Apple Inc.’s Financial Performance Analysis in 2020

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Table of Contents

Introduction
State of Apple Inc. in 2019 and 2020
Strategic Objectives of Apple Inc.
Operational Objectives of Apple Inc.
Key Performance Indicators
Financials
Conclusion
Reference List

Introduction

Analyzing financial reports of some major corporations and comparing them to their previous annual reports is essential for understanding how business processes work. Such an analysis allows to get insight ideas regarding the necessity to set achievable goals, have a clear connection between operational and strategic purposes, and probably identify weaknesses of an organization that do not allow it to become more successful. All these insights are useful in achieving the desired level of competence and professionalism. The purpose of this paper is to provide a critique of Apple Inc.’s business financial performance by comparing the company’s 2020 financial report against one from the previous year. Some critical strategic and operational objectives of Apple Inc., its key performance indicators, and the short and longer-term financial goals will be identified and rationalized.

State of Apple Inc. in 2019 and 2020

To begin with, it is essential to notice that Apple Inc. was and still is one of the most powerful and influential corporations in the world. Founded on April 1, 1976, this American multinational technology company began developing, designing, and selling various online services, consumer electronics, and computer software all over the world (Payne, 2017). Soon this public limited company became as successful as Facebook, Microsoft, Amazon, and Google, making sure that consumers love their products and mostly choose them over competitors’ analog devices (Payne, 2017). Apple’s success and popularity are the main reason it is rather interesting to explore its financial reports and compare its elements in 2019 and 2020. Moreover, since COVID-19 has affected all spheres of life, including such major corporations, it is even more useful to determine whether Apple’s efforts to maintain profit levels and the quality of its products have been successful. Overall, it is possible to say that the state of Apple Inc. is better in 2020 than it was in 2019.

Strategic Objectives of Apple Inc.

For every small or major business to be productive and effective, it is vital to set various goals. In order not to lose motivation, some of these aims should be short-term and some longer-term so that organizations continue achieving smaller tasks and approach more significant ones. Petryni (2019) describes strategic objectives as “long-term organizational goals that help to convert a mission statement from a broad vision into more specific plans and projects” (para. 2). Generally, strategic aims are developed to be a part of up to a four-year plan in which unique expectations, weaknesses, and strengths are identified to help the company achieve its mission statement (Petryni, 2019). For example, in the case of Apple Inc., its mission is to satisfy its customers by bringing the best user experience to them through its innovative services, hardware, and software (Rowland, 2020). Therefore, the corporation’s strategic objectives are to continue creating the best and most innovative products, dictate the future technology movement, and build anticipation for the upcoming products and services.

Operational Objectives of Apple Inc.

As mentioned above, small and easily achievable tasks are as crucial as longer-term goals. According to Petryni (2019), operational objectives are monthly, weekly, or even daily benchmarks that are set while also considering strategic aims, allowing to break them down into more achievable and smaller tasks. Therefore, knowing the strategic objectives of Apple Inc. allows dividing them into goals that can be achieved more easily. For example, it is possible to suggest that for the corporation to build anticipation for its upcoming products, it needs to develop an effective PR strategy (Rowland, 2020). Further, to create innovative products, Apple should study the ones suggested by its competitors. Successfully achieving these tasks is likely to contribute to the effective completion of the company’s mission.

Key Performance Indicators

One of the most essential elements that have to be taken into account when analyzing a company’s performance is its unique key performance indicators. Maintaining these indicators at a high level allows the company to remain resistant to competition, efficient and popular among customers. In the case of Apple Inc., its key performance indicators include customer satisfaction, employee alignment and commitment, market share, and shareholder value.

Customer Satisfaction

Apple has always been interested in making sure that its clients are satisfied and happy with the quality of its products and services, but in previous years the company was more focused on its technology. Nowadays, Apple Inc. makes questionnaires and surveys that allow managers to learn about customers’ disappointments and contentment. Considering the answers and feedback received from its buyers, the company can see whether it needs to improve or change anything and also understand its main strengths.

