Apple Inc. (NASDAQ:AAPL)

The financial data indicates several key trends over the analyzed periods.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrates a strong upward trend from 2019 to 2022, increasing from 53,447 million US dollars to a peak of 101,652 million US dollars. However, this was followed by a decline in the subsequent years, with the figures dropping to 94,296 million in 2023 and further to 91,849 million in 2024, signaling a potential slowdown or challenges affecting operating profitability.

Cost of Capital

The cost of capital has gradually increased throughout the periods analyzed. Starting at 16.26% in 2019, it rose steadily each year, reaching 17.26% by 2024. This incremental increase in the cost of capital suggests a slightly higher hurdle rate for investments, possibly reflecting increased market risks or changes in the company’s financing structure.

Invested Capital

Invested capital shows notable fluctuations over the years. After an initial decrease from 50,655 million US dollars in 2019 to 36,252 million in 2020, it rose again steadily to a peak of 60,243 million in 2023, before falling back to 50,072 million in 2024. This variability may suggest shifts in the company’s asset base or investment strategies, potentially reflecting capital allocations or divestments.

Economic Profit

Economic profit exhibits a strong trajectory, increasing consistently from 45,209 million US dollars in 2019 to a peak of 93,717 million in 2022. Following this, there is a moderate decline to 83,947 million in 2023 and a slight further decrease to 83,206 million in 2024. Despite these declines, economic profit remains significantly higher than initial values, indicating sustained value creation in excess of capital costs over the majority of the period.

In summary, the company experienced robust growth in operational profitability and economic profit up through 2022, accompanied by increasing cost of capital and fluctuations in invested capital. The more recent years show indications of a slight downturn in profitability and economic profit, while the cost of capital continues to rise, and invested capital decreases. These patterns suggest an evolving financial environment with potential challenges impacting the company’s returns and investment base.

Net Income

The net income exhibits a general upward trend from 2019 through 2022, increasing from 55,256 million USD in 2019 to a peak of 99,803 million USD in 2022. After this peak, net income shows a decline in the subsequent years, dropping to 96,995 million USD in 2023 and further to 93,736 million USD in 2024. Despite the decline in the last two years, the net income remains significantly higher than the initial 2019 figure, indicating overall growth but with recent signs of contraction.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrates a similar pattern to net income. Starting at 53,447 million USD in 2019, it increased steadily to reach 101,652 million USD in 2022, marking the highest value in the series. Subsequently, NOPAT decreased to 94,296 million USD in 2023 and further to 91,849 million USD in 2024. This trend suggests a peak in operating efficiency and profitability in 2022 followed by a notable reduction over the following two years.

Comparative Analysis

Both net income and NOPAT reflect an overall increase over the first four years of the analyzed period, indicating improvements in profitability and operating performance. The divergence in the last two years, with both metrics declining, could imply emerging challenges or shifts in operational dynamics. While the peaks in 2022 demonstrate strong financial performance, the decreases in 2023 and 2024 merit further investigation to identify underlying causes. Notably, net income consistently remains slightly higher than NOPAT across all years, as expected due to the difference in calculation bases between the two metrics.

Provision for Income Taxes

The provision for income taxes demonstrates a generally upward trend over the six-year period analyzed. Starting at 10,481 million US dollars in 2019, it slightly decreased in 2020 to 9,680 million but then increased significantly in subsequent years, reaching 29,749 million by 2024. This indicates substantial growth in tax expense provision, with the most pronounced increases occurring between 2021 to 2022 and 2023 to 2024.

Cash Operating Taxes

Cash operating taxes also rose substantially over the same timeframe. The value grew from 10,617 million US dollars in 2019 to 32,898 million in 2024. Unlike the provision for income taxes, cash operating taxes show a more consistent year-over-year increase, with a noteworthy acceleration between 2022 to 2023 and 2023 to 2024. There was a marked jump from 19,931 million in 2023 to 32,898 million in 2024.

Comparative Analysis

Both provision for income taxes and cash operating taxes exhibit strong growth trends, with cash operating taxes consistently exceeding the provisions. The widening gap in the latter years may suggest changes in tax payment timing, adjustments, or operational tax strategies. The accelerated increase in 2023 and 2024 warrants further examination to understand the underlying causes, such as changes in profitability, tax rates, or regulatory impacts.

