Apple Corporation Limited:
Steve Jobs, Steve Woznaik and Ronald Woyne are the founders of Apple. It is developed in 1976. It is incorporated as apple Inc. and it is American multinational Technology company. In 1977 the sales of its computers become very fast. Now a days apple is considered as the world’s largest company by its revenue. It is also considered as the most versatile and valuable company. Apple Inc. mission is to give its customer the most unique and innovative product by making changes in software and hardware as well to its customers so they enjoy every moment when they are using the Apple products.
Microsoft Corporation Limited:
Microsoft is also a American multinational company which is famous for giving products related to software to its customers. It most important, unique and versatile products are Microsoft Office suite, Internet explorer and edge web browser. It is founded by Bill Gates and Paul Allens on 4th of April 1975.
In 2016 it was the world’s largest company by its revenue. Microsoft mission is to empower every individual on this universe to achieve its ambitions.
Comparison between Apple and Microsoft:
Apple Inc. has currently 137000 full times employees while Microsoft has 144000 full times employees working in their organizations. The industry in which apple is operating is customer electronics while Microsoft is operating in software infrastructures.
The fiscal year of Apple ended on 2 September 2019 while the fiscal year of Microsoft ended on 29 June 2019.The Apple Inc. historical data shows the earning on 31st December 2019 is 25,201,400 USD while Microsoft earnings on 31st December 2019 is 18,369,400 USD.
PROFITABILITY OF MICROSOFT AND APPLE:
Gross profit = Sales – Cost of sales
The gross profirt of Apple Inc. was USD 98,392,000 on 29/9/2019 while on 29/9/2018 it was on 101,839,000 USD.
Profit = Sale price – Cost price
The profit margin of apple Inc. Is 21,49% while that of Microsoft Corporation is 33.02%.
Operating profit margin = operating profit / net sales * 100
The operating margin of Apple Inc. is 24.71% while that of Microsoft Corporation is 36.74%
Return on assets = Net income /Average total assets
Return on assets of Apple Inc. is 11.58% while that of Microsoft Corporation is 11.38%
Return on equity = Net income / shareholder’s equity
Return on equity of Apple Inc. is 55.47% while that of Microsoft Corporation is 43.83%
The growth estimates of Apple Inc. for current quarter is 22.00%. The next quarter growth estimates is 16.10%. The current year growth quarter is 16.90%. The previous 5 years growth was 8.42%.
P\E= Market value per share/ Earning per share
Microsoft’s earning per share was $5.74 in the end of December 2019 that is why P\E ratio is 29.66. Apple’s earning per share was $12.66 that is why its P\E ratio is 24.45.
Free Cash Flow= Cash from operations/ Capital expenditure of Apple and Microsoft
Apple’s free cash flow was $64.121B in 2018 and $58.896B in 2019. Microsoft’s free cash flow is $40,580 Mil.
Liquidity Ratios Between the Apple and Microsoft:
Current ratio= current assets/ current liabilities
Current ratio of Microsoft was 3.12 in 2018 and 2.85 in 2019. Apple’s current ratio was 1.30 in 2018 and 1.54 in 2019.
Quick ratio= current assets – inventory/ current liabilities
Quick ratio of Microsoft was 3.08 in 2018 and 2.81 in 2019. Quick ratio of Apple was 1.25 in 2018 and 1.50 in 2019.
Asset turnover= net sales/ average total assets
Asset turnover of Apple was 0.7× in the fiscal year of September 2015 to 2019. Asset turnover of Microsoft is 0.4× in the fiscal year of June 2015 to 2019.
Inventory turnover= cost of goods sold/ average ending inventory.
Inventory turn over of Apple is 40.1x and inventory turnover of Microsoft is 13.9x.
Debt ratio= total debt/ total asset
Debt ratio of Microsoft is 7.8% and debt ratio of Apple is 58.91%.
EBITDA coverage ratio= (EBITDA + lease payments)/ (interest + principal payments + lease payments)
Apple’s EBITDA for fiscal years September 2015 to 2019 averaged 76.559 billion. Microsoft’s EBITDA for 2019 was $15.657 billion.
MARKET VALUE of Apple and Microsoft:
Market value of Apple is 309.51 USD and market value of Microsoft is 170.23 USD