Bangladesh University of Professionals

Principles of Finance
Course Code: FIN1105

Term Paper on
Financial Performance of Apple Inc.

Submitted To
Dr. Jannatul Ferdaous
Professor
Department of Business Administration in Finance & Banking
Bangladesh University of Professionals

Submitted By
Group no.
Members: ID:
1)
2)
3)
4)
5)
Date of Submission: 29th June 2025
I. Letter of Transmittal
II. Acknowledgement
III. Executive Summary
IV. Table of Contents
 Chapter 1
Introduction
1. Introduction

1.1 Introduction
Apple Inc. operates as a world-famous American technology company from Cupertino, California,
that delivers elegant products with user-friendly interfaces and seamless hardware-software-
service integration. Apple Inc. started its operations on April 1, 1976, when Steve Jobs, Steve
Wozniak and Ronald Wayne established the company in a garage to market Wozniak's Apple I
personal computer. The Apple II revolutionized the industry by introducing color graphics while
becoming one of the first mass-produced microcomputers after the company established itself as
a leading force in personal computing. The Macintosh launch in 1984 brought graphical user
interfaces and mouse navigation to mainstream computing while setting new personal computer
standards. Apple developed its product range past computers by launching the iPod in 2001,
iPhone in 2007 and iPad in 2010, which transformed their respective markets through their
minimalist designs and user-friendly interfaces and focus on user experience. The unified
environment for millions of users worldwide exists through Apple's complete ecosystem, which
includes Mac computers together with iPhones, iPads, Apple Watch and services like iCloud,
Apple Music and the App Store. Apple maintains its enduring philosophy through simplicity,
attention to detail and continuous innovation, which manifests in its iconic products and "Think
different" ethos. Apple maintains its position as the largest technology company by revenue
through its dedication to innovation and excellence and its focus on delivering a seamless user
experience.

This paper evaluates Apple Inc.'s financial performance by analyzing its fundamental business
segments alongside its innovative strategies, which drive its sustained market dominance in global
technology.

1.2 Objective of the Study

This study aims to engage students with Apple Inc.'s highly organized and innovation-driven
corporate environment, and this report is the outcome of examining that structured setting. The
main goal is to illustrate real-world scenarios within Apple’s disciplined operational framework
while conducting a detailed financial ratio analysis over recent years. More specifically, this report
seeks to:

▪ Gather insights on Apple’s manufacturing, global supply chain, and ecosystem of

hardware, software, and services.
▪ Evaluate Apple’s performance over time using key ratios—such as liquidity, profitability,
efficiency, and solvency—to assess its financial health.
▪ Forecast Apple’s future standing in the tech sector.
▪ Identify the driver’s behind Apple’s growth and challenges
Specific Objectives-
1. Calculating the ratios
2. Interpreting the results

1.3 Limitations of the Study

Restricted access to confidential company data- The internal data availability is limited because
Apple maintains strict nondisclosure policies and operates with a secretive culture.

Limited analytical experience- The report was written by undergraduate researchers who are still
developing their analytical skills which may have limited the depth of the financial and operational
assessment.

Incomplete departmental insights- The three-year study period prevented us from collecting
complete data across all Apple departments particularly in the newly emerging fields of AI, health
research and autonomous systems.

Complex scale of manufacturing ecosystem- The extensive supply chain of Apple which
includes Chinese outsourced manufacturers creates operational challenges that surpass our current
capabilities.

Absence of industry-wide benchmarks- The absence of a strong industry-wide framework for

privacy engineering and secretive corporate cultures made it difficult to determine if Apple's
performance is truly exceptional or subpar.
 Chapter 2
Ratio Analysis
2. Ratio Analysis

2.1 Ratio Analysis

Ratio analysis is a financial evaluation method that involves interpreting data from a company’s
financial statements to assess its performance and financial health. The analysis provides essential
information about liquidity and profitability, together with efficiency and solvency. The analysis
of financial ratios, including Liquidity Ratios, Activity Ratios, Debt Ratios, Profitability Ratios
and Market Ratios, enables analysts and managers and investors to make appropriate decisions
about operations and investments and risk management. Ratio analysis helps companies to
evaluate their performance through time-based comparisons and peer industry assessments, which
reveal hidden trends and weaknesses in financial data.

