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Apple Business Case Study

Essay by   •  July 19, 2012  •  Case Study  •  846 Words (4 Pages)  •  924 Views

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Apple recentlyWorking capital is another name for a company's current assets. The level of the current assets and how they are financed is a working capital policy. The policy is developed through a set of plans, which can be aggressive or conservative. Under a conservative capital policy companies keep more cash and finance both short- term and long- term needs with long term debt. The policy is more expensive but offers lower risk and lower returns. An aggressive policy offer companies more risk and more return because with it both long and short term needs are financed with short term debt. The risk associated with this type of policy increases the likeliness of the inability to pay liabilities previewed iA company's working policy can be affected by many outside factors including the financial environment and the fluctuation of business indicators. If a company's working capital is not properly managed then the economic conditions within a business market can have detrimental effects on it. Even companies with healthy operations can end in bankruptcy because of poorly managed finances. Uncertainty of economic conditions can affect working capital policy causing companies to tighten capital polices (Chiou, Cheng & Wu, 2006).

Apple is well positioned to remain profitable. Apple Inc., is well known for it various innovating products, and customer loyalty. According to Apple Inc it plans to launch the new iPhone this coming fall. This new product is predicted to be a large hit and generate major profits. Apple is also moving forward with the iOS 6 which introduces more than 200 new features for iPhone®, iPad® and iPod touch® users, including new Siri® features, an all new Maps app, and Shared Photo Streams via iCloud®.

Lessons Learned and Areas for Further Development

To understand their working capital, one needs to focus on the current assets and liabilities. Partially offsetting the positive factors contributing to the overall increase in net sales was a decrease in iPod net sales of $821 million or 10% during 2011 compared to 2010. Similarly, iPod unit sales decreased by 15% in 2011 compared to 2010. However, net sales per iPod unit sold increased during 2011 compared to 2010 due primarily to a shift in iPod product mix toward iPod touch. Net sales of iPod accounted for 7% of the Company's total net sales for 2011. Optimizing capital is required to ensure customer satisfaction. The financial environment is a big influence in all companies including Apple. factors included in an investment, economic factors must be considered.

Walmart's working capital will not benefit from too many recommendations. Walmart's working capital strategy operates at a slight deficit, but through efficient operating leverage the company managed to increase its earnings before interest and tax. Walmart's aggressive approach to growth increased

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