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Apple Company’s Financial Statement Analysis Research Paper


The company I selected for the analysis is Apple. Its annual report for the previous year contains plenty of business-related information and is divided into four major parts (Apple Inc., 2016):

  • Part 1 encompasses all the background information about the company, the history of its development, its products, markets, business strategies, competitors, problems and risk factors it has to deal with (including unresolved issues), legal proceedings, and safety disclosures.
  • Part 2 provides information about stakeholder matters, analysis of financial conditions and results of operations, supplementary financial data, financial disclosure, controls and procedures, and other finance-related issues.
  • Part 3 is devoted to corporate governance. It covers information about directors, executive officers, security ownership, management, director independence, etc.
  • Part 4 provides financial statement schedules.

Thus, the information provided in the report is full and comprehensive. It encompasses all organizational issues that must be covered in the annual report.

It is difficult to say what information is the most useful as no data provided in the report can be excluded from it without affecting its integrity. It would be reasonable to say that the first section of the report is the most informative, especially for those who do not have any particular idea about the company’s operations and want to obtain some general knowledge about it. The quality of the business description determines whether the reader will go further in his/her investigation. In this particular report, it becomes quite evident what the company produces, in which activities it is engaged, who its target customers are, what competitors it has, and what problems it has to deal with.

This information is sufficient to make some conclusions about the company’s profitability and overall success. However, I believe that for those who want to penetrate deeper into the topic, the third section of the report would be more useful and interesting because it gives insight into corporate governance, directors, and composition of committees. The composition of the board of directors is highly important for understanding what policies can be expected from the company in the future. Moreover, with the increasing role of leadership in international business, personalities of leaders become key success factors. Taking into account that the company is operating in a highly competitive industry, its competitive edge will largely depend upon the leaders’ philosophy and policies (Chambers, Mohanna, Jones, & Wall, 2016).

Although the report is organized rather clearly, it lacks an executive summary the inclusion of which will certainly be useful for the reader. A brief outline of all the information presented in the report and some notes about its structure would be enough to facilitate the search process. Currently, however, the reader has only the table of contents to navigate him/her in the document.

The director’s statement is also missing, making it difficult to understand whether management has achieved revenue targets that it set at the beginning of the year and whether the strategies applied are going to be followed in the year to come. The inclusion of this statement would also serve to open a line of communication between Apple and its customers, the success of which can determine customers’ future commitment to Apple products. Furthermore, the tone of the director’s report is highly important for understanding whether the company’s performance is satisfactory or needs improvement.

I believe that the amount of information provided in the report is sufficient, although it could be distributed differently. Some sections could be expanded, whereas others contain too much detail. It must be admitted, however, that all-important business aspects are covered.

References

Apple Inc. (2016, September 26). Form 10-K (annual report).

Chambers, R., Mohanna, K., Jones, R., & Wall, D. (2016). How to succeed as a leader. Boca Raton, FL: CRC Press.

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IvyPanda. (2020, September 7). Apple Company's Financial Statement Analysis. Retrieved from https://ivypanda.com/essays/apple-companys-financial-statement-analysis/

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"Apple Company's Financial Statement Analysis." IvyPanda, 7 Sept. 2020, ivypanda.com/essays/apple-companys-financial-statement-analysis/.

1. IvyPanda. "Apple Company's Financial Statement Analysis." September 7, 2020. https://ivypanda.com/essays/apple-companys-financial-statement-analysis/.


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IvyPanda. "Apple Company's Financial Statement Analysis." September 7, 2020. https://ivypanda.com/essays/apple-companys-financial-statement-analysis/.

References

IvyPanda. 2020. "Apple Company's Financial Statement Analysis." September 7, 2020. https://ivypanda.com/essays/apple-companys-financial-statement-analysis/.

References

IvyPanda. (2020) 'Apple Company's Financial Statement Analysis'. 7 September.

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