Apple's Economic Performance, Characterized by High Growth,

Apple's economic performance, characterized by high growth, is not infinitely sustainable -- nothing is on a finite planet - but the company can sustain economic success for a very long time. The company's investment returns are very strong. The ROE is 45.58% and the ROA is 29.3%. Both of these figures are around the industry averages. Both of these figures are above the 5-year averages, indicating that Apple has been able to improve its operating performance in the past five years.

The company, even over the five-year time horizon, performs roughly in line with its industry peers. Over the past three years, Apple's performance has improved significantly, and this was on a base of very high performance. The company's income has increased from $42.9 billion in FY2009 to $108.2 billion in FY2011. The net income has increased from $8.2 billion to $25.9 billion in that same period of time. This means that not only has the company improved revenues, but it has improved its net margin as well, taking it from 19.19% to 23.9%.

Apple's balance sheet is equally impressive, and shows tremendous strength. At the end of FY 2011, Apple has $25 billion in cash, and a current ratio of 1.6. Three years ago, Apple had $23.464 billion in cash and a current ratio of 2.74. The company has not had any long-term debt on its books at any point in the past three years. This tells us that Apple has excellent balance sheet strength.

Its accounts receivable has increased rapidly over the past three years and that has driven down the current ratio, but the company still has enough cash to cover its payables in their entirety. In terms of Apple remaining a highly profitable entity with a great balance sheet, it is likely that this will continue for a long time. Apple's core products are all in either the growth or maturity stage of the life cycle, so even if sales slow, they will still remain at a very high level.

Apple has control over most of its costs, so expenses will not rise too rapidly. Even if the company begins to see slower growth, Apple will remain as a very healthy enterprise for a long time, many years at least. What might not be sustainable is the rapid pace of growth that Apple has enjoyed in the past five years. The company has succeeded with new product introductions and highly successful marketing campaigns, but with the pace of new product introductions slowing, the company's sales growth might also slow down.

That said, the company has room to grow especially in personal computers, where its market share remains.