2.2 Classifications of Ratio

2.2.1 Liquidity Ratio

The liquidity ratio measures a company's short-term obligation payment capability through its
liquid assets, including cash, accounts receivable and marketable securities. The ratio shows how
well a company can transform its assets into cash to fulfil its current liabilities. Financial health
improves when liquidity ratios are high because the company maintains sufficient cash flow to
avoid defaulting on short-term debts.

1) Current Ratio: The liquidity ratio measures a company's short-term obligation payment
capability through its liquid assets, including cash, accounts receivable and marketable securities.
The ratio shows how well a company can transform its assets into cash to fulfil its current
liabilities. Financial health improves when liquidity ratios are high because the company maintains
sufficient cash flow to avoid defaulting on short-term debts.

𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔
Current Ratio =
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔

2) Quick Ratio: The quick ratio or acid-test ratio evaluates a company's short-term liability
payment capabilities through its most liquid assets, while excluding inventory. The quick ratio
provides a more stringent liquidity assessment than the current ratio because it only considers
assets that can be easily converted into cash. A ratio of 1 or higher typically indicates strong
financial health and minimal risk of short-term default. Standard Quick ratio is 1:1.

𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔−𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
Quick Ratio = 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
2.2.2 Activity Ratio
Activity ratios show how well a company uses its assets to produce revenue. The ratios assess how
quickly assets such as inventory, receivables and total assets produce sales or cash. The three main
activity ratios used in financial analysis are inventory turnover, accounts receivable turnover and
total asset turnover. High activity ratios usually indicate good asset management and strong
operational performance, but lower ratios could indicate inefficiencies or underutilized resources
or potential liquidity issues.

1) Inventory Turnover: The financial ratio of inventory turnover shows the number of times a
company sells and restocks its inventory during a specific time frame. The ratio shows both the
effectiveness of inventory management and the performance of sales operations. A high turnover
rate indicates both strong sales performance and effective inventory management, but a low rate
could indicate overstocking or poor sales performance.

𝑪𝒐𝒔𝒕 𝒐𝒇 𝑮𝒐𝒐𝒅𝒔 𝑺𝒐𝒍𝒅

Inventory Turnover =
𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚

2) Average Collection Period (ACP): The Average Collection Period represents the duration in
days that a business needs to receive payments from its credit customers. The measurement shows
how well a company handles its accounts receivable operations. A shorter collection period
indicates quicker cash inflows and better liquidity, while a longer period may suggest collection
issues or lenient credit policies.

𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝑹𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆
Average Collection Period =
𝑨𝒏𝒏𝒖𝒂𝒍 𝑺𝒂𝒍𝒆𝒔 ÷ 𝟑𝟔𝟓

3) Average Payment Period (APP): The average payment period shows the number of days a
company needs to clear its payables. The metric helps organizations evaluate their short-term
financial liquidity together with their credit management approaches. A longer payment period
helps cash flow but may damage supplier relationships, while a shorter payment period indicates
immediate payments.

𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝑷𝒂𝒚𝒂𝒃𝒍𝒆
Average Payment Period =
𝑪𝒐𝒔𝒕 𝒐𝒇 𝑮𝒐𝒐𝒅 𝑺𝒐𝒍𝒅 ÷𝟑𝟔𝟓

4) Total Asset Turnover: Total asset turnover shows the efficiency of a company in using its total
assets to produce revenue. The ratio is obtained by dividing net profit by total assets. A higher
ratio indicates effective asset utilization and strong operational performance, while a lower ratio
may suggest inefficiencies or underused resources. This ratio is especially useful for comparing
companies within the same industry to assess their productivity and management effectiveness.
 𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
Total Asset Turnover =
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔

2.2.3 Debt Ratio

A firm’s debt position shows how much borrowed money is being used to generate profits.
Financial analysts mainly focus on long-term debt, as it requires ongoing payments over time.
Higher levels of debt increase the risk that the firm may struggle to meet these obligations. Since
creditors must be paid before any profits are given to shareholders, both investors and lenders
closely monitor the firm’s ability to repay its debts. Debt ratios serve as a key tool for investors
and creditors to evaluate both a company's long-term financial stability and its potential to default
on payments.

1) Debt Ratio: The debt ratio represents a financial indicator which shows how much of a
company's total assets come from debt financing. The debt ratio equals total liabilities divided by
total assets. A higher debt ratio indicates that most of the company's assets come from borrowing,
which suggests increased financial risk. A lower ratio indicates better financial stability because
the company depends less on external financing.

