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Evaluation of Apple Inc.

EVALUATION OF APPLE INC.

AppleInc. is a multinational technology company headquartered inCalifornia, USA. Steve Jobs, Steve Wozniak, and Ronald Wayne foundedthe company in 1976. Apple Inc. was started as a firm that developedand sold personal computers. It was incorporated as Apple ComputerInc. in 1977 and later changed to its present name as a result ofproduct diversification. Currently, the organization engages indesigning, developing and selling of consumer electronics, computersoftware, and offers a wide range of online services. Some of itshardware products are iPhone, iPad, Mac, Apple TV and Apple Watchwhile software products include iOS, OS X, and watchOS. Onlineservices that the company offers include cloud services (iCloud), MacApp Store, iBook, and Apple Music. The firm sells its products andservices across the globe through its retail stores, direct sales,other retailers, and value-added resellers.

Thecompany has had tremendous growth over the years in terms of revenueand market share. The growth is accredited to the leadership it hashad since its foundation. Currently, the CEO and chairman are TimCook and Arthur Levinson respectively. Apple Inc. is the largest ITCompany in the world in terms of revenue and total assets. By the endof 2015, the organization had over 115,000 full-time workers. Itoperates 478 stores in 17 countries. This paper analyzes thestrengths and weaknesses of Apple Inc. and recommends whether anindividual can purchase the company’s stock.

Financial statement review

The 2015 Annual Report of Apple Inc. presents a complete set offinancial statements as required by the International FinancialReporting Standards (IFRS). The statements in the report include thebalance sheet, statement of operations, comprehensive income,shareholder’s equity, cash flow, and notes. The structure andcontent of the financial reports also comply with the IFRSs. They canbe distinguished from other information in the 2015 Annual report.Every statement has a name, details of the reporting period, currencyand has indicated the level of rounding used. The profit or lossstatement provides information about the income and can be used todetermine the profitability of the company. The balance sheetpresents the financial position of Apple Inc. using its assets andliabilities. From the reporting entity, the value of assets exceedsthe liabilities of Apple Inc. The 2015 Annual Report also containsthe notes that on each of the financial statements. The reportingentities have financial details for the year ending September 27,2014 and September 26, 2015. This enables the comparison of theperformance of Apple Inc. between the two fiscal years (IAS Plus).

Pro Forma financial statements

Thenet sale of Apple Inc. was $233.715 billion in 2015. If the salegrows at 10% per year, it will be $257.086 billion and $282.795billion for the fiscal years ending 2016, and 2017 respectively. Thecost of goods sold for the year ending 2015 was $140.089 billion. At10% growth rate, the cost of production for the next two fiscal yearswill be $154.098 billion, and $169.507 billion respectively. Theincrease in sales and cost of goods sold will result in the growth ofnet income.

Pro Forma Income Statement

(Inmillions)

&nbsp

Year ending

&nbsp

26-Sep-17

27-Sep-16

26-Sep-15

Net sales

$282,795

$257,086

$233,715

Cost of sales

169507

154098

140089

Gross margin

113288

102988

93626

Operating expenses

&nbsp

Research and development

11056

9504

8067

Selling, general and administrative

16809

14897

14329

Total operating expenses

27865

24401

22396

Operating Income

85423

78587

71230

Other Income

1299

1523

1285

Income before provision for taxes

86722

80110

72515

Provision for taxes

22315

21956

19121

Net Income

64407

58154

53394

&nbsp

&nbsp

Earnings per share

&nbsp

Basic

$11.60

$10.13

$9.28

Diluted

$11.54

$10.06

$9.22

&nbsp

&nbsp

Shares used in computing earnings per share

&nbsp

Basic

6095421

5926064

5753421

Diluted

6101128

5967807

5793069

Cash dividends declared per share

$2.71

$2.41

$1.98

Pro Forma Balance Sheet

(In millions)

