Apple Financial Analysis Paper

Introduction – Researching Investments -- Apple
This paper will provide a rationale for the U.S. publicly traded company that I selected, indicating the significant factors driving my decision as a financial manager. It will determine the profile of the investor for which this company may be a fit, relative to that potential investor’s investment strategy. Next, this paper will describe my selection of five financial ratios, and analyze the past three years of the company’s financial data, ultimately determining the company’s financial health. Also, this paper will determine the risk level of the company from my investor’s point of view, based on my financial review. I will indicate the key strategies that I will use to minimize any perceived

It excludes all current assets except the most liquid: cash and cash equivalents. “ The cash ratio is an indication of the firm's ability to pay off its current liabilities if for some reason immediate payment were demanded” (Financial Ratios, 2014). Recently, Apple Inc.'s cash ratio showed marked improvement from 2012 to 2014, again demonstrating its positive investment potential (Apple, Inc. Liquidity Analysis, 2014). Fixed Assets Turnover Ratio
The fixed assets turnover ratio is a profitability ratio, and measures how effectively the firm uses its plant and equipment. It is calculated by dividing the sales by the net fixed assets; the industry average is approximately 3.0 (Brigham & Ehrhardt, 2014, p. 101). While Apple, Inc. has demonstrated a fluctuation in its fixed assets turnover ratio (9.82 to 17.26), the company has remained well above the industry average, demonstrating its ability to use its assets well (Apple, Inc. Marketsdata, 2014). Total Assets Turnover

These strategies include diversification, financial options, and derivatives. First, my client already possesses a diverse portfolio. On the topic of diversification, one source concluded that after a general analysis of various portfolio management, adding randomly selected and equally weighted risk investments to a portfolio will reduce its overall risk without affecting its profit (Conine,& Tamarkin, 1981, p. 1143). Next, including financial options or hedging to my client’s portfolio would reduce risk as well. To elaborate, hedging against an investment risk includes using strategically applied instruments in the market to offset the risk of any adverse price movements (Investopedia, n.d. para. 4). Essentially, financial options would have my investor hedging on one investment to make another