Financial Analysis Project – Final
Stefanie Staord
Saint Leo University
ACC549 Using Financial Accounting Information
Professor Dr. Mary Connor
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CONTENTS
Company Analysis………………………………………………………………………………………………………………………………3
Industry Analysis…………………………………………………………………………………………………………………………………4
Common Size Analysis…………………………………………………………………………………………………………………………7
Ratio Analysis…………………………………………………………………………………………………………………………………….11
Comparison…………………………………………………………………………………………………………………………………….…13
Conclusion…………………………………………………………………………………………………………………………………………14
References……………………………………………………………………………………………………………………………………..…16
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COMPANY ANALYSIS
When analyzing dierent companies and deciding which of them is the appropriate one to invest
in, knowing their background, history as well as looking at their financial statements is important but it is
equally important to see where they stand within their market, how the company’s stock prices
7uctuates and their business trends, up and coming developments that could change the company
standing and/or market, as well as any happenings that would cause uncertainty for a return on their
investment.
Apple Company Analysis
Apple Inc. has maintained a very strong presence in their market over the last decade. “The
iPhone has been a staple for tech lovers for almost eight years.” (Elise, 2015, para. 5) As of their first
quarter financials released in February 2015 they dominated the smartphone industry alone with 93% of
the market. Their continued advancements in technology and products have made current consumers
loyal to the Apple brand and helped pull others away from its competitors. “Many iPhone users
aggressively purchase only Apple products, such as iPads, Macbooks, and iMacs.” (Elise, 2015, para. 6)
According to Apple Inc.’s 10K report 4led with the SEC for their fourth-quarter of business in 2015, net
sales rose 28% ($50.9 billion) when compared to 2014. The dramatic increase in net sales was largely
driven by the increase in iPhone sales. The remaining product that drive net sales to soar year-over-year
was the release of the iWatch. This product is classified in “Other Products” sector by management and
accounted for over 100% increase in sales for the segment alone (Form 10-K, n.d.)
The current condition of our world is largely driven by technology. What can it provide for each
of us to make our lives more convenient? These are the questions that technology producing companies
are faced with on a daily basis. For Apple, Inc. to continue to maintain and grow their market share the
company is required to develop new and innovative products that outweigh its competitors. Some of the
recent developments that Apple has released to the public that have hit the market or are coming soon
are the 9.7-inch iPad Pro, iPhone SE, health apps with CareKit, and advancements with ResearchKit. The
new light weight iPad Pro has a new pro Retina display for beFer quality visual appearance and brighter
display. Their new iPhone features the same 64-bit A9 chip that was released in the 6 and 6s phones only
with a smaller 4” Retina display screen. The new and advancement apps to the CareKit and ResearchKit
have a medical use background. The CareKit allows for consumers to track their own medical conditions,
symptoms, medication, etc. while the ResearchKit allows medical researchers to gather information on
diseases and other conditions for various studies all over the world.
Additional pieces of financial data that will influence investors are stock prices of a company,
both past and present. In the very beginning Apple Inc.’s stock prices were a mere $0.51 and have
exploded to the highest price it has seen at $132.54 in May 2015. Since 2010 the stock price of Apple has
7uctuated from $28.25 in January of 2010 to its current price of $109.99. Between 2010 and 2012 are
the years that Apple experienced the first massive growth in their stock. They also felt the turmoil in the
U.S. economy suered in 2013 as their stock began to decline in price but were able to rebound and
regain what they had lost with additional gain by mid-2015. Apple Inc. has been able to withhold their
stock price to a degree that other companies would have diJculty with of which many experienced and
were unable to remain operational. The advanced technology and product oerings tailored to what
consumers want in their devices helped them survive and continue to 7ourish. However, Apple Inc.
discloses in their financial 4lings to the SEC that “Global markets for the Company’s products and
services are highly competitive and subject to rapid technological change, and the Company may be
unable to compete eectively in these markets.” (Form 10-K, n.d.) While this statement is important to
be included in the notes of the financial statements for current and potential investors to maintain a high
level of transparency which is aFractive to investors, it has the potential to cause concern for those
investors due to the unstable nature of the technology industry.
