Week 3 / fin571

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Chart for Apple Inc 2021

In a 1- to 2-page chart, compare your company’s current financial reports with the market conditions from the previous fiscal year. Focus on interest rates, Federal Reserve Bank monetary policy changes, or other market conditions relevant to the company you selected. 

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Comparing Apple’s Fiscal Year 2021

Financial Performance with Market Conditions

Yvette Garcia

FIN/571

Prof. Tucker

April 17, 2023

A multinational technology firm, Apple Inc. develops, produces, and markets electronic consumer goods, software, and online services. The company has its stock traded publicly, and as such quarterly financial reports are made available. We’ll contrast Apple’s financial performance for the upcoming fiscal year, 2021, with market conditions from the year before.

Market Condition

In 2020, the COVID-19 virus significantly negatively influenced the global economy and its growth. In response, the US Federal Reserve cut interest rates almost to zero and poured record amounts of money into the economy to regain some stability. Additionally, the Fed started a series of lending initiatives to increase the liquidity of the financial markets.

Financial Reports

In the fiscal year 2021, Apple reported sales of $365.8 billion, a 36% rise over the previous year. The company did exceptionally well thanks to increased sales of the iPhone, iPad, and Mac devices as well as the growth of its services sector. In the fiscal year 2021, Apple’s net income increased by 53% to $86 billion from the previous year. The company’s net profits increased as a result of the higher sales and gross margin.

Apple’s cash and cash equivalents totaled $191.8 billion at the end of its fiscal year 2021. This marked an increase of 6% from the prior year. The company had a large cash reserve, which enabled the company to invest in R&D, make wise acquisitions, and distribute money to shareholders.

Apple paid $2.3 billion in interest during the fiscal year 2021, 35% less than the year before. The corporation profited from lower interest rates since it paid less in interest.

Conclusion

Due to increasing product sales and a growing services sector, Apple’s fiscal year 2021 financial performance was strong. The company paid very little interest and had a lot of cash on hand. Throughout Apple’s most recent fiscal year, consumer spending and financial markets were supported by low-interest rates and generalized monetary stimulus.

References


Apple Inc. (2021). Form 10-K for the fiscal year ended September 25, 2021. U.S. Securities and Exchange Commission.

https://www.sec.gov/ix?doc=/Archives/edgar/data/320193/000032019321000096/aapl-20210925.htm

Simko, P. J. Apple Inc.: An Application of Financial Analysis, 2003–2018.

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