The History of Apple

The History of Apple


When I was first learning how to buy stocks, (which by the way, was a long time ago) Apple was nothing more than a start up company looking to make a big splash in the tech market.Apple was founded in 1976 by three college dropouts, Steve Jobs, Steve Wozniak and Ronald Wayne. Mr. Jobs and Mr. Wayne worked at the gaming company Atari and Mr. Wozniak worked for Hewlett Packard and spent a lot of time hanging out in Steve Jobs garage. They had incorporated Apple in 1976 but Wayne left and sold his share of the company for just $800 3 months after its inception. Steve Jobs and Steve Wozniak set a goal to develop a computer that was not only user friendly but small enough to put into homes and small offices.

What was Apples first computer?

In the beginning, the Apple 1 started out in Steve Jobs’ garage. The first apple was a DIY kit and did not include a monitor or keyboard and was sold for several hundred dollars; however, this equipment was added in 1977.

Then the Apple II was developed with color graphics in 1980. This changed the industry forever when it was launched to the public. The Apple II pushed sales to $117 million dollars and being the first all-in-one computer ever.

The fallout of Apple

Mr. Wozniak left Apple in 1983 and Mr. Jobs left in 1985 after he founded NeXT Software and purchasing Pixar from George Lucas which led to computer animation. Mr. Jobs then hired John Scully of Pepsi Co as President, which later may have been a mistake. Mr. Scully failed to cut a deal with Bill Gates to license Microsoft, which became their biggest competition.

Apple did well throughout the 1980s and in 1990 Mr. Jobs purchased a small company called Adobe which he set in motion to become desktop publishing before he left. By 1990s the company had peaked and by 1996 interest in Apple has dropped so low they were thought to be “done”.

The resurgence of Apple

In 1997 the company being desperate reached out to Steve Jobs for help at which time Mr. Jobs built an alliance with Microsoft to create a Mac or Macintosh version of its office software creating a graphical interface. This was a major move up for Apple, leading to the launch of the IBook, IPod and IPhone. These changes put Apple back in the industry as a viable competitor making this the most profitable part of Apples’ history. Steve Jobs and John Scully did not get along and Scully left the company stating that Jobs was relentless.
In 1998, Apple had two of the best characteristics. It was self contained and there was no complicated set up. It basically went from the box to the desk and one only needed to plug it in. This design made the Mac a best seller and they were selling faster than they were making them.

In 1999, the Apple I computer became the most collectible PC (Personal computer) of all time.

How is Apple doing today?

After becoming a pioneer in the computer industry multiple times and pushing the limits of technology past what was thought to be possible, Apple Inc continues to impact the marking leaving its mark. Today Apple continues to compete for the majority of the market and has continued to profit. Steve Jobs died October 5th 2005 but did not leave this world without his name being written down in the history books for our future generations to learn where their everyday handheld technology gadgets started and who was responsible.

Inflation Rate Formula and Its Economic Effects

Inflation Rate Formula and Its Economic Effects

An often used but little understood term in financial circles, inflation has been misinterpreted as a result or an effect of higher prices, but this is not the case.

The inflation rate formula is quite simple

You can fill these variables in by simply finding the CPI(Consumer Price Index) of the year you want to start with, and the CPI of the year you want to end with. Example, if you want to find the inflation rate from 1996 to 2000, simply go to the link we provided above, with the CPI of 1996 being the variable last year, and 2000 being this year. Then multiply your answer by 100 to get your percentage.

Inflation is a condition in a particular country’s economy where the amount of available currency outstretches the GDP figure for that country. This that is known as inflation, and higher prices are a result of this situation. Now that we have finished talking about the inflation rate formula, we can begin to talk about how inflation effects the economy as a whole.

This affects the Canadian investor by causing consumer pricing to rise

Thus leaving the investor with less money to invest with after buying groceries and filling their gas tank. This inability to invest also affects the stock market, leaving companies with less avenues of capital acquisition. For example, if the CPI levels rise considerably, markets such as the TSX can experience a lull in trading causing its index to drop. This could indicate that an economy is either stagnant or heading towards recession. Of course, this isn’t in the best interest of any country and if left unchecked, would lead to a wildly fluctuating market with tremendous risk such as the markets just before Black Tuesday, October 29, 1929. We have learned our lessons since and safeguards have been put in place to ensure that the market won’t bottom out like that again.