&nbsp

26-Sep-17

27-Sep-16

26-Sep-15

ASSETS

&nbsp

Current Assets:

&nbsp

Cash and cash equivalents

24055

23450

21120

Short-term marketable securities

26876

23973

20481

Accounts Receivables, less Allowances of $82 and $86, respectively

20631

17979

16,849

Inventories

2690

2506

2349

Deferred tax assets

6182

5755

5546

Vendor non-trade receivables

17865

12045

13494

Other Current assets

10654

8967

9539

Total Current assets

108,953

94,675

897378

Long-term marketable securities

210573

180453

164065

Property, plant and equipment, net

25876

24031

22471

Goodwill

6745

5597

5116

Acquired intangible assets, net

5756

6459

3893

Other assets

5895

7560

5556

Total assets

363,798

318,775

290479

&nbsp

&nbsp

LIABILITIES AND SHAREHOLDERS` EQUITY

&nbsp

Current liabilities

&nbsp

Account payable

46112

39047

35490

Accrued expenses

31342

28054

25181

Deferred revenue

12540

9563

8940

Commercial paper

14603

9781

8499

Current portion of long-term debt

0

3574

2500

Total current liabilities

104597

90019

80610

Deferred revenue, non-current

4487

3901

3624

Long-term debt

45724

67350

53463

Other non-current liabilities

40142

42011

33427

Total Liabilities

194950

203281

171124

Commitment and Contingencies

&nbsp

Shareholder`s equity:

&nbsp

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized 5,578,753 and 5,866,161 shares issued and outstanding, respectively

45239

30156

27416

Retained earnings

122783

85894

92284

Accumulated other comprehensive income

826

-556

-345

Total Shareholders` equity

168,848

115,494

119355

Total liabilities and shareholder`s equity

363,798

318,775

290479

Liquidity

Liquidityratios are used by investors to determine the capabilities of anorganization to settle its short-term obligations. It is a goodindicator that an individual seeking to purchase the company’sstock can use to evaluate its chances of being bankrupt. Highliquidity ratio of the company guarantees the security ofinvestments. Stockholders can also use liquidity ratios to evaluatehow Apple Inc. has invested in assets. For the company to beconsidered efficient, it should direct much of its investments tolong-term rather than short-term assets. The value of long-termmarketable assets of Apple Inc. is $164,065 million while currentassets were valued at $89,378 million in 2015. Since 60% of thecompany’s asset investments are on long-term securities, it isconsidered to be efficient in its production.

Thereare three liquidity ratios that would-be stockholders can use whendecide to invest in the company. They include current ratio, quickratio, and cash ratio. The first two ratios are the most commonlyused to analyze the solvency of the firm.

Current ratio

It compares the cash and others assets that can be quickly and easilybe converted to cash will all the short-term liabilities. In 2015,Apple Inc. had current assets and short-term liabilities worth$89,378 million and $80,610 million respectively.

Current ratio =

=1.1

The current ratio is 1.1. This value shows that Apple Inc. cancomfortably settle its short-term debts after liquidating its currentliabilities. The current for the year ending 2014 was 1.08.Therefore, the efficiency of the company is increasing. The securitystockholder’s investments are guaranteed

Quick ratio

Thequick ratio is more refined and stringent that current ratio inanalyzing the Apple Inc.’s solvency. Since it focuses on the mostliquid securities, inventory is left out. Inventories are difficultto liquidate at market value. The value of the company’s inventoryis $2349 million. The quick ratio of Apple Inc. is determined withthe following formula.

Quick ratio=

=

=1.07

Witha quick ratio of 1.07, investors are still guaranteed of the securityof their investments in Apple Inc. Based on the liquidity of thecompany a would-be stockholder should not hesitate to invest in thecompany. When the company becomes unable to settle its obligations,current assets can be liquidated to pay the loans. This means thatthe plant and equipment of the company will still be available tofacilitate the daily operations. Therefore, stockholders can investin Apple Inc. on either long-term or short-term basis.

