Analysis Of Apple Inc

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

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 ratio was 60.43, and in 2014, the most recent year recorded, Apple’s inventory turnover ratio was 53.18 times (Apple Inc. Form 10-K. 2014.). Figure 9 below is a graph depicting Apple’s inventory turnover ratio for the past 5

Earnings per share is calculated by dividing net income by the number of total shares outstanding (Ross 26). Apple Inc.’s 10-K lists earnings per share in two categories, basic a diluted. Basic earnings per share are calculated by dividing available income to common shareholders by the weighted-average number of outstanding common stock during the period. Diluted earnings per share are calculated by dividing available income to common shareholders by the weighted-average number of outstanding common stock during a period of time but it is increased to include additional shares of common stock that would have been outstanding if the potentially dilutive securities were not issued. In 2012 Apple reported basic 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.