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Apple Trend & Ratio Analysis
Student’s Name
Affiliate Institution
Course Title
Date
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Apple Trend & Ratio Analysis
1. Introduction
This paper will discuss the financial performance of Apple Inc. with focus on the
financial data from the year 2021 to the year 2023. The major emphasis is made of such key
financial indicators as revenue growth, net income growth, and selected balance sheet and
income statement figures. Ratio analysis is used here in order to assess Apple’s financial
leverage, profitability, operational efficiency, and liquidity. The results are compared with those
of a large industry competitor and the stability of Apple’s income statement analyzed. The paper
suggests what Apple should do to be financially sustainable and attractive from an investors’
perspective in the long run.
2. Trend Analysis (2021-2023)
Trend Analysis Data Table
Metric 2021 2022 2023
Revenue (in Billions) $365.82 $394.33 $383.93
Revenue Growth Rate - 7.79% -2.64%
Net Income (in Billions) $94.68 $99.80 $95.56
Net Income Growth Rate - 5.41% -4.25%
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Apple Revenue &Net Income Growth Rates 2021-2023
10
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Growth Rate (%)
0
2020.5 2021 2021.5 2022 2022.5 2023 2023.5
-2
-4
-6
Year
Revenue Growth (%) Net Income Growth (%)
Trend Analysis Discussion
An analysis of the gross and net Apple income and revenue for the years 2021-2023
reveals important shifts in growth in specific areas. Apple’s revenues went further up to $394.33
billion in 2022 from $365.82 billion in 2021 that’s a growth of 7.79% (MarketWatch, n.d.). This
change was as a result of recovery from disruptions caused by pandemic and increase in demand
for wearables, services, and iPhones. However, total revenue of the selected countries reduced to
the level of $ 383.93 billion in 2023, where there was a 2.64% decline. These changes are due to
global inflation, issues affecting the supply chain, and a slow rate consumer expenditure.
Likewise, Apple’s this year to net income went up by 5.41% in 2022 reaching $99.80
billion from $94.68 billion through good cost control and operational efficiency. However, on net
income basis, it declined to $95.56 billion in 2023, a 4.25 % decline (Apple Inc., 2023). This
decline is likely owing to factors already discussed.
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The fluctuations in the sales and net income growth rate exemplify how much the
business is vulnerable to other forces. Despite that it has been facing some challenges at the end
of the year 2023, the overall trend reveals Apple’s resilience and ability to maintain its
profitability This action shows how strong its business model and the ever market remain to be
the continuous market demand for Apple’s high-margin products and service.
3. Ratio Analysis (2021-2023)
Apple’s Key Ratios (2021-2023)
Ratio 2021 2022 2023
Current Ratio 1.07 1.06 1.08
Quick Ratio 0.99 0.98 0.97
Gross Profit Margin 41.78% 43.21% 42.54%
Operating Profit 30.29% 31.58% 29.90%
Margin
Net Profit Margin 25.88% 25.30% 24.89%
ROA 18.10% 18.37% 16.73%
ROE 147.44% 175.74 149.53%
%
Debt-to-Equity Ratio 1.65% 1.62% 1.58%
Source: MarketWatch n.d.
Apple Rati o Analysis 2021-2023
2021 2022 2023
43.31
42.54
41.78
31.58
30.29
29.9
25.88
24.89
25.3
1.08
1.07
1.06
0.99
0.98
0.97
C u r r e n t R a ti o Q u i c k R a ti o G r o s s P r o fi t O p e r a ti n g P r o fi t N e t P r o fi t
Mar gi n (% ) Mar gi n (% ) Mar gi n (% )
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b. Competitor Comparison (Samsung, 2023)
Ratio Apple Samsung
2023 2023
Current Ratio 1.08 1.36
Quick Ratio 0.97 1.02
Gross Profit Margin 42.54% 39.45%
Operating Profit 29.90% 27.33%
Margin
Net Profit Margin 24.89% 22.15%
ROA 16.73% 14.23%
ROE 149.53% 135.80%
Source: MarketWatch n.d.
Apple vs. Samsung Financial Comparison
(2023)
22.15
Net Profit Margin (%)
24.89
Operation Profit Margin 27.33
(%) 29.9
39.45
Gross Profit Margin (%)
42.54
1.02
Quick Ratio
0.97
1.36
Current Ratio
1.08
0 5 10 15 20 25 30 35 40 45
Samsung (2023) Apple (2023)
C. Ratio Analysis Discussion
Apple’s organizational operation efficiency and overall financial stability can be detected
using the ratio analysis for the years 2021, 2022, and 2023. The current ratio and quick ratio are
two liquidity ratios developed to ascertain the corporation’s ability to meet short-term
commitments. The current ratio of having 1.06 to 1.08 indicates that Apple has adequate current
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assets to help meet the company’s current liabilities (Apple Inc., 2023). However, these
fluctuations are actually quite small, which demonstrates very good liquidity management for
this steadiness. The quick ratio is slightly lower at 0.97 to 0.99 and reflects a reliance on cash and
receivables; an area in which efficient cash flow management and inventory control are
particularly crucial to a digital sector.
