Investmentsin AssetsAssetsin Apple Company include the future economic gains that are managedby past events. A study conducted in Apple Company reported that thecompany had an increase in the number of current assets from 2014 to2016 (Apple Inc, 2016a). The company had an increase in cashequivalents from 2014 to 2016. Further, the company also noticed anincrease in marketable securities from 2014 to 2016. The inventories,property, equipment, and plant, and non-current assets displayed anincreasing trend from the year 2014 to 2016 (Apple Inc, 2016a).AppleCompany considers the cash equivalents to be the liquid investmentsthat have a maturity of three months from the purchase date. It alsoinvolves the liquid investment that has a maturity of fewer thanthree months of the purchase date. The equity security andmarketable debt of Apple Company are organized and accounted for inthe company. The marketable debt of Apple Company is classified aslong-term or short-term on all the instruments that follow thecontracted date of maturity (Apple Inc, 2016a). For example, theMarketable debt securities that have a date of maturity of 12 monthsor below are considered to be a short term. The marketable securitydebt having a maturity of 12 months are referred to as the long-term.Some of the marketable equity securities in Apple Company could belong-term or short-term depending on the nature of every security andthe potential for use in the existing operations. The marketable debtof Apple Company together with the equity securities are calculatedfairly using the unrealized losses and gains. The net tax is thenreported as a factor of the income accumulates in the shareholder’sequity. The calculation does not include the losses that areunrealized or those losses that are considered to be temporal andreported in the earnings of the given period. The cost of the soldsecurity is depended on the method of identification. Economicperformance of Apple Company
Theeconomic performance of a Company reflects on the added economicvalue of a company. The economic values also known as the economicprofit refers to the differences between cost and revenues in theoperations of a company. Cost, in this case, refers to the expensesand the cost of capital. Economic profit refers to the corporateperformance calculated by finding the spread between investmentreturn, and the capital cost plus multiplying by the capitalinvested. From the year 2014 to the year 2015, Apple Companyexperienced an increase in the economic profit (Apple Inc, 2016b).Between the years 2015 to 2016, the company experienced some declinein the economic profit. The decline did not reach the level in 2014(Apple Inc, 2016b).
Thenet operating profit after tax (NOPAT) refers to the income that isreceived from the operations. It is calculated by removing it fromthe taxes and is calculated on cash basis relevant to the operatingincome. Just like the economic profit, the net operating profit, hada similar trend to that of the economic profit. The net operatingprofit had an increase from 2014 to 2015 but experienced a declinefrom 2015 to 2015 (Apple Inc, 2016b).
Theother aspect of the economic performance of Apple Company is the cashoperating taxes that is estimated through the adjustment of theexpenses of income tax for the changes in the tax benefit anddeferred taxes from the deducted interest. The company had anincrease in the cash operating taxes from the year 2014 to 2015 andthen had a decline in the cash operating taxes from 201 to 2016(Apple Inc, 2016b). Apple Company experienced an increasing trend inthe invested capital from the year 2014 to the year 2016. Theeconomic spread from 2014 to 2015 saw some improvement, but somedeteriorated from 2015 to 2016. The deterioration did not reach thelevel in 2014 (Apple Inc, 2016b).References
AppleInc.(2016a). Statement of financial position. Retrieved on 14/12/2016fromhttps://www.stock-analysis-on.net/NASDAQ/Company/Apple-Inc/Financial-Statement/Assets
AppleInc.(2016b). Economic value added. Retrieved on 14/12/2016 fromhttps://www.stock-analysis-on.net/NASDAQ/Company/Apple-Inc/Performance-Measure/Economic-Value-Added#Economic-Profit