Financial leverage

Financialleverage ratios provide insights about the sources of Apple Inc.’sfinances. The source can either be debts or equity. A company thatfinances its assets using debts engages in a financial risk since itis obligated to repay it back (Emamalizadeh et al., 2013).There two types of leverage ratios to analyze Apple Inc. They includecomponent percentage and coverage ratios. Coverage ratios indicatethe ability of Apple Inc. to meet its fixed obligations such asinterests. Component percentages show the proportion of the company’sdebt in relation to its total capital or equity. Total debt to assetand total debt to equity ratios are the commonly used componentpercentages.

Total debt to asset

Investorsuse this ratio to determine the proportion of assets that arefinanced with debt. The total debt to asset ratio of Apple Inc. is asfollows.

=0.589

At0.589, Apple Inc. has a moderate financial risk. Investors can stillconsider the company.

Total debt to equity ratio

Itshows how the company employs the combinations of debt and equity tofinance its assets. It is calculated as shown below.

=0.54

At0.54, Apple Inc. uses more shareholders’ equity than debts tofinance its assets. The financial risk associated with this leveragemay be advantageous to investors. Shareholders feel more secure thancreditors since they have access to a significant percentage ofequity dollars. In case Apple Inc. faults to pay any of its debts,creditors are less likely to own the company and thus, investors willbe on the losing side. However, Booker J. (2011) argues that theriskier the common shares, the higher the financial returns commonstockholders get.

Profitability

Profitabilityis the amount of profit a given company gets from its sales. Profitmargin ratios present the relationships between various aspects ofincome and net sales. Since the ratios focus on the numerator, theyare used to evaluate various aspects of the company. The gross profitmargin and operating profit margin are commonly used to evaluate theefficiency in generating income.

Gross profit margin

Grossprofit margin indicates how much income each dollar investedgenerates. It is determined by the division of gross income withsales. The gross profit margin for Apple Inc. is calculated below.

=0.4

Atthe gross profit margin of 0.4, an investor will get 40% for everydollar they invested in Apple Inc. This is a good profit for aninvestor and therefore, should not hesitate to purchase the company’sstocks. They will not lose.

Operating profit margin

Itrepresents the ratio of operating income to sales. Investors can useit to evaluate how much of each dollar is left over when operatingexpenses are settled.

Operating profitmargin=Operating income/sales

=71,230/233,715

=0.3 (30%)

Netprofit margin compares the net income with the sales. Indicates whatthe shareholders are likely to get after settling all expenses of thecompany. It is calculated as shown below.

Netprofit margin=

= 53394/233715

=0.23

Thenet profit margin indicates that every dollar a stockholder investsin Apple Inc. generates $0.22 after removing all expense. This iswhat is shared. Based on this ratio, when individuals purchase thecompany’s stock, they will have some returns at the end of theyear.

Asset management ratios

They are alsocalled efficiency ratios. Asset management ratios of Apple Inc.indicate how efficient the company uses the assets at its disposal togenerate revenue (Brigham &amp Houston, 2015). Stockholders can usethese ratios to determine how long their investments will take togenerate significant profit. When the efficiency ratios are high,stockholders will get high returns. Accounts receivable turnover,inventory turnover, accounts payable turnover and total assetturnover ratios can help a person to make the decision of whether topurchase the stock of Apple or not.

Account receivable turnover ratio

It measures thefrequency at which Apple Inc. generates and collects accountsreceivable within one year. It is calculated as shown below.

Average accountsreceivable =

=(13,844+21120)/2

=$17482million

=

=13.37

Theindustry’s ratio was 7.98. The high accounts receivable turnovershows that Apple Inc. is managing its accounts receivableefficiently. The revenue generated from the asset is high. However,the ratio has been decreasing from 2011 to 2014 before it startedstabilizing. In 2011, 2012, 2013, and 2014 Apple Inc. had ratios of20.16, 14.32, 13.04, and 10.47 respectively (NASDAQ). It seems thecompany addressed the lax in the collection of receivables during theperiod. To determine the frequency at which Apple Inc. collects itsreceivable, the total days of the year is divided by the accountsreceivable turnover ratio as shown.

