Apple released the iPhone 4S. The "S" stood for Siri, the intelligent personal assistant. The reaction to the 4S was positive. Apple sold four million phones over the first weekend, which was more than double the sales of the iPhone 4 over its first three days. A little over six months later (May 2012), Samsung released the Galaxy SIII. While the 4S had a 3.5 inch (diagonal) display, the SIII boasted a 4.8 inch screen. Tech commentators touted it as the "iPhone killer". T3 magazine awarded it "Phone of the Year" in 2012. It played a major role in pushing Samsung's Q2 2012 operating profit to a record level. Apple even sued Samsung over the Sill for patent infringement. In September 2012, Apple released the iPhone 5 with a 4 inch diagonal screen. While larger than the screen of the 4S, it was still smaller than the screen of the galaxy SIII. The extra features of the iPhone 5 boosted its cost to $207 which was $19 more than the 4S model. Apple retailed the i5 for US$649, which was the same price as the 4S. In March of 2013, Samsung responded by releasing the Galaxy S4 with an even larger display (5 inches). Income Statement ($ billion) 2012 2013 Revenue 157.00 172.10 Cost of Goods Sold 87.80 106.60 SG&A 6.80 4.00 R&D 3.40 4.50 Depreciation Expense 3.30 6.80 EBIT 55.70 50.20 Interest Expense 0.00 0.00 Earnings before Taxes 55.70 50.20 Provision for Income Taxes 14.00 13.10 Net Earnings 41.70 37.10 Shares Outstanding (billions) 0.934818 0.925331 Dividends per Share $2.65 $11.40 Print Done 2012 29.10 10.90 0.80 16.80 57.60 92.10 15.50 10.90 176.10 2013 40.50 13.10 1.80 17.90 73.30 106.20 16.60 10.90 207.00 Balance Sheet ($ billion) ASSETS Cash Accounts Receivable Inventories Other Total Current Assets Long-term Marketable Assets Property, Plant & Equipment, Net Goodwill Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable Other Total Current Liabilities Long Term Debt Other Liabilities Total Liabilities Common Stock Retained Earnings Total Shareholders' Equity Total Liabilities & Shareholders' Equity 21.20 17.40 38.60 0.00 19.30 57.90 16.40 101.80 118.20 176.10 22.40 21.30 43.70 17.00 22.80 83.50 19.80 103.70 123.50 207.00 Print Done a. What happened to Apple's ROE in 2013 compared to 2012? b. Using the Du Pont ratios, what is the biggest cause of the change in ROE from 2012 to 2013? 1. Change in leverage II. Change in total asset turnover Ill. Change in net profit margin c. What happened to Apple's net profit margin in 2013 compared to 2012? d. What happened to Apple's gross profit margin in 2013 compared to 2012? e. What is the best explanation for the change in net profit margin? 1. An increase in marketing costs II. An increase in production costs III. Price pressure from competitors f. What happened to Apple's total asset turnover in 2013 compared to 2012? g. Which of the following assets was managed better in 2013 compared to 2012? Inventory, Accounts Receivable, or Fixed Assets ? The return on equity for 2013 is []% (Round to two decimal places.) The return on assets for 2013 is % (Round to two decimal places.) The net profit margin for 2013 is %. (Round to two decimal places.) The gross profit margin for 2012 is (%. (Round to two decimal places.) The SG&A/Sales ratio for 2013 is % (Round to two decimal places.) The R&D/Salos ratio for 2012 in % (Round to two decimal places.) The inventory turnover for 2013 is (Round to two decimal places.) The receivables turnover for 2012 is (Round to two decimal places.) The fixed asset turnover for 2012 is. (Round to two decimal places) Click to select your answer(s)
