Financial Plan Apple
mdocke
InvestorPresentation1.pptxApple, Inc. Financial Performance
Mychelle Dockery
FIN/571
Professor Mahone
University of Phoenix
April 19, 2021
1
Apple Inc.’s Ticker Symbol
American manufacturer of personal computers, computer software, and online services.
Among the Top Five Fortune 500 companies.
AAPL ticker symbol.
Apple Inc. is among the world’s leading personal computer manufacturers and consumer electronics companies. The company is based in California and was established in 1977. Apple Inc. designs, develops, and sells computer software, consumer electronics such as personal computers and smartphones, and online services. It is one of the big four technology companies, with its key competitors being Google, Amazon, and Samsung (Apple, Inc., 2020).
A ticker symbol, also known as stock symbol, refers to an abbreviation that uniquely identify the publicly traded shares of a certain stock market. The ticker symbol for Apple Inc. is AAPL (Apple, Inc., 2021).
2
Cash Flow from Operations
Money from daily business operations/activities.
Cash Flow from Operating Activities = Net Income + Depreciation, Depletion, & Amortization + Deferred Taxes & investment Tax Credit + Changes in Working Capital
The cash flow from operations for AAPL for 2020 was $80.69B.
Cash flow from operations (CFO) shows the amount of money that an organization brings in from its regular and ongoing business activities like selling goods, manufacturing, and providing services to clients. Cash flow from operations, also known as operating cash flow (OCF), focuses on the core business activities.
Cash Flow from Operating Activities for Apple Inc. = Net Income + Depreciation, Depletion, & Amortization + Deferred Taxes & investment Tax Credit + Changes in Working Capital. The annual CFO for AAPL in 2020 was $80.69 billion, which is a 16.26% increase from 2019 (Apple, Inc., 2021).
3
Price-to-Earnings Ratio
Ratio for valuing an organization that measures the current share price in relation to its earnings per share.
P/E ratio = Current stock price/ Earnings per share
Investors and analysts use P/E ratios to determine the relative value of an organization’s shares.
P/E ratio for AAPL is 41.06
Price-to-earnings ratio refers to the ratio used for valuing an organization that measures the current share price of the company in relation to its earnings per share (EPS). P/E Ratio = current stock price / earnings per share. Investors and analysts uses P/E ratio to know the relative value of an organization’s share and to compare an organization against its historical record or aggregate markets against each other. The current P/E ratio for Apple Inc is 40.34 (Apple, Inc. (AAPL), 2021).
4
Stock Dividends and the Yield
A stock dividend refers to a dividend payment made in the form of extra shares rather than a cash payout.
$0.205 stock dividend payout as of last quarter
Dividend yield is shown in percentage and computed by dividing dollar value of dividends paid per share by dollar value of one share of stock
The dividend yield for AAPL is 0.6%.
Stock dividend can be defined as a dividend payment that is made in the form of additional shares and not as cash payout. Companies sometimes decide to distribute stock dividends to shareholders especially if liquid cash of the company is in short supply. Stock dividends are usually acknowledged as fractions paid to existing shares. The last stock dividend payout for AAPL was $0.205 (Apple, Inc., 2021). Dividend yield, on the other hand, refers to a financial ratio showing the amount a company pays out in dividends every year relative to its stock price. The current dividend yield for AAPL is 0.6% (Apple, Inc., 2021).
5
Earnings per Share (EPS) Ratio
Measures the amount of dollars of the net income that have been earned by every share of the common stock over a specified period.
It is a common measure of the overall profitability of an organization and is expressed in dollars.
The annual EPS for AAPL for 2020 was $3.31.
Earnings per share (EPS) ratio refers to an organization’s net earnings or losses that are attributable to shareholders per diluted share base. This includes all debts, convertible securities, options, and warrants. EPS measures the amount of dollars of the net income that have been earned by every share of the common stock over a specified period of time. Investors use EPS ratio to know whether a certain organization’s stock is cheap or expensive at a particular market price in relation to other companies trading in the market. The annual EPS for AAPL for 2020 was $3.31 (Apple, Inc., 2020).
6
Revenue estimates for the next 12 months
Consensus earnings/revenue estimates refers to the average or median forecasts of analysts on what an organization is expected to earn or lose in a specified period of time.
Investors can also make their estimates based on previous records of a company.
$348.49B revenue estimate for AAPL.
Consensus earnings/revenue estimates refers to the average or median forecasts of analysts on what an organization is expected to earn or loss in a specified period of time, usually quarterly or annually. These estimates cannot be perfect, but they are important in understanding stock’s valuation. Investors use revenue estimates to value stock of a company. Whether an organization beats, meets, or misses the estimates greatly affect the price of underlying stock in the short term. The revenue estimates for AAPL for the next 12 months is $348.49 billion (Apple, Inc., 2021).
7
Revenue from the previous 3 years
Revenue is the amount of money received by a company from customers in exchange for sales of goods and services.
The annual revenue for AAPL in 2020 was $274.15B.
The annual revenue for AAPL in 2019 was $259.97B.
The annual revenue for AAPL in in 2018 was $265.81B.