Total reported debt & leases

Over the period from September 2019 to September 2024, total reported debt and leases exhibited a fluctuating but overall slightly decreasing trend. The debt increased from approximately $116.6 billion in 2019 to a peak of about $136.5 billion in 2021. Following this peak, a downward trend is observed with debt reducing to roughly $119.1 billion by 2024, indicating a moderate deleveraging or improved debt management in the later years.

Shareholders’ equity

Shareholders' equity showed a declining pattern over the six-year span. Starting at around $90.5 billion in 2019, it declined sharply to approximately $65.3 billion in 2020 and continued a gradual decrease, reaching a low of about $50.7 billion in 2022. A partial recovery is seen in 2023 with equity rising to $62.1 billion, but it declined again to $56.9 billion by 2024. This trend indicates erosion in net assets attributable to shareholders, reflecting potential challenges in profitability, retained earnings, or possible share repurchases.

Invested capital

The invested capital figures demonstrate variability with an overall increase followed by a decline. Beginning at roughly $50.7 billion in 2019, it fell sharply to about $36.3 billion in 2020, likely reflecting reduced investment or asset base changes during that period. Subsequently, a recovery trend is apparent, with invested capital rising to nearly $60.2 billion by 2023. However, it decreased again to approximately $50.1 billion in 2024. These fluctuations suggest changes in operational efficiency, capital expenditures, or asset turnover impacting the capital invested in the business.

The analyzed data reflects significant variations in key financial metrics over a six-year period, highlighting important trends in economic profit, invested capital, and economic spread ratio.

Economic Profit

Economic profit shows a general upward trajectory from 2019 to 2024, starting at 45,209 million US dollars and reaching a peak of 93,717 million in 2022. After this peak, there is a decline over the following two years, with economic profit decreasing to 83,947 million in 2023 and slightly further to 83,206 million in 2024. Despite the decrease after 2022, economic profit remains substantially higher than the levels seen in 2019 and 2020.

Invested Capital

Invested capital exhibits a more variable pattern. It initially decreases significantly from 50,655 million US dollars in 2019 to 36,252 million in 2020. Subsequently, it increases gradually each year to 60,243 million in 2023. However, in 2024, invested capital falls to 50,072 million, which indicates fluctuating investment levels without a clear ascending or descending long-term trend. The peak invested capital in 2023 aligns with the period just before the drop in economic profit.

Economic Spread Ratio

The economic spread ratio, representing profitability relative to invested capital, increases substantially from 89.25% in 2019 to a high of 200.85% in 2022. This sharp rise indicates improving returns on investment during these years. Following the peak, it declines in 2023 to 139.35%, then recovers somewhat to 166.17% in 2024. Despite this post-2022 volatility, the economic spread ratio remains well above the 2019 level, suggesting sustained efficient capital usage compared to the beginning of the period.

Overall, the data suggests the company achieved notable growth in economic profit and profitability efficiency up to 2022. The subsequent years show some normalization or correction, with economic profit and spread decreasing but maintaining levels higher than at the beginning of the period. Invested capital demonstrates less consistency, which may reflect strategic adjustments in resource allocation. These patterns indicate a period of strong financial performance followed by stabilization and rebalancing of investment and returns.

Economic profit

There is a noticeable upward trend in economic profit over the observed periods, starting from $45,209 million in 2019 and peaking at $93,717 million in 2022. Following this peak, economic profit slightly declined to $83,206 million by 2024, indicating some fluctuations but maintaining a generally high level compared to the initial value.

Adjusted net sales

Adjusted net sales demonstrate consistent growth from 2019 to 2022, increasing from $259,474 million to $394,828 million. However, a slight decrease occurred in 2023, dropping to $382,985 million, before rising marginally again in 2024 to $391,735 million. Overall, the sales figures reflect a steady expansion trend with minor short-term volatility.

Economic profit margin

The economic profit margin improved significantly between 2019 and 2022, from 17.42% to a peak of 23.74%. After this period of growth, the margin decreased gradually to 21.24% by 2024. Despite this decline, the margin remains considerably higher than the initial level, suggesting sustained operational efficiency and profitability.