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– Nelson Mandela

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Operating Risks and Financial Risk

Operating Risks and Financial Risk

Q How would you assess the overall risk structure of the Apple Inc in terms of its operating risks and financial risk (debt-to-capitalization ratio)? Responses only need to be a couple of paragraphs. Would you invest in Apple Inc? Why or why not?

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Debt to capitalisation ratio= 115164/ (803531+115164) =0.1254 Debt to capital ratio is a measurement of company’s financial leverage. It indicates how much debt a company has raised to finance its assets, which implies higher the ratio, higher the business risk. Debt to capital ratio of The Apple is .1254 or 12.54% which is comparatively low than other competitors. Apple has a huge capital resources and the only reason for raising debt is to save money as tax.