The increase of Apple’s performance Essay

Apple performance has seen to be improving with time though it faces aggressive competition in terms of price, design, features, reliability, quality, performance, third party software, marketing, distribution capability service and corporate reputation. The net sale in domestic and international accounted for 35% and 65% of the total net sale. Gross profit margin, net operating profit, ROE and ROCE has also improved in recent years. EPS has increased which enhances the investor confidence. The company has sufficient cash and marketable securities to satisfy its working capital and other liquidity requirement. Any amounts held by the foreign subsidiaries are subject to U.S tax on repatriation to the U.S. The investment portfolio is invested primarily in high related securities and limits the amount of credit exposure. Operating cash flow was 13.5 billion and 17 billion were returned to the investor through share purchase and dividend.
The company capital structure comprise of debt more than equity hence it was financially geared where as competitor has low gearing and does not depends on long term borrowing creating a threat for the apple company solvency for future period. The company operation and performance depend significantly on global and regional economic condition. Demand also differ materially from the company expectation as a result of currency fluctuation because the company generally raises price of goods and services sold outside the U.S in order to strengthen the U.S $. The company sells complex hardware and software product and serviced that can contain design and manufacturing defects such as bugs that can interfere in normal operation. The company is subject to changes in tax rates on adoption of new U.S or international tax legislation or exposure to additional tax liabilities. The company rely on floating and fixed rate debt which amount to be 55.7 billion this means that they would have secured some assets to get loan, hence the lender has the right to confiscate asset if the company fail to fulfill its obligation.
Recommendation
The company should work on the deficiencies in their product by carrying out reviews in order to identify those areas where company lack behind, this will also help to evaluate the needs of the customer and how they can come up to their expectations.
The company should try to offer Applications free of cost and reduce the price for their product to make it more affordable, they should also target middle class people with low earning so that they can get advantage of using the branded item at low cost.
Company can improve profit margin by cutting cost through effective management.
They should focus on better dividend policy to attract different investor to hold their investment in company share and improving the performance of the company through capital growth.
As the company heavily relies on debt finance to conduct its operation it should use effective method to hedge interest rate risk by arranging swap and other hedging techniques.
The company should expand in different market and should not limit themselves to specific product.