The Bank of Canada has a hand in setting inflation rates to accommodate the disparity of goods versus monetary availability. By monitoring the core CPI, the Bank of Canada arrives at the comfortable inflation numbers that will keep the economy on track and within good financial reason. If you are wondering, core CPI is a specific group of consumer goods not considered to be volatile. The term ‘volatile’ in this context is meant to refer to price fluctuation, not combustion. These volatile products would include such things as fuel, vegetables, fruit, tobacco products and mortgage interest.

In the 1980s, according to Statscan, the inflation rate was at 10%

This may seem minuscule, but a rate such as this can cause general consumer pricing to double in less than ten years. Luckily for Canadians, our inflation rate has dropped to less than 5%. With current mandates from the Bank of Canada to put the inflation rate at 3%, consumer pricing would take approximately 24 years to double. This presents a much more tantalizing prospect for the Canadian investor with long-term goals.

According to investing experts, inflation is not a bad thing. The Canadian investor has to be aware of certain factors in their investment, suppose McCain Foods has an offering of 100,000 shares with a rate of 4%. If the Canadian economy had an inflation rate of 3%, this would leave the prospective investor with a positive growth percentage of 1%. Not a bad investment. However, if the Canadian economy had an inflation rate of 5%, the prospective investor has started their investment in the red, not necessarily a good investment idea. But even in this situation, investment isn’t really out of the question. If you can ascertain that the economy is headed for a sustained surge down the road and you are thinking about long-term investment, it might be prudent to buy-in as your investment in the long run may achieve a positive growth outstripping the rate of inflation. This is dependent on when the economy will perform, for how long and how well versus the time length of your investment. Knowing about inflation is an important step to losing needless and ill-informed investment fear.

Here is an inflation calculator supplied by the Bank Of Canada, you can use this instead of using the inflation rate formula and manually calculating, although it is important to know HOW the rate of inflation is calculated and what influences it. View the calculator here.

Income Statement Format And Elements

Income Statement Format And Elements

Income statements provide an overview of how a company has performed over a given period of time. It indicates how revenue is transformed into net income and provides important insights into how effectively the management is controlling expenses. We will go over a basic income statement format, and some of the elements you should consider inside of it in this article. Keep in mind,with  some stocks like penny stocks you will have a hard time finding this information. It’s because they are not fully required to file such paperwork.

Income Statement Format

While the following section describes the common elements of income statements, the format of income statements will vary according to the complexity of business activities. Here is a very basic income statement example.
Income Statement Format

Elements Of An Income Statement

Revenue / Net Sales

Our first look into income statements we will briefly cover the revenue aspect. Revenue is classified as “revenue from primary sources” and “revenue from secondary sources”. Revenue from primary sources is also referred as “operating revenue”. For a manufacturer, revenue from the sale of manufactured goods would be its primary activity. Revenue from secondary activities would include the revenue or income generated from the non-operating activities. For example, interests received on cash investments, rent received from a vacant space, and gains on the sale of a long-term asset would all be recorded under this heading. It is important to differentiate revenues from receipts. As per the accrual basis of accounting, revenue is recognized in income statements when the sale takes place and not when the cash payment is made.

Cost of Sales

The cost of goods sold includes all the expenses that are directly related to the production process, or the core operations of the business like raw material cost, and direct labor costs. For example, the cost of goods sold for a car manufacturer would be the material costs for the parts that go into making the car along with the labor costs used to put the car together. The cost of selling the car would be excluded, as this expense does not directly contribute to the manufacturing process. While there are many ways of calculating cost of sales, the most basic way is to add the total purchases to the beginning inventory for the period and deducting the ending inventory. An efficient and integrated business process helps the management in controlling the cost of sales.

Gross Margin

This indicates the profitability of the core operations of the business. The level of gross margin varies across industries, as in a service company would have a higher gross margin compared to a manufacturing company. While a consistently high gross margin indicates that a company is well positioned to support its indirect expenses, a consistently low gross margin is an indicator of future liquidity problems.

