Financial Outcomes Paper






Financial Outcomes Paper

FIN/419
May 11, 2015
Maria Johnson


Financial Outcomes Paper
Apple Inc. is one of the most well-known and popular Fortune 500 companies in the world. Through their constant innovation & creation of new products and services. Apple has found a way to continually reinvent themselves and provide consumers with products and services that assist with making their lives easier.
One of Apple’s current financial initiatives revolves around sales. In order to continually fuel company growth, Apple’s CEO Tim Cook has developed an initiative to release new products and services into the market place in 2015. According to "Apple Reports Fourth Quarter Results" (2014), “With the amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015” (para. 3).
Learning Team C will compare and contrast the three potential financial outcomes of this new initiative. Our team will determine the most likely outcome and discuss the possible positive and negative effects on Apple’s organization.
Financial Outcome 1: Effects of Increase in Sales
An increase in sales is obviously the ideal situation for Apple to be in. Sales going up means the company is doing what it should be doing in terms of making money. This positive outcome is not without its drawbacks, however. Making more money only means that more product is being consumed by the consumer, which in turn means that more product must be produced to meet demand. This situation is something that Apple is very well prepared for. Being a large Fortune 500 corporation such as Apple means that money is no object when it comes to making more money. A corporation that will not spend money to make money is one that is limiting its growth and shortening its horizons. Luckily for Apple and its stockholders, such is not the case for them. The business has shown a willingness time and time again to be a daring, innovative and exploratory leader in the world of technology and electronics. These devices are excellent for making money in both the personal use world as well as business use. According to Wakabayashi (2014) “The popularity of the iPhone and iPad among employees is promoting corporate tech managers to rewrite policies and change traditional buying patterns. The iPhone has replaced the BlackBerry as the mobile phone of choice, as the iPad assumes tasks once reserved for PCs” (p. 1).
Since the third quarter of 2013, the financial reports show the per share price to be consistently on the rise after being retroactively adjusted to reflect the stock split. Prices have increased from $55.01 – $66.54 in the 2013 third quarter to $92.09 - $103.74 in the fourth quarter of 2014. With increases like this it stands to reason that the iPods, iPads and iPhones produced by Apple are only gaining momentum in terms of popularity and profitability. The Apple Watch will likely become the next big product that Apple makes a substantial profit from, adding to the docket another big money maker to sweeten the pot for the corporation. Apple also makes a considerable amount of its gains in the service industry, through programs like iTunes that pair with their devices ingeniously to help the company become even more profitable. With Apple's track record and patterns of success, there is no reason to believe that they will not continue to add other successful products and services to their available arsenal and further dominate the technological industry.
Financial Outcome 2: Decrease in Sales of Apple Products
A decrease in sales would raise some red flags within the Apple organization. A decrease in sales could mean a couple of different things. It could mean a product is not reaching its targeting audience, or it could mean that the features of the technology is replaced by a newer, faster software. Either way a decrease in sales should force the company to look within to try to pinpoint the product or service that is not performing to par. Once identified, a quick resolution can be implemented to recover sales.
There can be many factors that could play a part in a company reporting a loss