Apple Financial Review

Apple has existed for a long time and has a generally rich corporate history. Apple was originally founded as a computer company in 1977 but has evolved into a personal electronics solution. In recent years Apple has become more known for their flagship product (the iPod) than the computer hardware and software that they had traditionally been known for. The iPod has effectively changed the way that consumer's listen to music. In the past few years the iPod has successfully fended off a wide number of devices vying to take its dominant market share position. With multiple versions being released each year, the iPod will likely provide Apple with a very strong income for years to come.

Apple also currently owns iTunes, which is a store that allows people to purchase music and video online. By selling both the content and the devices used to play the content Apple has successfully grasped a vertical hold of the music industry. This has put apple in the position to experiment with a wide variety of other new markets. Some devices designed to utilize and maximize benefit from this position include the iTv, the iCar, and the iPhone.

The huge success of the iPod has allowed apple to possess a significant amount of cash and cash equivalents ($6,392,000,000), this sum is up roughly 37% from last year. Apple has used this huge source of income to pay off all of their debts and develop new product lines that will create new consumer markets. Apple has also used this income to expand into worldwide markets (such as Asia).

Apple is able to offer consumer's significantly more than its top competitor (Dell). Key ratio comparisons show Apple has a greater abundance of working capital than Dell, as well as a greater return on their assets. Dell does have an advantage when it comes to the number of days' sales inventory. This advantage simply explains that Dell is able to acquire, sell, and replace their inventory faster than Apple. Year to year comparisons show favor towards Apple's numbers in that they are becoming more efficient in inventory turnover, while Dell is becoming less efficient.

All of Apple's financial vital signs are healthy and well above the industry average. With a Price to Earnings ratio of 32.6, compared to an industry average of 27.9, investor's are clearly expecting that Apple will perform even better in the future, than it is now. Apple's price to book value is relatively low. Apples quick ratio is nearly double the industry's average which measures the ability to instantly pay off debt, which also motivates investors. Apples gross margin of 30.2 allows it to turn a great number of raw materials into products that in turn provides apple with a high net profit margin (11.7).

Such financial vital signs coupled with the likelihood of vast growth in the future make Apple a great stock to invest in.