Operating Expenses

This aspect of income statements includes expenses incurred by the company for running its operations during a given period of time. General administration expenses, selling and distribution expenses, research and development expenses, and depreciation are the major items of consideration. Interest paid on loans taken to finance the business operations, long-term loans, debentures are excluded from this line as this expense is the result of the management financing decisions and not the result of business operations. Maintaining low operating expenses without affecting the ability to compete with competitors is a crucial challenge for management.

Operating Income

Operating income reflects the profit generated by the normal and recurring business activities of the company and does not take into account the gains from non-operating activities, interest expenses and taxes.

Other Income / Expense

This includes income gained or expenses incurred due to transactions not related to the normal and recurring operating activities of the company. Items like interest and dividend income, profit or loss from the sale of fixed assets and restructuring expenses are all included under this heading.

Extraordinary Items

This includes one-time gains and losses incurred by the firm due to certain unforeseen events like natural calamities. Extraordinary income and gains are recorded as a separate line so that they don’t skew the company’s regular earnings.

Net Income

This income statements figure indicates the profitability of all the business activities during a given period of time. An investor should be very careful while analyzing this figure as negative net income does not always indicate bad performance and vice versa. Increases in certain expenses like restructuring expenses, or research and development expenses will have a negative impact on the net profit of the current year, however, benefits can be reaped in the form of increased profitability in the future of the business. Similarly, a positive net income may be due to window-dressing by the company or a manipulation of accounting methods used.

Key items to be considered while analyzing income statements:

Income statements reveal much more than the earnings of the company. They indicate the efficiency of the management in controlling expenses, and financing the business operations. Ratios such as rate of return on assets, investments and capital employed are the most commonly used ratios while analyzing a company. However, a novice investor should be very careful while analyzing the income statement of a company.

The following are some of the ways in which a company can manipulate its bottom line to project an image of healthy profitability using income statements:

The revenue figure for the current year can be inflated by advancing the sales of the following year.

– Altering other income like sales of fixed assets.– Changing the rate or method of depreciation.

– Capitalizing expenses like research and development and product promotion costs that are usually written-off in the year that they are incurred.

– A company can defer expenses like training, advertising, research and development for the following year.

Now that we have shown you a basic income statement format and some of its elements to consider, lets move on from income statement examples and read our article on actually analyzing these income statements, and how the elements are calculated. You can read these here.

Income Statement Example – Analyzing Elements

Income Statement Example – Analyzing Elements


To the diligent investor, income statements analysis provides important insight into how effectively management is controlling expenses

Ratios are used to make rate comparisons of elements and data recorded on the statement. In our previous article about the format of an income statement, we showed you a basic income statement example. We will now bring that income statement to life by calculating some of the elements contained in it.

Income Statement Analysis

The first line of any income statements includes total sales revenue generated by a business during the time period specified in the heading. The expenses the company incurred in making those sales, or the cost of goods sold, is listed next and then deducted from revenue to give the gross profit figure.

That is pretty basic and simple, however we want to stay ahead of all these simple things on the income statements so they don’t pile up to make a complicated and confusing matter of this entirely straight-forward analysis procedure.

Gross Profit Margin (GPM)

Gross profit margin is a percentage ratio measuring production and distribution efficiency. Simply calculate the percentage of revenue that remains after subtracting cost of goods sold. A higher GPM than a competitor or industry standard means the company is more efficient. Usually this number will remain consistent over time, sudden large or irregular variations are reason for concern about accounting irregularities.

Operating Expense

Operating expense is the next income statement section. This consists of employee payroll, costs of research and development and miscellaneous charges to a company’s income. An investor will want to put money into management that keeps close control over operating expense, keeping it low without hindering the underlying business. Operating income or operating profit is income a company generates from its own operations only, and does not include income from investments or unusual extraneous revenues.

Operating Profit Margin (OPM)

Operating profit margin is another measure of management efficiency included on income statements, comparing quality of a company’s operations to its competitors. Higher operating margins than the industry average indicates more flexibility or a broader range in determining price due to lower fixed costs and better gross margins.

