Apple In-Depth Financial AnalysisEssay Preview: Apple In-Depth Financial AnalysisReport this essayIntroductionObjective of paper.The objective of this paper is thoroughly analyze Apples financial statements for performance. Also, Apples operations, executives, and future outlook will be examined.
B. Summary of findings.Throughout the paper are significant examples that display the state of growth that Apple is currently in. From 2001 – 2005, Apple has experienced notable growth which is evident especially in the analysis of its financial ratios.
Chapter IBriefly summarize the business description.Apple Computer Inc. designs, markets, and develops personal computers and related software, services, peripherals, and networking solutions. Additionally, Apple has entered the digital music sector and designs, markets, and develops a line of portable digital music players along with related accessories and services including the online distribution of third party music, audio books,
short films, and television shows. The company sells its products online and through its own retail stores.What is the industry?Primary SIC code: Electronic computersWhat is the sector?Primary NAICS: 334111 Electronic computer manufacturingSelect a number of analysts ratings. What is your opinion of those ratings? Are they too high or too low?Throughout the month of October, the consensus has been to hold the stock (Prudential and Banc of America). I believe this opinion to be fairly accurate. They are in a spot for potential growth, but
at the same time are towards the higher end of their 52-week high.Review and comment on the three most recent news headlines.From the Associated Press Financial Wire on October 31, 2006Apple most recently released a $79 1GB iPod shuffle capable of holding up to 250 songs. This product is an addition to the already extremely popular portable digital music player line that Apple produces.
Small in size and extremely affordable, the Apple shuffle is marketed to all sorts of consumers – those on a budget and those wanting a smaller player. As Apple continues to creatively augment its product line with innovative ideas, it will stay at the head of the portable digital music market.
From bellweatherreport.com on October 19, 2006The bellweatherreport.com article wants the public to focus its attention on the rapidly growing company, Apple. It too focuses on innovative products including, iPhone, iTV, iPod, and the iMac. It comments on the 4th quarter earning of 2006 and expects an acceleration in 2007 with the launch of these products currently in the works.
From the Associated Press Worldstream on October 16, 2006Steve Jobs apologizes for Apple Computers past stock option practices. Following internal investigation of practices between 1997 and 2002, there were concerns about the way in which stock options were being handled.
Concerns arise when such news arise in the wake of company fraud scandals, Enron and WorldComm. As the financial world is still recovering from those devastations, many investors are still sensitive to such news and accusations.
List the peer companies.International Business Machines Corp.Hewlett-Packard Co.Dell Inc.Sun Microsystems Inc.Unisys Corp.Gateway Inc.For your company and each peer company, list the current sales.International Business Machines Corp.$91,134,000,000Hewlett-Packard Co.86,696,000,000Dell Inc.55,908,000,000Apple Computer, Inc.13,931,000,000Sun Microsystems Inc.13,068,000,000Unisys Corp.5,758, 700,000Gateway Inc.3,854,061,000For current sales, select the peer weight for your company.5.00%For current sales, select the peer aggregate.$270,349,000,000For current sales, select the peer mean.$38,621,394,000For current sales, select the peer median.$13,931,000Comment on how dominant your company appears to be in relation to the peer set of companies.Apple falls in the middle of these peer companies selected. However, their sales are significantlylower than IBM, HP, and Dell, and yet they lead Sun Microsystems, Unisys, Gateway. Apple isactive in several different markets ranging from desktop computer, to peripherals, to digital portable music player and thus, it is often difficult to select proper peer groups.
Who are the external auditors? What is the date and opinion on the last statement?KPMG are the external auditors. The last statement was given an unqualified opinion on November 29, 2005.B. Chapter 2Review directors for name, principal occupation, or other employment/business affiliation, age, and director service.The following is the list of board of directors:Fred. D. Anderson, 61 (as of 2006, not currently a director)Partner, Elevation PartnersFormer CFO, Apple Computer, Inc.Board of Director, ebay Inc.Bill Campbell, 65Compensation Committee, Finance and Audit CommitteeChairman and former CEO, IntuitBoard of Director, Opsware Inc.Millard Drexler, 61Compensation Committee, Nominating CommitteeChairman
B. Subsequent to the hiring of the CEO, the new directors are given a total compensation of $941,056,000.The “employee group” includes the staff of the Board of Directors, a newly created advisory board, and others who have left the current board memberships to support their own personal retirement plans.The board of directors is responsible for the appointment of new directors.The Executive Compensation Committee (ECC) is responsible for the appointment of new members. It includes employees, trustees, and directors.The Committee on Compensation (CPC), which was formed to oversee the compensation of directors of the American Council of Credit Suisse & Co., was formed to oversee the compensation of board members and other independent board officials.This year, the Committee of Compensation and Corporate Governance and of the Company-Owned Retirement System (ECRBS) are the same body that oversaw the decision to terminate the board during the year, in 2014. The Committee also oversaw a board of directors decision to hold elections for a new board of directors who will hold elective jobs, with one being chosen by the executive committee for the next five years. The ECRC was formed to hold a selection meeting to discuss the best practice in meeting employees and members of the board.The Audit Director was originally appointed as the interim head on the Board on March 27, 2006, for the period when Chief Executive, Inc. will be the most prominent company at the time. The Board had an interim Administrator on the Board appointed on February 2, 2010 for the same period, however it has since come to a decision that the new Administrator, who had been appointed on December 1, 2010, will not be nominated for that appointment until March 4, 2015. The interim Chairman is appointed by the current Board from the original board approved by the Chairman on March 11, 2006.The Board has an interim Finance Director appointed by the Board on May 21, 2006, who previously served as a special director until January 8, 2007. The interim Chief Financial Officer is appointed to provide support to shareholders and its Board-appointed Executive Director by the Board through a formal appointment as interim Financial Officer from the Board appointed on April 19, 2007.The Director of the Board is appointed by the current Board through a formal appointment after it is appointed on March 9, 2007. The Director of the Board has two new directors appointed by the Board to serve concurrently. The Chairman is appointed by the current Board through a formal appointment by the original chairman as interim Chief Executive Officer, July 27, 2008.The Board has a $1 million surplus from the $600,000 annual General Education Fund in fiscal year 2008 that is funded for administrative expenses. This fund provides additional funds to pay for special expenditures