Essay on Apple Inc. : Asset Management

Essay on Apple Inc. : Asset Management

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Inventories have very little influence as to whether Apple Inc. has the ability to be responsible for current liabilities using their current assets. This fact is a representation that Apple does not rely heavily on inventories to account for assets. This means that Apple has other current, or short-term assets like, cash and cash equivalents, short-term marketable securities, and accounts receivable among other assets, that if needed, could cover the company’s current liabilities. Apple maintains levels of inventory that keep up with consumer demand rather than sitting on inventory that could potentially not move (Apple Inc. Form 10-K. 2014.). Apple also maintains quick ratios that exceed median industry levels and are closer to industry highs (Dun & Bradstreet).
Asset Management Ratios (KS)
Asset management ratios, also referred to as asset utilization ratios, are specific ratios used to determine how efficiently companies are using their assets to generate sales revenue. Certain asset management ratios deal with inventory turnover, like the inventory turnover ratio and the days’ sales in inventory turnover (Ross 61).
• Inventory Turnover Ratio
The inventory turnover ratio is calculated by dividing the costs of goods sold by the inventory. This ratio is used to calculate how many times in a period a company is turning over inventory. As long as a company is not running out of stock of inventory thereby missing out on selling opportunities, the higher the inventory turnover ratio is, the more effectively a company is managing their inventory (Ross 61). In 2010, Apple Inc.’s inventory turnover ratio was 37.62 times, in 2011 the ratio was 83.03 times, in 2012 the ratio was 111.06, in 2013 the ra...


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... earnings per share (EPS) of $6.38 and diluted EPS of $6.31. In 2013 the company reported basic EPS of $5.72 and diluted EPS of $5.68, and in 2014 the company reported basic EPS of $6.49 and diluted EPS of $6.45 (Apple Inc. Form 10-K. 2014.).
Apple Inc.’s earnings per share have maintained a trend of hovering around the same price. The company’s EPS have exceeded Hewlett-Packards by more than double for the previous three years, but Google has nearly double the EPS share reported by Apple during the same periods (“Revenue and EPS Summary”). In Apple’s most recent quarter they have reported an improvement on EPS of 44.5% compared to the same quarter a year ago. For the past two years the company has maintained a pattern of positive EPS growth and they are predicted to report earnings that jump to $9.13, which could contend with Google’s EPS (Ingram).

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