Revenue is the amount of money received by a company from customers in exchange for sales of goods and services. It is the topline item on the income statement and all costs and expenses are subtracted from it to get the net income. The annual revenue for AAPL in 2020 was $274.15 billion. The annual revenue for AAPL in 2019 was $259.97 billion. The annual revenue for AAPL in in 2017 was $265.81 billion (Apple, Inc. (AAPL), 2021).
8
Statement of Cash Flows
Financial statement summarizing amount of cash and cash equivalents that are entering a company.
Annual Apple operating cash flow was $80.67B in 2020, $69.39B in 2019, and $77.43B in 2018.
Annual Apple investing cash flow was -$4.29B in 2020, $45.9B in 2019, and $16.07B in 2018.
Annual Apple financing cash flow was -$86.82B in 2020, -$90.98B in 2019, and -$87.88B in 2018.
State of cash flows refers to financial statement summarizing amount of cash and cash equivalents that are entering a company. Cash flow statements measures how well an organization manages its cash, which shows how well an organization generates cash to funds its operating expenses and pay its debt obligations. The annual Apple operating cash flow was $80.67B in 2020, $69.39B in 2019, and $77.43B in 2018. The annual Apple investing cash flow was -$4.29B in 2020, $45.9B in 2019, and $16.07B in 2018. The annual Apple financing cash flow was -$86.82B in 2020, -$90.98B in 2019, and -$87.88B in 2018 (Apple, Inc., 2021).
9
Average Trade Volume
Average number of shares traded in a specified period of time in each stock.
The average trading volume of AAPL is 106.3M.
Average trading volume is an essential tool for investors as it helps them to analyze price action of liquid asset.
Average trading volume refers to the average number of shares traded in a specified period of time in each stock. The average trading volume of AAPL is 106.3 million (Apple, Inc. 2021). Average trading volume is an essential tool for investors as it helps them to analyze price action of liquid asset.
10
Current Stock Price
The price in which a share of stock or any security last traded.
Current stock price acts as a baseline.
The current stock price for AAPL is $133.02.
The 1-Year estimated stock price is $145.09.
The current stock price is price at which a single share of stock or any other form of security traded last. In an open market, the current stock price acts as a baseline. The current stock price show the price in which a buyer would be willing to pay, and a seller would be willing to take for a subsequent transaction in the same security. The current stock price for AAPL is $133.02. The 1-Year estimated stock price is $145.09 (Apple, Inc., 2021).
11
Analysts’ Recommendations for Stock
Analysts offering a forecast of 155.00 median target
The most recent results bets the consensus expectations for both earning per share (EPS) and revenue.
Analyst recommend buying stock in Apple, Inc. (Apple Inc., 2021).
The analysts offering 12-month price forecasts for Apple Inc have a median target of 155.00, with a high estimate of 175.00, and a low estimate of 83.00. The median estimate represents a +16.54% increase from the last price of 133 (Apple Inc., 2021). Today, Apple’s share are hitting all-time high. The stock is performing exceptionally well. The most recent quarterly results bets the consensus expectations for both earning per share (EPS) and revenue. The current consensus among 42 polled investment analysts is to buy stock in Apple Inc.
12
Market Cap
The total value of all an organization's shares of stock.
Computed by multiplying price of a stock by the total number of outstanding shares.
Market cap of AAPL is 2.312T.
Enables investors to understand the relative size of one organization versus another.
Market cap, also known as market capitalization can be defined as the total value of all an organization’s shares of stock. Market cap is computed by multiplying the total number of outstanding shares by the price of a stock. The market cap of AAPL is $2.312 trillion (Apple Inc., 2021). Market cap enables investors to understand the relative size of one organization versus another. Investors also use market cap to measure what an organization is worth in an open market and market’s perception of the company’s future prospect since market cap reflects what investors are willing and able to pay for the stock.
13
Conclusion and Recommendation
Stock price reflects the value that investors are putting on an investment while P/E ratio shows how much investors are willing to pay for each dollar of earnings.
When an organization pays cash dividends to shareholders, the stockholder’s equity is reduced by the total value of dividends paid.
However, when paid as additional shares, the equity increases by the same value.
14
Cont’d
The stock price of AAPL is increasing gradually indicating that the company is gaining value.
Based on my analysis, Apple Inc. will meet its financial goals. This is because its value is increasing which increases its market cap or net worth.
Apple Inc. is experiencing growth in terms of number of shares, stock price and net worth. The company is becoming sustainable for investors.
I recommend this stock for purchase because the stock price is increasing and investment in the company can guarantee profitability for investors.
15
References
Apple, Inc.. (2021). https://www.marketwatch.com/investing/stock/aapl/financials/cash-flow
Apple, Inc. (AAPL). (2021). https://finance.yahoo.com/quote/AAPL/financials?p=AAPL
Apple, Inc.. (2020). Form 10-K. https://s2.q4cdn.com/470004039/files/doc_financials/2020/ar/_10-K-2020-(As-Filed).pdf
Apple Inc.(2021). https://money.cnn.com/quote/forecast/forecast.html?symb=AAPL#:~:text=Apple%20Inc%20(NASDAQ%3AAAPL)&text=The%2037%20analysts%20offering%2012,the%20last%20price%20of%20134.86
