Address the "Required" questions in your main response with a minimum of one external reference (not including your textbook). I have also included it in a Word document in case it does not come out properly.

CASE 9-5 DELICIOUS APPLE

Apple, Inc.* presented this selected financial data with its 2010 annual report:

CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share amounts which are reflected in thousands and per share amounts)
Three years ended September 25, 2010	2010	2009	2008
Net sales	$ 65,225	$ 42,905	$ 37,491
Cost of sales	39,541	25,683	24,294
Gross margin	25,684	17,222	13,197
Operating expenses:
Research and development	1,782	1,333	1,109
Selling, general and administrative	5,517	4,149	3,761
Total operating expenses	7,299	5,482	4,870
Operating income	18,385	11,740	8,327
Other income and expense	155	326	620
Income before provision for income taxes	18,540	12,066	8,947
Provision for income taxes	4,527	3,831	2,828
Net income	$ 14,013	$ 8,345	$ 6,119
Earnings per common share:
Basic	$ 15.41	$ 9.22	$ 6.94
Diluted	$ 15.15	$ 9.08	$ 6.78
Shares used in computing earnings per share:
Basic	909,461	893,016	881,592
Diluted	924,712	907,005	902,139

Fiscal Years

?The Company's fiscal year is the 52 or 53-week period that ends on the last Saturday of September. The Company's fiscal years 2010, 2009 and 2008 ended on September 25, 2010, September 26, 2009 and September 27, 2008, respectively, and included 52 weeks each. An additional week is included in the first fiscal quarter approximately every six years to realign fiscal quarters with calendar quarters.? 10-K

Other:
Market price per share:
September 25, 2010	$292.32
September 26, 2009	$182.37
September 27, 2008	$128.24
Total dividends paid:
2010	0
2009	0
2008	0

Dividends declared per share:
2010	0
2009	0
2008	0

Required

a.

1. For consolidated statements of operations, prepare a horizontal common-size analysis for 2008?2010. Use 2008 as the base.

2. Comment on the results in (1).

b.

1. For consolidated statements of operations, prepare a vertical common-size analysis for 2008?2010. Use net sales as the base.

2. Comment on the results in (1).

c. Based on these data, compute the following for 2008?2010.

1. Price/earnings ratio

2. Dividend yield

3. Comment on the results in (1) and (2)

CASE 9-5 DELICIOUS APPLE Apple, Inc.* presented this selected financial data with its 2010 annual report: CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share amounts which are reflected in thousands and per share amounts) Three years ended September 2010 2009 2008 25, 2010 $ Net sales $ 65,225 $ 42,905 37,491 Cost of sales 39,541 25,683 24,294 Gross margin 25,684 17,222 13,197 Operating expenses: Research and 1,782 1,333 1,109 development Selling, general and 5,517 4,149 3,761 administrative Total operating 7,299 5,482 4,870 expenses Operating income 18,385 11,740 8,327 Other income 155 326 620 and expense Income before provision for 18,540 12,066 8,947 income taxes Provision for 4,527 3,831 2,828 income taxes $ Net income $ 14,013 $ 8,345 6,119 Earnings per common share: Basic Diluted Shares used in computing earnings per share: $ 15.41 $ 15.15 $ 9.22 $ 9.08 Basic 909,461 893,016 Diluted 924,712 907,005 $ 6.94 $ 6.78 881,59 2 902,13 9 Fiscal Years \"The Company's fiscal year is the 52 or 53-week period that ends on the last Saturday of September. The Company's fiscal years 2010, 2009 and 2008 ended on September 25, 2010, September 26, 2009 and September 27, 2008, respectively, and included 52 weeks each. An additional week is included in the first fiscal quarter approximately every six years to realign fiscal quarters with calendar quarters.\" 10-K Other: Market price per share: September 25, 2010 $292.32 September 26, 2009 $182.37 September 27, 2008 $128.24 Total dividends paid: 2010 0 2009 0 2008 0 Dividends declared per share: 2010 2009 2008 Required 0 0 0 D D D D D D D D D a. 1. For consolidated statements of operations, prepare a horizontal common-size analysis for 2008- 2010. Use 2008 as the base. 2. Comment on the results in (1). b. 1. For consolidated statements of operations, prepare a vertical common-size analysis for 2008-2010. Use net sales as the base. 2. Comment on the results in (1). c. Based on these data, compute the following for 2008-2010. 1. Price/earnings ratio 2. Dividend yield 3. Comment on the results in (1) and (2)