Apple statement Example

Apple statement Example Apple statement – Essay Example Apple ment Ratio values for the year ending are provided in the following table Operatingcurrent assets OCA 15,960.00 2 Operating current liabilities OCL 23,879.00 3 Net Operating working capital NOWC (7,919.00) 4 Operating capital OPT CAP (142.00) 5 Net investment in operating capital NET INVES IN OPT CAP (4,994.00) 6 Net operating profit after tax NOPAT 25,612.82 7 Free cash flow FCF 30,606.82 8 Return on invested capital ROIC -18037% 9 Operating cash flow OPT CF 27,426.82 10 Economic value added EVA 25,622.76 11 Market value added MVA 545,553.00 Source of Data: (â€Å"SEC Form 10-K 2011†). Based on the financial ratio analysis, it could be stated that the company faced problems with managing its operating current liabilities, which exceeded its operating current assets. It also implied that the company could have problems meeting its current obligations as its liquid assets were less. The company decreased its investment in operating capital in the year 2011. However, the company had strong profitability reflected from its NOPAT. The company also had strong free cash flows and operating cash flow that implied that the company could easily invest further in its product development and network expansion infrastructure. Since, the company’s operating capital was negative, therefore, the ROIC was negative. The company was able to increase shareholders’ wealth as indicated by MVA. Moreover, the company exhibited efficiency by generating high EVA. 2. The optimal level of current assets would be where its value is equal to current liabilities. At this level the current ratio value would be 1. This depends upon efficient management of business operations and ensuring that the business maintains optimal balance between its current assets and liabilities. 3. The optimal level of leverage measured by debt to total assets would be closer to a value of zero. It implies that the company would seek an optimal capital structure that maximizes shareholders’ value. If the company is able to minimize its dependence of external debt then the amount allocated by the company for interest and principal amount repayments would be minimized and shareholders can expect higher return on their investments. Work Cited â€Å"SEC Form 10-K 2011†. Cupertino: Apple, Inc., 2011.