Receivablescollection period = 365/13.37

=27.3 days

The ratioprovides information about how efficient Apple Inc. utilizes itsinventory.

Inventory turnover ratio

The inventoryturnover ratio of the company is determined using the followingformula.

=

=

=59.64

Inventoryprocessing period= 365/59.64

=6.12 days

Theratio, 59.64, is significantly higher than the inventory turnover forthe technology industry (16.38) in 2016. The high inventory indicatesthat the company utilized more inventory while maintaining lessinventory on shelves. Therefore, Apple Inc. had more revenue andminimal cost of stocking inventory (Godwin &amp Alderman, 2012).Since inventory turnover has a direct relationship with the profitearning capacity of a company, stockholders will benefit frompurchasing Apple Inc.’s stocks. The high inventory turnover ratiomay also indicate that the company is losing market opportunities dueto inventory shortages. However, ordering system can help ensure theavailability of inventory and utilization of market opportunities.Another indicator in the utilization of inventory is the growth ofthe ratio. The inventory reduced from 111.06 in 2012 to 53.64 in 2014and increased to 59.64 in 2015 (NASDAQ).

Total asset turnover ratio

It measures howefficient Apple Inc. uses all of its assets to generate income. Theratio is determined by dividing the net sales with total assets.

Total Assetturnover ratio = 233,715/290479

=0.8

Market value

Marketcapitalization figure indicates the value of Apple Inc. using itsvalue according to the stock market. It can be calculated through themultiplication of the share price with the total number of shares.However, since the share price is a contributing factor of theshareholder wealth through capital gains, there is a correlationbetween shareholder wealth the market capitalization. Apple Inc. wasranked number one in the technology industry based on market value.The market value of the company was $724,773 million in 2015. Themarket capitalization of the second largest company was less thanhalf of Apple Inc. this is an indication of large market share andhigh profits by the company. Subsequently, the stockholder gains werealso high in 2015.

Thereare three categories that a company can be classified according totheir market value small-cap, middle-cap, and large-cap. Apple Inc.is classified as a large-cap firm. According to Müller, T. (2014),the main feature of a large cap company is that they have amoderately constant and established market value. However, it mayexperience some little fluctuations and minimal effect on theirproductivity and revenue. The tendency of the market value tofluctuate can be employed by stockholders to decide to invest inApple Inc. on long-term or short-term basis. The moderately constantmarket capitalization of the company guarantees would-be stockholdersconsistent gains from the stock they purchase.

Apartfrom the market capitalization model, the market value of Apple Inc.can also be evaluated using price to earnings ratio and market tobook value ratio.

Price to earnings (P/E)

P/Ecompares earnings and share price of a firm. It is determined by thedivision of the current price per share with the earnings per share.For the case of Apple Inc. in 2015, the share price was $119.27 andearnings per share were $9.58.

P/E ratio=119.27/9.58

=12.45

Companieswith high share price and price to earnings ratio are consideredsuccessful. Stocks with high P/E are common with firms that areexpected to grow rapidly in value. The price to earnings of AppleInc. is lower than that of the technology industry (12.93).

Market to book value ratio

Thisratio is used to evaluate whether the value of stock is exaggerated.It is determined by dividing the common stock by the accounting bookvalue per share ratio (BVPS). Book value per share and the commonstock of Apple Inc. in 2015 were $21.41 and $119.27 respectively.

Market to bookvalue ratio =119/21.41

=5.57

Theratio for the industry was 4.10. Since Apple Inc. has a market priceper share of the stock that is more than BVPS, the company’s futureincome is valuable more than the liquidation value. In such as case,when the company is liquidated and paid off all creditors, commonstockholders will have more earnings compared to the common stock inthe market. Therefore, purchasing the company’s stock is worthy.

