(AAPL) Apple - Ratings and Ratios

Apple Inc. (NASDAQ:AAPL) is a U.S.-based public company that designs, manufactures, and markets consumer electronics, software, and related services. It operates within the Technology Hardware, Storage & Peripherals sub‑industry, positioning it among the world’s largest technology manufacturers and service providers.

In fiscal 2023 Apple generated approximately $383 billion in revenue, delivering a net income of about $97 billion and a free cash flow exceeding $90 billion. The firm’s gross margin consistently hovers near 43 % and its operating margin around 30 %, reflecting strong pricing power and a high‑margin services segment that now contributes over 20 % of total revenue.

Apple’s yearly income tax expense has averaged roughly $15–$20 billion over the past five years, translating to an effective tax rate near 15 %. This rate is lower than the U.S. statutory corporate rate because of a combination of foreign earnings deferral, the 2017 Tax Cuts and Jobs Act repatriation provisions, and substantial R&D tax credits earned across multiple jurisdictions. Any shift in global tax policy—such as the OECD’s Base‑Erosion and Profit‑Shifting (BEPS) reforms or changes to U.S. corporate tax rates—could materially affect the effective tax rate and, consequently, net earnings.

Key performance drivers for Apple include the launch cadence of flagship iPhone models, the expanding services ecosystem (App Store, Apple Music, iCloud, etc.), and the company’s ability to maintain a premium brand that supports high average selling prices. Macro‑economic factors—particularly consumer discretionary spending, foreign exchange fluctuations, and global supply‑chain resilience—directly influence both top‑line growth and cost structures.

Critical financial KPIs that investors monitor are earnings per share (EPS), which has risen at a compound annual growth rate (CAGR) of roughly 12 % over the last decade, and return on invested capital (ROIC), which consistently exceeds 30 %. Apple’s balance sheet is characterized by a net cash position of over $70 billion, enabling continued share buybacks, dividend growth, and strategic acquisitions.

Risk considerations include potential adverse changes in international tax regimes, heightened regulatory scrutiny over App Store practices, and exposure to semiconductor supply constraints that could compress margins. A material increase in the effective tax rate or a slowdown in consumer demand would directly erode net income and free cash flow, thereby impacting the company’s valuation.