Introduction Computer industry stock Apple Vs. Dell Done By

Computer industry stock

Apple Vs. Dell



Done By

Ebtihal Al-Arbash

Mada Khudaier Al-Enizi

Roba Algothmi

In the past five year the computer and technology sector has become one of the profitable industries to invest in. According to Zacks Investment Research firms the most profitable sector in 2011 was computer and technology sector. "The computer and technology sector was expected to see an incredible 16.3% net profit margin in 2011, up from 15.3% in 2010. That means for every $1 in revenue, companies keep an average of 16.3 cents after-tax. That's nearly twice the average of the S&P 500. Moreover, revenues are expected to grow 10.7% in the sector, leading to net income growth of 18.3% in 2011. Valuation is very reasonable too, with the sector sporting an average P/E of 15.0x 2011 earnings. That's a slight premium to the S&P multiple of 13.9x, but still well below its historical average (Bunton, 2011)".

Inventory turnover is “the number of times on average the inventory is sold during the period”. This ratio measures the liquidity of the inventory and is calculated by the equation cost of goods sold/average inventory = inventory turnover.

A measure of how often the company sells and replaces its inventory is the ratio of annual cost of sales to the latest inventory. One can also interpret the ratio as the time to which inventory is held. For example a ratio of 26 implies that inventory is held, on average, for two weeks (365 days in a year divided by inventory turnover ratio of 26 equals 14 days per 2 weeks average inventory holding period). It is best to use this ratio to compare companies within an industry (high turnover is a good sign) because there are huge differences in this ratio across industries.

Inventory turnover

Year	Dell	Apple
2008	31.2	36
2009	46	49
2010	49	56
2011	34	68.5
2012	31.2	107.9

Apple is the best than dell.

Research Question:

Which companies of computers industry are more profitable in the market?

Research Method:

The project will be conducted by gathering information from soft resources like the companies official website and some articles related to the stock market. Also, the opinion of some of the investors will gather through survey distributed among them. Another method is founded information from library resources such as books journals.

What drives a stock's value? Many factors come into play, including how much profit the company earns, how its products fare in the market place, and the overall state of the company. But what matter most is what investors believe about the company's future.

This book is talk about the method of evaluating the stock in the market and explain the factors that drive the value of stock. The value of share is a function of its future returns. To predict the value of company stock in future must have an overview of the sales and profit of it. This would done by assuming that the historical trend will continue as its behavior. One way to know the profit of particular company is common size income statement. Also, predicting the value of the stock is considering how effective "the impact of the new product introduction on the market which will have an average, approximately 5% abnormal return". The condition of the company is having enormous effect on the stock, it have to be  concern with economic indicator such as GDP, unemployment, and inflation, these indicators will determine the rate of return an investor will obtain from investment on stock. "in order to trade profitably and to be able to interpret corrective in the current state of economy, it is essential to understand the effect of economic indicators on stock market. What's more, it will help investors make wise and informed decision on whether or not to invest in the companies they are interested".

Another source are Yahoo finance website which show the current information about the stock market which give the research the accurate information to evaluate which stock are much stable and profitable. Lot of the information that provided in this website are dependable and uses by lots of investors. It also provide and average of the past year performance of the stocks.

The links was useful to me in giving the knowledge that I needed. And give me background of the two companies. Also, the link make me aware of new products for the two companies. Like, A measure of how often the company sells and replaces its inventory and also This ratio measures the liquidity of the inventory and is calculated by the equation cost of goods sold/average inventory = inventory turnover.

In 2011 todd bunton wrote his expectation in an article in zacks investment research website and the article was about The Most Profitable Sector in 2011. Todd Bunton was expecting the computer sector to be the most profitable sector to invest in ,he based his expectation on a lot of research and that research was proofing that the computer industry is growing really fast and a lot of people willing to invest in that sector because it going to be the most profitable sector that anyone want to invest in. ( Bunton, 2011)

The most lucrative business ideas that one can start in this year 2012 is Investing in the computer industry. Kenya seed if there is someone wont to make a lot of profit in easy way and in short time so what you need is Investing in the technology sector. The resone behind that is because nowadays nobody can life without technology and al the company and governmental department can't get rid of the technology because it makes everything easy and fast .due to that technology industry become one of the most profitable sector in those days and it will be a lot profitable in the future. (Kenya, 2012)

References:

1. 
   Bunton, T. ( 2011, April 11). 4 stocks from the most profitable sector. Retrieved from http://www.zacks.com/commentary/17495/4-stocks-from-the-most-profitable-sector
   
2. 
   Dell Computer Systems and Services." Dell Computer Systems and Services. N.p., n.d. Web. 28 Nov. 2012. .
   
3. 
   Kenya. (2012). lucrative business ideas to start. Retrieved from http://kenyaentrepreneur.hubpages.com/hub/Lucrative-And-Profitable-Business-Ideas-To-Start
   

In this research we collected our data and information that are related to the topic through searching in the internet. We found a lot of articles and websites that helped us doing this research and were our supportive material. Moreover, the type of information is secondary sources and qualitative information. The information was meaningful and useful to doing this research. In addition to that, the data we collected gave us a meaningful concept and ability that helped us to solve the research question.

We spend lots of efforts gathering current information that match the research questions. We tried to convenience the readers By providing some resources that contain accurate information for the research. After we find the resources that we need, we simplify the information to be understandable. We put the gathered information in order to make it easier to read and to reach the want able points. Some quotations from famous business persons were added to the paper to support it. After we done with the paper, we reread it and we tried to fills the gaps and correct the spelling and grammar mistakes on it. In addition to that, some opinion from finance experts were included in the paper.

The data that were collected from the internet, studied at university lectures and book have the goal to take advantage from the analysis of the financial statements of Dell and Apple. Moreover, we found out the reasons for the growth in the profits of these companies. In addition to that financial analysis is very important to understanding the financial statements. it was useful to know that any analyst needs analysis tools that help him/here to understand the company's operations and stand on the position and see how to improve their skills. At the last we wear able through the internet to collect everything about the two companies and draw conclusions.