Introduction
Business markets provide different investment fund channels for investors. As a result, some institutions provide short-term funds, while others provide long-term capital for investors (Cameron 245). Organizations that provide short-term fund trade the money market, while corporations that provide long-term deals trade the capital market. By implication, the financial market facilitates business investments between lenders and borrowers. Previous reports revealed that financial intermediation improves the economy (Huber 90). By implication, financial intermediation manages the lenders and borrowers arrangement. As a result, money and capital market investors must collaborate with financial trends to make decisions (Henri 9). Consequently, banking institutions must decide the right investor, and environment (Burns 60). As a result, comparative analysis of the money market and capital market will focus on stocks and treasury bills (Simons 362). The paper will evaluate the overall performance of the selected companies that trade in money and capital markets using the IFRS and GPIS standards. The selected banking institution and Stock Corporation include JPMorgan Chase and Apple Corporation. Thus, we will compare the cost of transactions and the ROI as it affects stocks and treasury bills.
Apple company overview
Apple Corporation is a global conglomerate that manufactures consumer electronics, smart phones, tablets, and personal computers. Consequently, the corporation designs electronic accessories for computer brands such as Mackintosh, iPhone, and iPod. The corporation is a multinational corporation with 370 outlets and operates in 14 countries. As a result, the company invests in capital markets as the largest traded stock. The organization was established in 1976 and incorporated in 1977. Consequently, the corporation launched the Mackintosh computer in 1984. The company has 77,000 employees and its headquarters in California, USA.
Industry overview
The strength of the corporation includes brand reputation, an efficient financial stability, innovation, and strong client base. Thus, the organization uses brand differentiation to assist its target audience. As a result, the company builds reputation and integrity to overcome competition. However, the Apple’s weakness includes price differentiation, market share value, succession plan, and gross margin decline. The opportunity of the corporation includes higher demand, new products, effective market strategy, and market performance. However, the threats to the organization include tax increases, technology trends, increase in liabilities, and exchange value. The SWOT analysis of Apple Corporation evaluates its strengths, weaknesses, opportunities, and threats. The Corporation’s strength includes strong customer base, innovation, retail outlets, brand reputation, brand image, financial stability, software technology, and consumer satisfaction. However, Apple’s weaknesses include high prices, product defects, market recession, and a succession challenge, poor service, and product delivery, substitute competition; fall in stock value, and unnecessary apps.
The US Securities and Exchange Commission
The US Securities and Exchange Commission was established in 1934 to stabilize economic growth of the country after the Great Depression. As a result, the SEC is designed to improve investors’ confidence in the financial markets. The responsibility of the US Securities and Exchange Commission was invoked with the provisions of the amended and supplementary laws. Thus, the enabling laws promote investors’ confidence in the capital market and provide client protection in the financial operations. The SEC enforces regulatory observations and examinations to mitigate financial fraud. By implication, capital market investment relies on effective and liberal policy to improve performance.
The operations of the US SEC
The operations of the US SEC facilitate capital formations and investment performance. Consequently, the commission regulates the capital market investment to monitor, control, and maintain a fair and organized market. Thus, the regulation body mandates public company to full disclosure on investments before acquisition.
The International Financial Reporting Standards (IFRS)
The International Financial Reporting Standards (IFRS) is an accounting standard that compares business investment, finical records, and profitability. The accounting rules were harmonized to align with global business practice. As a result, the IFRS is recognized across boundaries. Thus, the IFRS evaluates the position of different financial statements, which include assets, liabilities, income, cash flow, contributions, and equity. The features of the IFRS include compliance policy, offsetting, accrual basis of reporting, fair presentation, report frequency, comparison, and consistency. Thus, the IFRS standards improve reporting relevance, timeliness, comparability, comprehension, and verifiability (Otley 370). The IFRS guidelines cover various aspects of business investments, which include financial instruments, insurance contracts, operating segments, business combinations, share-based payments, consolidated financial statements, the fair value measurement, disclosures, joint arrangements, regulatory deferral accounts, and no-asset operations.
Global Investment Performance Standards (GIPS)
The Global Investment Performance Standards is a set of interchangeable principles designed for business investments. As a result, investors compare their performances with other investments under global practices. Thus, this paper will compare the overall performance of the selected companies using the IFRS and GIPS standards.
Investment performance of Apple Inc.
The accounting standards improve neutrality, completeness, faithful representation, and verifiability. Thus, the market capitalization for Apple Inc. compared with major competitors will support the comparative study. The market caps as revealed by the international financial reporting standards (IFRS). The market cap indicates stability in Apple Corporation compared to Hewlett-Packard, BlackBerry Limited, and Google.
The comparison is based on revenue, earnings per share, net income, and price per earnings ratio. Consequently, the analysis reveals the financial stability of Apple Corporation compared to substitute competitors. Apple’s revenue in 2014 was $613 billion, while the earnings per share was 8.05. Consequently, the net income was $68 billion, while the price per earnings was 22.19. The overall performance compared with substitute competitors indicates financial stability.
References
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