Interest expense is the cost of borrowing money to build plants and offices, purchase inventory, or fund day-to-day operations. The borrowed money is converted to an asset on the balance sheet, but the actual interest paid is an expense because the company does not receive an asset for it. The cost of borrowing must be reported on the income statement as interest expense.

Interest Coverage Ratio (ICR)

Interest coverage ratio is a measure of the debt burden of a company. The number of times a company could make its interest payments from before tax and interest earnings. A heavy debt burden is indicated by a low ratio.

Be sure to look at these items on the income statements when reviewing a company as a potential investment, and if you need a refresher on what an income statement looks like, view our income statement example in our previous article here.

How does the stock market work? – Learn these useful tips to become better

How does the stock market work? – Learn these useful tips to become better

how does the stock market work

When it comes to talking about investment, the stock market appears first in our lists. That’s why it belongs to a kind wise money investment which can be much more measurable and controlled by the investors than others like properties, for example. However, no matter how friendly it is, it’s important to ask ourselves How does the stock market work? And try to obtain serious and useful answers. Everything you need to know about the stock market

Reasons for buying stocks

shares are the goods of the stock market and investors buy them because today they’re valued at a certain price, but in a year time, they can be worth thousands of dollars more than our modest investment. The reason to buy them is that they can make you rich or earn a lot of money. Of course, that holding shares is an activity which is profitable by itself since you obtain benefits and dividends from the company you’ve got the shares of. However, they can also decrease in price and you can lose a lot of money. That’s why there are tendencies to pay attention to and strategies to develop in order not to be in the last group of investors.

When to sell stocks

shares must be sold for two main reasons. One of them is when you need the cash urgently and the other is when you notice their price is starting to fall and there will be no way out for that company’s shares.

There are several determiners for the stock price variation. Profitability is one of the main determiners of it. The more profitable the company is, the more expensive its shares are going to be. Other variables are the supply and demand, the sector of industry the company belongs to if the company has been recently successful in the market and the future of the company. A very important factor to take into account is that stock prices can dramatically rise or fall after you have placed your offer. So, it doesn’t mean that you’re going to buy the share in exactly the same conditions as you saw it initially.

Strategies with the stock market

There are strategies that have to be developed by the investor which will help to determine what is going to happen in the near and distant future with the price of the shares. Observation plays a crucial role and practicing before making a real investment is also very important. There are moments in which rushing is the advisable thing to do, while in some other patients will have to take place.

The role of the brokers in the stock market

The brokers are the intermediaries between the company’s share and you. Some of them offer free trials and they also help you develop the strategies that will make you a successful business person in the stock market.

Final conclusions

The stock market is a very profitable place for investments. However, there’s also a bit of luck that can either make your operation a success or a disaster. Developing strategies to anticipate the future of a specific company’s shares is just part of this every day growing business; there’s part of it that lies hidden beneath your eyes and that can be decisive in the results of your investment.

Stocks vs Bonds – Which Is Better?

Stocks vs Bonds – Which Is Better?


Everyone falls into debt. Whether it’s your neighbor, family member or yourself, we all have to recover from our mistakes, learn from it, and start making wise investments. Likewise, the government and large corporations are also susceptible to debts. In this regard, their objective is to secure a loan. Since large corporations need more money than the average person or a group of persons for that matter, they might resort to borrowing from financial organizations. Often times, these corporations need more money than the banks can offer. In this regard, bonds come into play. In simple terms, bonds refer to a loan in which you are the one lending the money. Any company that sells a bond is referred to as an issuer while the lender refers to the investor.

Now that I know about bonds, what about stocks?

Not only do people invest in bonds but they also invest in stocks. Stocks refer to an assertion of assets and revenue in a company. It involves shares in which you are given part ownership as a result of your investments. Many people have doubts about these tools and may express their concerns in investing in either bonds or stocks, with relations to their similarities and differences.

Similarities of bonds and stocks

Bonds and stocks are both financial tools that are used by investors to make a profit or capital on what they have invested. Both tools are used by organizations to assist in acquiring funds whether for expansion or operation purposes. Furthermore, the governance of both trades is done by security boards locally. In addition, these too money making tools are known to afford investors security. Even though bonds and stocks are deemed to be secured, they are not risks free.

