Apple's_Business_Enivironment

Apple's Business Environment Researching a company’s business environment provides a tremendous amount of information about a company. This information informs possible investors, consumers, outside watch groups, and competitors of the strengths and weaknesses of a company. This essay will review Apple’s business environment along with two of its closest competitors, Google, and Hewlett-Packard. This review will include the three companies income statements, balance sheets, and cash flow to determine the financial health of each. Income Statement An income statement details what a company earns over a specific timeframe. Apples income statement indicates that it continues to post record setting profits. “Apple® today announced financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share”. ("Apple Reports Third," 2011, p. 1). Google’s third quarter revenue is $9.03 billion, which is a 32% increase over the same period last year. Hewlett-Packard’s third quarter revenue is $31.2 billion, which is up 1% over last year’s revenue. ("Income Statement," 2011, p. 1). After reviewing the income statements of each company, the next step will be to review their balance sheets. Balance Sheet Balance sheets represent a company’s financial condition on a certain date. As of June 2011, Apple’s balance sheet reflects the company has total current assets of 46,898,000; it has total assets of 106,758,000, total liabilities of 37,415,000, total equity of 69,343,000, and total liabilities and stock equity of 106,758,000. As of June 2011, Google’s balance sheet reflects the company has total current assets of 46,442,000; it has total assets of 64,861,000, total liabilities of 12,870,000, total equity of 51,991,000, and total liabilities and stock equity of 64,861,000. As of July 2011, Hewlett-Packard’s balance sheet reflects the company has total current assets of 56,279,000; it has total assets of 129,917,000, total liabilities of 86,094,000, total equity of 38,823,000, and total liabilities and stock equity of 124,917,000. After reviewing the balance sheets of each company, the next step will be to review their cash flow. Statement of Cash Flows “The statement of cash flows, which provides a summary of money coming into and going out of the firm that tracks a company’s cash receipts and cash payments.” (Nickels, McHugh, & McHugh, 2010, p. 464.). As of June 2011(9 month), Apple’s net cash from operating activities are 27,100,000; its net cash from investing activities are 27,283,000, and its net cash from financing activities are 1,013,000. As of June 2011, As of June 2011(6 month), Google’s cash flow from operating activities are 6,691,000; its net cash from investing activities are 11,035,000, and its net cash from financing activities are 847,000. As of October 2010, Hewlett-Packard’s net cash from operating activities are 11,922,000; its net cash from investing activities are 11,359,000, and its net cash from financing activities are 2,913,000. Review of the Data After reviewing Apples income statement, balance sheet, and cash flow alongside two of their competitors demonstrates exactly how vibrant Apple is financially. Analyzing Apple, Google, and Hewlett-Packard’s financial statements reveals that Apple’s revenues are up 82%, its closest competitor Google, revenues are up 32%, and Hewlett-Packard’s revenues are up a meager 1%. Apple’s profits are up 125%; its net income is $23.61B, Google’s net income is $9.01B, and Hewlett-Packard’s net income is 9.37B. Apples financial statements render no areas of concern. These staggering numbers will allow Apple’s management to take this information and continue to produce new and innovative technologies that consumers anticipate eagerly for years to come. Summarizing Apple’s financial health, comparing it to its competitor’s points to one conclusion. Apple is leaps and bounds ahead of the competition. Technological Advantages Apple’s technological advantages are the iPod, iPhone, and the iPad; these devices have left the competition shaking their heads. “It may not come as a massive surprise that Apple’s iPhone, despite the excessive price tag, is the top-selling smartphone in the U.S. market right now. It is followed by its predecessor, the iPhone 3GS, which despite being over two years old, continues to outsell Android-based devices from likes of Samsung and HTC.” ("iPhone 4 and 3GS," 2011, p. 1.). Globalization Apple produces a large portion of their products overseas. The interesting thing about apple and globalization is the fact they impose standards tougher than the governments of the countries in which they do business. Apple also produces a responsibility report for suppliers that are available for anyone to see. This globalization strategy ensures Apple stays ahead of the groups that could create problems for the company and its bottom line. Benchmarking Analysis Using best practices analysis of Apple’s iPad 2 against Motorola’s Zoom and Samsung Galaxy Tab demonstrates just how far ahead Apple’s iPad 2 is in comparison to the latest entries into the tablet market. “Early, detailed benchmarks of the iPad 2's performance have provided a surprise win by Apple over the Motorola Xoom.” “The benchmarking would give Apple a performance lead not just over the Xoom but over every Android 3.0 tablet using the same 1GHz Tegra 2, such as the Samsung Galaxy Tab 10.1.” (“iPad 2 Benchmarks” 2011, p. 1.). Apple’s operational processes and procedures set the bar for others to follow. This is evident by the volume of sales of its iPhone. “Motorola says it shipped 13.7 million smartphones in 2010. In comparison, Apple shipped 47.49 million in 2010, outpacing Motorola by more than three times.” These numbers alone demonstrates how important a company’s operational processes and procedures are. Products and services is another factor to consider while comparing Apple, Samsung, and Motorola. The thing that sets Apple apart is the amazing fact that Apple does not conduct any market research for its products. Its competitors cannot say the same. Conclusion Researching a company’s business environment provides a tremendous amount of information about a company. Researching Apple and a two other companies income statements, balance sheets, and statement of cash flow reveals why Apple is the market leader in every sector it produces products in. Apple is far ahead of the pack in smartphone phones, tablets, and downloadable music. The iPhone is the top-selling smartphone in the United States market. Record-breaking profits and sales volume prove this. The benchmarking analysis shows how Apple’s iPad 2 is head and shoulders above Motorola and Samsung’s entries to the tablet market. References Apple Reports Third Quarter Results. (2011). Retrieved September 18, 2011 from http://www.apple.com/pr/library/2011/07/19Apple-Reports-Third-Quarter-Results.html Balance Sheet. (2011). Forbes.com. Retrieved September 18, 2011from http://finapps.forbes.com/finapps/jsp/finance/compinfo/FinancialIndustrial.jsp'tkr=hpq&period=qtr Income Statement. (2011). Forbes.com. Retrieved September 18, 2011from http://finapps.forbes.com/finapps/jsp/finance/compinfo/FinancialIndustrial.jsp'tkr=hpq&period=qtr iPad 2 Benchmarks Trounce Xoom (2011). Electronista Retrieved September 18, 2011 from http://www.electronista.com/articles/11/03/12/ipad.2.benched.against.xoom iPhone 4 And 3GS Are The Best-Selling Smartphones In The U.S.. (2011). Redmond Pie.com. Retrieved September 18, 2011from http://www.redmondpie.com/iphone-4-and-3gs-are-the-best-selling-smartphones-in-the-u.s./ Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2010). Understanding Business, Ninth Edition (9th ed.). Retrieved September 18, 2011 from https://ecampus.phoenix.edu/content/eBookLibrary2/content/eReader.aspx The Truth about Android vs iPhone Market Share. (2011). Loopinsight.com. Retrieved September 18, 2011 from http://www.loopinsight.com/2011/04/28/the-truth-about-android-vs-iphone-market-share/