Apple Inc. Announced A New 4-Inch Display IPhone

Apple Incmonday Apple Announced A New 4 Inch Display Iphone Called T

Apple Inc. announced a new 4-inch-display iPhone, called the SE, aimed at consumers whose small hands, tight pockets, or thin pocketbooks couldn’t handle the big-screened iPhones unveiled last year. The iPhone SE starts at $399, making it the most affordable iPhone ever by $150. Product managers project to sell 3.5 million units in 2017. Several other companies announced their financial outlooks: IBM signed a partnership with Facebook expected to increase revenue by 1% with flat SG&A; General Electric forecasted a 7% decline in revenue; Walmart projected a 5% revenue increase along with decreases in COGS and other expenses; Alcoa anticipated an 11% decline in steel market share and projected revenue drops of 6% in 2017 and 10% in 2018; Boeing won a defense contract and expects a 10% revenue increase alongside a 20% dividend payout increase; Deere & Co. shifted depreciation methods to reduce expenses; MasterCard is launching rebate programs likely reducing gross margin by 9%; Oracle increased its cloud customer base increasing revenue by 3%; Visa plans to increase marketing expenses by 22%. These strategic projections imply diverse impacts on financial statements and profitability for each company, influencing investor expectations and strategic planning.

Given this context, the assignment requires an analysis and projection of financial performance for your chosen company based on last year’s financial data, constructing three scenario models for future revenues, and calculating corresponding EPS for each scenario. Additionally, you are to find the number of authorized shares, predict EPS across scenarios, and prepare a visual PowerPoint slide commenting on the results with relevant visuals. This process involves detailed financial modeling using Excel, including data import, formula application, scenario analysis, and visualization, all focused on assessing how various potential future states impact profitability and shareholder value.

Paper For Above instruction

The announcement by Apple of the new 4-inch iPhone SE signifies a strategic move to capture a niche market segment that values compact and affordable devices. This targeted product launch not only aims to expand Apple's consumer base but also impacts the company's anticipated revenue streams. Analyzing last year’s financial data and projecting future performance under three different scenarios—projection, below projection, and above projection—enables a comprehensive understanding of potential outcomes.

To effectively conduct this analysis, the initial step involves gathering the previous year's income statement and balance sheet data for Apple Inc., ensuring data accuracy and integrity. These financial statements form the baseline for forecasting future revenues and earnings. Downloading this data into Excel allows for detailed calculations and scenario modeling, where explicit formulas account for variables such as projected sales growth, cost fluctuations, and market dynamics.

The core of this exercise involves constructing three scenario models for net revenues. The baseline projection level aligns with the subsequent event projections shared by Apple, translating expected sales figures into dollar amounts. The below projection scenario considers a 50% reduction in the projected sales growth, simulating adverse market conditions or operational setbacks. Conversely, the above projection assumes a 25% increase in sales relative to the baseline, representing optimistic growth or successful product acceptance.

In parallel, it is essential to research and identify the number of authorized shares outstanding for Apple Inc., as this figure is critical in calculating earnings per share (EPS). Utilizing Excel, the forecasted net income under each scenario can be divided by the corresponding number of shares to derive EPS estimates. Producing these calculations across all scenarios facilitates comparison and sensitivity analysis, revealing potential impacts on shareholder value.

Furthermore, data visualization plays a pivotal role in conveying insights effectively. Creating charts such as bar graphs, line graphs, or pie charts within Excel can illustrate the differences in revenue and EPS across scenarios. These visuals enhance understanding of how varying assumptions influence financial metrics and aid stakeholders in informed decision-making.

Finally, a succinct PowerPoint slide encapsulates the key findings, illustrating the projected revenue ranges, EPS variations, and implications for strategic planning. Including relevant visuals, such as scenario comparison charts or trend lines, bolsters the communication’s clarity and impact. This comprehensive approach not only demonstrates technical proficiency in financial modeling but also provides strategic insights into managing future uncertainties.

References

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  • Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2019). Fundamentals of Corporate Finance. McGraw-Hill Education.
  • Fabozzi, F. J., & Peterson, P. P. (2003). Financial Management and Analysis. Wiley & Sons.
  • Johnston, I., & Ross, D. (2014). Corporate Financial Strategy. Macmillan International Higher Education.
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  • Wikipedia contributors. (2023). Apple Inc. In Wikipedia. https://en.wikipedia.org/wiki/Apple_Inc

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