Appendix $1$: Apple's Financial Statements

Apple Inc.

CONSOLIDATED BALANCE SHEETS

$($In millions, except number of shares which are reflected in thousands and par value$)$

September $28,2019$

ASSETS

Current assets

Cash and cash equivalents

Marketable securities

Accounts receivable, net

Inventories

Vendor non$-$trade receivables

Other current assets

Total current assets

LLAII.ITIES AND SHAREHOLDERS' EQUITY

Commitments and contingencies

Shareholders' equity

Common stock and additional paid$-$in capital, $$0\mathrm{.}00001$ par value: $12,600,000$ shares

authorized; $4,443,236$ and $4,754,986$ shares iscued and outstanding. recpectively

Retained earnings

Accumulated ocher comprehensive income $($lass$)$

Total sharebolders equity

Total liabilities and shartholders' equity Apple Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

$($In millions, except number of shares which are reflected in thousands and per share amounts$)$

See accompanying Notes to Consolidated Financial Statements. PART $1(38$ pts$)$: To answer the below questions, please use the attached financial statements of Apple company, presented in Appendix $1.$

Question $1(12$ pts$)$: Using the year $2017$ as the base year, compute trend percentages for fiscal years $2017,2018,$ and $2019$ for total net sales, total cost of sales, operating income, and net income.

$\backslash$table$[[,2019,2018,2017],[$Total Net Sales,,,$],[$The Cost of Sales,,,$],[$Operating Income,,,$],[$Net Income,,,$]]$

$1$ Question $2(6$ pts$)$: By referring your answers to question $1$;

a$.$ Comment on if there is a clear increasing$/$decreasing trend for the specified items.

b$.$ If there are any trends, please specify whether the trends are compatible with each other

or not $($if trend percentages go hand$-$in$-$hand for all items or diverge from each other$).$

c$.$ If the trend percents diverge from each other what could be the possible reason for it$?$

Answer:

Question $3(8$ pts$)$:

a$.$ Calculate the profit margin ratio and return on assets for the years $2019$ and $2018,$

and fill in the below table.

b$.$ Did profit margin improve or worsen for Apple? $($Explain all your rationale, please Only

the answer of improve$/$worsen will not be accepted$)$

c$.$ Based on return on assets, please comment on whether Apple's operating efficiency

improved or worsened in $2019$ versus $2018.($Explain all your rationale, please. Only

the answer of improve$/$worsen will not be accepted$)$Question $3(4$ pts$)$: Using current assets as a percent of total assets to measure liguidity, did

Apple's assets become more liguid of less liquid in $2019?($Explain all your rationale please.

Only the answer of yes$/$no will not be accepted$)$

Answer:

Question $5(8$ pts$)$: Here are the additional key figures for Apple and Google.

a$.$ If Google paid a dividend, would the value of retained earnings as a percent of total assets

increase or decrease? $($Explain your rationale please Only the answer of

increase$/$decrease will not be accepted$)$

b$.$ Which company has the better gross $($profit$)$ margin ratio on sales? $($Show all your

calculations, please Only the answer of Apple$/$Google will not be accepted$)$