According to the recent research, it is evident at Apple Inc. has successfully integrated the use of mathematics in the formulation of its financial analysis and records. The company closed its financial report with a stock of 40% as at March 2015. In addition, the market value is reported to be approximately $200 billion as compared to the initial financial year. In other terms, mathematical concept plays a major role in facilitating the financial reporting for the company.
The balance and the income statement of the company borrows the ideas or concept of mathematics. It means that most of the balance sheet features integrates the balancing unit for both equity, assets and liabilities. On the other hand, the income statement take into account the trading profits and losses incurred within a given financial period. Apple Inc. use the balance to act as a snapshot of the actual financial position of the company. The accounting concept goes hand in hand with the mathematical concepts. For instance, according to the balance of Apple Inc. the accounting equation for the assets, liabilities and equity used a mathematical expression that state that assets are equivalent to the equity in addition with the liability of the company.
According to the accounting standard, the mathematical expression allows the accounting equation to be represented in an alphabetical sequence hence C=A-L. The company income statement is used to show the relationship of all its financial measurements within a given or specific time or period. According to the recent income statement of Apple Inc. it is evident that the company expenses are corresponding to the level on income realized within the particular period. Mathematically, Apple’s income statement has incorporate the use of accounting equalization. Mathematics plays a fundamental role in determining the appropriate equation for a particular financial statement. For instance, the income statement compares the relationship of the company’s income and expenses using the following accounting equation A= C+L+ (I-E). The equation implies that assets value is equivalent to the liabilities value in addition to the available capital along with the income in excess.
Mathematic is used to solve most the business problem. In other words, mathematics is used in the day to day activities. For instance, in a business context, mathematics is used to determine if the business has recording any profits or losses. It is use to evaluate the financial position of a business by factoring the necessary measurements. It is used to make market value projection by calculating the estimated market value within a given period.
The accounting department of Apple Inc. uses the cost recovery method of identifying the loophole within its financial statements. Its audit the balance sheet eliminates any form of errors. It uses a consolidated income statement to easily identify point or sectors of which the company is incurring low sales or high expenses. At the same time its conducts its cost recovery process through a mathematical expression that gives room for accounts or accounting process to pin point any misconduct or fraud within the accounting statements.
The company has two the types of indebtedness reported. The current and long term liabilities are reported in the recent balance sheet of Apple Inc. the company account for both short and term debt in order to determine its actual financial position. It considers its accounts payable, outstanding wages, and any notes payment within one year. At the same time, its takes into consideration the bond payable and the note payable within a period exceed one year. The interest for the company debts is calculated based on the term and condition for a specific liability. For instance, a current liability interest might be calculated based on the repayment period and nature of the liability.
The use ratio rate is very significant for a business or organization to determine it financial progress. It enable the relevant bodies to identify the strengths, weakness, threat and opportunity of the company’s competitive advantage. It equips the company with relevant information n as to the market share and the emerging issues within the organization. Financial ratios rate use mathematical concept to evaluate the stability or current financial position of the organization. For instance, the liquidity ratios give a statistical analysis of the company’s liquidity and stability within the economy.
Palepu, K., & Healy, P. (2007). Business analysis and valuation: Using financial statements. Cengage Learning.
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2015). Financial & Managerial Accounting. John Wiley & Sons.