executive summary for apple inc

Apple Inc. is a corporation that designs and manufactures computer hardware, software and other consumer electronic products. The company is known for the Macintosh personal computers, iTunes media applications and the iPod personal music players. Apple was founded in April 1976 by Steven Wozniak and Steve Jobs, both college dropouts. In 1976, Wozniak and Jobs created the Apple I computer which did not have a keyboard or power supply for a computer hobbyist club. Later that summer Wozniak started his development of the Apple II, which was designed to attract a broader market than the hobbyist clubs.

The earliest Apple II used cassette tapes to read and store information, which were unreliable and slow. By 1978, Wozniak had introduced the Apple Disk II at the time was the only fastest and cheapest disk drive available for computers. The Disk II led to the development of software for the Apple II (Funding Universe, 2011). According to Funding Universe (2011), “The introduction of Apple II, with a user manual, at a consumer electronics show signaled that Apple was expanding beyond the hobbyist market to make its computers consumer items.

By the end of 1978, Apple was one of the fastest growing companies in the United States, with its products carried by over 100 dealers” (Company Histories, para. 1-8). In December 1980, Apple went public, the company is traded on the NASDAQ exchange and the ticker symbol is AAPL (Common Stock). According to Funding Universe (2011), “The offering of 4. 6 million shares at twenty-two dollars each sold out within minutes. A second offering of 2. 6 million shares quickly sold out in May 1981” (Company Histories, para. 1-8).

In 1998, Apple released the iMac and in 2001, they released Mac OS X, an operating system that attracted both consumers and professionals. The iMac line of personal computers joined up with Mac OS X and returned Apple to prosperity and the announcement of the iPod portable digital audio player was the ultimate addition to Apple product line. (Funding Universe, 2011). Assets and Account Payables Apple, Inc. (APPL) operates under a fiscal year accounting period. This period consists of the 52 (or 53) week period that ends on the last Saturday of September.

September 25 was the specific date observed as the end of the annual reporting period for 2009 and 2010. Every six years Apple adds an additional week in its first fiscal quarter in an effort to realign its fiscal quarters with calendar quarter. Apple’s annual report, as submitted to the United States Securities and Exchange Commission (SEC) on Form 10-K, lists its total assets as $47,501 for fiscal year 2009 and $75,183 for fiscal year 2010. Its largest asset for the same two years was $18,201 in short-term marketable securities in 2009 and $25,391 in long-term marketable securities in 2010.

Accounts payable listed as $5,601 in 2009 and $12,015 in 2010. All figures are noted in millions (Apple, Inc. Annual Report). Apple does not report taxes collected from its customers that are paid to governmental authorities. Apple’s 2010 annual report lists cash, cash equivalents, and marketable securities valued in 2010 as $51,011 million and in 2009 as $33,992 million. Total current assets in the year of 2010 were $41,678 million and for the year ending 2009 were $31,555 million. Current assets are listed in the order in which they are thought to be transferred to cash.

For Apple this included cash and cash equivalent, short term marketable securities, and accounts and notes receivable as first on the list. Apple reports having $27,392 million worth of liabilities in the year ending 2010, and $15,861 million for the year ending 2009. Revenue Apple is known as a leader in technology with the production and sale of its products such as the Mac computer, the iPhone, and most recently, the iPad. Apple recognizes revenue for the sale of its products when the products are ordered (purchased), shipped, priced, and collection is noted as likely to occur.

When customers order products online, Apple defers recognizing revenue until the customer has received the product because Apple is still at risk of loss during shipping. If a customer enters a prepaid agreement for devices, Apple will defer recording and recognizing revenue. In February 2010, Marketwatch. com reported that Apple closed 2009 with nearly $40B in the bank. Revenue is listed in the form of cash and marketable securities, which accounted for a little over 61% of Apple’s total current assets-at that time (Marketwatch. om 2009). Marketable securities are either short-term or long-term based on the underlying contract maturity date. Short-term securities mature in less than 12 months. Long-term securities reach maturity in one to five years (Phx. corporate. ir. net). Net Income vs. Liabilities Net income for Apple, Inc. has increased every year for the last three years. In 2008, net income was $6,119 million, 2009 net income was $8,235 million and most recently in 2010 the net income was more than double from 2008 at $14,013 million.

Apple’s net revenue in 2010, as previously noted, was $14,013 million with the company’s liabilities recorded at $15,861 million. The biggest contributors to the company’s liabilities in 2010 were accounts payable and accrued expenses. At the end of the 2009 reporting period Apple’s net revenue was $8,235 million with the company’s liabilities at $27,392 million, accrued expenses and accounts payables also being the largest contributing factor into liabilities. At the end of the 2008 reporting period Apple’s net revenue was 6,119 million. Company External Auditors

Ernst & Young, LLP, Independent Registered Public Accounting Firm, audits financial information for Apple, Inc. They are responsible auditing consolidated balance sheets, statement of operations, shareholders’ equity and cash flows of Apple, Inc. dated 9/29/09 and 9/25/10. The audits are in accordance with the Public Company Accounting Oversight Board of the United States. They inspect the financial statements to review for accuracy to gain confidence that there aren’t any misstatements. Also included in the audit process is the review of the accounting principles used and estimates reated by the management of Apple, Inc. After review of the financial statements, Ernest & Young LLP were able to confirm that the documents were in accordance with the Generally Accepted Accounting Principles (GAAP) guidelines. Conclusion Apple Inc. is a company that has created new and innovative designs since 1976, providing its consumers with computer hardware, software and other consumer electronic products. The company has proven to be a profitable company even through unstable economic times.

References

Apple, Inc. 2010) United States Securities and Exchange Commission. Retrieved from:http://phx. corporate-ir. net/phoenix. zhtml? c=107357&p=irol-reports Funding Universe. (2011). Apple Computer, Inc. Retrieved from http://www. fundinguniverse. com/company-histories. Marketwatch. com (2010): Apple CEO Jobs says Cash Hoard Provides Security. Retrieved from: www. marketwatch. com/story/apple-ceo-jobs-says-cash-hoard-provides-security-2010-02-25 Weygandt, J. J. (2008). Financial accounting (6th ed. ). Hoboken, NJ: John Wiley & Sons.

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