Corporate Financial Analysis Informed Investment Decision

Question: Discuss about the Corporate Financial Analysis for Informed Investment Decision. Answer: Introduction Investors need to evaluate the fundamental aspect of an organisation in order to make an informed investment decision. Fundamental analysis is key when determining the attractiveness of a prospective company to invest in . It entails carefully screening the company information to establish the key indicators of its attractiveness for investment . Such indicators are a business strategy, performance , governance , and major pronouncements among others . This is beyond the normal analysis of daily stock performance in terms of returns (Exchange, 2010). Apple inc. Background information The company was incorporated in California USA in the year 1977 and has its shares listed on NASDAQ. Its in the information technology industry whereby its engaged in the production of a variety of devices ,software development and provision of services. It has a rich portfolio of products and services which include iPhone, iPad,mac,ios,osx,tvOs, iLife,iWork,iMovie, internet services, icloud , Apple care, Apple pay,Apple watch an Apple Tv and OSX (Inc., 2015) Business Strategy The company devotes its resources to offer high-quality products and services to its customers . It boasts of exemplary resources in terms of investment in research and development and in human resources . Human resources and services usage have been identified as the key determinant factors to the success of the company .It is committed to innovations which ensure that high-quality devices , content , software and new products are availed to the market to meet changing customer needs, for example, it launched Apple TV in September 2015.(Inc., 2015). Performance The company sales in major markets rose by 28% in the year 2015 compared to 2014 . This is attributed to growth in iPhone sales by 52% during the year under review and is an indication of market growth for the financial year .Total assets grew by 25% in the year 2015 compared to 2014 while net income grew by 35% during the period under review .Its cash and cash equivalent grew by 32% in the year 2015 compared to 2014. This indicates its financial soundness as it can comfortably finance its working capital and other needs .Its share returns have been outperforming the market indexes (SP 500,SP information technology and Dow Jones US technological supersector) in the last five years (Inc., 2015). Governance Its management which comprises of experienced managers has been attributed to the high success of the company. Tom Cook, who is the CEO has a vast experience in the field of IT . He has previously worked with Compaq, IBM and more as Apple operating officer. He has an MBA from Duke university.The board of directors is made up of persons with key skills which acts as a driving force to the company success. They oversee the management to ensure ethical standards are met .(Inc., 2016) Major pronouncements The company has continued to make pronouncements on new products in the market. Like on September 7, 2016, it has released iPhone 7 , 7 plus,Apple watch series and Air pods(Inc., 2016) Tesla Motors ,Inc Company background The company was incorporated in the year 2003 in Califonia USA and is listed in NASDAQ securities exchange. It is in Automobile industry with its main business activities being manufacturing ,selling and servicing of electric cars and energy saving devices. Its portfolio comprises of model S cars , Model X ,10 KW/h and 7KW/h power banks(Reuters, 2013) Business strategy The company manufactures high-technology electric cars ,an area which their competitors have not yet fully ventured into . They possess the major resources like the engineers and the technological ability which makes them competitive in this market. They are able to manufacture the high performance, safe and well functioning electric cars through this resources (Tesla Motors, 2015) Performance Its stock returns have been growing at a higher rate compared to the market from the year 2013. Revenues have grown by 26% in the year 2015 as compared to 2014.Net assets grew by 39% in the year 2015 compared to 2014. They have been able to deliver 107 units in period 2012 to 2015. However, the company losses have increased by 202% in the year 2015 compared to 2014 and the company has a negative working capital of $24,706 in the year 2015 an indication of strains in financing its operation during the year.Its leverage is 58% which could adversely affect their cash flows in future in sales will not increase significantly (Tesla Motors, 2015) Major pronouncements The company plans to introduce low-cost model 3 car in the year 2017 which could lead to increase in sales as a result of an increase in demand. Also, it is planning to launch a 100 KWH power bank for industrial use which could create new markets and product portfolio increase (Tesla Motors, 2015) References Exchange, M. S., 2010. Fundamental analysis. Bestnet Analytics, I(1), pp. 1-12. Inc., A., 2015. Apple Inc. form 10-k ,For the Fiscal Year Ended September 26, 2015. [Online] Available at: https://investor.apple.com/secfiling.cfm?filingid=1193125-15-356351cik= [Accessed 7 October 2016]. Inc., A., 2016. Apple special Event. [Online] Available at: https://www.apple.com/apple-events/ [Accessed 7 October 2016]. Inc., A., 2016. Leadership Governance. [Online] Available at: https://investor.apple.com/corporate-governance.cfm [Accessed 7 October 2016]. Reuters, 2013. Tesla Motors Inc (TSLA.O). [Online] Available at: https://www.reuters.com/finance/stocks/companyProfile?symbol=TSLA.O [Accessed 7 October 2016]. Tesla Motors, I., 2015. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2015. [Online] Available at: https://ir.tesla.com/secfiling.cfm?filingid=1564590-16-13195cik= [Accessed 7 October 2016].