𝑻𝒐𝒕𝒂𝒍 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
Debt Ratio =
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔

2) Times Interest Earned: The times interest earned (TIE), also known as the interest coverage
ratio, measures a company’s ability to meet its interest obligations on debt using its earnings before
interest and taxes (EBIT). It indicates how comfortably a firm can handle interest expenses with
its operating income. A higher ratio suggests greater financial stability and lower risk for creditors,
while a low ratio signals potential difficulty in meeting debt obligations

𝑬𝑩𝑰𝑻
Times Interest Earned =
𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕

3) Fixed-Payment Coverage Ratio: The fixed-payment coverage ratio (FPCR) measures a

company’s ability to meet all fixed financial obligations, including interest, lease payments, and
principal repayments. It indicates how well earnings before interest and taxes (EBIT) cover these
fixed charges. A higher ratio suggests stronger financial stability and a lower risk of default, while
a lower ratio may signal financial strain and difficulty in meeting recurring fixed commitments.

Fixed-Payment Coverage Ratio =

𝑬𝑩𝑰𝑻+𝑳𝒆𝒂𝒔𝒆 𝑷𝒂𝒚𝒎𝒆𝒏𝒕
𝑷𝒓𝒊𝒏𝒄𝒊𝒑𝒂𝒍 𝑷𝒂𝒚𝒎𝒆𝒏𝒕𝒔+𝑷𝒓𝒆𝒇𝒆𝒓𝒓𝒆𝒅 𝑺𝒕𝒐𝒄𝒌 𝑫𝒊𝒗𝒊𝒅𝒆𝒏𝒅𝒔
𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕+𝑳𝒆𝒂𝒔𝒆 𝑷𝒂𝒚𝒎𝒆𝒏𝒕+( )
𝟏−𝑻
2.2.4 Profitability Ratio
The assessment of profitability ratios shows how well a company generates earnings in relation to
its revenue, assets, equity and other financial metrics. The ratios show how well a business
transforms its resources into profit. The main profitability ratios consist of gross profit margin, net
profit margin, return on assets (ROA), and return on equity (ROE). Higher profitability ratios
generally indicate strong financial performance and effective cost control. These ratios help
investors and analysts assess both operational efficiency and financial health, future growth
potential and return prospects of a company.

1) Gross Profit Margin: Gross profit margin reveals the percentage of revenue that remains after
subtracting the cost of goods sold (COGS). The ratio demonstrates how well a company manages
its product production and sales processes. Companies with higher margins demonstrate effective
production cost management and strong pricing approaches, but lower margins could indicate high
expenses or market price competition.

𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕
Gross Profit Margin = 𝒙 𝟏𝟎𝟎
𝑹𝒆𝒗𝒆𝒏𝒖𝒆

2) Operating profit margin: Operating profit margin reveals the percentage of revenue which
remains after paying operating expenses but before accounting for interest and taxes. The ratio
demonstrates how well a company manages its operational costs and pricing methods. A higher
margin indicates better control over operating costs and stronger profitability. Operating income
(or earnings before interest and taxes) divided by revenue produces the ratio. The ratio enables
industry-specific company comparisons and helps evaluate how well management controls
fundamental business expenses.

𝑶𝒑𝒆𝒓𝒂𝒕𝒊𝒏𝒈 𝑷𝒓𝒐𝒇𝒊𝒕
Operating Profit Margin = 𝒙 𝟏𝟎𝟎
𝑹𝒆𝒗𝒆𝒏𝒖𝒆

3) Net Profit Margin: Net profit margin is a profitability ratio that shows the percentage of net
profit earned from total revenue. It indicates how effectively a company converts sales into actual
profit after all expenses, including taxes and interest, are deducted. A higher net profit margin
reflects better financial performance and cost management.

𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
Net Profit Margin = 𝒙 𝟏𝟎𝟎
𝑹𝒆𝒗𝒆𝒏𝒖𝒆

4) Earnings Per Share (EPS): Earnings per share (EPS) represents a fundamental profitability
indicator which demonstrates the amount of net income generated for each outstanding common
stock share. Investors use EPS to evaluate both the financial performance and the profitability of
a company. Companies with higher EPS values tend to demonstrate better profitability, which
usually leads to increased stock prices.
 𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
Earnings Per Share =
𝑵𝒐. 𝒐𝒇 𝑪𝒐𝒎𝒎𝒐𝒏 𝑺𝒕𝒐𝒄𝒌 𝑬𝒒𝒖𝒊𝒕𝒚

5) Return on Assets (ROA): Return on Assets (ROA) is a profitability ratio that measures how
effectively a company uses its total assets to generate profit. It indicates the efficiency of
management in turning assets into profits. A higher ROA reflects better performance and efficient
resource utilization. It is calculated by dividing net profit by total assets, usually expressed as a
percentage, and is helpful for comparing companies across industries.

𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
ROA = 𝒙 𝟏𝟎𝟎
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔

6) Return on Equity (ROE): Return on Equity (ROE) is a profitability ratio that measures how
effectively a company uses shareholders’ equity to generate net income. It indicates the return
earned on the owners’ investment and is calculated by dividing net income by average
shareholders’ equity. A higher ROE suggests efficient use of equity and strong financial
performance, while a lower ROE may signal inefficiencies or weak profitability.

𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕
ROE = 𝒙 𝟏𝟎𝟎
𝑻𝒐𝒕𝒂𝒍 𝑬𝒒𝒖𝒊𝒕𝒚

2.2.4 Market Ratios

Market ratios are financial metrics used to evaluate a company’s stock market performance
relative to its earnings, book value, and other financial indicators. These ratios help investors
assess the attractiveness and valuation of a company’s shares. Common market ratios include the
price-to-earnings (P/E) ratio and the market-to-book (M/B) ratio. They provide insight into
investor expectations, growth potential, and market sentiment. High or low ratios can indicate
whether a stock is overvalued or undervalued compared to its actual financial performance.

1) Price / Earnings (P/E) Ratio: The Price/Earnings (P/E) ratio shows how much investors pay
for each dollar of earnings per share (EPS) through the current share price. The ratio shows how
much investors are willing to spend for each dollar of earnings. A high P/E ratio may suggest
expectations of future growth, while a low P/E can indicate undervaluation or weak prospects. It
is widely used for stock valuation and comparing companies within the same industry.

𝑷𝒓𝒊𝒄𝒆 𝑷𝒆𝒓 𝑺𝒉𝒂𝒓𝒆

P/E Ratio =
𝑬𝒂𝒓𝒏𝒊𝒏𝒈𝒔 𝑷𝒆𝒓 𝑺𝒉𝒂𝒓𝒆

2) Market / Book (M/B) Ratio: The Market/Book (M/B) ratio compares a company’s market value
per share to its book value per share. It indicates how much investors are willing to pay for each
dollar of the company’s net assets. A ratio above 1 suggests that the market values the firm more
than its accounting value, often reflecting investor confidence, while a ratio below 1 may indicate
undervaluation or concerns about future performance.

𝑴𝒂𝒓𝒌𝒆𝒕 𝑽𝒂𝒍𝒖𝒆 𝒐𝒇 𝑺𝒉𝒂𝒓𝒆

M/B Ratio =
𝑩𝒐𝒐𝒌 𝑽𝒂𝒍𝒖𝒆 𝒐𝒇 𝑺𝒉𝒂𝒓𝒆
 Chapter 3
Company Overview
3.1 Foundation and Evolution
Steve Jobs, Steve Wozniak and Ronald Wayne established Apple Inc. on April 1, 1976, in
Cupertino, California. Apple I and Apple II computers brought the company its first success, which
helped establish personal computing as a new market. In 1984, Apple introduced the first graphical
user interface (GUI) – based Macintosh, setting a new standard for user-friendly computing.
After facing near-bankruptcy in the mid-1990s, Apple rebounded strongly post-1997 following the
acquisition of NeXT, which brought Steve Jobs back to the company. The company's revival under
Steve Jobs resulted in the creation of revolutionary products, including iMac, iPod, iPhone and
iPad, which have permanently transformed the technology industry.

3.2 Leadership and Organization

Steve Jobs brought Apple to worldwide recognition until his death in 2011 when Tim Cook took
over as CEO. Apple operates through a functional organizational structure which includes
hardware, software, services, marketing and retail divisions. The organizational structure which
Jobs created and Cook maintained allows different departments to work together effectively while
developing specialized skills which drives both innovation and operational efficiency.

3.3 Headquarters and Workforce

Apple’s corporate headquarters is Apple Park, a 2.8 million square foot, eco-friendly campus
located in Cupertino, California. This “spaceship” campus houses approximately 12,000
employees. Globally, Apple employs around 161,000 to 164,000 people, reflecting its vast
operational scale and global reach.

