2 (Two Paragraphs)

• For Apple Inc Interpret whether the trend for each ratio (Notes on bottom of the page) is an improvement or a decline in performance for the company.
• use a table that lists each ratio as either a strength or a weakness in the most current year, based on its trend and your interpretation.
• Determine the overall financial strength of the company based on the ratios identified as either strengths or weaknesses.
  • Consider all the ratios discussed so far. Is the company's strength the fact that the debt management ratios are improving? Or is it that the liquidity ratios are increasing? Is the company's weakness that the turnover ratios are declining? Or is the company's weakness that debt management ratios are weakening?
  • Categorize the company's overall ratio performance as either strong, neutral, or weak, based on your determination from the ratios.
• (My Notes)

Profitability Ratios

Apple's return on assets (ROA) There was a decrease of 21.21% in 2022 to 20.26% in 2023, before recovering to 21.46% in 2024. This fluctuation suggests a temporary decrease in efficiency in utilizing assets to generate earnings, followed by an improvement (Stock Analysis, 2024).The average return on equity (ROE) declined to 175.46% in 2022 to 171.95% in 2023 and then to 157.41% in 2024. Due to a change in the company's financial structure or maybe more retained earnings, the drop in ROE suggests that Apple is less able to make money off the equity held by the shareholder.

Liquidity Ratios

There were variations in Apple's liquidity status. This increased to 0.88 in 2022 to 0.99 in 2023 before falling to 0.87 in 2024. A ratio below one displays that Apple's current liabilities increase its current assets, showing potential liquidity constraints (Yahoo Finance, 2024). This ratio, which prohibits inventory from current assets, suggests that Apple has limited liquid assets available to meet immediate financial obligations.

Debt Management Ratios

Between 2022 and 2023, Apple's long-term debt-to-equity ratio declined at 2.61 to 1.99, but in 2024, it grew little to 2.09. This change shows that, although initially lowering its reliance on long-term debt, Apple somewhat raised its leverage once more in 2024. In 2024, the overall debt-to-equity ratio increased little after declining in 2023 (Stock Analysis, 2024).

Asset Management Ratios

Apple's total asset turnover ratio, which assesses how effectively the company utilizes its assets to generate revenue, declined from 1.12 in 2022 to 1.09 in both 2023 and 2024. A decreasing ratio suggests a slight reduction in operational efficiency.This declining pattern implies that Apple's inventory movement decreased, maybe because of supply chain modifications or shifting customer demand.

Per-Share Metrics

Apple's book value per share, a measure of the company's net asset value per share, was reported at $4.44 in 2024. This metric provides insight into the intrinsic value of the company from an accounting perspective and helps investors evaluate whether the stock is overvalued or undervalued relative to its book value (Hickman, 2013)."