Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 28, 2019 Years ended September 29, 2018 September 30, 2017 Net sales: Products $ $ $ Services 2 1 3,8 8 3 46,291 260,1 74 2 2 5,8 4 7 39,7 48 2 6 5,5 95 1 96,5 34 32,700 2 2 9,2 3 4 Total net sales Cost of sales: Products Services Total cost of sales 1.4.4,996 16,78 6 1 61,78 2 98,3 9 2 1 4 8,1 6 4 15,5 9 2 1 6 3,75 6 101,8 39 1 2 6,3 3 7 14,7 1 1 14 1,048 88,1 8 6 Gross margin 16,2 1 7 1 4,2 36 Operating expenses: Research and development Selling, general and administrative Total operating expenses 1 1,581 1 8,2 4 5 16,705 15,261 34,4 6 2 30.9 4 1 26,8 42 63,9 30 Operating income Other income (expense). net 70.8 98 6 1,3 4 4 1,807 2,005 2.7 4 5 Income before provision for Income taxes Provision for income taxes 65.7 3 7 10,4 81 7 2.9 0 3 13,3 7 2 64,0 89 15,7 3 8 6 3,9 30 70,8 98 6 1,3 4.4 1,8 0 7 2,005 2,745 Operating income Other income/(expense) net Income before provision for income taxes Provision for income taxes Net Income 65,737 10,4 8 1 55, 256 72,903 1 3,3 7 2 59,5 31 64,089 15,7 38 48,3 5 1 $ $ $ Earnings per share: Basic 11.97 $ 12.01 $ 9.2 7 Diluted 1 1.89 $ 11.91 $ 9.2 1 Shares used in computing earnings per share: Basic 4,6 17,8 34 4,64 8,9 13 Diluted 4,9 5 5,3 77 5,00 0,109 5,2 17,2 4 2 5,2 5 1,6 92 See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2019 Form 10-K 129 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) September 28, 2019 Years ended September 29, 2018 $5 9,5 3 1 September 30, 2017 $48,3 5 1 $5 5,2 5 6 Net income Other comprehensive income/(loss): Change in foreign currency translation, net of tax (408) (525) 2 2 4 (6 61 ) 5 2 3 1,3 1 5 Change in unrealized gains/osses on derivative instruments, net of tax: Change in fair value of derivatives Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on derivative instruments 2 3 3 8 2 (1,477) (6 38 ) 9 0 5 (1 62) 3,8 02 Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on marketable securities (3,407 ) (7 82) 25 1 (64) 3,8 2 7 (3,406 (8 46) Total other comprehensive incomelloss) Total comprehensive income 2,7 8 1 $5 8.0 3 7 ) (3.0 26 $5 6,50 5 (7 84 $4 7.5 67 See accompanying Notes to consolidated CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 28, 2019 September 29, 2018 ASSETS: Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets $ 48,8 4 4 51,7 1 3 2 2,9 26 4,106 22,8 78 1 2,35 2 1 6 2,8 19 $ 25,9 1 3 40,388 2 3,1 8 6 3,956 25,809 1 2,087 1 31,3 39 Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets 10 5,341 37,3 7 8 32,9 78 1 7 5 ,6 97 $3 3 8,5 16 1 70,79 9 4 1,304 2 2,2 8 3 2 3 4,386 $3 6 5,7 25 Total assets LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $ $ Other current liabilities 46,236 37,7 2 0 5,5 2 2 55,888 3 3,3 27 Deferred revenue 5,9 6 6 Commercial paper Term debt 11,964 5,9 80 10,260 105.718 8 7 8 4 Total current liabilities 1 15 9 29 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities $ 46,236 37,7 2 0 5,5 2 2 5,980 10,260 105,7 18 $ 5 5,8 8 8 3 3,3 2 7 5,9 66 11,964 8,784 115,9 29 Non-current liabilities: 50, Term debt Other non-current liabilities Total non-current liabilities Total liabilities 9 1,8 0 7 5 0 3 1 4 2,3 1 0 248,028 93,7 35 48 9 1 4 1 4 2,6 49 25 8,5 7 8 Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized: 4,443,236 and 4,754,986 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Total liabilities and shareholders' equity 4 5,1 74 4 5,8 98 (5 84 ) 90,4 8 8 $3 3 8,5 16 40,2 0 1 70.4 0 0 (3,4 5 4 107,1 4 7 $3 6 5,7 2 5 ) See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2019 Form 10-K131 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In milions, except per share amounts) Years ended September 28, 2019 September 29, 2018 September 30, 2017 Total shareholders' equity, beginning balances $1 0 7,1 4 7 $1 3 4,0 4 7 $1 2 8,2 4 9 40,2 0 1 781 35,8 6 7 31, 2 5 1 5 5 5 6 69 Common stock and additional paid-in capital: Beginning balances Common stock issued Common stock withheld related to net share settlement of equity awards Share-based compensation Tax benefit from equity awards, including transfer pricing adjustments Ending balances (2,0 02) 6,194 (1,7 7 8 ) 5,4 4 3 (1,4 6 8 ) 4,909 4 5,1 74 40,2 0 1 6 2 0 35,8 6 7 70,400 5 5,2 5 6 98,33 0 5 9,5 31 96,3 64 48,3 5 1 Retained earnings: Beginning balances Net income Dividends and dividend equivalents declared Common stock withheld related to net share settlement of equity awards Common stock repurchased Cumulative effects of changes in accounting principles 14,129 ) (13,7 3 5 ) (1 2,8 0 3 ) (1,029 (6 7,1 01 (948) (7 3,0 5 6 ) (581) (3 3.0 0.1.) 