Research Your Company's Financial Reports For 2017 ✓ Solved

Research your company’s financial reports for 2017. Complete a 2- to 3-page FAQ/Shareholder Analysis

Continue your work with the company you selected in Week 2 (Apple). 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.

Sample Paper For Above instruction

Introduction

Apple Inc., a global leader in technology and innovation, experienced significant financial performance in 2017. Analyzing Apples’ financial reports for that year alongside economic and market conditions offers insights into how external factors influence corporate performance. This analysis explores Apple's 2017 financial results, compares them with 2016, and evaluates macroeconomic influences such as interest rates, monetary policy, currency fluctuations, and political factors.

Apple's 2017 Financial Overview

In 2017, Apple reported revenues of approximately $229 billion, reflecting a growth of about 5% compared to the previous year. Net income was around $48 billion, showing a slight increase from $45.6 billion in 2016 (Apple, 2017). Key financial ratios such as the Price-to-Earnings (P/E) ratios, return on assets (ROA), and return on equity (ROE) indicated healthy financial health, with a trailing P/E ratio of approximately 17.3 and a forward P/E ratio of 16.8 (Morningstar, 2018). Apple's strong market position was reinforced by robust product sales, particularly in iPhones and services.

Economic and Political Conditions in 2017

The global economic environment in 2017 was characterized by synchronized growth, low inflation, and accommodative monetary policies. The U.S. Federal Reserve increased interest rates three times during the year, moving from a near-zero rate environment to a target range of 1.25-1.5% (Federal Reserve, 2017). These changes affected borrowing costs and consumer spending, indirectly impacting Apple's sales, especially in regions like China and Europe.

Politically, the 2017 tax reform in the United States introduced significant corporate tax cuts, which positively affected Apple's profitability and stock valuation (U.S. Congress, 2017). However, increasing global tensions and trade negotiations posed risks to supply chains and market stability, potentially influencing Apple's investment decisions and revenue streams.

Environmental and Currency Influences

Apple's operations are heavily impacted by environmental policies, especially concerning green energy initiatives and electronic waste management. In 2017, Apple increased investments in renewable energy projects to achieve its environmental commitments (Apple, 2017). Currency fluctuations, particularly in the Chinese yuan and Euro, affected Apple's revenue, as a significant portion of sales was generated outside the U.S. (Bloomberg, 2018). The strengthening of the dollar during parts of 2017 contracted international revenues when converted back to USD, marginally impacting earnings.

Market Conditions vs. Apple's Performance

Market conditions in 2017, such as low-interest rates and Federal Reserve’s gradual rate hikes, supported consumer spending and business investments. These conditions benefited Apple's growth, as consumers were more willing to spend on high-end electronics amidst favorable financing options. The relatively stable global economic environment contributed to consistent supply chain operations and product launches, like the iPhone X, which bolstered revenue.

Comparing 2016 and 2017, Apple's revenue increased marginally, but profit margins remained relatively stable due to efficient cost management and premium product positioning. The company's ROA and ROE showed slight improvement, reflecting effective utilization of assets and shareholder equity. The P/E ratios indicated investor confidence, supported by positive earnings growth and expectations of continued innovation (Yahoo Finance, 2018).

Conclusion

The macroeconomic environment in 2017 positively influenced Apple's performance, driven by low-interest rates, accommodative monetary policy, and a favorable political stance towards corporate taxation. Currency fluctuations and global political tensions presented challenges, but overall, the economic conditions supported steady growth. Apple's ability to adapt to changing market conditions and leverage global economic trends was crucial to its success that year.

References

• Apple. (2017). Apple Annual Report 2017. https://investor.apple.com/investor-relations/default.aspx
• Bloomberg. (2018). Currency Movements and Their Impact on Corporate Revenues. https://www.bloomberg.com
• Federal Reserve. (2017). Monetary Policy Report, December 2017. https://federalreserve.gov/monetarypolicy.htm
• Morningstar. (2018). Apple Stock Analysis and Valuations. https://www.morningstar.com
• U.S. Congress. (2017). Tax Cuts and Jobs Act. https://www.congress.gov/bill/115th-congress/house-bill/1
• Yahoo Finance. (2018). Apple Inc. Financials and Ratios. https://finance.yahoo.com/quote/AAPL