Assignment Content: Continue Your Work With The Company You

Assignment Contentcontinueyour Work With The Company You Selected In W

Continue your work with the company you selected in Week 2. Research your company’s financial reports for 2017. Complete a 2- to 3-page FAQ/Shareholder Analysis. Evaluate economic conditions that influence company performance. Consider political, environmental, currency (money), global economics, and government influences on economic conditions.

Compare market conditions with the company’s performance for 2017. Conclude how the market conditions that year influenced the company’s performance, such as interest rates, Federal Reserve Bank monetary policy changes, or other market conditions relevant to the company you selected. Analyze year-over-year performance from 2016 and 2017. Consider key metrics or ratios such as trailing PE ratio, forward PE ratio, price to book, return on assets, and return on equity in your conclusions. Cite references to support your assignment. Format your citations according to APA guidelines.

Paper For Above instruction

In this analysis, I will examine the financial performance of Apple Inc. during the year 2017, considering the broader economic and market conditions that influenced its operations. The research is based on Apple’s financial statements for 2017, as well as economic reports, market analyses, and relevant financial metrics. This comprehensive overview aims to clarify how external factors impacted Apple’s performance and how their key financial ratios evolved from 2016 to 2017.

Apple Inc., a leading technology company specializing in consumer electronics, software, and digital services, reported a revenue of approximately $229 billion in 2017, up from about $215.6 billion in 2016 (Apple Inc., 2018). The company's net income also increased, reflecting robust growth. To understand the performance context, it is essential to analyze the macroeconomic conditions prevalent during 2017, which include a relatively stable U.S. economy, favorable monetary policy, and increasing consumer confidence.

Economic Conditions Influencing Company Performance

During 2017, the U.S. economy experienced moderate growth, with GDP increasing by about 2.3% (Bureau of Economic Analysis, 2018). The unemployment rate declined to around 4.1%, indicating a tightening labor market and higher consumer disposable income, which positively affected consumer spending on Apple’s products. Additionally, the political climate was relatively stable, with the Trump administration implementing policies aimed at deregulation and tax reform—factors that boosted business confidence and investment (U.S. Congressional Budget Office, 2018).

The Federal Reserve maintained its policy of gradual interest rate hikes throughout 2017, which generally signaled confidence in ongoing economic expansion (Federal Reserve, 2018). Although rising interest rates can lead to increased borrowing costs, they also indicate a strong economy, supporting consumer and corporate spending. Moreover, global economic growth was steady, with emerging markets expanding, although some countries faced currency fluctuations that could influence Cupertino’s international sales and supply chain costs.

Market Conditions and Apple’s Performance

Market conditions in 2017 were characterized by a bullish stock market; the S&P 500 index increased by about 19.4%, reflecting investor optimism (Standard & Poor’s, 2018). Apple’s stock price experienced significant appreciation, driven by strong earnings growth, product launches like the iPhone X, and an increased focus on services and wearables. The company also benefited from favorable currency exchange rates, as the USD depreciated slightly against major currencies, improving international revenue margins (Apple Inc., 2018).

The Federal Reserve’s monetary policy trajectory, characterized by gradual rate increases, contributed to a conducive environment for equities, including technology stocks like Apple. Low inflation and stable interest rates made borrowing easier for consumers and businesses, elevating demand for gadgets, services, and subscriptions. Market optimism during 2017 thus generally supported Apple’s revenue growth and share price appreciation.

Year-over-Year Performance: 2016-2017

Comparing Apple’s key financial ratios between 2016 and 2017 reveals notable improvements. The trailing Price-to-Earnings (PE) ratio increased slightly from approximately 11.4 in 2016 to 13.4 in 2017, reflecting buoyant investor demand and expectations of continued growth (Morningstar, 2018). The forward PE ratio also rose, indicating optimism about future earnings.

Similarly, the price-to-book ratio increased from 3.5 in 2016 to 4.1 in 2017, signaling higher investor valuation of Apple’s assets. Return on assets (ROA) improved from approximately 10.2% in 2016 to 11.5% in 2017, demonstrating enhanced efficiency in generating profit from its assets (Apple Inc., 2018). Return on equity (ROE) showed a similar trend, increasing from about 35% to 38%, indicative of efficient capital management and profitability growth. These performance metrics suggest that Apple capitalized on positive economic and market conditions, translating external factors into tangible financial gains.

Conclusion

The year 2017 was a period of favorable macroeconomic and market environments that significantly influenced Apple’s performance. The stable U.S. economic growth, supportive monetary policy with gradual interest rate hikes, and strong global markets created a conducive backdrop for the company’s growth. The equity market's bullish trend further amplified investor confidence, positively affecting Apple’s stock value and financial ratios.

Overall, Apple’s robust financial performance in 2017 can be attributed to a confluence of beneficial external conditions, including steady economic growth, favorable currency fluctuations, and supportive financial policies. These external factors, combined with strategic company initiatives, resulted in higher revenues, profitability, and valuation metrics compared to 2016, showcasing the close relationship between macroeconomic conditions and corporate performance.

References

• Apple Inc. (2018). Annual report 2017. https://www.apple.com/investor/static/pdf/10-K_2017.pdf
• Bureau of Economic Analysis. (2018). National economic accounts, GDP overview. https://www.bea.gov/data/gdp/gross-domestic-product
• Federal Reserve. (2018). Federal Open Market Committee statements and meeting minutes. https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
• Morningstar. (2018). Apple Inc. stock analysis and valuation metrics. https://www.morningstar.com/stocks/xnas/aapl/financials
• Standard & Poor’s. (2018). S&P 500 index performance 2017. https://www.spglobal.com/spdji/en/indices/equity/sp-500/#overview
• U.S. Congressional Budget Office. (2018). The economic outlook, 2018. https://www.cbo.gov/publication/53512