Student no : CT0350846

Introduction:
One of the most well-known and significant IT firms in the world
is Apple Inc. Steve Jobs, Steve Wozniak, and Ronald Wayne
founded the business in 1976, and since then, it has expanded
from a modest start-up that concentrated on personal
computers to a major player in consumer electronics, software,
and digital services worldwide. Although Apple operates in
many different industries, such as software development,
hardware design, retail, and digital content services, its main
goal is to provide high-quality, user-friendly products that are
benchmarks for the industry. The business has changed sectors
such wearable technology, digital music, mobile phones, and
computers.

Business Activities :
The creation, production, and distribution of consumer
electronics devices, as well as an expanding software and
service ecosystem, are at the heart of Apple's operations.
Among its product offerings are:

 Apple's flagship product :

the iPhone, is the market leader for smartphones
worldwide.
 The Mac computer line is renowned for its performance,
operating system (macOS), and design.
 iPads: Tablets made to work in unison with other Apple
apps and products.
 AirPods, the Apple Watch, and other accessories are
examples of wearable technology.
  Services: Among the many offerings of Apple's expanding
services section are the App Store, iCloud, Apple Music,
Apple TV+, Apple Fitness+, and Apple Pay.
 applications: Apple creates a range of productivity and
creative applications, such as iWork and Final Cut Pro, in
addition to its proprietary operating systems (iOS, macOS,
watchOS, and tvOS).

Innovation, premium product quality, and an interconnected

ecosystem that produces a smooth experience across all of
the company's goods and services are the main drivers of its
success. Because switching between devices within the
Apple ecosystem is simple, this ecosystem promotes brand
loyalty.

Financial Objectives and Size :

With a heavy emphasis on innovation and upholding a

premium brand image, Apple's financial goals center on long-
term growth, profitability, and market share increase. The
business has shown remarkable financial performance over
the last 20 years, setting records for both revenue and
profitability. According to Apple's fiscal year 2023 report:

 Revenue:

With a sales of almost $394 billion, it is among the biggest

corporations globally.

 Net Income :

Net Income: In fiscal 2023, Apple's net income was around

$99.8 billion.

 Market Capitalisation :
 Market Capitalisation: With a market value of over $2.8
trillion as of 2024, Apple is still among the most valuable
firms in the world and was the first to attain a $3 trillion
market value in 2022.

Growth Rates :

Product innovation, service diversification, and market

expansion have all contributed to Apple's steady growth
throughout the years. Despite economic instability throughout
the world, Apple's revenues are still rising, with its services
section seeing particularly strong growth. Apple's revenue
increased by over 300% between( 2010 and 2020), which was a
reflection of the growing demand for its products across the
globe. The company's growth trajectory has also been
influenced by the launch of new product categories, like the
Apple Watch and AirPods. Additionally, its services division has
expanded quickly and now contributes significantly to total
sales.

 Revenue Growth :

Over the last ten years, Apple's revenue has increased at a

compound annual growth rate of about 8–10%.

 Service Growth :

Apple's transition toward recurring revenue sources and the

growing significance of its ecosystem beyond hardware sales
are highlighted by the company's $85 billion in services
revenue in 2023, which accounted for 21% of total revenue.

Industrial role and Economic Impact :

Apple is a major force behind innovation in hardware, software,

and services in the worldwide technology sector. It has a
significant impact on software ecosystems and product design
in the mobile phone sector. By establishing new benchmarks for
performance, design, and user experience, the iPhone alone
completely transformed the smartphone industry. In addition to
smartphones, Apple has had a major influence on wearable
technologies, digital entertainment, and personal computers.

With its manufacturing partners and retail network, Apple

creates millions of jobs globally and has a significant economic
impact on global supply chains. Additionally, the business
stimulates demand for high-tech parts that underpin entire
industries, including as semiconductors, screens, and memory
storage.

Global Employment :

Apple employs over 160,000 people directly, and its supply chain
creates millions of additional jobs in manufacturing, retail, and
services.

2.Discussion of the company’s role to its industry and/or its

impact on the economy as a whole.

