The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company's website.

Instructions 

Answer the following questions using Apple's Consolidated Statements of Operations. 

a. What was the percentage change in (1) net sales and in (2) net income from 2017 to 2018 and from 2018 to 2019? 

b. What was the company's gross profit rate in 2017, 2018, and 2019? 

c. What was the company's percentage of net income to net sales in 2017, 2018, and 2019? Comment on any trend in this percentage.

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A-2 APPENDIX A Specimen Financial Statements: Apple Inc. Net sales: Products Services Total net sales Cost of sales: Products Services Total cost of sales Gross margin Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 28, September 29, September 30, 2019 2018 2017 Operating expenses: Research and development Selling, general and administrative Total operating expenses Operating income Other income/(expense), net Income before provision for income taxes Provision for income taxes Net income Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted $ 213,883 46,291 260,174 144,996 16,786 161,782 98,392 16,217 18,245 34,462 63,930 1,807 65,737 10,481 55,256 11.97 11.89 4,617,834 4,648,913 See accompanying Notes to Consolidated Financial Statements. $ 225,847 39,748 265,595 148,164 15,592 163,756 101,839 14,236 16,705 30,941 70,898 2,005 72,903 13,372 59,531 12.01 11.91 4,955,377 5,000,109 $ 196,534 32,700 229,234 126,337 14,711 141,048 88,186 11,581 15,261 26,842 61,344 2,745 64,089 15,738 $ 48,351 9.27 9.21 5,217,242 5,251,692