Assignment 3: Required Assignment 3 –Calculating Financial Ratios
George L. Burga
Prof. Leon Grove
October 03, 2015
* Download a company’s balance sheet and income statement from one of the many sites where financials are available, such as Zacks Investment Research or MarketWatch.
* Choose five financial ratios, one from each of the five categories described in Chapter 3 of Brigham and Ehrhardt (i.e., liquidity, asset management, financial leverage, profitability, and market value) and look at them over a three-year period. Put your findings in a table with the years across the top (horizontal axis) and the ratios along the side ...view middle of the document...
Designs, manufactures, and markets mobile communication and media devices, personal computers, watches, and portable digital music players worldwide. The company also sells related software, services, accessories, networking solutions, and third-party digital content and applications. It offers iPhone, a line of smartphones that comprise a phone, music player, and Internet device; iPad, a line of multi-purpose tablets; Mac, a line of desktop and portable personal computers; iPod, a line of portable digital music and media players, such as iPod touch, iPod nano, and iPod shuffle; and Apple Watches, personal electronic devices that combine watch technology with an iOS-based user interface. The company also provides iTunes app and the iTunes Store; Mac App Store that allows customers to discover, download, and install Mac applications; iCloud, a cloud service; Apple Pay for making mobile payments; Apple TV, a portfolio of consumer and professional software applications; iOS and OS X operating systems software; iLife, a consumer-oriented digital lifestyle software application suite; iWork, an integrated productivity suite designed to help users create, present, and publish documents, presentations, and spreadsheets; and other application software, including Final Cut Pro, Logic Pro X, and its FileMaker Pro database software. Also, it offers various Apple-branded and third-party Mac-compatible and iOS-compatible accessories, including headphones, cases, displays, storage devices, and various other connectivity and computing products and supplies. The company sells and delivers digital content and applications through the iTunes Store, App Store, iBooks Store, and Mac App Store; and sells its products through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. The company was founded in 1977 and is headquartered in Cupertino, California.
Liquidity Ratio, Current Ratio
Ratio | Formula | Apple Inc. | Apple Inc. | Apple Inc. |
| | 2014 | 2013 | 2012 |
Current Ratio | Current Assets/ | Current Assets | 68,531000 | Current Assets | 73,286,000 | Current Assets | 57,653,000 |
| Current Liabilities | Current Liabilities | 63,448000 | Current Liabilities | 43,658,000 | Current Liabilities | 38,542,000 |
| | | | | | | |
| | Current Ratio | 1.08 | Current Ratio | 1.68 | Current Ratio | 1.50 |
| | | | | | | |
The current ratio can provide investors and analysts with clues about the efficiency of a company’s operating cycle or its ability to monetize its products. The higher the ratio, the more able a company is to pay off its obligations. While acceptable ratios vary depending on the specific industry, a ratio between 1.5 and 3 is considered healthy. Investors and analysts would consider MSFT, with a current ratio of 3.22, financially healthy and capable of paying off its...