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... o be more competitive in its industry. IBM compatibility would be a good start for Apple to improve competitiveness. Financial Analysis Summary According to our textbook, a current ratio is the extent to which a firm can meet its short-term obligations.
Apples 2001 current ratio is 3. 39 (See 3 year financial trend paper). Apples current ratio is better than the industries and is an improvement from 2000. According to our textbook, a quick ratio is the extent to which a firm can meet its short-term obligations without relying upon the sales of its inventories. Apples quick ratio is 3. 08 for 2001, which is an improvement from 2000, and it better than the industry (See 3 year financial trend paper).
According to our textbook the debt to equity ratio is the percentage of total funds provided by creditors versus owners. Apples debt to equity ratio is. 35 for 2001, which is an improvement from 2000, and is better than the industry (See 3 year financial trend paper). According to our textbook the long-term debt to equity ratio is the balance between and equity in a firms long-term capital structure. Apples long-term debt to equity ratio for 2001 is. 081, which is an improvement from 2000, and is better than the industry (See 3 year financial trend paper). The Inventory turnover ratio determines helps determine if a company is holds excessive stocks of inventory. Apples inventory turnover for 2001 is 488 compared to 26. 02 for the industry.
It is an improvement from 2000. Our textbook says, Total assets turnover is whether a firm holds excessive stocks of inventories and whether a firm is selling inventories slowly compared to the industry average. Apples total asset turnover for 2001 is. 0891. It was 1. 17 in 2000 and is lower than the industry average. Our textbook says, Gross profit margin is the total margin available to cover operating expenses and yield a profit. Apples gross profit margin for 2001 was 23 (In millions) compared to 27 for 2000, and 30. 83 for the industry in 2001.
Our textbook says, Operating profit margin is profitability without concern for taxes and interest. Apples operating profit margin for 2001 was. 9 down from 13. 7 in 2001 and compared to 5. 61 for the industry in 2001. Our textbook says, Net profit margin is after tax profit per dollar of sales. Apples net profit margin was. 098 in 2000, . 005 in 2001, and 4. 77 in the industry in 2001. Apple is got worse from 2000 to 2001 and is not doing as good as the industry. Our textbook says, Return on total assets is after-tax profits per dollar of assets.
Apples return on total assets was. 116 in 2000, . 004 in 2001, and 5. 75 for the industry. Apple is getting worse and not doing as well as the industry. Return on stockholders equity is profits after taxes for every dollar of shareholder investment. Apples return on stockholder equity was. 191 for 2000, . 006 for 2001 and 21. 93 for the industry. Apple is getting worse and not doing as well as the industry.
Earnings per share is earnings that shareholders get to keep. Apples earnings per share was 2. 18 for 2000, -. 07 for 2001 and 2. 36 for the industry. Apple is getting worse and not doing as well as the industry. Price earnings ratio is how much investors are willing to pay for a firms earnings. Apples PE ratio was 37. 2 in 2000, 42. 8 in 2001, and 35. 6 for the industry.
Apple is getting better and doing better than the industry. Apples sales have increased 18. 1 in 2000, and decreased 13. 78 in 2001. The industries sales growth ratio decreased 6. 78 in 2001. Apple is doing worse than it did in 2000 and not as well as the industry in 2001. Apples earnings per share growth ratio increased 26. 15 in 2000, decreased 44. 2 in 2001, and is worse than the 2001 industry average of a negative 22. 78. Earnings per share have decreased for Apples and the industry.
Alternative strategies Summary My first SO strategy in the TOWS matrix was offer free computer classes for seniors in the new Apple computer stores. This would introduce apple computers to new customers and be good for the community. My second SO strategy in the TOWS matrix was to offer interest free financing to parents that have children in school that use Apple computers. The children are already familiar with Apple computers and the parents would be enticed by the interest free financing. My third strategy in the TOWS matrix is to market computers to consumers globally.
There is a large untapped market that Apple could pursue more aggressively. My first ST strategy is to advertise on popular web sites. This would increase Internet sales. My second ST strategy is to offer free computer classes to displaced workers. The workers may purchase Apple computers when the get back to work and they will be more employable after completing the computer classes. My third ST strategy is to make computers that are harder to illegally clone.
This would protect Apple from losing profits. My first WO strategy is to offer discounts to past customers that recommend new customers. They say word of mouth is the best advertising and who would know better than someone who already owns an Apple product. My second WO strategy is to offer discounts to AARP members. Older people usually have more disposable income to purchase discretionary items. My Third WO strategy is to develop a computer that is IBM compatible.
IBM compatibility would make it more competitive because customers would be compatible with the majority of pc users. My first WT strategy is to implement a just in time system. A just in time system would cut down on excess inventory and help the bottom line. My second WT strategy would be to merge with IBM and produce computers that are IBM compatible. Apple could produce IBM compatible computers or just work in its education and technical niche if it merged with IBM. The Grand matrix shows us that Apple is in a slow growth industry and has a weak competitive position.
Apple should consider retrenchment, co centric diversification, horizontal diversification, conglomerate diversification, divestiture, and liquidation as strategies. The space matrix confirms that Apple is has a weak competitive position and is in an industry that is technologically stable but decreasing in sales. Strategy Recommendation The two strategies I evaluate in the QSPM are to develop an IBM compatible PC and develop and Apple that is more competitive with the IBM compatible PCs. After completing the QSPM, developing an IBM compatible computer was the obvious choice. Developing an IBM compatible PC scored 5. 60 on the QSPM and Improving the Apple PCs scored 4. 46 on the QSPM. Apple is alienating itself from a large part of the market by not being IBM compatible.
Apple would sell a lot more computers if it got rid of its operating system and used Microsoft's operating system. I recommend developing an Apple computer that keeps the Apple operating system and it compatible. Implementation I recommend that Apple approach IBM, Microsoft, Compaq, or another company in the hardware or software industry and propose a merger. A company like IBM could supply Apple with the investment dollars, expertise, and licensing rights to make an IBM compatible computer. Although some die hard Apple fans may not like the idea of a merger, Apple would be more competitive in the end.
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