Apple Inc. reported revenues of 171 billion USD and net income of 37 billion USD in 2012. These figures represent a stunning annual growth in revenue and net income of 57 percent and 43 percent, respectively, for the 2011 to 2013 time period. This information indicates the importance of using __________ to evaluate company financial performance.
A)financial ratios
B)industry norms
C)historical comparisons
D)competitor analysis

Question

Quizplus · Accepted Answer

When evaluating company financial performance, it is very useful to compare its financial position over time. This provides a means of evaluating trends. For example, Apple Inc. reported revenues of 171 billion USD and net income of 37 billion USD in 2012. These figures represent a stunning annual growth in revenue and net income of 57 percent and 43 percent, respectively, for the 2011 to 2013 time period. Had Apple's revenues and net income in 2013 been 80 billion USD and 20 billion USD, respectively, it would still be a very large and highly profitable enterprise. However, such performance would have significantly damaged Apples market valuation and reputation as well as the careers of many of its executives.

Apple Inc Reported Revenues of 171 Billion USD and Net Income