Operational effectiveness of Apple is presented by the ratio analysis: Profitability. The
gross profit margin had slightly decreased from 41.78% in 2021 up to its highest point at 43.31%
in 2022 but reduced more, marginally to 42.54% in 2023. Such a pattern indicates good control
of costs, and a strategic pricing model, especially for value products such as the iPhone. This
trend was also evidenced by Apple Inc. (2022) in the increase in the operating profit margin,
which indicated that apple managed to manage its operating expenses as a percentage of total
operating revenue evidenced by the 31.58% in 2022. However, in 2023 the operating margin
reduced to 29.90%, this figure might be arrived from increased operating expenses caused by
inflation and rising cost of raw materials.
The measure of overall profitability is the net profit margin which has reduced from
25.88% in 2021, to 24.89% in 2023. The decrease reflected the problem Apple encountered in
maintaining its profitability in the context of operational volatilities; at the same time, the figure
remains far above the levels typical for the industry, proving Apple’s stability.
Apple’s debt to equity ratio also reduced with time from 1.65 in the year ending 2021 to
1.58 in year ending 2023 meaning that financial leverage was decreasing. This pattern indicates
that Apple strategy is very prudent regarding leverage, in other words, the company controls high
number of debts but at the same time it possesses a great number of equities. Being relatively
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insignificant, Apple’s cash balances allow the company to leverage minimal debt to finance it
growth opportunities without aggressive levels of financial risk.
The averages of the interest earned to average assets reduced slightly from 18.10% to
16.73% revealing that there was reduction in the productivity of effective assets in providing
profits (MarketWatch, n.d.). Nevertheless, Apple’s return on assets has been recorded to be
slightly higher for the year 2023 than the average in the industry, thus meaning that its assets
have been put to efficient use. In contrast to the vigorous growth of net profit margins, the
biggest fluctuation concerning the company’s limited resources can be observed in the variation
of return on equity (ROE), which was 175.74% for 2022 but then has leveled off to 149.53% for
2023. A tiny cut led to erosion of equities’ returns due to slower revenue growths and increasing
operation costs It highlights high return on equity to show that Apple has the capacity to generate
large returns to shareholders.
By using DuPont analysis, it is shown that low asset turnover and low net profit margin,
not the issue with financial leverage as previously assumed, are behind the decline in ROE. The
decline of the net profit margin means that although Apple’s profitability remains very high, the
company’s expenses are also on the rise and are also affecting its margins.
Therefore, Apple analysis based on ratio study from 2021 to 2023 reveals effective
liquidity position, cost controls and high profitability but the company has some troubles in
maintaining high growth rates and keeping operating expenses in check. Based on the ratios, the
company’s financial structure is ready to face future opportunities; however, because of the
prevailing economic instability, sustaining the company’s financial stability would require proper
strategic management.
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4. Recommendation
This paper also reveals that through trend and ratio research, Apple has been fiscally
sound amidst its fluctuations in stock. Despite the fact that It’s net income and a revenue slightly
declined in 2023, it maintains a very high level of profitability. It emerges that the company has
higher operational efficiency compared to the industry average and major rivals such as Samsung
Electronics, while the absolute values of its liquidity ratios suggest that the company is in a
position to meet all its near-term operating obligations. Therefore, considering these aspects
Apple stands better situated for long term financial commitment and thus Apple should be the
better option for a long-term commitment. However, the investors should nevertheless remain
vigilant to possible difficulties originating from the broader macroeconomic setting.
5. Reflection
From this examination, there is enhanced understanding in the evaluation of financial
performance focusing on trend and ratio analysis to estimate the stability and competitiveness of
a business. These ideas can be applied in the workplace scenario to determine the financial
performance of different companies, come up with recommendations on specific issue, and
identify point where management may be able to enhance operations.
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References
Apple Inc. (2021). Form 10-K for the fiscal year ended September 25, 2021. United States
Securities and Exchange Commission.
https://www.sec.gov/Archives/edgar/data/320193/000032019321000096/aapl-
20210925.htm
Apple Inc. (2022). Form 10-K for the fiscal year ended September 24, 2022. United States
Securities and Exchange Commission.
https://www.sec.gov/Archives/edgar/data/320193/000032019322000095/aapl-
20220924.htm
Apple Inc. (2023). Form 10-K for the fiscal year ended September 30, 2023. United States
Securities and Exchange Commission.
https://www.sec.gov/Archives/edgar/data/320193/000032019323000094/aapl-
20230930.htm
MarketWatch. (n.d.). Apple Inc. financials. Retrieved October 1, 2024, from
https://www.marketwatch.com/investing/stock/aapl/financials?mod=mw_quote_tab
MarketWatch. (n.d.). Samsung Electronics Co. Ltd. financials. Retrieved October 1, 2024, from
https://www.marketwatch.com/investing/stock/005930/financials?
countrycode=kr&mod=mw_quote_tab
