Apple Inc.'s financial performance and profitability analysis 2016-2018

Reporting Regulations and Requirements
General conclusions on the overall performance of the company
In overall, Apple Inc.’s performance is positive and commendable. The revenue generated by the company has gradually increased in the past three financial years from 2016 to 2018 from $215.639 billion to 229.234 billion and further up to $265.596 billion respectively. Similarly, the net income generated by the Apple Inc. increased from $45.687 billion in 2016 to $48.351 billion in 2017 and further up to $59.531 billion in 2018 (Yahoo Finance, 2019). The profitability of the company can be perceptible through the profitability ratios. The operating margin is a ratio that is indicative of the amount of revenue that the company remains with subsequent to the deduction of cost of goods sold and operating expenses. The operating margin of Apple Inc. is 24.87 percent. This indicates that the company generates an operating margin of 24.87 cents for every single dollar of revenue generated. The net profit margin is a profitability ratio that point toward what percentage of the total revenues generated by the firm is constituted by and signified by net income. In reality, the net profit margin forms the amount of revenues that are excess or accessible consequent to the compensation or payment all variable or operating expenditures, interest, taxes and preferred stock dividends from the revenue generated. The net profit margin specifies what percentage of revenue made it all the way to the bottom line, a feature that is beneficial for the shareholders and investors. The profit margin of the company is 21.50 percent, which points out that the company generates a return of 21.50 cents for every dollar of revenue generated (Yahoo Finance, 2019).
The effectiveness of the management of Apple Inc. has been positive. The return on assets ratio is a profitability financial ratio demonstrates the magnitude to which an establishment makes the most of its total assets to generate a profit or return in a financial year. The return on assets ratio of the company is 11.99 percent. The inference of this is that the company has been able to manage its assets efficaciously. That is, for every dollar invested in the company’s assets, the return of the company is 11.99 cents. The return on equity ratio is profitability financial ratio that demonstrates the magnitude to which an establishment makes the most of its shareholder’s equity to generate a profit or return in a financial year. The return on equity of the company is 52.69 percent. This means that for every dollar of the shareholders’ equity invested, the company has generated a return of 52.69 cents (Yahoo Finance, 2019). Liquidity delineates the capability of a company to meet its debt obligations. The current ratio of the company is 1.50. This implies that Apple Inc. has the ability to meet its current debt obligations. This means that the company is able to cater to the current liabilities and still have returns for stakeholders.
The beta of Apple Inc. is 1.08. Beta of a stock is a measure of its level of volatility of returns in relation to the market as a whole. It is employed as a measure of risk and a firm that has a higher beta has greater risk as well as greater expected returns. In this case, it is perceptible that Apple has a beta that is greater than the market rate of 1, and this implies not only is the stock slightly riskier but at the same times also implies that the stock has higher anticipated returns. This implies that the stock is appealing to more investors (Damodaran, 2016).
A description of current economic or industry trends that may have an impact on the company's financial reporting in the future
There are a number of current economic or industry trends that might have an effect on the financial reporting of Apple Inc. in the future. Internet usage by companies has been mounting owing to technological inventions. Presently, the advancement of cloud technology is growing at a fast-paced rate and continues to be a significant distracting factor within the technological sector. The practice of accounting departments spending numerous hours inputting accounting data and information that is at the end of the day created into standardized accounting and financial accounting and also several amounts of paper in reporting is long gone (Etro, 2015). Cloud accounting facilitates the utilization of online account software where both data and software are stored on the instead of hard drives. Therefore, owing to the cloud, it becomes conceivable to be accessible at any given point in time and place through any internet-accessible device.
The progression of technology within the industry is anticipated to significantly affect the financial and accounting reporting. With changes in technology continuing to evolve rapidly, financial reporting requirements are also progressively more changing. One of the key aspects is the advancement of eXtensible Business Reporting Language (XBRL) and iXBRL, which is changing the system of financial reporting. Companies are now being impelled to utilize taxonomies to report data by tagging accounting figures (Ib et al., 2015). This standardized and continual tagging enhances the analysis and examination of financial information and leads to superior comparable and reliable information (Yang, Liu and Zhu, 2018). This is expected to facilitate the corporations within the industry with respect to the filing their financial annual reports in a format that is progressively more well-organized and ordered, which is nothing like the normal PDF format. At the end of the day, this decreases the burden of creating several different financial reports (Hall, 2015).
Examples of how each aspect of financial reporting is used by external users
Financial reporting information is utilized in different ways. Stockholders of company make use of financial reporting information in making decisions regarding what to do with their various investments. Potential or forthcoming investors necessitate information for assessment of the firm’s potential to attain success and profitability. Management of a firm also use financial reporting information in order to carry out regular financial decisions. Business decision making such as meeting targets and cash flow sufficiency necessitated the analysis of financial reporting information. Other key stakeholders of the company are lenders. Imperatively, lenders of finances, for instance, banking and other financial institutions, require this information and make use of it in order to ascertain whether the company in question has the capacity to pay its liabilities and debt obligations upon maturity. In addition, other key stakeholders comprise of trade creditors and suppliers, who capitalize on the information to determine whether the company is able to pay obligations when they become due (Robinson et al., 2015).
More importantly, regulators make use of financial reporting information to determine whether the company is being compliant with the established rules and regulations. In the case of Apple Inc., the SEC plays the role of guaranteeing that these standards are upheld and that the firm conducts proper financial reporting. The institution is culpable for the implementation of the federal securities rules, establishing securities course of action, and regulating the securities industry. The specific reporting requirements for Apple Inc. are reporting the financial statements of the company in pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934. This is an obligation of the company to file reports with the SEC periodically. The history of this requirement is lined to SEC Act of 1934, which also indicated that an organization becomes subject to these reporting requirements, if it has registered a class of securities with the SEC (Thompson Reuters, 2019).
There are consequences that Apple Inc. faces by failing to abide by these rules and regulations. From a legal perspective, there is the ramification of legal suits filed against the company and also criminal charges that members of the team are likely to face. Imperatively, the failure by management or employees to comply with the regulations can result in jail time. There is also the substantial consequence of the adverse impact on the veracity, quality and confidence from the general public in the company’s published financial reporting. From an ethical perspective, there is the consequence of having a negative and tarnished reputation. When a company gets into the public domain owing to the wrong reasons such as fraud and failure of being compliant, it faces the consequence of its reputation being soiled and this results in the firm’s distrust (Lexis Nexis, 2017). At the end of the day, the company can lose consumers, suppliers and even business partners. Furthermore, from a regulatory perspective, one of the major consequences that a firm faces is facing fines and even worse, facing bans or proscriptions from business operations. Aside from altering the legal status of the firm, which can cause the firm in becoming vulnerable, government establishments might choose to implement fines or execute dissolution (Lexis Nexis, 2017).

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