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Apple faced significant operating exposure issues due to the trade war between the US and China. The tariffs imposed on Chinese goods increased Apple's production costs and the prices of its products. This led to reduced demand. Apple worked to diversify its supply chain and lower prices to maintain its market position. The issues demonstrate the challenges of managing global operations and trade policies for multinational companies.

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Alonso Beltran
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112 views

Name: Enrollment

Apple faced significant operating exposure issues due to the trade war between the US and China. The tariffs imposed on Chinese goods increased Apple's production costs and the prices of its products. This led to reduced demand. Apple worked to diversify its supply chain and lower prices to maintain its market position. The issues demonstrate the challenges of managing global operations and trade policies for multinational companies.

Uploaded by

Alonso Beltran
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: Enrollment:

Javier Alonso Beltrán Franco 2934686

Name of course: Teacher:

International Finance Jesus Guerrero Huerta

Module: Activity: Operating exposure

Date: 14/04/2023

Bibliography:
Apple. (2023, April 1). Apple reports fourth quarter results. Apple Newsroom
(Mexico). https://www.apple.com/mx/newsroom/2021/10/apple-reports-fourth-
quarter-results/.

Apple Income Statement - Investing.com Mexico. (s.f.). Investing.com Mexico.


https://mx.investing.com/equities/apple-computer-inc-income-statement.

The Economist. (2022, January 27). Apple's net profit grew 64% in 2021. The
Economist. https://www.eleconomista.com.mx/mercados/Utilidad-neta-de-
Apple-crecio-64-en-el-2021-20220127-0084.html.
Apple. (s.f.). Companies. Apple (Mexico). https://www.apple.com/mx/business/.

Instructions:

1. First, search for information on a multinational corporation that recently (in


the last two years) had important issues related to operating exposure.
Then, write a summary of the operating exposure issue faced by the
company you researched about.
Cite and reference correctly in APA style.

Using the previous information, complete the following table:

Total accounts$
receivable
In foreign currency $
In domestic currency$
Total current assets $

2. Then, integrate the information in a cognitive map using boxes, emphasizing


the following:
a. Situation caused by operating exposure.
b. Operating exposure impact on the financial health of the company.
c. The standpoint taken by the company’s management members.

Development
APPLE

I found that the multinational corporation that recently had important issues related
to operating exposure is Apple Inc.

Apple Inc. is an American multinational technology company that designs,


develops, and sells consumer electronics, computer software, and online services.
In the last two years, Apple faced significant operating exposure issues related to
the trade war between the United States and China.

The trade war resulted in an increase in tariffs on a range of goods imported from
China, including many of the products Apple sells. This increase in tariffs had a
significant impact on Apple's supply chain and production costs, as many of its
components and finished products are manufactured in China. The tariffs
increased the cost of manufacturing, leading to higher prices for consumers and
reducing demand for Apple's products.

In response to these challenges, Apple worked to diversify its supply chain by


moving some of its production outside of China. The company also implemented
price cuts and promotions to boost sales and maintain its market position.
Additionally, Apple lobbied the US government to reconsider the tariffs and sought
waivers for some of the products it imports from China.
Overall, Apple's operating exposure issues related to the trade war demonstrate
the challenges faced by multinational corporations in managing their global supply
chains and navigating trade policies and regulations.

Here are the figures for Apple Inc. as of September 25, 2021, as reported in their
2021 annual report:

 Total accounts receivable: $36,372 million.


 Foreign currency: Apple operates in many countries and uses various
currencies for its operations. As of September 25, 2021, the company held
foreign currency assets of $33,303 million and foreign currency liabilities of
$30,151 million, resulting in a net foreign currency asset position of $3,152
million.
 In domestic currency: The majority of Apple's revenue is generated in the
United States, and therefore, the amount reported in domestic currency
would be the same as the total accounts receivable figure, which is $36,372
million.
 Total current assets: $115,761 million.

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