APPLE AND DELL

Apple and Dell

Apple and Dell

Introduction

The investment theory provides us with an insight to look into the information, material and tools to suggest and identify investments in projects and stocks. In this paper, we review the basics of financial management theory to evaluate how feasible it is for an investor to invest in Apple Inc. and Dell Inc., how well are the company's financial performance. This overview is on two well-known computer companies, Dell and Apple. The discussion will provide a history of the companies, their exchange and securities, and the analyses of financial performance using their annual reports.

Apple Company profile

Apple Inc., Formerly Apple Computer, Inc., is a company multinational U.S. that designs and sells consumer electronics, from computers and computer software. Among the best-known products of the company's computers are Macintosh, the iPod, the iPhone and the iPad, the media player iTunes, the office suite iWork, the multimedia suite iLife and software for professionals such as Final Cut Pro and Logic Pro. In 2010, the company employed 46 600 employees for an annual turnover of 65.23 billion dollars (Kane & Clark 2009). It operates with 301 Apple Stores in 10 countries and an online store that sells the hardware and software from Apple and third parties.

According to a ranking of the magazine Fortune, Apple is the most admired company in the world in 2008, 2009 and 2010 (Kane & Clark 2009). However, the company also received much criticism of working conditions of its workers, its business practices and environmental disregard. All of its products are manufactured in Asian countries such as the India or China, especially in plants of Foxconn described as concentration camps by a Chinese academic study. It went up to the direction of the Apple brand in 1997 and is therefore responsible for the success of various global products launched since then. It always grew at a rate almost twice a year during Steve's famous "keynotes”. Steve Jobs finally gave up his position as CEO on August 25, 2011, with vice president Tim Cook succeeding.

Apple was established on 1 April 1976 to Cupertino (in California) by Steve Jobs and Steve Wozniak, and incorporated as a company on Jan. 3, 1977 originally under the name of Apple Computer Inc. For 30 years it reflected diversification of its products, so the word "computer" was removed on January 9, 2007. Its approach is based on innovation, ergonomics and aesthetics of its products popular with consumers in its advertising campaigns and original customers who identify with the company and the brand. Apple has built a reputation in the singular consumer electronics industry.

Fundamentals of financial management

The two most important sources where a company's financial analysis can be made from are the income statement and balance sheet (Friedlob & Schleifer 2003). Using these two sources, we can study the earnings, income and financial position of a business at a given time (Choi 2003). The following table provides the consolidated data extracted from income statement and balance sheet of Apple ...