2. Apple Inc. is an American multinational corporation headquartered
in Cupertino, California, that designs, develops, and sells consumer electronics,
computer software and personal computers. Apple was founded by Steve Jobs, Steve
Wozniak, and Ronald Wayne on April 1, 1976 to develop and sell personal computers.
It was incorporated as Apple Computer, Inc. on January 3, 1977, and was renamed as
Apple Inc. on January 9, 2007 to reflect its shifted focus towards consumer electronics.
Apple is the world's second-largest information technology company by
revenue after Samsung Electronics, and the world's third-largest mobile phone
maker after Samsung and Nokia. Fortune magazine named Apple the most admired
company in the United States in 2008, and in the world from 2008 to 2012. On
September 30, 2013, Apple surpassed Coca-Cola to become the world's most valuable
brand in the Omnicom Group's "Best Global Brands" report. However, the company
has received criticism for its contractors' labour practices, and for Apple's own
environmental and business practices.
3. Revenue US$ 170.910 billion (2013)
Operating income US$ 48.999 billion (2013)
Net income US$ 37.037 billion (2013)
Total assets US$ 207.000 billion (2013)
Total equity US$ 123.549 billion (2013)
4. Item Description
Components The aggregate carrying amount as of the balance sheet
date of items held by the entity which are partially
completed at the time of measurement and
unprocessed items that will go through the
production process and become part of the final
product. Includes supplies used directly or indirectly
in the manufacturing or production process. This
element may be used when the reporting entity
combines work in process and raw materials into an
aggregate amount
Finished Goods Carrying amount as of the balance sheet date of
merchandise or goods held by the company that are
readily available for sale
Inventories Carrying amount (lower of cost or market) as of the
balance sheet date of inventories less all valuation and
other allowances. Excludes noncurrent inventory
balances (expected to remain on hand past one year or
one operating cycle, if longer)
5. Apple Statement of Financial Position, Inventory level
USD $ in millions
Sep, 2013 sep, 2012 sep, 2011 Sep, 2010 Sep, 2009
Raw materials 683 124 0 0 0
Work-in-process 0 0 0 0 0
Finished goods 1081 667 0 0 0
Other Inventories 0 0 776 1051 445
Inventories 1764 791 776 1051 455
Source: Based on data from Apple Inc. Annual
Reports
Source: www.stock-analysis-on.net
6. Item Description
Raw Material Inventory goods on hand that will be
used to manufacture a product
Work-in-process The amount or value of all materials,
components, and subassemblies
representing partially completed
production; anything between the raw
material/purchased component stage
and finished-goods stage.
8. Item APPLE
Components Apple Inc.'s components increased from 2011 to 2012 and from
2012 to 2013
Finished Goods Apple Inc.'s finished goods declined from 2011 to 2012 but then
increased from 2012 to 2013 exceeding 2011 level
Inventories Apple Inc.'s inventories increased from 2011 to 2012 and from 2012
to 2013
9. Item(March 2014) Apple(in $ million)
Raw Material 0
Work In Progress 0
Finished Goods 0
Other Inventories 1,829
Inventories 1,829
11. Cost of Goods sold(Mar
2014)
Average Inventory Inventory turnover =
COG/Avg. Inventory
$27899 $1829 15.14(approx)
Inventory Turnover Inventory Turnover measures how fast the company turns over its
inventory within a year. A higher inventory turnover means the
company has light inventory. Therefore the company spends less
money on storage, write downs, and obsolete inventory. If the
inventory is too light, it may affect sales because the company may
not have enough to meet demand.
1. Days Inventory indicates the number of days of goods in sales
that a company has in the inventory.
Days Inventory=(Inventory in each period/COG in each
period)*No. of days in that period
2. Inventory to Revenue determines the ability of a company to
manage their inventory levels. It measures the percentage of
Inventories the company currently has on hand to support the
current amount of Revenue. Apple Inc's Inventory to Revenue for
the quarter that ended in Mar. 2014 is calculated as
Inventory to revenue= Inventory in each period/revenue
12. Some pointers on Apple’s procurement and alignment with overall organizational goal
Risk Diversification
Addition of a new supplier will provide a greater flexibility and Apple can react faster to supply
chain disruptions, should they arise.
Capacity management
To succeed in emerging markets such as China and India (one the world’s largest user base),
Apple needs to ramp up its production capacity rather quickly. Having a second supplier will ease
some of the capacity constraints and help Apple focus on its core business – developing
groundbreaking technologies.
Margins Sustenance
Apple is planning to introduce stripped down versions of its flagship products at reduced prices
to increase market share. To maintain the high levels of profitability as the company embarks on the
next phase of growth, it needs its suppliers to help reduce costs. Positioning Pegatron as a reliable
supplier will help Apple gain strong bargaining leverage.
Supplier Innovation
A new supplier will also be more willing to invest in capital to fund growth as opposed to a long
serving incumbent who may have reservations on the returns on such an investment. In order to
increase its share of Apple’s business, Pegatron may strive to improve operational efficiencies in an
effort to differentiate itself from its competitor
Sourcing Process
13. Suppliers at Apple Inc.
Apple requires each of its suppliers to meet the highest standards for all goods and
services. Apple’s requirements include a commitment to rigorous quality assurance. In
addition, suppliers must be committed, as we are, to ensuring the highest standards of social
responsibility
Supplier Diversity program
Sourcing Program
Apple’s sourcing process is designed to ensure equal and fair treatment of suppliers so
that they can fully participate in a competitive procurement process.
14. 1. SERVICES & DELIVERABLES
2. DELIVERY
3. IDENTIFICATION, RISK OF LOSS, & DESTRUCTION OF GOODS
4. PAYMENT
5. WARRANTIES-
6. INSPECTION
7. INDEPENDENT CONTRACTOR
8. SELLER RESPONSIBLE FOR TAXES AND RECORDS-
9. INSURANCE
10. INDEMNITY
11. CONFIDENTIALITY; PERSONAL DATA; DATA SECURITY
12.ANTI-CORRUPTION
13. TERMINATION
14. SURVIVAL OF OBLIGATIONS
15. FORCE MAJEURE
16. SEVERABILITY
17. REMEDIES
18. ATTORNEYS' FEES
19. LIMITATION OF LIABILITY
15. 20. ASSIGNMENT/WAIVER
21. NONEXCLUSIVE AGREEMENT
23. COMPLIANCE WITH LAWS; SAFETY AND LABOR STANDARDS
24. PUBLICITY/MARKS
25. GOVERNING LAW
26. DISPUTE RESOLUTION, JURISDICTION AND VENUE
27. EQUITABLE RELIEF
28. ENTIRE AGREEMENT/MODIFICATION
29. THIRD PARTY CONTRACT RIGHTS