Employee Alignment and Commitment

Next, it is hard to disagree that employees dedicated to their workplace and its objectives are increasingly valuable. They do not work only to make money but also because they genuinely love their company and are thus ready to contribute to its productivity, high performance, and success. Apple Inc. recognizes the value of having employee alignment and commitment and invests in keeping them satisfied and interested in professional growth (Apple and Procurement no date). Special surveys conducted among random workers allow the managers to find out whether employees understand the mission statement correctly and have the resources for achieving the company’s goals.

Market Share

Another indicator that is especially crucial for an organization in the technology sector is market share – a factor that stands for the percentage of total sales that a taken organization generates in an industry. The importance of this indicator is that it is interconnected with companies’ profits. For example, Apple aims to gather an increased number of market shares to gain a significant influence on software developers who collaborate with the company and make its profits higher (Apple and Procurement no date). Currently, the market share of Apple Inc. in the personal computing industry is small but in the smartphone industry is huge.

Shareholder Value

Finally, the fourth key performance indicator of Apple Inc. is shareholder value. The company puts it into its operations, global manufacturing, product design, and sales vision. In this way, it becomes possible to evaluate new business deals by assessing the activities of a unit and tying them to Apple’s appraisal system. All these operations increase the likelihood of Apple Inc. creating investments for its future development and growth.

Financials

Income

Apple’s annual financial reports allow making conclusions regarding the company’s success in increasing its profits. First, Appendix A contains Consolidated Statements of Operations 2019, where it is evident that 2018 was a more productive and efficient year for the company compared to 2019. Then, according to Appendix B, the corporation managed to increase its net income from $213.883 in 2019 to $220.747 in 2020, which is still lower than in 2018. However, this may be explained by COVID-19 consequences, and taking them into account, it is evident that Apple is managing the issue successfully. Therefore, a short-term objective for Apple that should be achieved in less than a year is to make its profits equal to or higher than those of 2018.

Stock Price

Stock prices are incredibly significant for companies as they signify their value. As shown in Appendixes C and D, the company stock performance was relatively the same in 2019 and increased extremely in 2020. That was rather significant growth, so another short-term financial objective for Apple is to prevent its stock price from reducing.

Growth

Depending on the company’s overall performance, it is possible to evaluate its growth. Compared to the results of 2019, Apple’s performance in 2020 was much more successful and effective. Despite the adverse circumstances caused by the coronavirus, the company managed to increase its profits and stock price, which may be considered a remarkable growth that was not expected.

Balance Sheet

Finally, a balance sheet is a financial statement that summarises Apple’s assets, shareholders’ equity, and liabilities. To begin with, the assets were greater in 2019 than in 2018, as well as liabilities were lower (see Appendix E). However, in 2020, the liabilities grew from $248.028 to $258.549, meaning that Apple’s state is not as perfect as it could seem (see Appendix F). The longer-term objective for the company is to reduce its total liabilities.

Conclusion

To conclude, one may say that Apple Inc. is indeed a powerful corporation that has impressive indicators in its financial statements. Even though there are some problems in the company’s 2020 report’s numbers, it is still possible to state that Apple knows how to manage challenging situations and gain as much profit and benefit from them as possible. If the corporation manages to achieve short and longer-term goals, its state will likely become better in less than a year.

Reference List

Apple and Procurement(no date) Web.

Apple Inc. (2019) Apple annual report 2019. Web.

Apple Inc. (2020)Apple annual report 2020. Web.

Payne, B. (2017) ‘Brand positioning and its usefulness for brand management: the case of Apple Inc.’, Newcastle Business School Student Journal, 1(1), pp. 51-57.

Petryni, M. (2019) Difference between strategic & operational objectives. Web.

Rowland, C. (2020) Apple Inc.’s mission statement and vision statement (an analysis).Web.

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