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SWOT Analyses and Preferred Financial Statements

1. Describe what a SWOT is all about and how and why it is done.
2. Choose an actual company on which to complete a brief SWOT analysis.
3. Describe brief examples of a strength, a weakness, an opportunity, and a threat for that actual company using the definitions below.

- A strength is something a company is better at than its competitors
- A weakness is something a company is not as good at as its competitors
- An opportunity is something occurring external to the company that could affect it and all its competitors favorably
- A threat is something occurring external to the company that could affect it and all its competitors adversely

Part 2

A. If you had only 1 of the 4 main financial statements available to study to assess the financial health of the company, which would you prefer to have

- income statement
- balance sheet
- cash flow statement
- statement of changes in owner's equity

State which one you would prefer and why you choose that one specifically.

B. Out of the 20 or more popular ratios:
- List 4 key financial ratios that could be calculated from these 4 statements
- For each ratio listed, describe what it tells about the financial health of a company

Solution Preview

SWOT Analysis

A SWOT analysis is a strategic planning technique that evaluates an organization's strengths, Weaknesses, Opportunities and Threats. It is a descriptive methodology for the evaluation of an organizations technologies, methods, processes, projects and businesses in a bid to understand what the strengths, opportunities, threats and weaknesses of the business are (Bradford, Duncan & Tarcy, 2002).

SWOT analysis is often done in order to understand an organization's resource capabilities and to align these capabilities and resources to the competitive environment within which the organization operates. This implies that SWOT analysis scans the operating environment of the business and provides information that is important to an organization's strategy decisions (Bradford, Duncan & Tarcy, 2002).

Swot Analysis of Apple Inc.


Some of Apple Inc's strengths are strong brand names including iPad, iPod, iPhone and Macintosh computers, good image among their customers, and strong international presence with over 301 retail outlets in 10 countries and online stores. It also has a highly diversified portfolio of products consisting of computer software, consumer electronics, and personal computers; a strong customer base especially in the US and a strong financial position with the stock prices hitting $97.80 in 2007. Apple is also the third largest mobile handset supplier in the world due to the high success of iPhones. It also has focused R&D driving innovation within the company and consolidating its market positioning (Datamonitor: Apple Inc, 2011; MBA Lectures, 2010).

Strength is something a company is better at than its competitors, Apple in ...

Solution Summary

This solution provides assistance with the questions below regarding SWOT analyses and which financial statements are preferred.