The Dupont Analysis of Apple and Microsoft

925 Words2 Pages

Apple vs Microsoft Apple Inc. originated out of California in 1976. Steve Jobs and Steve Wozniak dropped out of college together to begin making technology in their garage. Apple’s technology skyrocketed becoming one of the top technology producing companies. They fell short in the nineties though, companies began to catch up and now there was more competition than before. Apple released their ipod in 2001, putting them back in the leadof the technology industry (The History of Apple). Presently, Apple is still exceeding other companies in the technology industry, such as Microsoft, Blackberry, Google and Hewlett Packard. Microsoft is Apple’s largest competitor, which is revealed through the Dupont analysis and other activity ratios, these particular ratios also make known that Apple’s numbers are not all accurate. The Dupont analysis includes the asset turnover ratio, the profit margin percantage, return on shareholder’s equity percentage, return on assets, and the equity multiplier (Spiceland, Sepe, and Nelson 258-264). The asset turnover ratio is the amount of revenue received for every one dollar of assets, it reveals how efficiently the company is distributing assets. Apple’s asset turnover ratio is 60.43 which means for every one dollar Apple has in assets, they receive approximately sixty cents (Apple Inc). Microsoft’s asset turnover ratio is 13.17 so for every dollar they only receive about thirteen cents (Microsoft Inc). Apple is doing significantly better in this category. The profit margin is just how much of a company’s sales they keep as a profit. Apple’s profit margin is 21.67% while Microsoft has a 28% profit margin so Microsoft is accumulating more profit off each sale but their sales are lower. The return on shar... ... middle of paper ... ...equity depends on profitability, activity and financial leverage (Spiceland, Sepe, and Nelson 258-264). Apple, along with its competitors, are easily analyzed by investors and owners through the Dupont analysis and other activity ratios while also bringing to light the construed formulas Apple uses. Works Cited "Apple Inc." (2014): n.pag. Business Insights: Essentials. Database. 5 Apr 2014. . "Microsoft Corp.." (2014): n.pag. Business Insights: Essentials. Database. 5 Apr 2014. . Spiceland, David, Jim Sepe, and Mark NelsonGlobal Edition. New York: McGraw Hill, 2012. 258-264. Print. "The History of Apple." nostoptechnology.com. N.p., n.d. Web. 5 Apr 2014. .

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