Apple Inc. Financial Ratio Analysis: Debt, Equity & Beta
This paper examines the financial health of Apple Inc. through key financial ratios and market data sourced from Yahoo Finance and related platforms. The analysis covers Apple's debt-to-equity ratio across quarterly periods in 2015, return on equity trends from 2012 to 2016, stock price volatility, and beta coefficient. The paper finds that while Apple maintains impressive profit and operating margins and a substantial enterprise value, its rising debt-to-equity ratio, declining stock price from its 2015 peak, and an above-market beta of 1.43 introduce notable uncertainty about the company's near-term financial trajectory.
- Introduction to Financial Analysis: Rationale for using public financial data on Apple
- Debt-to-Equity Ratio: Apple's quarterly debt-to-equity trends throughout 2015
- Return on Equity: Apple's return on equity from 2012 to 2016
- Stock Price and Market Volatility: Beta coefficient and stock price volatility analysis
- Conclusion: Overall assessment of Apple's financial outlook
✍️ How to write this paper — guide, tools & examples ▾
What makes this paper effective
- The paper grounds each ratio in a clear definition before applying it to Apple's actual data, making it accessible to readers unfamiliar with financial metrics.
- It wisely expands the time horizon for return on equity analysis, explaining why a single data point is insufficient — a methodologically sound choice that strengthens the argument.
- The inclusion of beta as a contextual frame for the stock price volatility observed in the preceding section demonstrates strong analytical integration across sections.
Key academic technique demonstrated
The paper exemplifies ratio contextualization — not simply reporting financial figures but situating each metric within a trend (quarterly, multi-year, or relative-to-market). This technique prevents static misreading of data and is supported by a citation to an empirical finance study (Bhandari, 1988), lending academic credibility to the methodological choice.
Structure breakdown
The paper opens with a brief rationale for using public financial data and identifies Apple as the subject. Two core sections analyze specific ratios (debt-to-equity, return on equity) with supporting figures. A third analytical section addresses stock price behavior and transitions naturally into a discussion of beta. The conclusion synthesizes findings without overstating or dismissing concerns, ending with an appropriately hedged outlook.
Introduction to Financial Analysis
When it comes to assessing the financial health and future of a publicly traded company, there is more than one way to do so. However, many financial analysts use, in whole or in part, the financial ratios and other data that are available for public review on sites like Yahoo Finance, Bloomberg, and the Securities and Exchange Commission (SEC) website. Because publicly traded companies are generally subject to uniform reporting rules, the level of disclosure required for these companies is consistently high and largely comparable from one company to the next. The company analyzed here as an example of this process is Apple Inc. While Apple appears to be in good financial shape overall, certain elements within its financial data warrant closer scrutiny.
Debt-to-Equity Ratio
One ratio directly relevant to this analysis is the debt-to-equity ratio. Looking at Apple's quarterly results for this ratio throughout 2015, the figure shows a sharp rise through most of the year, followed by a tapering off at year's end. The March 31, 2015 value was 0.3401. The June 30, 2015 value was 0.433. The September 30, 2015 value was 0.5401. These first three values are clearly ascending. However, the number tapered off to 0.4909 in December 2015. In short, roughly half of the gain from the second quarter to the third quarter was reversed in the fourth quarter.
This ratio represents the amount of debt a company carries relative to its equity — in other words, the lower the number, the better. A value near fifty percent is not ideal, but it could be considerably worse. One would hope that the ratio would continue to fall rather than resume rising (Yahoo Charts, 2016).
References
Bhandari, L. C. (1988). Debt/equity ratio and expected common stock returns: Empirical evidence. Journal of Finance, 43(2), 507–528.
Yahoo Charts. (2016). YCharts: The modern financial data research platform — stock screener, Excel add-in, stock charts and more. Ycharts.com. Retrieved July 28, 2016, from https://ycharts.com/
Yahoo Finance. (2016). AAPL: Summary for Apple Inc. — Yahoo Finance. Finance.yahoo.com. Retrieved July 28, 2016, from http://finance.yahoo.com/quote/AAPL?ltr=1
Create your account
Always verify citation format against your institution’s current style guide requirements.