Apple Inc. (NASDAQ: AAPL) is one of the most iconic and valuable companies in the world, known for its innovative products, loyal customer base, and impressive financial performance.
If you had invested $10,000 in Apple stock 5 years ago, you would have made a substantial return on your investment, as the company’s stock price has surged over this period.
In this article, we will explore how much your investment would be worth today and provide a detailed analysis of Apple’s financial performance, including its income statement, balance sheet, cash flow, and key financial ratios over the past five years.
Investment Performance
On August 19, 2019, Apple’s stock price was $50.66 per share. If you had invested $10,000 at that time, you would have been able to purchase approximately 197.43 shares ($10,000 ÷ $50.66 = 197.43 shares).
As of August 16, 2024, Apple’s stock price has increased to $226.05 per share. The value of your investment would be calculated as follows:
- Value of Investment = Number of Shares × Current Stock Price
- Value of Investment = 197.43 shares × $226.05 = $44,614.34
Therefore, your $10,000 investment in Apple stock five years ago would be worth $44,614.34 today, representing a remarkable return of 330.14%.
Apple’s Financial Performance Over the Last 5 Years
Apple’s financial performance over the last five years has been impressive, with consistent growth in revenue, net income, and strong cash flow generation. Let’s delve into the details of the company’s financials.
Income Statement
Apple’s revenue has shown steady growth over the past five years, driven by the success of its iPhone, Mac, and services segments. The company’s gross profit and net income have also increased, reflecting its ability to maintain healthy profit margins.
- Revenue: In 2019, Apple’s revenue was $260.17 billion, and by 2023, it had grown to $383.29 billion, a 47.3% increase over five years.
- Gross Profit: Apple’s gross profit increased from $98.39 billion in 2019 to $169.15 billion in 2023, demonstrating the company’s strong pricing power and operational efficiency.
- Net Income: Apple’s net income grew from $55.26 billion in 2019 to $96.99 billion in 2023, a 75.5% increase, highlighting the company’s ability to generate significant profits.
Apple’s Earnings Per Share (EPS) also saw substantial growth, with diluted EPS increasing from $2.97 in 2019 to $6.13 in 2023.
Balance Sheet
Apple’s balance sheet reflects its strong financial position, with significant assets and manageable liabilities. Over the past five years, the company has maintained a robust cash position and has continued to invest in property, plant, and equipment.
- Total Assets: Apple’s total assets grew from $338.52 billion in 2019 to $352.58 billion in 2023, showing a steady increase in the company’s asset base.
- Cash and Short-Term Investments: Apple had $100.56 billion in cash and short-term investments in 2019, which slightly decreased to $61.56 billion in 2023, as the company used some of its cash for share buybacks and dividends.
- Total Liabilities: Apple’s total liabilities increased from $248.03 billion in 2019 to $290.44 billion in 2023, driven by growth in both current and long-term liabilities.
- Shareholders’ Equity: Despite the increase in liabilities, Apple’s shareholders’ equity has remained positive, although it decreased from $90.49 billion in 2019 to $62.15 billion in 2023, mainly due to share repurchases.
Cash Flow
Apple’s cash flow generation has been strong, with significant cash from operations. The company has also been actively returning capital to shareholders through dividends and share buybacks.
- Cash from Operations: Apple’s cash from operations increased from $69.39 billion in 2019 to $110.54 billion in 2023, reflecting its strong ability to generate cash.
- Capital Expenditures: The company has consistently invested in capital expenditures, with spending ranging from $10.50 billion in 2019 to $10.96 billion in 2023.
- Dividends and Share Buybacks: Apple has returned a substantial amount of capital to shareholders, with dividends paid totaling $15.03 billion in 2023, and share buybacks amounting to $77.55 billion in the same year.
Key Financial Ratios
Examining Apple’s financial ratios over the last five years provides further insights into the company’s financial health and performance:
- Current Ratio: Apple’s current ratio, which measures its ability to cover short-term liabilities with short-term assets, was 0.95 in 2023, down slightly from 1.07 in 2020. A current ratio below 1 indicates that Apple has more current liabilities than current assets, which is not uncommon for a company with a strong cash flow like Apple.
- Debt to Equity Ratio: The debt to equity ratio increased from 1.99 in 2020 to 1.52 in 2023, indicating a higher level of debt relative to shareholders’ equity. Despite the increase, Apple’s strong cash flow and profitability reduce concerns about its debt levels.
- Return on Equity (ROE): Apple’s ROE remained extraordinarily high, reaching 152.84% in 2023. This is indicative of Apple’s efficient use of equity capital to generate profits.
- Price to Earnings (P/E) Ratio: Apple’s P/E ratio was 34.41 in 2023, up from 26.19 in 2020. The increase in P/E reflects both the rising stock price and investor confidence in Apple’s future growth prospects.
- Dividend Yield: Apple’s dividend yield was relatively low, standing at 0.44% in 2023. This low yield reflects Apple’s strategy of prioritizing share buybacks over dividends as a means of returning capital to shareholders.