2,5 0 1 278 98,33 0 59,5 3 1 96,3 64 48,3 5 1 (1 3,7 35 ) (1 2,8 03 Retained odlings Beginning balances 70,400 Net income 5 5,2 5 6 Dividends and dividend equivalents declared (14,129 ) Common stock withheld related to net share settlement of equity awards (1,029) Common stock repurchased (67,1 0 1 Cumulative effects of changes in accounting principles 2,5 0 1 Ending balances 4 5,8 98 (948) (7 3,0 5 6 ) (5 8 1 ) (3 3,0 01 2 78 70,400 98,33 0 (3,4 5 4 ) (150) 6 34 Accumulated other comprehensive income/loss): Beginning balances Other comprehensive income (loss) Cumulative effects of changes in accounting principles Ending balances 2,781 (3,0 2 6 ) (784) 89 (278) (3,4 5 4 (5 84 ) (150) Total shareholders' equity, ending balances $ 90,4 8 8 $10 7,1 4 7 $1 3 4,0 4 7 Dividends and dividend equivalents declared per share or RSU } 3.00 $ 2.72 $ 2.40 See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2019 Form 10-K 132 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) September 28, 2019 Years ended September 29, 2018 September 30, 2017 $ 25,9 13 $ 20,2 8 9 $ 20,484 5 5,2 5 6 5 9,5 31 48,3 5 1 Cash, cash equivalents and restricted cash, beginning balances Operating activities: Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deterred income tax expense/benefit) 1 2,5 4 7 6,0 68 (340) (6 5 2 ) 10,90 3 5,340 (3 2,590 ) (4 4 4 ) 1 0,1 5 7 4,8 40 5,966 (1 66 ) Other Changes in operating assets and liabilities: Accounts receivable, net 2 4 5 Inventories (289) 2,931 Vendor non-trade receivables Other current and non-current assets Accounts payable (5,3 2 2 ) 8 2 8 (8,0 10 ) (4 23 ) 9,1 75 8 7 3 (2,093 ) (2,7 2 3 > (4,2 5 4 > (5,3 1 8 8,9 66 (593) 1,092 64,2 25 (1,9 2 3 ) Deferred revenue (6 25 ) (3) 38,4 49 > (4,700 69,3 9 1 77.4 34 Other current and non-current liabilities Cash generated by operating activities Investing activities: Purchases of marketable securities (39,630 ) (1,356) (1 59.4 86 ) Proceeds from maturities of marketable securities Proceeds from sales of marketable securities 4 0.1 0 2 55,8 81 4 7,8 38 31,775 94.5 64 56.9 8 8 Payments for acquisition of property, plant and equipment (10.405 ) (13,3 1 3 > (1 2.45 1 ) 001 39,6 30 0,336 19,4 86 40,1 0 2 56,988 55,8 81 4 7,8 38 31,7 75 94,5 64 Proceeds from maturites of marketable securities Proceeds from sales of marketable securities Payments for acquisition of property, plant and equipment Payments made in connection with business acquisitions, net Purchases of non-marketable securities Proceeds from non-marketable securities (10,495 (1 3,3 13 ) (1 2,4 5 1 (624) (1,001) (329) (5 21 ) (721) (1,8 7 1 ) 353 (745 ) 1,6 3 4 1 2 6 Other (1,078 (1 24 ) 45,8 96 16,066 (4 6,4 46 ) 7 8 1 669 5 5 5 (2,8 17 ) (2,5 27 ) (1,8 7 4 ) Cash generated by/(used in) investing activities Financing activities: Proceeds from issuance of common stock Payments for taxes related to net share settlement of equity awards Payments for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net Repayments of term debt Proceeds from/(Repayments of commercial paper, net Other ) (14,119 (6 6,8 97 ) ) (13,7 12 ) (72,7 38 ) 6,969 (6,500 ) ) (12,769 (3 2,900 28,6 6 2 (3,500 6,963 (8,805 ) ) (5.9 7 7 ) (37) 3,8 5 2 (105) (9 0,9 7 6 ) (87.876 (1 7.9 7 4 Cash used in financing activities Increase (Decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, ending balances 24,3 1 1 5.6 2.4 (195) $ 50,2 24 $ 25,9 1 3 $ 20.2 8 9 Supplemental cash flow disclosure Cash paid for income taxes.net $ 15,2 6 3 $ 10,4 1 7 Cash paid for interest $ 3,4 2 3 $ 3.0 2 2 See accompanying Notes to Consolidated Financial Statements s 11,591 $ 2.0 9 2 Apple Inc. I 2019 Form 10-K133 Tasks: 1. Using information from Apple's most recent annual report, compute the following ratios: 1. Short-term solvency, or liquidity, ratios 365 days Days sales in receivables Current assets Receivables turnover Current ratio Current liabilities Sales Total asset turnover Quick xatio- Current assets - Inventory Total assets Current abilities Total assets Capital intensity Cash Sales Cash ratio Current liabilities IV. Profitability ratios II. Long-term solvency, or financial leverage, ratios Net income Profit margin Sales Total debt ratio Total assets - Total equity Total assets Net income Return on assets (POA) Debt-equity ratio Total debit/Total equity Total assets Equity multiplier - Total assets/Total equity Return on equity (ROE) - Not income EBIT Total equity Times interest oamed ratio Interest ROE Not income Sales Assets Sales EBIT Depreciation Cash coverage ratio Assets Equity Interest V. Market value ratios I. Asset utilization, or turnover, ratios Price-carnings ratio Price per share Cost of goods sold Earnings por share Inventory turnover Inventory Market-to-book ratio Market value per share 365 days Book value per share Days sales in inventory Inventory turnover Receivables turnover Sales Accounts receivable