Evaluation of corporate performance

Evaluation of corporate performance

Introduction

Entrepreneur or business owner frequently needs to analyze their business and the evaluate the performance of their business, for effective evaluation good grasp and knowledge of financial ratios gives more clear picture of the business as compared with any other tool. Financial ratios provide important information of the business in terms of various categories. For instance it provides the information about the efficiency of assets in generating revenue in terms of return on assets (ROA). There are various types of ratios used to analyze different type of information. Financial ratios posses' equal importance for investors also as these ratios is used by investors to identify favorable investment options. Financial ratios also help in identifying strengths and weakness of the business. Investor or entrepreneur, if frequently analysis the business than he can update himself according the financial condition of the business and its performance over different period of time. Financial ratios are found to be helpful tools in analysis of financial statement and forecasting for business because ratio of financial statements enables owner of the business to define particular objectives and goals and he can easily evaluate performance of the business in pursuing that goals. It is critical to carefully select the financial ratios for the business, because there are number of financial ratios available for business and industry specific. Therefore, right selection of ratios can bring fruitful results.

Discussion

Apple Inc.

Apple Inc. is a renowned company in developing designing and marketing of top end personal computers, portable digital music players, mobile phones and other media devices. In addition to this it also sells various IT related services, software, peripherals, network solutions and digital content and applications from third party. Apple mainly operates in United States with its headquarter in Cupertino, California. There are 76,100 people working at Apple at the end of September 2012 among which full time employees are 72,800 and temporary full time equivalent employees and contract employees are 3,300. Among them majority of their workforce, around 42,400 employees are working in the retail segment of company (Apple Inc., 2013).

In fiscal year 2012 which ended on September 2012, Apple Inc. recorded total revenue of $ 156,508 million which was approximately 50 percent more than previous year's revenues. This revenue generated operating profit of $ 55,241 million which was approximately which was approximately 64 percent increased from previous year's operating profit. Net profit earned by Apple Inc. was increased by around 61 percent as compared to FY 2011 and was $ 41,733 (Apple Inc., 2013).

History

Apple Inc. was founded in 1977 and it was co-founded by Steve Jobs and Steven Wozniak. However, they introduced the Apple I computer in 1976 and it was a failed product. Despite the failure of Apple I, they launched Apple II during 1980 which was a successful product. In the same year, Apple offered initial public offering. During 1980, IT industry faced intense competition and this led to important changes in management. Apple faced a strong competition in 1983 with entrance ...