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Samsung Company Analysis
In Q3 of 2015, Samsung was able to regain its market leader title in the smartphone market over
its main competitor Apple. “Samsung’s improved streamlined porNolio of devices, including premium
inspired A-series, proved successful in many mid-tier markets that were typically dominated by local
brands.” (IDC: Smartphone Vendor Market Share, n.d.) While this was a big step for Samsung to regain its
status, it was unable to eectively compete with Apple on its other products such as iPads, iWatch, and
computers. Due to this Samsung is second in the technology products market falling to Apple. While
there are other competitors present in the market, the two main rivals today are Samsung and Apple.
While Apple Inc. has numerous new products and updates for their current products throughout
the year, Samsung focuses more on the much larger projects that will change the way that consumers
used technology today. Samsung is working with their partner, the Russian Academy of Science to
develop a 3D projection and display (Shaughnessy, n.d.). This large product is being worked on
concurrently with other smaller projects in relation to smartphones and personal devices to continue
with demand from the consumers within the market.
Samsung has been operating within the technology market since 1969, more than a decade
older than its main competitor; Apple Inc. Samsung also felt a large hit to their stock price in 2013 with
the rest of the domestic and international businesses operating within the United States. In relation to
stock prices, Samsung 4nds themselves in a less stable environment than their main competitor. The
constant 7uctuation in the stock prices can make investors weary of investing in this company especially
with the nature of the industry and the rapid changing environments and competition.
Investors are influenced not only on financial data provided by the company but in the
happenings within the market that they business operates, the overall standing and perception of the
business among other items. In 2015 600 million Samsung Galaxy phones were exposed to hackers. This
is not the type of press that a company wants consumers and investors to see and read about. A
company can alleviate and reassure investors by correcting the issue and puRng policies and procedures
in place to prevent the occurrence from happening again. In this case, seven months went by without
anything being done to prevent consumers from being exposed to hackers that would steal their
personal information for their own bene4t. Again, due to the rapidly changing technological
environment it is diJcult for these types of companies to stay ahead of individuals and groups that try to
“break in” to the companies’ data and technology to gain control of others information. This type of
uncertainty can cause hesitation and unaFractiveness to investors.
INDUSTRY ANALYSIS
The electronic technology industry and is fast-changing and interesting industry to many. Within
this industry are the “latest and greatest” breakthroughs in technology in relation to electronics. These
personal electronics include smartphones, tablets, and computers to name a few. Companies in this
industry are consistently having to adapt to the new advancements in technology and aFempts to satisfy
the demands of consumers. When analyzing these companies from an investor point-of-view, looking at
market activity, indicators impacting the industry, changes in stock prices, industry averages for 4nancial
ratios and opinions on whether to buy/sell/hold are all important factors that will aect the decision
made by investors.
Recent Market Ac!vity
In the personal electronics industry, primarily focusing on the companies that are in the
smartphone business have been faced with aFempting to anticipate and plan eectively for the trends in
consumer demands that are constantly changing. The smartphone industry appeals consumers by the
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hardware and soSware that they develop and produce. Listed below are some of the current trends and
new data points for the smartphone industry.
Hardware:
1. The smartphone industry is growing with a 23% YOY growth which translates into 295
million smartphone shipments (Danova, 2014).
2. The two leaders of the industry, Apple and Samsung have “slipped”. Apple is still
continuing to increase sales, but is not able to keep up with vendors in the East. Samsung smartphone
orders and shipments declined 4% YOY (Danova, 2014).
3. Chinese vendors are outselling Samsung. When combining the sales of the 4ve Chinese
vendors, their sales outnumber the amount of Samsung shipments in the second quarter by
approximately one million (Danova, 2014).
SoSware:
1. Android is increasing its market share across Europe (UK, Germany, Italy, Spain, and
France). Apple’s market share in Europe is decreasing overall as a result (Danova, 2014).
2. Android has 84% of the operating system dominated in China (Danova, 2014).
3. Android has materially grown in their market share in Brazil. They have increased over
forty percent (Danova, 2014).
In addition to the changes in the hardware and soSware that is developed for smartphones, companies
have begun to branch out into dierent personal electronic devices that work simultaneously with a
consumers’ smartphone, such as tablets, watches, and 4tness trackers.
Recent Indicators Impac!ng the Industry