3.4 Products and Services Portfolio

Apple produces a wide range of flagship products which include iPhone, Mac, iPad, Apple Watch,
AirPods and Apple TV together with numerous accessories. The software ecosystem of the
company includes operating systems such as iOS, iPadOS, macOS, watchOS and tvOS as well as
productivity and creative applications such as Pages and Final Cut Pro.
The company provides a broad selection of services including the App Store, Apple Music, iCloud,
Apple Pay, Apple TV+, fitness and news subscriptions, and the Apple Card which generate
substantial recurring revenue streams.

3.5 Financials and Market Position

Apple operates as one of the Big Five technology companies together with Alphabet, Microsoft,
Amazon, and Meta. The company operates as a publicly traded entity under the stock symbol
AAPL. Apple generated between $383 billion and $391 billion in revenue during fiscal year 2023
while iPhones accounted for about 52% of total revenue. The revenue stream of Apple has
expanded through its services and wearable technology products. Apple achieved $1 trillion
market capitalization in 2018 before reaching $2 trillion in 2020 and its estimated value ranges
from $3 trillion to $3.7 trillion during mid-2025 which demonstrates its market leadership.

3.6 Business Model and Competitive Advantage

Apple achieves strong brand loyalty and high profit margins through its vertical integration of
hardware, software, services and retail which creates a seamless user experience. The functional
organizational structure at Apple enables departmental coordination and deep specialization which
differentiates the company from competitors such as Samsung.

3.7 Global Supply Chain and Operations

Apple relies on partners including Foxconn, Pegatron, Wistron for assembly work while obtaining
components from 43 different countries. Apple continues to expand its manufacturing base in India
by opening its first Delhi flagship store while aiming to reach 25% domestic production within
five years. Apple implements Supplier Responsibility programs to handle labor and environmental
issues across its supply chain.

3.8 Innovation and Research Development

In fiscal year 2024, Apple invested approximately $31 billion in research and development,
representing about 8% of its revenue. Its R&D focus areas include custom silicon chips (A-series
and M-series), artificial intelligence, augmented and virtual reality (such as the Vision Pro
headset), health technologies, and advanced camera systems.
Apple maintains an active portfolio of patents across hardware, software, biometric security, AI,
and AR technologies, reinforcing its position as a leader in innovation.

3.9 Culture, Values and Challenges

The culture at Apple stems from Steve Jobs's emphasis on empathy, focus and his dedication to
precise details which drives both innovation and design excellence. Apple Park operates on 100%
renewable energy while the company maintains its dedication to environmental stewardship.
However, Apple continues to face ongoing criticism about its supply chain labor practices as well
as antitrust investigations and repair limitations and environmental policy difficulties.
3.10 Apple Inc. Leadership and Organizational Structure

1. Board of Directors
▪ Arthur D. Levinson – Chairman
▪ A.I. Gore
▪ Alex Gorsky
▪ Andrea Jung
▪ Monica Lozano
▪ Ronald Sugar
▪ Susan Wagner
The Board of Directors oversees Apple’s strategic direction and governance, ensuring the
company’s long-term success and accountability.

2. Chief Executive Officer (CEO)

▪ Tim Cook
Tim Cook reports directly to the Board of Directors and acts as the central connector among
Apple’s various functions, driving the company’s overall vision and operational execution.

3. Senior Leadership Team – Functional Divisions

The senior executives report directly to the CEO and lead key functional areas critical to Apple’s
innovation and business operations:
▪ Software Engineering – Craig Federighi
▪ Hardware Engineering – John Ternus
▪ Hardware Technologies – Johny Srouji
▪ Machine Learning & AI Strategy – John Giannandrea
▪ Services (App Store, Apple Pay, etc) – Eddy Cue
▪ Marketing (Worldwide) – Greg Joswiak
▪ Operations & Supply Chain – Sabih Khan
▪ Retail & People – Deirdre O’Brien
▪ Finance – Kevan Parekh (CFO)
▪ Legal & General Counsel – Katherine Adams
▪ Design (Appe Fellow) – Phil Schiller
▪ Chief Operating Officer (COO) – Jeff Williams
 Chapter 4
Financial Performance of the Company
4. Financial Performance of Apple Inc.
Current Ratio:
2022 2023 2024

0.879 0.988 0.867

Table: 4.1

Current Ratio
1
0.98
0.96
0.94
0.92
0.9
0.88
0.86
0.84
0.82
0.8
2022 2023 2024

Current Ratio

Fig: 4.1

Interpretation: The current ratio increased from 0.879 in 2022 to 0.988 in 2023, which shows
better liquidity and a stronger ability to meet short-term obligations. However, it declined again to
0.867 in 2024, which suggests a potential weakening in financial stability. This trend indicates that
the company needs to review its short-term asset and liability management.

