C. Refer to BTN 8-2 page 397 and the financial statement (Form 10-K) for Apple dated 9/29/2018 and 9/24/2016 and the financial statement (Form 10-K) for Google (Alphabet) dated 12/31/2018 and 12/31/2016 to answer these questions. 1. Compute total asset turnover for Apple for the years ended 9/29/18 and 9/30/17. 2. Compute total asset turnover for Google for the years ended 12/31/2018 and 12/31/2017. 3. Which company is more efficient in generating net sales given the total assets it employs? Assume an Industry average of 1.0 for asset turnover. Asset Turnover Net Sales Divided by Average Total Assets Average Collection Period 365 Divided by Asset Turnover Apple Inc. CONSOLIDATED BALANCE SHEETS (In milions, except number of shares which are reflected in thousands and per value) September 29, September 30, ASSETS: $ Current assets Cash and cash equivalents Marketable securities Accounts receivable.net Inventories Vendor non-trade receivables Other current assets Total current assets 25.913 40388 23.188 3.956 25 809 12.087 131,339 20 289 53,892 17.874 4855 17.799 13 906 Non-current assets Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 170.799 41.304 22,283 234 388 365,725 194,714 33 783 18. 177 246.674 375,319 $ LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: $ 55.888 32,687 7.543 Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 44.242 30,551 7,548 11,977 6.496 100,814 8.784 116.888 Non-current liabilities: Deferred revenue Term debt Other non-current liabilities Total non-current liabilities Total liabilities 2,797 93.735 45,180 141,712 258.578 2,836 97 207 40,415 140.458 241.272 Commitments and contingencies Shareholders' equity Common stock and additional paid in capital. $0.00001 par value: 12.600000 shares authorised 4,754,986 and 5,126,201 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/loss) Total shareholders' equity Total abilities and shareholders' equity 40 201 70,400 (3.454) 107.147 385.725 35,867 98.330 (150) 134 047 375,319 $ $ See accompanying Notes to Consolidated Financial Statements. Alphabet Inc. CONSOLIDATED BALANCE SHEETS (in millions, except share and par value amounts which are reflected in thousands. and par value per share amounts) December 31, 2016 December 31, 2017 12.918 $ 86,333 14,137 268 4,575 106,408 5,878 10,715 91,156 101,871 18,336 369 749 2.983 124,308 7.813 680 42,383 2,692 16,747 2.672 197.295 383 34,234 3,307 16,468 1,819 167.4973 Assets Current assets: Cash and cash equivalents Marketable securities Total cash, cash equivalents, and marketable securities Accounts receivable, net of allowance of $467 and $674 Income taxes receivable, net Inventory Other current assets Total current assets Non-marketable investments Deferred income taxes Property and equipment, net Intangible assets, net Goodwill Other non-current assets Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued compensation and benefits Accrued expenses and other current liabilities Accrued revenue share Deferred revenue Income taxes payable, net Total current liabilities Long-term debt Deferred revenue, non-current Income taxes payable, non-current Deferred income taxes Other long-term liabilities Total liabilities Commitments and Contingencies (Note 10) Stockholders' equity Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding Class A and Class B common stock, and Class C capital stock and additional pald-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000. Class C 3,000,000): 691,293 (Class A 296.992. Class B 47,437, Class C 346,864) and 694,783 (Class A 298,470, Class B 46,972, Class C 349,341) shares issued and outstanding Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 2,041 $ 3.976 6,144 2,942 1,099 554 16.756 3,935 3,137 4,581 10.177 3,975 1,432 881 24,183 3.969 340 12,812 430 3.059 44 793 4.677 226 2.665 28.461 36,307 (2,402) 105.131 139.036 167.497 40,247 (992) 113,247 152,502 197 295 S See accompanying notes Comparative Analysis - BTN 8-2 Note: Total asset turnover = Net sales / Average total assets 1. Total asset turnover for Apple ($ millions) Current Year: $233,715 ($290,479 + $231,839)/2 = 0.89 times Prior Year: $182,795 ($231,839 + $207,000)/2 = 0.83 times Total asset turnover for Google ($ millions) Current Year: $74,989 ($147,461 + $129,187)/2 = 0.54 times Prior Year: = 0.55 times $66,001 ($129,187 + $110,920)/2 2. Each dollar of Apple's assets produces $0.89 and $0.83 in net sales for the current and prior year, respectively. Each dollar of Google's assets produces $0.54 and $0.55 in net sales for the current year and prior year, respectively. Apple's asset efficiency increased while Google's asset efficiency decreased slightly from last year to this year. Apple employs its assets more efficiently than Google for both years. Both Apple's and Google's total asset turnover are less than the industry average of 1.0 for the current and prior year