Discuss/ whether the profitability ratios of liquidity and solvency ratios. Would this company (Apple) be considered a good investment. why? why not?

Profitability Ratios	2022	2021	2020
Net Profit Margin Ratio	0.25	0.26	0.21				In 2021 the net profit margin ratio improved for Apple. However, in 2022, Apple saw a slight decrease due to an increase in net expenses from losses on debt securities.
Total Asset Turnover	2.92	2.63	1.79				The total asset turnover ratio has been seeing a steady improvment year after year meaning Apple is becoming more efficient possibly due to improvments in technology
Return on Assets	0.28	0.27	0.18				Return on assets is also improving as net income continuse to increase compared to total assets.
Operating Income Margin	0.25	0.26	0.21				The operating income margin is staying steading indicating that Apple has been able to contol fixed costs despite supply chain issues and inflation.
Sales to Fixed Assets	4.08	4.14	3.46				Againg the improvment from year to year with the sales to fixed assets ratio reinforcess that Apple has done well in utilizing its fixed assets when compared to sales.
ROE	1.97	1.50	0.88				Return on equity has seen excelent improvments year over year due to an increase in net income and a decrease in stockholder equity.
Return on Common Equity	1.48	1.40	0.85				Similar to ROE the return on common equity has also seen improvment due to an increase in net income.
Gross Profit Margin	0.43	0.42	0.38				Gross profit is also seing steady improvment year after year primarily due to a decrease in the cost of revenue as Apple worksd on becoming more efficient.
Investor Ratios
Degree of Financial Leverage	0.597	1.034	1.893				The degree of financial leverage indicates the volitility of earnings per share compared to operating income. Apple has been able to decrease this ratio showing that Apple has steady earnings.
Earnings per Share	6.15	5.67	3.31				The earnigs per share improved significantly from 2020 to 2021 due to Apples growth in the service industry which improved total revinues without increasing the cost of revenue.
Diluted Earnings per Share	6.11	5.61	3.28				Dliuted earnings per share saw the same effects as earnigs per share for the same reasons
Price/Earnings Ratio	26.83	23.86	22.37				Becouse of the significant increase in earnings per share the price earnings ratio has also seen a significant improvment indicating that investors will get a higher return on their investment.
Percentage of Earnings Retained	-0.03	0.06	0.26				Apple has been increasing the amount of retained earnings over the past three years primarily to reinvest into its online streaming services which has caused a significant decrease in percentage of earnings retained ratio.
Dividend Payout	0.15	0.15	0.25				The dividend payout has also decreased due to the increase in net income but steady payments for dividends,
Dividend Yield	0.56	0.47	0.27				Each year the dividend yeald has increased primarily due to the price per share

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ANSWER Profitability ratios measure a companys ability to generate profits relative to its revenue assets and equity while liquidity and solvency rati... View the full answer