APublicly Traded, U.S. Corporation
AppleInc. is one of the corporations that are publicly traded in theUnited States. This report will use the financial information for thecompany in answering different questions. The financial report forthe organization is provided at the last page of this assignment.
Netincome for the current fiscal year for Apple Inc. is $9,014 million.The net income for 2016 is a decrease from the previous year’svalue since net income for the company, in 2015, stood at $11,124million (Apple Inc., 2016). A change in the net income of an entityis exceedingly critical aspect to an investor because it helps inestablishing the performance of a company. When there is a decreasein the net income, it is possible for an investor to notice that theperformance of an organization may be at jeopardy. Alternatively, anincrease in the net income of an entity is a depiction that a companyhas a higher probability of improving its performance. To aninvestor, the net income is a significant indicator of an entity’sexpected performance and he/she may make the decision of whether toinvest or not depending on the anticipated performance. Therefore,changes in the net income are crucial to an investor as it mayinfluence the investment decision.
Acompany’s shareholders’ equity describes the entity’s totalassets less the total liabilities for the organization. The totalshareholders’ equity for the Apple Incl., in 2016, stands at $128,249 million (Apple Inc., 2016). Organizations such as laborunions are interested in the shareholders’ equity for a companybecause they are usually concerned with the welfare of shareholders,and the shareholders’ equity can be capable of establishing howcontented the shareholders will be in an organization. This isbecause the shareholders’ equity represents the net value of abusiness that would be given back to the shareholders in case all theassets of a company were to be liquidated and its debts repaid infull. Therefore, Labor Unions would be interested in theshareholders’ equity in determining the welfare of the investors.
Thevalue of assets for the Apple Inc. in 2016 is $ 321,686 million. Thisis an increase in value from the previous balance since, in 2015, thevalue for total assets was $ 290,345 million (Apple Inc., 2016). Thetotal value of assets for an organization is exceedingly significantto potential creditors. Before a creditor offers a loan or credit toa firm, there is a need to establish whether the organization beingprovided with credit has the ability to pay back the loan or notthis is usually determined using the value of assets. The creditorhas to evaluate the value of assets for an entity that desires tohave a loan in order to establish whether the amount to be borrowedis higher or lower than the assets. In case, it is higher than theassets value, the creditor has to lower the amount up to a level thatthe organization is able to support. Therefore, total value of assetsis relevant to a potential creditor since it helps in determining thecredit worth of a business, as well as, the amount that anorganization can borrow.
Fromthe cash flow statement of the organization, the total cash flowsfrom operating activities in the current year amount to $ 65,824million (Apple Inc., 2016). This was a decrease from the previousyear’s balance since the cash flows from operating activitiesamounted to $ 81,266 million in 2015.
Thereare different users of financial statements, which include thegovernment, employees, shareholders, creditors, as well as directors.The users that would find the financial statements of the AppleCompany as most important would include the government, shareholders,and creditors. The government would deem the financial statements asvital since it would the statements in determining the amount of taxthat the corporation should submit to the revenue collection center.Alternatively, the financial statements would be important to theshareholders since they would help them in establishing the amountthat they would receive at the end of the trading period. Also, thefinancial statements would help shareholders in understanding whenthe organization is sinking in losses or when the company is makingenormous profits. On the other hand, creditors would also view thefinancial statements as important since they would help them ingauging the credit worthiness of the organization.
Inthe position of a manager, the financial statements of the companywould be of immense importance. The statements would be useful inpredicting the future performance of the organization. The financialreport for different times would be used in determining the futurevalues for the business. Furthermore, as a manager, the financialstatements for the company would be utilized in comparing theperformance of the entity in relation to other firms in the industry.In addition, the financial statements would be used in discoveringareas of weaknesses for the organization and finding solutions to theareas. Therefore, the financial statements would be critical inmaking managerial decisions.
AppleInc. (2016). Apple Consolidated Financial Statements. Retrieved fromhttp://images.apple.com/newsroom/pdfs/Q4FY16ConsolidatedFinancialStatements.pdf