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 2015 2016 2017 2018 2019 0.78 0.72 Low debt Repair, maintenance and personal services Professional, scientific and technical services Educational and healthcare services (private, non-gov't) Mining 0.73 0.86 0.722 0.547 0.829 0.56 0.674 0.653 0.656 0.81 0.77 0.681 0.503 0.693 0.73 0.508 0.564 0.673 1.57 1.477 High Debt Construction Motor vehicle and parts dealers Real estate Machinery and equipment rental and leasing 1.699 2.656 2.134 1.904 2.516 1.944 1.593 2.629 1.869 1.975 1.565 2.378 1.994 1.864 1.683 1.926 1.668 1.962 | 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 FY 2012 FY 2011 FY 2010 Results of Operations (in Millions, except shares in thousands, per share amounts) Net sales Domestic International Total net sales Costs and operating expenses: Cost of sales $60,949 95,559 156,508 $41,812 66,437 106,249 $28,633 36592 65,225 87,846 64,431 39,541 3.381 10,040 13,421 2,429 7.599 10,028 1.782 5517 7,299 Research and development (R&D) Seling, general and administrative (SG&A) Total operating expenses 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 18,540 4527 Net Income $41.733 $25,922 $14,013 Diluted earrings por share Shares used in computing diluted earnings per share in thousands) Cash dividers declared per common share $44.15 945,355 $2.65 $27.68 936,645 $0.00 $15.15 924,712 $0.00 Financial Position ($ millors) September 29, 2012 September 24, 2011 September 25, 2010 Cash, cash equivalents and maricetable securities Accounts receivable, net inventories Property, plant and equipment, net Total assets Current abilities 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 57,777 $116,371 $27,970 $11.786 $76,615 $51,011 $5,510 $1,051 $4,760 $75,183 $20,722 $6,670 $47,791 September 25, 2010 Other Data (Unaudited) Regular employees Temporary employees and contractors 46,600 2,800 FY 2010 International 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 percentage of net sales Operating income as a percentage of net sales Retum on net sales Price range per common share Sentender 29, 2012 September 24, 2011 72,800 60,400 3,300 2,900 FY 2012 FY 2011 61% 61% 43.99 40.546 24 296 6% 746 35% 31% 274 2496 $354.24 - $705.07 $275.00 - $422.86 56% 39.4% 3% 89% 28% 219 $180.70 - $293.53 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 2015 2016 2017 2018 2019 0.78 0.72 Low debt Repair, maintenance and personal services Professional, scientific and technical services Educational and healthcare services (private, non-gov't) Mining 0.73 0.86 0.722 0.547 0.829 0.56 0.674 0.653 0.656 0.81 0.77 0.681 0.503 0.693 0.73 0.508 0.564 0.673 1.57 1.477 High Debt Construction Motor vehicle and parts dealers Real estate Machinery and equipment rental and leasing 1.699 2.656 2.134 1.904 2.516 1.944 1.593 2.629 1.869 1.975 1.565 2.378 1.994 1.864 1.683 1.926 1.668 1.962 | 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 FY 2012 FY 2011 FY 2010 Results of Operations (in Millions, except shares in thousands, per share amounts) Net sales Domestic International Total net sales Costs and operating expenses: Cost of sales $60,949 95,559 156,508 $41,812 66,437 106,249 $28,633 36592 65,225 87,846 64,431 39,541 3.381 10,040 13,421 2,429 7.599 10,028 1.782 5517 7,299 Research and development (R&D) Seling, general and administrative (SG&A) Total operating expenses 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 18,540 4527 Net Income $41.733 $25,922 $14,013 Diluted earrings por share Shares used in computing diluted earnings per share in thousands) Cash dividers declared per common share $44.15 945,355 $2.65 $27.68 936,645 $0.00 $15.15 924,712 $0.00 Financial Position ($ millors) September 29, 2012 September 24, 2011 September 25, 2010 Cash, cash equivalents and maricetable securities Accounts receivable, net inventories Property, plant and equipment, net Total assets Current abilities 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 57,777 $116,371 $27,970 $11.786 $76,615 $51,011 $5,510 $1,051 $4,760 $75,183 $20,722 $6,670 $47,791 September 25, 2010 Other Data (Unaudited) Regular employees Temporary employees and contractors 46,600 2,800 FY 2010 International 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 percentage of net sales Operating income as a percentage of net sales Retum on net sales Price range per common share Sentender 29, 2012 September 24, 2011 72,800 60,400 3,300 2,900 FY 2012 FY 2011 61% 61% 43.99 40.546 24 296 6% 746 35% 31% 274 2496 $354.24 - $705.07 $275.00 - $422.86 56% 39.4% 3% 89% 28% 219 $180.70 - $293.53