Analyzing Apple 's Stocks And Bonds Essay

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 their credit is. Apple was driving to get an AAA rating, however, they only achieved an AA+ rating. The company currently has $53.46 billion in long term bond debt and another $10.5 billion in short term bond debt, according to Guru Focus (2016), which also reported that their average interest rate on their debt is 2.5%. The amount may seem high, but they have a lot of cash assets and very little debt compared to other companies. For most companies, it would be a huge burden to take on $64 billion in debt. While most companies have to acquire bond debt to sustain their business, Apple does it to save money. They acquire long and short term bond debt and sell bonds because more than 70% of their cash and marketable securities are…