Financial Comparison Paper

A comparison (Appendix B, Tables 5 and 6) of financial performance across fiscal years (FY) 2014 to 2016 offered greater insight into competitors Google and Microsoft. In terms of gross profit, both Google and Microsoft outperformed Apple in achieving near identical performance in retaining 61 cents for every dollar spent on selling inventory in 2016. Interestingly, all three firms achieved near consistent gross profit margins across FYs 2014-2016, although Apple’s gross profit margin was significantly less than Google and Microsoft. Comparable to the gross profit margin performance, Apple outclassed the competition in achieving a higher return on assets and kept 14 cents per dollar in assets from 2014 to 2016. In comparison, Google and Microsoft retained a smaller fraction of 11 and 8 cents per dollar in assets, respectively. In addition, Apple was generated greater profits from equity in 2016 and retained 35 cents in profit for each dollar of common shareholder

In these activities, Apple generated a quicker average collection period of 26 days in 2016, whereas Google and Microsoft collected every 57 and 78 days, respectively. Supporting the quicker collection period, Apple outpaced Google and Microsoft by turning over accounts receivable 14 times per year. Surprisingly, Google was very efficient and effective in turning over inventory 131 times in 2016, whereas Apple achieved 61 turnovers and Microsoft reached 14 turnovers. However, Google was last in using fixed assets to generate revenue. In this respect, Apple gained $7.98 dollars for every dollar in fixed assets, and Microsoft was middle of the pack. A comparison of total asset turnovers suggested Apple outperformed Google and Microsoft by generating 67 cents for every dollar in total assets. Analysis of asset utilization ratios indicated Apple’s financial performance outpaced Google and