Differences with bonds and stocks

Stocks are accompanied by greater risks in relation to bonds. Since stocks are ownerships within a company, if that company loses money then the shareholders likewise lose money and vice versa. However, since bonds are loans that are offered at a fixed rate of interest, they are paid back at a fixed price or cost in the form of interest. This means that if the company loses money, you are still entitled to what you formerly invested as a bond. In this respect, bonds are more secured in comparison to stocks. In case a company files for bankruptcy, those that are holding stocks (shareholders) are the last in line to receive anything.

While you are entitled to ownership of a company as a shareholder, whether a small or large part, as an individual holding bond (lender), you share the debt of the company. While shareholders are part owners and are allowed to make future decisions that impact the company, lenders are not given this privilege. Shareholders share in the profits of the company in the form of dividends while lenders are only entitled to what was stipulated in the terms before they shared the debt of the company. They are given returns on their investments but only a fixed return (interest). A higher return is able to be made, provided that the company profits.

Whatever method of investing you choose whether investing in bonds or stocks, always take into consideration that they both attract some level of risks but are able to acquire you great returns.

Outlook of the Stock Market In 2018

Outlook of the Stock Market In 2018

Stock market

This article will teach people how to invest and give you information on trends in the Canadian economy and outlook of the stock market in the year 2018.

It is expected the Canadian economy should grow by about 2.2% in 2018 which is slow compared to the 3.1 growth in 2017 but it is still a steady and decent growth on a global standard. Having the industrial and commercial provinces as engines to drive the economy such as British Columbia, Alberta, Ontario, and Saskatchewan. The Atlantic Provinces in Canada will a much slower growth rate of about 1% to the 2.2% forecast.

Interest Rates

For the first time in over 7 years, the Bank of Canada raised the interest rate twice. This is decisive information for Canadian stock markets. Both of the increase presents to country lenders the much-anticipated margin boosts in lending. But the higher interest rate implies that it would be more expensive to borrow money globally which in turn will have a negative impact on businesses in Canada. For business owners, it means it will cost more to borrow money.

NAFTA negotiation stall

The renegotiation of North American Free Trade Agreement (NAFTA)(link NAFTA to nafta website Jojie) by the Canadian and United States Government has called for concerns. With up to 2/3 of Canadian goods and services to be exported to the US, the NAFTA agreement is very important to exporters in Canada. There will be a drastic change in tariffs back to the standards of the World Trade Organization if the NAFTA doesn’t work out. The Agreement will be very helpful because Canada depends on the majority of its trade with the US and the world at large. The Canadian dollar could depreciate by about 5% against the US dollar with will cushion the higher export prices.

Oil Price

The prices of a barrel of crude oil are expected to be within 50 dollars to 65 dollars range and it is expected to stay that way in 2018. There is been a positive impact on the prices of crude oil worldwide due to increase in economic activities. The agreement reached by oil-producing countries with OPEC to reduce oil production has helped drastically to stabilize the oil prices. This will help increase growth in the Atlantic and western part of Canada.

The ever-expanding economy of the world presents an incredible chance for Canadian investors to channel themselves for development and maximize the opportunities for the growth in the Canadian economy. Will the interest rates still fairly low, it is a great time to invest to be competitive and productive.

Dollar Cost Averaging For Your Investments

Dollar Cost Averaging For Your Investments

Dollar cost averaging for your investments is important because you must find a way of keeping your costs similar across all investments that you make. You will find that you may make a similar investment whether a stock is expensive or not, and you will begin to control your money much better than you would have in the past. Consider how you will spend regulated amounts of money on investments rather than slinging your cash around with every new idea you come across.

What Is Dollar Cost Averaging?

You are planning to spend the same amount of money on a particular stock regardless of its price. This means that you have a budget for the investment, and you will not exceed that budget. You will plan to use the money you have set aside to buy from that company alone, and you will determine how many shares you buy because of your budget. A company with expensive stocks will yield only a few shares, but a company with cheap stocks will give you the chance to buy many shares. You are spending a dollar amount on a company and you don’t care about the amount of shares you get. This goes against the method people imagine stocks are bought, but it is much safer.

