1.) The Table below shows Canadian industries that use small and large amounts of debt respectively. Explain why these industries choose the debt policies they do. Except possibly in the case of the mining industry, you should be able to find a rationale that applies to the whole group of 4 industries, and not have to explain each industry separately. Debt/Equity Ratios for Canadian Industries 2018 2019 2015 2016 20172 Low debt Repair, maintenance and personal services 0.73 0.7224 0.829 Professional, scientific and technical services 0.86 0.547 0.56 Educational and healthcare services (private, non-gov't) 0.81 0.77 0.681 Mining 0.508 0.564 0.503 0.78 0.72 0.674 0.653 0.6934 0.656 0.73 0.6736 1 1. High Debte Construction Motor vehicle and parts dealers Real estate- Machinery and equipment rental and leasing 1.699 2.656 2.134 1.57 1.5934 2.516 2.629 1.944 1.869 1.962 1.975 1.565 1.47764 2.3784 1.6834 1.994 1.9264 1.8644 1.6684 1.904 e 2.) Look at the accompanying file with Apple's financial statements from 2010-2012 and explain why Apple used no debt financing during this period APPLE THREE-YEAR FINANCIAL HISTORY REFY 2012 FY 2011 FY 2011 Y 2010 Results of Operations (in 5 milionis, except shares in thousands, per share amounts) Net sales: Domestic International Total net sales $60,949 95.559 156,508 541.812 66,437 108,249 S28,633 36,592 65,225 Costs and operating expenses: Cost of sales 87,846 64,431 39,541 Research and development (R&D) Selling general and administrative (SG&A) Total operating expenses 3,381 10.040 13,421 2,429 7,599 10.028 1,782 5,517 7.299 Operating income Other income/(expense), net Income before provision for income taxes Provision for Income taxes 55,241 522 55,763 14,030 33,790 415 34,205 8,283 18,385 155 18,500 4,527 Net income $41.733 $25,922 514,013 Diluted earnings per share Shares used in computing diluted earnings per share (in thousands) Cash div dends declared per common share $44.15 945,355 $2.65 $27.68 936,645 $0.00 $15.15 924,712 $0.00 Financial Position (5 millions) September 29, 2012 September 24, 2011 September 25, 2010 Cash, cash cuivalents and marketable securities Accounts receivable, net Inventories Property, plant and equipment, net Total assets Current liabilities Non-current liabilities Shareholders' equity $121,251 $10,930 $791 $15.452 $176,064 $38,542 $19,312 $118,210 $81,570 $5,369 $776 $7.777 $116,371 $27.970 $11,786 $76,615 $51,011 S5,510 $1.051 $4,768 $75,183 $20,722 56,670 $47,791 Other Data (Unaudited) ) Regular employees Temporary employees and contractors September 29, 2012 September 24, 2011 September 25, 2010 72,800 60,400 46,500 3,300 2,900 2,800 FY 2012 AFY 2011 FY 2010 Interational net sales as a percentage of total net sales Gross margin as a percentage of net sales R&D as a percentage of net sales SG&A as a percer tage of net sales Operating income as a percentage of net sales Return on net sales Price range per common share 61% 43.9% 296 6% 3.5% 279 $354 24 - $705.07 6196 40.596 294 7% 3196 24% $275.00 - $422.86 56% 39.496 396 8% 28% 21% $180.70 - $293.53
