Apple Inc. is a corporation that focuses on computer hardware, software, and consumer electronic products. They offer Macintosh computers, iTunes media applications, and iPod music players. Steven Wozniak and Steve Jobs founded the company in April 1976 after leaving college. In that year, they made the Apple I computer for a hobbyist club but it did not have a keyboard or power supply. Wozniak then worked on creating the Apple II during the summer to target a larger market.
Initially, the Apple II utilized cassette tapes to read and store data, but this approach was deemed inefficient and sluggish. In 1978, Wozniak unveiled the Apple Disk II, which emerged as the swiftest and most budget-friendly disk drive alternative for computers during that period. This advancement facilitated the creation of software tailored specifically for the Apple II. As stated by Funding Universe (2011), when Apple presented the Apple II at a consumer electronics exhibition along with a user manual, it represented their expansion from catering solely to hobbyists to producing goods for consumers.
Apple experienced rapid growth in the late 1970s and became one of the fastest-growing companies in the United States. By the end of 1978, their products were carried by over 100 dealers (Company Histories, para. 1-8). In December 1980, Apple went public and their stock (ticker symbol: AAPL) started trading on the NASDAQ exchange (Common Stock). According to Funding Universe (2011), they offered a total of 4.6 million shares at a price of twenty-two dollars each, which sold out within minutes. They also had a second offering of 2.6 million shares that quickly sold out in May 1981 (Company Histories, para. 1-8).
In 1998, Apple released the iMac and in 2001, they released Mac OS X, an operating system that appealed to both consumers and professionals. The combination of iMac computers with Mac OS X helped Apple regain success.
The introduction of the iPod portable digital audio player was a significant addition to Apple’s product line (Funding Universe, 2011).
Apple, Inc. (APPL) follows a fiscal year accounting period that lasts for 52 (or 53) weeks and concludes on the last Saturday of September.
Apple concluded its annual reporting period for 2009 and 2010 on September 25. To align its fiscal quarters with calendar quarters, the company includes an extra week in its first fiscal quarter every six years. In the Form 10-K report submitted to the SEC, Apple reveals that it possessed total assets worth $47,501 in fiscal year 2009 and $75,183 in fiscal year 2010. Moreover, during those two years, its primary asset consisted of $18,201 in short-term marketable securities in 2009 and $25,391 in long-term marketable securities in 2010.
Apple’s Annual Report revealed that the accounts payable rose from $5,601 million in 2009 to $12,015 million in 2010. These amounts are all measured in millions of dollars. It is worth mentioning that Apple does not disclose the taxes collected from customers and paid to governmental authorities. In the 2010 annual report, cash, cash equivalents, and marketable securities amounted to $51,011 million compared to $33,992 million in 2009. The total current assets for 2010 were valued at $41,678 million while they were valued at $31,555 million for 2009. The order in which the current assets are listed depends on how easily they can be converted into cash.
Apple’s liabilities were $27,392 million in 2010 and $15,861 million in 2009. These liabilities consist of cash and cash equivalents, short-term marketable securities, as well as accounts and notes receivable. Apple is renowned for its technological dominance attained through the production and sale of products such as the Mac computer, iPhone, and iPad. Revenue recognition for Apple occurs when products are ordered (purchased), shipped, priced, and expected to be collected.
The recognition of revenue for online product orders and prepaid agreements is delayed by Apple until the customer receives the product due to shipping risks. According to Marketwatch.com (2009), Apple had approximately $40 billion in cash and marketable securities as of December 2009, accounting for over 61% of their total current assets. Marketable securities are categorized as short-term or long-term based on maturity dates – less than 12 months or one to five years respectively (Phx.corporate.ir.net). In recent years, Apple has consistently seen growth in net income. It reached $6,119 million in 2008, increased to $8,235 million in 2009, and doubled that amount to reach $14,013 million in 2010.
Apple’s net revenue in 2010 was $14,013 million and its liabilities were $15,861 million. The main contributors to these liabilities were accounts payable and accrued expenses. In the 2009 reporting period, Apple’s net revenue was $8,235 million and its liabilities amounted to $27,392 million, with accrued expenses and accounts payable being the major factors. Furthermore, in 2008, Apple’s net revenue was $6,119 million. It is important to note that these financial figures are overseen by the company’s external auditors.
Ernst & Young, LLP is an independent registered public accounting firm that audits the financial information of Apple, Inc. They audit the consolidated balance sheets, statement of operations, shareholders’ equity, and cash flows of Apple, Inc. dated 9/29/09 and 9/25/10 in accordance with the Public Company Accounting Oversight Board of the United States.
The purpose of these audits is to ensure accuracy and absence of misstatements in the financial statements. Ernst & Young LLP also reviews Apple, Inc.’s management’s accounting principles used and estimates made.
After reviewing the financial statements, Ernst & Young LLP confirms compliance with Generally Accepted Accounting Principles (GAAP) guidelines.
In conclusion, Apple Inc., established in 1976 by Steve Jobs and Steve Wozniak, offers innovative designs for computer hardware such as MacBooks and iMacs), software like iOS operating systems (such as macOS), and consumer electronic products including iPhones. Despite economic instability over its history with ups-and-downs in sales figures due to market competition or recession periods like post-2008 global crisis survival challenge), the company has maintained profitability thanks to strong brand loyalty from devoted customers worldwide who appreciate their high-quality products.
References
Apple, Inc. (2010). United States Securities and Exchange Commission. Retrieved from: http://phx.corporate-ir.net/phoenix.zhtml?c=107357&p=irol-reports. Funding Universe. (2011). Apple Computer, Inc. Retrieved from http://www.fundinguniverse.com/company-histories. Marketwatch.com (2010): Apple CEO Jobs says Cash Hoard Provides Security. Retrieved from: www.marketwatch.com/story/apple-ceo-jobs-says-cash-hoard-provides-security-2010-02-25. Weygandt, J. J. (2008). Financial accounting (6th ed.). Hoboken, NJ: John Wiley & Sons.