Return on equity (ROE)

Itrefers to the comparison between earnings and equity. Equityrepresents the owner’s claims against or interests in the assets ofa firm. In large a large company like Apple Inc., equity is thestockholder’s equity. Return on equity measures the income acompany generates from existing projects on the book and new projectsstarted within the fiscal year. It is a suitable ratio that astockholder can use to decide whether to buy the company’s stocksor not. Conventionally, it is calculated by dividing the net incomein by the book value of equity. An appropriate method of determiningROE of a firm is by using the DuPont System.

TheDuPont system evaluates the return on equity of a firm using theindividual ratios comprising the profit margin and turnover. Itrelates the ROE with return on asset (ROA) of a company. The systemuses net profit margin, total asset turnover and leverage ratio. TheROE of Apple Inc. is calculated as shown below.

ROE =Net profit xtotal asset turnover x

=(x )/(1-)1.8378

=(x )/(1-)

=4.473

TheROE of Apple Inc. has been increasing over the years. The ROE in2012, 2013, 2014 and 2015 were 37.96%, 29.49%, 32.60% and 44.73%. Theincreasing return on equity is a good sign for the would-bestockholders since it is an indication that the company is givingthem more for their money invested.

Economic Value Added (EVA)

Theratio is considered the most appropriate performance metric used byfirms and investors. It is the value that remains after thestockholders, and all other providers of capital have received theirshare. It is linked to the performance of the management of acompany. EVA is a performance metric because it is a measure underthe control of a company, unlike wealth metric which is dependent onthe stock market’s collective and future perspective. As aperformance metric, EVA influence market value, earnings per share,and price to earnings ratio. The three ratios are used by potentialinvestors in making their decisions of whether and how to invest inApple Inc.

EVAshows how efficient Apple Inc. manages the use of its resources togenerate revenue. The variables that determine earnings per share ofApple Inc. include earnings and shares outstanding. These variablesare affected by the actions and decisions that the company makes. Itis through the decision-making process that determines the presentand future status of a company. Decisions define the course ofactions that a given company will take in order to achieve its goalsand fulfill the demands of its key stakeholders such as stockholders.Apart from the decision-making process, the efficiency of a companyis also determined by the implementation of strategies. There is awide range of management principles that Apple Inc. can employ toimprove its performance and income stockholders receive. Theefficiency of its management in creating value using the investedcapital is shown by economic value added. EVA is calculated as shownbelow.

EVA= Netinvestment X (Return on investment – cost of capital)

Apple Inc. has a net investment of $56274 million, cost of capital of9.75% and actual return on investment of 39.74 in 2015. Therefore,its EVA is as follows

EVA = $56274million x (39.74 – 9.75)

= $16876.57million economic value added

Thehigh EVA indicates that the management performance of Apple Inc. isoutstanding. It employs techniques and strategies that ensure anincreased productivity of the entire organization. It is also anindication of good leadership of the company. The leadershipfunctions in formulating and overseeing the implementation ofstrategies. The management of the firm understands what value is aswell as it sources. Therefore, they develop and implement thestrategies that ensure the maximization of the value generated fromassets and investments. With the high performance, a potentialinvestor will benefit from the purchase of the company’s stocks.

Financial policies

Thefinancial policies of a firm show how efficient the company is whenit comes to creating value and maximizing profits. There are variousstrategies that Apple Inc. has implemented. They include capitalstructure, debt, leverage, and dividend policies.

Capital structure

Capitalstructure refers to the composition of equity and debt the firm useswhen financing its operations. The decision about the capitalstructure composition is aimed at reducing the capital cost whilemaximizing value. Equity is determined by adding common stock andretaining earnings and subtracting the treasury shares. Total debt tocapital ratio, debt to equity ratio and interest coverage measuresthe capital structure (Jiranyakul &amp Jiang, 2013).