Quick Ratio:
2022 2023 2024

0.847 0.944 0.826

Table: 4.2
 Quick Ratio
0.96
0.94
0.92
0.9
0.88
0.86
0.84
0.82
0.8
0.78
0.76
2022 2023 2024

Quick Ratio

Fig: 4.2

Interpretation: The quick ratio increased from 0.847 in 2022 to reach its highest point at 0.944
in 2023, which shows better short-term liquidity and the company's capacity to pay off immediate
liabilities. The liquidity position weakened when the quick ratio dropped to 0.826 in 2024. The
decrease in the quick ratio may result from higher current liabilities or reduced liquid assets.

Inventory Turnover:
2022 2023 2024

45.197 33.823 28.87

Table: 4.3
 Inventory Turnover
50
45
40
35
30
25
20
15
10
5
0
2022 2023 2024

Inventory Turnover

Fig: 4.3

Interpretation: The inventory turnover has steadily declined over the three years shown. In 2022,
turnover was highest at 45.197, dropping to 33.823 in 2023, and further decreasing to 28.87 in
2024. This trend suggests slower inventory movement, which may indicate reduced sales
efficiency or overstocking.

Total Asset Turnover:

2022 2023 2024

1.117 1.087 1.071

Table: 4.4
 Total Asset Turnover
1.13
1.12
1.11
1.1
1.09
1.08
1.07
1.06
1.05
1.04
2022 2023 2024

Total Asset Turnover

Fig: 4.4

Interpretation: The total asset turnover ratio decreased from 1.12 in 2022 to 1.09 in 2023 and
then to 1.07 in 2024. The company has become less efficient in using its assets to generate revenue
over time. The downward trend could indicate that the company is not using its assets effectively
or that sales have decreased.

Average Collection Period:

2022 2023 2024

26.087 28.1 31.185

Table: 4.5
 Average Collection Period
32
31
30
29
28
27
26
25
24
23
2022 2023 2024

Fig: 4.5

Interpretation: The average collection period increased from around 26 days in 2022 to 28 days
in 2023, and then further rose to about 31 days in 2024. This indicates that it is taking the company
longer to collect payments from customers each year, which could lead to cash flow challenges.
The rising trend may suggest inefficiencies in credit control or slower customer payments.

Average Payment Period:

2022 2023 2024

104.685 106.721 119.658

Table: 4.6
 Average Payment Period
125

120

115

110

105

100

95
2022 2023 2024

Fig: 4.6

Interpretation: The average payment period increased from around 104 days in 2022 to
approximately 106 days in 2023, and then sharply rose to about 120 days in 2024. This suggests
the company is taking longer to pay its suppliers, which could reflect improved cash flow
management or delayed payments. However, the rising trend might also strain supplier
relationships if it continues.

Average Age of Inventory:

2022 2023 2024

8.075 10.791 12.642

Table: 4.7
 Average age of inventory(In days)
14

12

10

0
2022 2023 2024

Average age of inventory(In days)

Fig: 4.7

Interpretation: The average age of inventory increased steadily from about 8 days in 2022 to
around 11 days in 2023, and then to approximately 13 days in 2024. This indicates that inventory
is taking longer to sell each year, which may signal slower sales or overstocking. A rising trend
like this could impact cash flow and operational efficiency if not managed properly.

Debt Ratio:
2022 2023 2024

0.856 0.823 0.843

Table: 4.8

Debt ratio
0.86

0.85

0.84

0.83

0.82

0.81

0.8
2022 2023 2024

Debt ratio
 Fig: 4.8

Interpretation: The debt ratio decreased from about 0.856 in 2022 to approximately 0.823 in
2023, indicating a reduction in reliance on debt. However, it rose again to around 0.843 in 2024,
suggesting the company increased its debt levels slightly. This fluctuation may reflect strategic
borrowing or changing capital structure priorities.

