Financial Policy at Apple Case Write-up

Question Description

1. ( 25 points) How did Apple amass so much cash?

In the Apple Financial Policy case, it is stated that so much cash was created because of high profitability, the reduction of product costs, and efficient management of Apple’s capital structure.

As a supply chain analyst, you want to verify those claims. Use the data in Exhibit 5 to compare the the two years of 2002 and 2012.

a. Create a a data table comparing the growth rate of the following for the two years of 2002 and 2012:

Revenue, COGS, SG&A, Gross Profit, EBIT, Inventory, and Cash
Compare the growth rate of the following: COGS, SG&A, Gross Profit, EBIT as percentages of revenue.

b. Based on the data table, what is your analysis of how Apple’s supply chain strategy has changed in that decade in order to generate so much cash? You can address and/or chart how the supply chain strategy has changed relative to key concepts: product characteristics (functional vs innovative product supply chain design), channel characteristics (online vs retail), customer value proposition, customer segments, economies of scale vs forecast uncertainty, lead time, push-pull boundary etc.

2. (25 points) Cost Structure

Using the sec.gov/edgar financial database, compare Apple (APPL), HP Inc (HPQ), and Dell Technologies (DELL) over the most recent three completed fiscal years for which 10-K filings are available (2019, 2018, 2017).

a. Cost Structure: Create a table comparing the cost structures of the three companies over the most recent fiscal year (2019) for which 10-K were submitted.

b. What are the significant differences in the cost structures of the three companies and why are they different?

3. (25 points) CCC and Inventory Turns

a. Using three years of 10-K financial data, calculate the annual inventory turns for each company for each of three years. What is the percentage change of each company’s turns over the three year time frame, and how do the companies compare to each other? What is your analysis of their operating strategy?

b. Using the same three years of data, chart each company’s DIO, DSO, DPO, and overall CCC. What can you infer about the supply chain strategy among these three companies?

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