Thetotal debt to equity ratio of Apple Inc. is the measure of leveragethrough the comparison between long-term debt and shareholder’sequity. The long-term debt of Apple Inc. was $53463 million, and itsshareholders’ equity was $119355 million in 2015. Therefore, itsdebt to capital ratio was

= 0.44

Thedebt to equity ratio of 0.44 indicates that the company finances lessthan half of its operations with creditors’ resources. This is anindication that the financial policy of Apple Inc. ensures thatshareholders have a larger part of its ownership. Therefore,stockholders are safe when the company declines.

Debtto total capital ratio evaluates the capital structure of Apple Inc.by comparing long-term loans to the sum of long-term loans andshareholders equity. The ratio for the company is calculated as shownbelow.

=0.31

Giventhat the company’s current liabilities are low, debt to totalcapital ratio of 0.31 indicates that Apple Inc.’s capital structurepolicy are effective since it ensures minimal financial risks. It isa positive indication that is attractive to investors.

Interest coverageratio is used to determine the ability of Apple Inc. to pay theinterest on its outstanding debt. It is calculated as shown below.

=99.93

Atthe interest coverage of 99.93, Apple Inc.’s capital structurepolicy is healthy since it is able to pay the interests of itsoutstanding debts. The policy ensures that the company cannot defaulton its loans. This shows that Apple Inc. will not have to sell itsassets to settle its debts. Consequently, the share price of AppleInc. will remain high. The company has a strong balance sheetcompared to the technology industry which has interest coverage of49.91.

Debt policy

Thedebt policy uses the comparison between long-term debt and totalassets of Apple Inc. Long-term debt to total asset ratio is used inevaluating this policy. The ratio shows the soundness of thefinancial policies of the company in meeting its current loans. It iscalculated by dividing the long term debts with the total assets ofthe firm.

Long-term debt tototal asset ratio=

=0.18

Theratios for the year ending 2013, 2014 and 2015 were 0.08, 0.13, and0.18 respectively. The increase in the ratio indicates that the debtpolicy is not appropriate since the company progressively becomesmore dependent on loan to expand its business operations. The growingdependency on debts put the share price of the company at risk.

Leverage

Leverageinfluences the financial decisions of a firm. Financial leveragecompares the income before interests and taxes with the common stockearnings per share. The decisions that employ leverage aims atincreasing the earnings per share. A high leverage ratio indicatesthat a company’s financial policies guarantee the increment in thevalue of stocks (DeAngelo &amp Stulz, 2015). It also shows that thecompany is creating value for stakeholders. Leverage policy becomespositive when it results in profit before taxes that is higher thanthe actual cost of borrowed capital. In the case of Apple Inc., thecost of borrowed money was $514 million while the income before taxeswas $72,515 million in 2015. This shows the existence of equilibriumin the financial structure of Apple Inc. and stability of itseconomic activity. This situation guarantees the stockholderssecurity and profit for their shares in the company (Mihalciuc C. &ampGrosu M., 2015).

Dividend policy

Thefinancial leverage has an impact on the dividend policy of Apple Inc.The productivity of a company resulting from the use of its leveragedetermines the stock price and dividend. The increasing revenue ofApple indicates an increasing dividend payout ratio. The ratioindicates the portion of the net income of Apple Inc. that is givento its stockholders. It is calculated as shown below.

=0.216 (21.6%)

Theratio of 21.6% indicates that for every dollar of earnings during2015, Apple Inc. declared 21.6 cents in cash dividends. Therefore,stockholders who want more profit can purchase the company’sstocks. The ratio of 21.6% also shows that the company plows backsome earnings back into operations and thus, increasing theshareholders’ equity in relation to debts. Most of the finances ofthe company will be equity. Increasing the shareholders’ equityreduces its dependency on loans while increasing the safety ofstockholders’ investments (Godwin &amp Alderman, 2012).

