Final Project

Final Project

[Author Name(s), First M. Last, Omit Titles and Degrees]

[Institutional Affiliation(s)]

Author Note

[Include any grant/funding information and a complete correspondence address.]

Final Project

Introduction

All the previous research has been on Apple Inc. since the start of the course. Apple is a prestigious Information Technology company that was started by Steve Jobs in 1976. It has a short but interesting history of rising and fall where on one side it faced great failures on the other side it earned the credit of becoming the first privately held company that made history after breaking the $ 1 trillion mark on the market of Wall Street. Currently, it is a leading multinational technology company that has headquarters in Cupertino, California. It has many products including Mac, iPod, iPad, and iPhone. Moreover, it has shifted its focus on iMacs and MacBooks, etc. as per the demand of the market. The most expensive iPhones belong to this company and it creates no obstacles in the way its development, thanks to its matchless products. The stock market has positive views about the future of the company and it is also a stable company currently. For the last three years, the market value of Apple has been 127.666666667 USD. The stock price did not fell more once it reached 115.97 USD on December 16, 2016, and could not rise more once it reached 270.31 USD (‎11 Dec 2019) during the years from December 2016 to December 2019. The annual report of Apple Inc. reveals that it is still a handsome choice for investing in as it is the world’s top brand that can ensure profits. Moreover, it has the vision to ensure the shareholders' revenues. Apart from that, it is a potential company for investment because the overall performance of the company is positive and revenues have no threat of declining although shares outstanding face this issue sometime.

Cash Position and Policies of Apple Inc.

Every potential company is examined and judged by its recent performance and the performance of Apple during the last three years has been satisfactory recently. During the last three years, Apple experienced many ups and downs and many rivals like Samsung and Huawei which attempted to devalue the market of Apple by offering the products cheaper than iPhone with almost the same features offered by Apple, but Apple still competes them and enjoys the prestige of being the richest multi-technology company. The three years performance of Apple Inc. was examined and analyzed from the year 2016 to 2019. The stock market price of Apple remained encouraging as the average price was $ 127.666666667. The study was concerned actually from December 2016 to December 2019 and both the lowest and the highest market prices were examined (Kahney, 2019). The company faced the lowest number of its market price on December 16, 2016, when it fell down to $ 115.97. The progress after this fall and the stock market started to rise. After revolving around the figure of $ 127.5 for two years the sudden rise started and the value rose to $ 270.31 on December 11, 2019. Thus, it is apparent that the company improved during these years and despite the fact that the world is facing the issue of Trade War apart from man bother issues and the United States of America, the home country of Apple Inc. is the leading participant of this war, the company maintained its position in the international market. iPhones were broken and many others collected back from the users in China when Donald Trump the president of the USA announced tariffs on the |Chinese products in the USA. This was a big challenge for Apple Inc. to stand after being rejected by such a large market like China, but the figures collected during this research appreciate the credibility of Apple Inc. because it did not let such challenges down its progress.

Apple Inc. is an organized and advanced company and it is apparent when it comes to dealing with the issue of cash inflows. Investors give the most attention to cash inflows because it determines the credibility of the company. The matter of cash inflows comes under discussion when one intends to make an investment in any company. Apple has strategies to satisfy the investors at this crucial moment. Apple is listed on the Wall Street stock market as “NASDAQ: AAPL”. The crucial part of the cash flows are the cash flows from operations because it determines the internal value of the company by showing that how much cash the company produces internally from the operations. If a company has a positive graph in producing cash internally it would have a better position to bargain while dealing with the external investors. Andrés Cardenal notes in his article Cash Flow Analysis on Apple Stock: What You Need to Know (2014) that the company generated $46.46 billion in operating cash flows during the last three quarters, and the company needed to reinvest only $ 5.75 billion in property plant and equipment over that period. It resulted in the form of $ 40.71 billion free cash inflows. The strategies and methods adopted by Apple Inc. to maintain the positive inflow of cash are easy to understand. First of all, it ensures positive and encouraging indoor production to maintain its status on the table of negotiation. When a company has a chart that shows the continuous and fast increase in its expected future development, the investors will easily be seduced. Then, it approaches investors with plenty of catchy offers and packages. Apple is currently a grand company and it has its customers throughout the world. It calls the investors and gives them more profit than the market norm if they reinvest their capital. It rewards its investors with generous dividends and share buybacks. Moreover, it has a clear motto that it would not let the capital of its investors go waste or in a loss. These factors satisfy the investors and they invest in this company with passion (Meyer, & Breitenbach, 2004).