1. Function in the Technology Sector

Leading the technology sector globally, Apple Inc. is well-known

for its cutting-edge devices, including the iPhone, iPad, Mac,
Apple Watch, and software ecosystems like iOS and macOS.
Apple is renowned for establishing standards for functionality,
design, and user experience. The following is a summary of its
function:

 Pioneering Innovation:
With the 2007 release of the iPhone, Apple completely changed
the smartphone market by establishing the benchmark for
touch-screen user interfaces and app stores. Similar to how the
iPad revolutionised tablets, the Apple Watch sparked a booming
desire for wearable technology.

 Market Influence:

Apple dominates a number of markets, including wearable

technology and high-end smartphones. Its impact goes beyond
influencing customer expectations; it also forces rivals to
innovate in order to stay competitive.

 Integration and Ecosystem:

Apple has a devoted following and a competitive advantage in

the market because to its smooth integration of hardware,
software, and services.

2.Impact on the economy

Beyond the technology industry, Apple has an impact on global

supply chains, economic growth, and job creation.

 Job Creation :

Both directly and indirectly, Apple supports millions of jobs

worldwide. Apple directly employs more than 150,000 workers
as of 2023. Furthermore, since its launch, its App Store
ecosystem has generated over $500 billion in transactions and
millions of jobs for developers.

 Supply Chain:

Apple supports manufacturers, suppliers, and logistics firms all

around the world through a massive global supply chain. The
economies of China, Taiwan, and the United States are greatly
impacted by its alliances with suppliers like Foxconn and TSMC.

 Tax Revenue:

Apple pays a significant amount of corporation taxes and is

among the most lucrative businesses in the world. For instance,
its activities in the United States greatly increase state and
federal tax receipts.

3.Broader Economic influences:

 Consumer Spending:

With gadgets like iPhones becoming necessities in daily life,

Apple items are the main source of consumer spending.

 Impact on the Stock Market:

With a market valuation of more than $2.5 trillion in 2023,

Apple is among the biggest publicly traded corporations. Its
success has a significant impact on stock markets and indexes
such as the Nasdaq and S&P 500.

 Sustainability Efforts:

By lowering its carbon footprint and utilising recycled materials,

Apple is setting the industry standard for sustainability and
influencing supply chain norms worldwide.

Three key considerations that inform a company's financial

strategy are at the heart of corporate finance:

1. Investment Choices:
(Where should the business put its money?

2. Financing decisions:

(How should the business finance its investments?)

3. Dividend decisions:

How should the business provide its shareholders their

returns?)

Each of these inquiries has a direct bearing on particular

sections of the balance sheet and offers information about the
operational priorities and financial standing of an organization
such as Apple Inc.

Investment decision:

Question: Where should the business put its money to make

money?

How a business distributes its resources to optimise future

growth and profitability is the main consideration in investment
decisions. These choices frequently entail spending money on
working capital, infrastructure, intellectual property, and
product development for Apple.

In connection with the balance sheet

The balance sheet's assets section largely reflects investment

decisions:

 Current Assets: Apple's short-term working capital

strategy is demonstrated by its cash, accounts receivable,
and inventory investments. For instance, Apple's strict
 control over supply chain activities to reduce holding costs
is reflected in the $4 billion in inventory
.
 Non-Current Assets: Notable sums in Goodwill &
Intangibles ($17 billion) and Property, Plant, and
Equipment (PPE) ($41 billion) demonstrate Apple's
sustained investment in intellectual property and
infrastructure.

Additionally, Apple has $120 billion in assets, demonstrating its

emphasis on using marketable securities and other investment
vehicles to generate returns from excess cash.

Examples pertaining to Apple:

Apple makes significant R&D investments (about $27 billion in

2023) to promote product innovation. The development of
proprietary technologies like the M1 and M2 semiconductors
and Apple's software ecosystem (e.g., iOS, macOS) are
examples of how these investments are represented in the
increase of intangible assets.

Financing Decision:
Key Question for Financing Decisions: How should the business
pay for its investments?

How a business raises capital, whether through debt, stock, or

internally generated cash flows, is the subject of financing
decisions. Maintaining an ideal combination of funding sources
to reduce expenses and promote growth is the key goal of
Apple's financial strategy.