Conclusion

AppleInc. has an increasing revenue and net income. The revenue and incomeprovide a general view of the company’s financial performance. Moreinsights about the soundness of the company before buying its stockis developed through the use of financial ratios such as liquidity,profitability, financial leverage, asset management, market value,return on equity, management performance and the financial policies.According to the solvency ratios, Apple Inc. has efficient productionactivities processes and is able to meet its short-term loans usingthe current assets. The company finances most of its operations usingshareholders’ equity and thus, has reduced financial risks. A largepercentage of the ownership is own shareholders. The profitabilityratios indicate that investing in the company is profitable and thus,will have high earnings per share. The management of the companyensures the formulation of effective strategies to manage its assets.The company was able to address the factors that resulted in thereduction of its efficiency in collecting receivables (Jiranyakul &ampJiang, 2013). It is more efficient in managing its assets to generateincome to its shareholders compared to the industry’s performance.

BecauseApple Inc. is a large cap firm, the value of stockholders’investments will be constant. The earnings per share will beconsistent. Apple Inc. is likely to grow in value. According to thebook value per share, the returns that stockholders get will alsoincrease in the future. The return on equity ratio also supports theincreasing earnings the company distributes to its shareholders. Theprofitability of Apple Inc. is also shown by how well the managementof the company uses various strategies to create value. According tothe economic value added, the company makes appropriate decisions andformulation of invaluable strategies to ensure their efficientimplementation. The financial policies of Apple Inc. also favor itsstockholders. The threat associated with purchasing the company’sstock is the increasing dependency on debt. Despite the growingreliance on loans, the company’s ability to repay them alsoincreases. The stockholder should worry less about it. Furthermore,it is the most profitable and stable company in the technologyindustry.

Thestockholder should purchase the stocks of the company. It isappropriate when the individual receives part of their earnings andreinvest the remainder. This way, the value for the investment willincrease with time. Stockholders willing to purchase should prepareto monitor the performance of Apple Inc.

References

Apple Inc., 2015 Annual Report.

Brigham E. F. &amp Houston J. F., (2015), Fundamentals ofFinancial Management, Cengage

DeAngelo, H., &amp Stulz, R. M. (2015). Liquid-claim production,risk management, and bank capital structure: Why high leverage isoptimal for banks.&nbspJournal of Financial Economics,&nbsp116(2),219-236.

Emamalizadeh, M., Ahmadi, M., &amp Pouyamanesh, J. (2013). Impact offinancial leverage on dividend policy at Tehran Stock Exchange: Acase study of food industry.&nbspAfrican Journal of BusinessManagement,&nbsp7(34), 3287.

Godwin, N. H., &amp Alderman, C. W. (2012).&nbspFinancial ACCT.Mason, Ohio: South-Western.

IAS Plus, IAS 1 — Presentation of Financial Statements, retrievedfrom http://www.iasplus.com/en/standards/ias/ias1Accessed 16 November 2016

Jiranyakul, K., &amp Jiang, J. (2013). Capital structure, cost ofdebt and dividend payout of firms in New York and Shanghai stockexchanges.&nbspJiang, J., and Jiranyakul, K.,`Capital Structure,Cost of Debt and Dividend Payout of Firms in New York and ShanghaiStock Exchanges,`International Journal of Economics and FinancialIssues,&nbsp3(1), 113-121.

Mihalciuc C. &amp Grosu M. (2015), The financial Leverage Model-Tool Used for Financial Policy Decision Making, European JournalOf Accounting, Finance &amp Business, 3(2).

Müller, T. (2014).&nbspA Study on the Integrated Approach ofShareholder Value Analysis. Hamburg Anchor Academic Publishing

NASDAQ, AAPL Company Financials, Retrieved fromhttp://www.nasdaq.com/symbol/aapl/financials?query=ratiosAccessed 15 November 2016