Apple Inc. uses some interesting short-term financing methods to deal with its issue of sudden need for capital. Stock Split is the first method that this firm uses. It is a method where the company increases the number of its shares by declaring Stock-Split (Duhigg, & Bradsher, 2012). The number of shares increases and the value per share decreases. It helps the company to maintain its image of having a certain number of shares in the market. Apple Inc. has announced declared stock-split four times in history so far. June 1987 observed the first split declared by the company and the second split happened to be on June 21, 2000. The article Apple, America and a squeezed middle class (2014) co-authored by Charles Duhigg and Keith Bradsher reveals that the third split by the company was announced on February 28, 2005, whereas the fourth stock split declared by the company in 2019 on the day of June 9 (Coram, 2019).

Some people doubt the credibility of Apple being an attractive capital investment destination due to some challenges that the company is facing whereas researchers and analysts still believe that it is a potential company to invest in. It is true that Berkshire Hathaway sold 750,000 shares of tech kingpin Apple (NASDAQ: AAPL) during the third quarter of the previous years, but it is also true that Buffet and his team still hold 248.8 million shares. They have 75 billion American dollars’ worth. The reason for his selling the shares is unclear but this factor does not question the authority of Apple Inc. on the multi-technology companies worldwide. It still is a potential company because it has a prestigious status in the Wall Street companies list having free cash flow totaling more than $ 58 billion during the last year (Hague, & Neilsen, 1991). Moreover, it has $ 94 billion in cash on its books and its strong 21% profit margin also is a good attraction for the investors. Apart from its capital worth, the safety policies adopted by the company to assure the investors' money safety and profit. These factors make this company a potential destination for investors.

Conclusion

Apple Inc. is a multi-technology global company that has the prestige of being the richest privately-owned company and exceeding the $ 1 trillion limit in the Wall Street stock market. The company has an average 127.666666667 USD market value in Wall Street and approximate capital of $ 1.3, noted in December 2019. Apple Inc. uses many strategies to maintain its business by keeping the active and continuous inflow of capital cash in the company. The crucial step in this respect is that the company enhances cash flows from the operations. This step enriches the company with possessions and this factor also helps it to have a good bargain with the investors. This firm also has many short-term financing methods to deal with the issue of sudden need for capital. The method of stock-split is also used by this company. Analysts argue that despite the challenges Apple Inc. is facing, it is a great destination for the investors being the richest privately-owned company. Wall Street stock market also sees this firm as a potential company in the future so it reveals its Annual Report.

References

Coram, A. (2019). Apple Stock Is Hitting Record Highs; But Is It A Good Buy? Here's What Earnings, Chart Say. Retrieved 11 December 2019, from https://www.investors.com/research/apple-stock-buy-now/

Duhigg, C., & Bradsher, K. (2012). Apple, America and a squeezed middle class. The New York Times, 21.

Hague, E. J., & Neilsen, D. (1991). Rapid production methods for Ottawa-3 rootstock and branched apple nursery stock. HortScience, 26(11), 1416-1419.

Meyer, N. G., & Breitenbach, M. C. (2004). The market potential of the South African apple industry: strategies and options. Agrekon, 43(1), 22-37.

Kahney, L. (2019). Tim Cook: The Genius who Took Apple to the Next Level. Penguin UK.