give shareholders returns, reinvest in the business, to settle debts, and to give a buffer over financial challenges that may occur in the future (Anthony & Leslie, 1999).

Users Who Find Financial Statement Most Important

Financial statement is very important to business owner, the creditors, investors, competitors, and the government. They help the owners to understand the business financial health and to establish on the aspects to improve on. They help creditors to assess the risk and determine the company’s ability to handle its credits in the future or in case of financial crisis. Financial statements assist investors to assess their returns and the company’s ability to increase their returns or chances of suffering losses in the future. The competitors are able to learn on their peer competitiveness and efficiency to be able to assess their position in the market. The government also uses the financial statement to asses on their tax revenue. The labor union also uses the financial statement to gain the ground for their higher salary bargaining power (Horngren & Gary, 1990).

Role of Financial Statement in My Current Position and its Use in Making Managerial Decision

Financial statement is used to compute different financial ratios that assist in evaluating the financial health of a company. In my aspired role as a manager, the financial statements will help me in understanding the company’s financial position, which include aspects in which the company is failing in and those that it is successful in. This will assist the company management in making decision regarding the new marketing, production, and operation strategies to employ. They show where the company is failing in its operation and guide the company management in developing strategies to counter the failures. For instance, a company may realize that its profits are going down despite high volume of sales. This would result to employment of strategies to cut on the operation cost (Anthony & Leslie, 1999).

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