Research Your Company’s Financial Reports For 2017 020632

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

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.

Paper For Above instruction

Apple Inc. is one of the most recognized technology companies globally, known for its innovative products and robust financial performance. Analyzing Apple's financial reports for 2017 provides insights into how various economic, political, environmental, and global factors influenced its performance during that year. This analysis draws on key financial metrics, market conditions, and wider economic trends to understand the company's position from a shareholder perspective.

In 2017, Apple’s financial performance was strong, with revenue reaching approximately $229 billion and net income around $48 billion. This performance was influenced by a positive macroeconomic environment characterized by stable economic growth globally, low unemployment rates, and increasing consumer purchasing power. The U.S. economy, in particular, experienced steady growth, supported by accommodative monetary policy from the Federal Reserve and low-interest rates, which bolstered consumer spending and corporate investment (Federal Reserve, 2017). The prevailing low-interest rate environment reduced borrowing costs, encouraged investment, and contributed to Apple's sales growth, especially in premium segments.

Political and regulatory factors also played a role in shaping the economic setting for Apple in 2017. The U.S. government maintained a generally business-friendly stance, with tax reforms announced towards the end of the year aiming to incentivize domestic investment and repatriation of overseas profits. Additionally, Apple's global operations meant that currency fluctuations impacted its revenues and profits. The USD weakened slightly against major currencies such as the Euro and Yen, which benefited Apple's overseas earnings when converted to USD (Apple Annual Report, 2017). Conversely, global economic uncertainty, including geopolitical tensions and trade negotiations, created some volatility but did not significantly derail Apple’s growth trajectory.

Market conditions in 2017 were characterized by an optimistic investor sentiment, driven by technological innovation and steady economic growth. The Federal Reserve gradually increased interest rates three times during the year, signaling confidence in the U.S. economy's strength (Federal Reserve, 2017). These rate hikes, while increasing borrowing costs marginally, did not dampen consumer or business activity substantially. For Apple, these conditions supported its stock performance, with its share price appreciating and market capitalization reaching new heights.

From a financial ratios perspective, Apple’s trailing PE ratio in 2017 averaged around 17, indicating a relatively stable valuation considering the strong earnings. The forward PE ratio was slightly higher, reflecting investor expectations of continued growth. The price-to-book ratio hovered around 4.7, indicating premium valuation consistent with technology companies of high growth potential. Apple’s return on assets (ROA) was approximately 11%, and return on equity (ROE) was about 36%, both reflecting efficient management and profitability despite intense industry competition (Apple Inc., 2017). These metrics compared favorably to industry peers and underscored Apple's effective utilization of its assets and shareholder equity.

Year-over-year comparison between 2016 and 2017 indicates significant growth driven by increased iPhone sales, expansion into services, and emerging markets. Apple's revenue grew by nearly 6% from 2016 to 2017, bolstered by demand for newer iPhone models and higher service revenue. The global economic environment, low-interest rates, and favorable currency movements contributed positively to this growth. Conversely, increased competition from other smartphone manufacturers and escalating trade tensions were potential risks but had minimal immediate impact in 2017.

In conclusion, 2017 was a year where favorable macroeconomic and market conditions significantly benefited Apple. Low-interest rates and accommodative monetary policies reduced financing costs and supported consumer spending, while a relatively stable political and regulatory environment amid currency fluctuations fostered growth. The company's strong financial ratios and year-over-year improvements reflect its resilience and strategic positioning amid these external conditions. External economic factors, especially Federal Reserve policies and global economic stability, played crucial roles in underpinning Apple's successful performance that year.

References

  • Federal Reserve. (2017). Monetary policy report. Retrieved from https://www.federalreserve.gov/monetarypolicy.htm
  • Apple Inc.. (2017). Annual report 2017. Retrieved from https://investor.apple.com/investor-relations/default.aspx
  • Bloomberg. (2018). Apple Inc. Financial Analysis 2017. Retrieved from https://www.bloomberg.com
  • Morningstar. (2018). Apple Financial Ratios 2017. Retrieved from https://www.morningstar.com
  • Statista. (2018). Apple revenue 2017. Retrieved from https://www.statista.com
  • Yahoo Finance. (2018). Apple stock performance and market analysis 2017. Retrieved from https://finance.yahoo.com
  • CNBC. (2017). U.S. Federal Reserve raises interest rates. Retrieved from https://www.cnbc.com
  • World Bank. (2018). Global economic prospects. Retrieved from https://www.worldbank.org
  • Reuters. (2017). Impact of currency fluctuations on multinational corporations. Retrieved from https://www.reuters.com
  • Harvard Business Review. (2018). Managing external economic risks. Retrieved from https://hbr.org

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