Gross Profit Margin:

2022 2023 2024

43.309 44.131 46.206

Table: 4.9

Gross Profit Margin (%)

46.5
46
45.5
45
44.5
44
43.5
43
42.5
42
41.5
2022 2023 2024

Fig: 4.9

Interpretation: The gross profit margin has shown a consistent upward trend from 2022 to 2024.
It increased from approximately 43.3% in 2022 to around 44.1% in 2023, and further to about
46.2% in 2024. This suggests improving profitability, likely due to better cost control or increased
pricing power.

Net Profit Margin:

2022 2023 2024

25.309 25.306 23.971

Table: 4.10
 Net Profit Margin (%)
25.5

25

24.5

24

23.5

23
2022 2023 2024

Fig: 4.10

Interpretation: The net profit margin remained stable between 2022 and 2023, both hovering
around 25%. However, in 2024, it saw a noticeable decline to about 24%, suggesting that the
company experienced lower profitability or increased costs. This decline could signal potential
challenges in maintaining profit levels, such as rising expenses or reduced sales.

Earnings Per Share:

2022 2023 2024

6.273 6.236 6.201

Table: 4.11

EPS
6.28

6.26

6.24

6.22

6.2

6.18

6.16
2022 2023 2024

EPS
 Fig: 4.11

Interpretation: The chart shows a consistent decline in EPS (Earnings Per Share) from 2022 to
2024. EPS decreased from just above $6.27 in 2022 to about $6.23 in 2023, and further down to
approximately $6.2 in 2024, indicating a downward trend in the company's profitability over these
years.

Operating Profit Margin:

2022 2023 2024

30.288 29.821 31.510

Table: 4.12

Operating profit margin (%)

32
31.5
31
30.5
30
29.5
29
28.5
2022 2023 2024

Operating profit margin

Fig: 4.12

Interpretation: The operating profit margin declined slightly from around 30.3% in 2022 to
approximately 29.8% in 2023, indicating a dip in operational efficiency or increased operating
costs. However, it rebounded significantly in 2024 to about 31.5%, suggesting improved cost
control or higher operational income. Overall, the margin trend shows resilience and recovery after
a temporary decline.
Return on Asset:
2022 2023 2024

28.292 27.509 25.682

Table: 4.13
 Return on Asset (%)
28.5
28
27.5
27
26.5
26
25.5
25
24.5
24
2022 2023 2024

Return on total asset

Fig: 4.13

Interpretation: The return on total assets steadily declined from 2022 to 2024, dropping from
approximately 28.3% in 2022 to around 27.5% in 2023, and further down to about 25.7% in 2024.
This downward trend indicates the company’s decreasing efficiency in generating profit from its
assets over the three-year period.

Return on Equity:
2022 2023 2024

196.958 156.076 164.593

Table: 4.14

Return on Equity (%)

250

200

150

100

50

0
2022 2023 2024

Return on total equity

 Fig: 4.14

Interpretation: The return on total equity decreased significantly from 2022 to 2023, dropping
from around 196.95% to about 156.076%. In 2024, there was a slight recovery as the return
increased marginally, but it remained well below the 2022 level. This suggests the company's
efficiency in generating returns from its equity weakened in 2023 and only partially rebounded in
2024.

Price/Earning Ratio:
2022 2023 2024

24.089 27.217 37.441

Table: 4.15

P/E ratio
40
35
30
25
20
15
10
5
0
2022 2023 2024

P/E ratio

Fig: 4.15

Interpretation: The P/E (Price-to-Earnings) ratio increased consistently from around 24 in 2022
to 28 in 2023, and then to approximately 37 in 2024. This upward trend suggests growing investor
confidence and higher market valuation of the company relative to its earnings. However, it may
also indicate that the stock is becoming more expensive, potentially reflecting expectations of
strong future growth.

Market/Book Ratio:
2022 2023 2024
 47.535 42.541 61.586S

Table: 4.16

M/B ratio
70
60
50
40
30
20
10
0
2022 2023 2024

M/B ratio

Fig: 4.16

Interpretation: The M/B (Market-to-Book) ratio increased from about 42 in 2022 to 44 in 2023,
and then further rose to approximately 62 in 2024. This upward trend indicates an increasing
market valuation relative to the company's book value, which may reflect investor optimism or
higher growth expectations. However, such high ratios could also suggest that the company's stock
is becoming expensive, potentially signaling overvaluation.
 Chapter 5
Findings and Recommendations