Financial Ratio Analysis of Apple Inc.: Assessing Performance and Efficiency

Abstract

Apple Inc., a leading global technology company, has demonstrated remarkable success in effectively utilizing its assets and equity. This report conducts a financial ratio analysis using data obtained from the Securities and Exchange Commission for the years 2019 to 2022. The analysis reveals that Apple maintains a strong liquidity position, as indicated by consistently favourable current ratio, acid test ratio, and cash ratio. A positive trend is evident in the company's profitability ratios, which encompass gross profit margin, return on equity, and return on assets. This trend indicates efficient utilization of resources and generating attractive returns for shareholders. Furthermore, Apple showcases adept management of its receivables and inventory through its activity ratios, which serve as evidence of the company's efficiency in handling its receivables and inventory. The analysis also highlights Apple's prudent debt management approach, minimizing reliance on debt financing. Overall, these outcomes validate Apple's financial well-being and sound operational strategies, positioning the organization favourably for sustained growth and the creation of substantial value.