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The company that we chose APPLE What is the risk profile of your company? (How much...

  • The company that we chose APPLE
  • What is the risk profile of your company? (How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry or currency)? How is the risk profile changing?)
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The risk profile of the company which is Apple in this case is pretty low and this is primarily due to its dominant status in the market and also the fact that it has got good reserves and is a cash rich company. Due to these factors, the business model of the company faces less risk and hence it is well poised to grow in the future. To quantify the risk would be difficult but a good proxy is the beta of the company which is close to 1 and thus indicates a risk in line with the overall market.

The major source of risk is the possibility of a technological disruption happening in the product segment in which Apple is the leader and thus threat is from competitors such as Google, Samsung and other start up companies also.

The risk profile is changing gradually as companies have become more agile and can transform their business model faster and thus Apple also needs to be on their toes to respond to these changes in a fast manner.

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