Apple is one of the well-known organizations, which pays a lot of attention to its financial position in the market. The company’s fiscal period is 52 or 53 weeks; during this time, they consider different accounting strategies to increase revenue and decrease useless expenditures (Apple Inc., 2021). Increased attention is paid to current and non-current liabilities, and Apple presents its accurate information to the public. The key items in the liability part of the balance sheet are accounts payable, deferred revenue, commercial paper, term debt, and other non-current liabilities like long-term taxes payable (Apple Inc., 2021). Apple is a massive business that can purchase things instead of borrowing them. This aspect shows that managers have a chance to evaluate the risks and produce efficient strategies to improve performance.
Long-term and short-term obligations are commonly known as current and non-current liabilities. According to Warren et al. (2019), current liabilities define short-term accountabilities that should be paid for 12 months, while non-current liabilities show that the debts can be paid after a year or more. Apple’s reports are presented separately, and financial workers provide non-current obligations first to show the costs they have to cover. The total amount of long-term liabilities is $125,481 in 2021 compared to the previous year when the total amount was $105,392 (Apple Inc., 2021). Short-term liabilities do not include much information, but the total amount of term debt is $162,431 in 2021, which is significantly more than the statement of 2020 when their total payment was $153,157 (Apple Inc., 2021). Long-term obligations can be paid in five or ten years, which makes the total number lower compared to current liabilities.
The general amount of the company’s liabilities for 2021 allows managers to control the financial situation and ensure the further success of new products. In the financial report, accounting workers mention that due to the changing laws in the world and the global crisis happening in many countries, the total costs might increase and affect the business (Apple Inc., 2021). This type of risk is not mentioned in the financial statement because of the uncertainty of future global changes.
The information about Apple’s debt can be found in a different part of the report, and it is not only represented in the financial statement. Understanding the company’s debts helps to recognize the changes in the revenue and how workers’ income varies depending on the assets and liabilities (Dwyer, 2018). Apple Inc (2021) shows its debt in the comprehensive income statement, which calculates gains and losses on marketable securities. The company analyzed these factors and found that its net income has increased almost twice (Apple Inc., 2021). The organization has presented clear statements and balance sheets where the explanation of liabilities is reachable and can be easily understood. Tables with the exact amount allowed us to learn more about Apple’s stability and ensure that the business will stay successful.
The corporation considers including expenses and expenditures in its financial report. These two terms are related to costs, expenses define revenues, and expenditures increase the value of assets (Warren et al., 2019). The definitions are different to ensure the depth of financial analyses. Expenses and expenditures are distinct from liabilities because they usually work with the firm’s items. Nevertheless, both play a significant role in Apple’s company as by owning assets, the business can understand how to generate more profit. Current assets compared to fixed in Apple show how quickly the market can change and what solutions can be adjusted for a short period. The phrase “all assets are eventually expenses” can be incorrect for Apple company as such aspects as receivables, cash, and land cannot be defined as expenses.
In conclusion, the performance of Apple company is significant as they evaluate its financial results every year to minimize risks and understand its future. The detailed explanation of current and non-current liabilities and assets allows for staying more aware of the debts that should be paid out. Moreover, the company can build future success and avoid extra spending by evaluating and understanding more financial aspects like expenses and expenditures.
References
Apple Inc. (2021). Form 10-K. California.
Dwyer, R. E. (2018). Credit, debt, and inequality. Annual Review of Sociology, 44, 237-261.
Warren, C., Jones, J. P., & Tayler, W. B. (2019). Financial and Managerial Accounting (15th ed.). Boston: Cengage.