In connection with the balance sheet

The balance sheet's liabilities and equity sides show the results
of financing decisions:
  Liabilities: To finance operations and strategic projects,
(Apple has $10 billion in short-term debt and $99 billion in
long-term deb)t. Apple issues debt in order to benefit from
low interest rates and increase capital efficiency, even if
company has substantial cash reserves.
Apple's effective management of supplier payments, which
enables the corporation to preserve liquidity, is reflected in the
($60 billion accounts payable.)

 Equity: Apple prioritises giving money back to shareholders

through dividends Apple's and stock buybacks rather than
holding onto surplus equity, as evidenced by its $50 billion
shareholders' equity, which is quite little when compared
to its liabilities.
dividend payments and reinvestment choices have an impact
on retained earnings, a component of equity.

Examples pertaining to Apple:

Despite having substantial cash reserves, Apple has issued a lot

of bonds in recent years. Apple maintains cash for strategic
investments while funding dividends and share buybacks
through the use of low-interest debt. This strategy is a perfect
example of effective financial choices.

Dividend Decision :

Key Question for Dividend Decisions: How should the business

allocate its earnings to shareholders?

Determining how much of a company's income should be

distributed to shareholders as opposed to being reinvested for
expansion is known as the dividend choice. Apple repurchases
shares and pays dividends on a regular basis to balance these
choices.
In connection with the balance sheet

Decisions about dividends have an effect on the balance

sheet's equity section:

 Retained Earnings: Retained earnings fall as dividends are

distributed. Apple's consistent dividend payments
demonstrate its high profitability and dedication to its
owners.

 Equity of Shareholders: Apple frequently buys back shares,

which lowers the number of outstanding shares and raises
earnings per share. These repurchases increase
shareholder value without decreasing total shareholders'
equity.

Examples pertaining to Apple:

Through dividends and share buybacks, Apple gave back

almost $90 billion to stockholders in 2023. These choices show
how Apple priorities increasing shareholder returns while
keeping enough cash on hand for operations and investing.
3.Determine the operating cycle of this listed company. You
may assume there are 365 days in the year .

We'll start by extracting the relevant figures from Apple's 2023 annual
report (10-K filing). For this example, let’s use the following approximate
values based on Apple's financials for fiscal 2023:

Step 1 :

 Cost of Goods Sold (COGS): $394.32 billion

 Average Inventory: $3.89 billion
 Average Accounts Receivable: $24.68 billion
 Average Accounts Payable: $32.31 billion
 Net Sales: $394.32 billion (same as COGS, simplifying this
assumption)

Step 2: Calculate Inventory Turnover

The Inventory Turnover is calculated as:

Inventory Turnover=COGS/Average Inventory

Substituting the values:

Inventory Turnover = 394.32 billion / 3.89 billion = 101.3

Step 3: Calculate Accounts Receivables Turnover

The Receivables Turnover is calculated as:

Receivables Turnover = credit sales / Average Account receivables

Substituting the values:

Receivables Turnover = 394.32 billion / 24.68 billion = 15.97

Step 4: Calculate the Accounts Receivables Period

Next, we calculate the Accounts Receivables Period (Days Sales Outstanding), which tells
us how long it takes for Apple to collect payments:

Accounts Receivables Period = 365 / Receivables TurnoverAccounts

Substituting the values:Accounts Receivables Period=365 / 15.97 = 22.85

daysAccounts Receivables Period
The Operating Cycle is the sum of the Inventory Period and Accounts Receivables Period:

Operating Cycle = Inventory Period+Accounts Receivables Period

Substituting the values:

Operating Cycle= 3.61 days + 22.85 days = 26.46 days

Step 5: Calculate the Accounts Payable Period

Now we calculate the Accounts Payable Period (Days Payables Outstanding), which tells us
how long it takes for Apple to pay its suppliers:

Accounts Payable Period=365 / payables Turnover Account

Substituting the values:

Accounts Payable Period = 365 / 12.2 = 29.92 days

Introduction :

According to the computation, Apple's operational cycle in fiscal 2023 will be roughly -3.47
days. Apple may be able to receive money from its consumers (via accounts receivable)
before it has to pay its suppliers (through accounts payable), according to this negative
operating cycle. This is an extremely effective working capital management technique that
reflects Apple's robust cash conversion cycle, which effectively means that it requires little
outside funding to run its daily operations. Businesses with strong market dominance and
high operational efficiency, such as Apple, frequently experience a negative operating cycle.