Why Do You Need Dollar Cost Averaging?

You need a way to start on a budget and stay on your budget. You will find that the average price you decide to spend may be recorded for that company, and you can easily calculate what your return will be. You are not planning to buy more shares in the future so much as you are planning to assign more money to this company.

Who Needs Dollar Cost Averaging?

Young and small investors will find that dollar cost averaging is a very investment plan. You may spend a certain amount of money on a company, and you will track the progress of that money until you are ready to sell or continue investing. You can clearly see what your returns are, and you are not over complicating the process. You do not get excited and buy more shares because you have committed to the budget you currently have.

How Do You Choose An Average?

The average that you choose will ensure that you have spent a worthy amount of money on each company. You can study these companies to learn how much you should spend, and you will find that you may use the average to assign an priority to a company, whether it be your best, or worst investment. A company that is not growing will have a low priority, but a company that could grow a lot has a high priority. You are simply using your research to set a basic budget.


To dollar cost average, you simply decide a dollar amount you want to spend on a company and you execute the trade. You do not buy 100 shares. You plan to spend $100 on the company. You will use dollar cost averaging to keep your money safe, and you will ensure that you have studied and invested in each company the right way.

The Average Return of The Stock Market

The Average Return of The Stock Market

stock market
The average return of the stock market for basic stocks since 1926 has been 10.5 percent. This sum incorporates both stock value development and profits earned. Remember however, that execution has changed drastically starting with one decade then onto the next. In the 1950s and 60s, for instance, the average return was around 15 percent, but the 1970s gave financial specialists not as much as a 5 percent average rate of return.

Organization Measure

Yearly rates of return differ among different kinds of organizations. Vast organizations, with billions of dollars in capitalization, are called a substantial top or blue-chip stocks. Amid the decade beginning in 2000, blue-chip stocks have earned only 4.3 percent every year, as indicated by Bloomberg’s Businessweek. In the interim, top organizations have improved as of late, returning an average of 9.69 percent amid a similar period.

Average Returns are Controlled By Market Averages

Average rates of return are ascertained given market composites or mutual funds. A mutual fund is a gathering of stocks picked to expand to different market areas. Singular stocks can fail to meet expectations of market averages. Numerous common assets are intended to reflect market lists, for example, the S&P 500.

Market Cycles

The stock market offers a decent impression of the economy. Free market economies are recurrent, and they waver between times of monetary blast and financial bust. In the stock market, times of increase are called bull markets and times of decrease are called bear markets. In the vicinity of 1929 and 2009, there were 14 bear market cycles enduring in the vicinity of one and 10 years each. The average rate of return for stocks will depend enormously on when you purchase and on any bear market cycles that happen following your purchase.

But where does that 7% number originate from?

My essential hotspot for that number originates from Warren Buffett, who claims point-clear that you ought to expect a 6-7% yearly average return of the stock market over the long haul. In that article, Buffett depicts the investigation that drove him to that sort of conclusion:

“The economy, as measured by total national output, can be required to develop at a yearly rate of around 3 percent over the long haul, and swelling of 2 percent would drive ostensible Gross domestic product development to 5 percent, Buffett said. Stocks will presumably ascend at about that rate, and profit installments will support add up to returns to 6 percent to 7 percent”

“The Standard and Poor’s 500 Record, a benchmark for U.S. stocks, surged 18 percent a year on average from 1982 to 1999. The positively trending market polluted speculator desires, Buffett said. Surveys in the late 1990s demonstrated a few speculators anticipated that stocks would pick up 14 percent to 15 percent a year”

“‘Suspecting that in a low-expansion condition is imagining”

Past that, the long haul information for the stock market indicates that 7% number too. For the period 1950 to 2009, if you alter the S&P 500 for swelling and record for profits, the average yearly return turns out to precisely 7.0%. Check the information for yourself. Given these two things – the crude authentic information and the examination of Warren Buffett – I’m willing to utilize 7% as a gauge of long-haul stock market returns. There’s one major issue. Past execution is no sign of future outcomes. That basic proclamation is valid for any speculation. It’s valid for nearly anything in life. If there is one guarantee, it’s that we cannot predict the market.