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Working Capital Strategies For Apple Inc.

Financial Outcomes

Review your organization's most recent financial reports, such as balance sheets, statements of cash flow, management comments, and footnotes to financial statements, to explain how each current asset and liability account has affected cash management strategies. Complete the following in your paper:

-Assume next year's forecasted revenues increase by 20%.
-Provide a detailed working capital recommendation to senior management based on next year's increase in revenue along with assumptions you make regarding other line items in the pro forma financial statements.

Solution Preview

If we review the current asset and current liability related items in the balance sheet of the last two years, we observe that the company has managed its current assets and liabilities position in a very effective manner, even after displaying strong sales growth. If we see trade receivables, it actually declined in 2011 and the overall increase in net receivables was also not too high, considering strong growth in revenues. This means that the company's credit policies is quite tight and it has been very efficient in collection of its payment. Further, the company's inventory declined in 2011 as compared to 2010, which again reflects efficient management of inventory.

On the current liabilities front, the company was able to secure more credit from its suppliers, as reflected in the increase in accounts payable. Accrued expenses also showed ...

Solution Summary

Review your organization's most recent financial reports, such as balance sheets, statements of cash flow, management comments, and footnotes to financial statements, to explain how each current asset and liability account has affected cash management strategies. Complete the following in your paper:

-Assume next year's forecasted revenues increase by 20%.
-Provide a detailed working capital recommendation to senior management based on next year's increase in revenue along with assumptions you make regarding other line items in the pro forma financial statements.

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