Apple Company Bond Analysis

The purpose of this paper is to analyze Apple’s stocks and bonds to determine whether an individual investor should invest in this company. I will use financial statements, reports from previous years, and ratio analyses. Combined this data will determine whether to add Apple to an investor’s portfolio or whether they should look for another investment opportunity. I will use various sources to gather information on the companies short and long term debt, credit rating, and interest rates to complete the bond analysis. I will complete an analysis of their stock using their current market value, both book and forecasted prices, financial statements, and past stock trading prices. To evaluate Apple’s bonds, we must first determine what …show more content…
If they shut down tomorrow, there is enough cash on hand to pay off their debt. Their bonds are about as safe as purchasing a government bond and in some cases have a higher rate of return. As with all companies, the longer term bonds have a greater rate of return. In the past, Apple stock has been volatile, which is why the longer term bonds pay more. Looking at their rates over the last few years, I would suggest adding Apple’s bonds to an investor’s portfolio. By using Apple’s capitalization ratio, we can determine that the company is a good investment. Although they took on $64 billion in long and short term debt they are a solid company. When we divide the debt by the stockholders’ equity we can determine that Apple has a 31% capitalization ratio, which is up over 10% from the previous …show more content…
Looking at the last 5 years, we can see that their dividends have steadily increased. This company has shown that they have shown significant growth in the past. Apple’s average growth over the last 5 years has been over 30% according to Yahoo Finance (2016), which means they are a good investment. Last year Apple had a gross profit margin of 40.06%, an operating margin of 30.48% and a net profit margin of 22.85%, according to Stock Analysis On (2016). This shows excellent growth compared to their competitors. Apple had a return on equity of 44.74% and a return on assets of 18.38%, according to Yahoo Finance (2016). Apple would be a great choice for an investor to add into their portfolio. Whether an investor chooses to add Apple bonds or stocks, they should continue to see year over year growth. The current stockholders should hold on to what they have or consider purchasing additional shares so they can continue to take advantage of the dividends they are