Financial And Financial Analysis Of Apple Inc.

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As another method to understand both companies’ performance is to look at the balance sheet, and each company’s cash and cash equivalents, inventory, accounts receivable, and property, plant, and equipment will be analyzed by using horizontal and vertical analysis. Firstly, Apple Inc. had an increase in cash and cash equivalents in the year 2013 compared to 2012. Its cash was increased by 32.69% in 2013 as compared to 2012. However, in the fiscal year 2014, it decreased by 2.91% as compared to its previous year. The major reason of this particular change is that Apple Inc. repurchased a large amount of common stocks and paid dividends. "Cash used to repurchase common stock of $45.0 billion and cash used to pay dividends and dividend equivalents …show more content…

It seems that Apple Inc. keeps investing effectively and does not keep too much cash, which is good. In contrast, cash and cash equivalents for Hewlett-Packard Co. had increase rates in the year 2012 to 2014. In the fiscal year 2013, its cash was increased by 7.63% as compared to 2012. Additionally, a big increase of 24.42% was in the fiscal year 2014 as compared to 2013. The increase was due to cash generated from sales of available-for-sale securities (Hewlett-Packard, 73). According to vertical analysis, it shows that cash and cash equivalents were 10.39%, 11.51%, and 14.66% in year 2012, 2013, and 2014, respectively. Cash for fiscal year 2012 and year 2013 was similar at around 11%; however, it has increased in year …show more content…

had tremendously increased in year 2013 by 123.01% as compared to 2012. However, in the year 2014, it increased by 19.67% as compared to 2013. Apple Inc. explains the change; “the Company must order components for its products and build inventory in advance of product shipments” (Apple, 40). Additionally, vertical analysis shows the inventory to be under 1%, which is 0.45%, 0.85%, and 0.91% for 2012, 2013, and 2014, respectively. In this case, it seems that Apple Inc. does not have a lot of inventory and does not manage it well in time manner. In contrast, Hewlett-Packard Co. had a decrease of 4.29% in inventory for 2013, comparing to 2012. Furthermore, its inventory was increased by 6.10% in 2014 as compared to 2013. These changes were made mainly based on changes in demand. “Factors influencing these adjustments include changes in demand, technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues” (Hewlett-Packard, 51). According to vertical analysis, inventory shows to be at around 6% for 2012, 2013, and 2014, which means the company manages the inventory

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