FCUVUN PUPUYO10118494/99ZFUPSYZF Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 24, 2016 215,639 131,376 September 30, 2017 229,234 141.048 $ Net sales Cost of sales Gross margin $ September 26, 2015 233,715 140,089 93,626 88,186 84.263 Operating expenses: Research and development Selling, general and administrative Total operating expenses 1.581 15.261 26,842 10,045 14,194 24.239 8,067 14,329 22,396 Operating income Other income/expense), net Income before provision for income taxes Provision for income taxes Net income 61,344 2,745 64,089 15,738 48,351 60,024 1,348 61,372 15,685 45,687 71.230 1,285 72,515 19,121 53,394 Earnings per share: Basic Diluted 9.27 $ 9.21 8.35 8.31 $ $ 9.28 9.22 $ Shares used in computing earnings per share: Basic Diluted 5.217.242 5,251,692 5,470,820 5,500,281 5,753,421 5,793,069 Cash dividends declared per share 2.18 $ 1.98 Cash dividends declared per share 2.40 $ 2.18 $ 1.98 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) September 30, 2017 48,351 Years ended September 24, 2016 45.687 September 26, 2015 53,394 $ $ $ Net Income Other comprehensive income/loss): Change in foreign currency translation, net of tax effects of $(77) $8 and $201. respectively 1.315 2,905 Change in unrealized gains/losses on derivative Instruments: Change in fair value of derivatives, net of tax benefit (expense) of $(478). $(7) and $(441), respectively Adjustment for not (gainslosses realized and included in net income, net of tax expense/benefit of $475, $131 and 5630, respectively Total change in unrealized gins/losses on derivative Instruments, net of tax (1.477) (162) (3,497) (502) (782) 1,582 (483) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $425, $(863) and $264, respectively Adjustment for net (gains/losses realized and included in net income, net of tax expense benefit of $35, S(31) and $(32), respectively Total change in unrealized gains/losses on marketable securities, net of tax 59 (64) (846) 1.638 (424) Total other comprehensive income foss) Total comprehensive income (784) 47,567 979 46.666 (1.427) 51.967 $ $ See accompanying Notes to Consolidated Financial Statements Apple Inc. Apple Inc. CONSOLIDATED BALANCE SHEETS (in Millions, except number of shares which are reflected in thousands and par value) September 30, 2017 September 24, 2016 ASSETS: $ Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $58 and $53, respectively Inventories Vendor non-trade receivables Other current assets Total current assets 20,289 53,892 17,874 4,855 17,799 20,484 46,671 15,754 2,132 13,545 8,283 106,869 13.936 128,645 Long-term marketable securities Property, plant and equipment, net Goodwill Acquired intangible assets, net Other non-current assets Total assets 194714 33,783 5.717 2,298 10,162 375 319 170,430 27,010 5,414 3.206 8,757 321,686 LIABILITIES AND SHAREHOLDERS' EQUITY: $ Current liabilities: Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long-term debt 49,049 25.744 7,548 11,977 6,496 37.294 22,027 8,080 8,105 3,500 Current portion of long-term debt Total current liabilities 6,496 100,814 3.500 79.006 Deferred revenue, non-current Long-term debt Other non-current liabilities Total liabilities 2,836 97,207 40,415 241,272 2.930 75,427 36,074 193.437 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, 50.00001 par value: 12,600,000 shares authorized 5,126,201 and 5.336,166 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income foss) Total shareholders' equity Total liabilities and shareholders' equity 35,867 98.330 (150) 134,047 31.251 96,364 634 128,249 321,686 375,319 Soo accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in millions, except number of shares which are reflected in thousands) Common Stock and Additional Paid-in Capital Shares 5,866,161 Amount 23,313 $ Accumulated Other Comprehensive Income (Loss) 1,082 Retained Earnings 87,152 53,394 $ Balances as of September 27, 2014 Net income Other comprehensive income/loss) Dividends and dividend equivalents declared Total Shareholders Equity 111,547 53,394 (1.427) (1.427) (11.6271 (11,627) (36,026) (325,032) (11,627) (36,026) 3,586 3,586 37,624 (231) (609) (840) 748 27,416 5,578,753 9 (345) 2.284 45,687 119,355 45.687 979 (12,188) (29,000) 4,262 (12,188) (29,000) (279.609) 4,262 Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 26, 2015 Net Income Other comprehensive income (loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 24, 2016 Net Income Other comprehensive income (loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 30, 2017 37,022 (806) (419) (1.225) 379 379 31.251 5,336,166 96,364 48,351 128,249 48,351 (784) (12.803) (33,001) 4,909 (12,803) (33,001) (246,496) 4,909 36,531 (913) (581) (1.494) 5,126.201 $ 620 35,867 $ 620 134.047 (150) $ See accompanying Notes to Consolidated Financial Statements Apple Inc. Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) September 30, 2017 Years ended September 24, 2016 21,120 September 26, 2015 Cash and cash equivalents, beginning of the year 20,484 $ 13,844 48,351 45,687 53,394 10.157 4,840 5,966 (166) 10.505 4.210 4,938 486 11,257 3,586 1.382 385 527 217 Operating activities: Not income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense Other Changes in operating assets and liabilities: Accounts receivable.net Inventories Vendor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities Cash generated by operating activities Investing activities: Purchases of marketable securities Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments made in connection with business acquisitions, net Payments for acquisition of property, plant and equipment Payments for acquisition of intangible assets Payments for strategic investments, net (2,093) (2.723) (4.254) (5,318) 9.618 (626) (51) 1,055 1.837 (1.554) (2,033) 65 824 (238) (3.735) (203) 5,001 1.042 0.058 81.266 (154) 63 598 (150.486) 31.775 94,564 (329) (12,451) (344) (395) (142,428) 21,258 90,536 (297) (12,734) (814) (1.388) (166,402) 14,538 107 447 (343) (11.247) 1,837 (1,554) (2,033) 65,824 5,001 1,042 9.058 B1 266 (142,428) 21,258 90,536 (297) (12,734) (814) (1,388) (166,402) 14,538 107,447 (343) (11,247) (241) 1110) (26) (56.274) 145,977) Deferred revenue Other current and non-current liabilities Cash generated by operating activities 63.598 Investing activities: Purchases of marketable securities 1159.486) Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments made in connection with business acquisitions, net Payments for acquisition of property, plant and equipment Payments for acquisition of intangible assets Payments for strategic investments, net Other Cash used in investing activities Financing activities: Proceeds from issuance of common stock Excess tax benefits from equity awards Payments for taxes related to not share settlement of equity awards (1.874) Payments for dividends and dividend equivalents (12,769) Repurchases of common stock (32,900) Proceeds from issuance of term debl, net 28,662 Repayments of term debt (3.500) Change in commercial paper, net 3,852 Cash used in financing activities (17,347) Increase/Decrease) in cash and cash equivalents (195) Cash and cash equivalents, end of the year 20,289 Supplemental cash flow disclosure: Cash paid for income taxes, net 11,591 Cash paid for interest 2,092 See accompanying Notes to Consolidated Financial Statements 407 (1.570) (12,150) (29,722) 24,954 (2,500) (397) (20,483) (636) 20,484 543 749 (1.499) (11,561) (35.253) 27.114 2,191 (17.716) 7,276 21.120 $ $ $ 10,444 1.316 $ $ 13.252 514 Your parents are considering investing in Apple Inc. common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Financial statements of Apple are presented in Appendix A. The complete annual report, including the notes to its financial statements, is available at the company's website. Click here to view Appendix A. Answer the following questions. Make a 5-year trend analysis, using 2013 as the base year, of (1) net sales and (2) net income. (Round percentages to decimal places, e.g. 15% and enter amounts in millions.) APPLE INC. Trend Analysis of Net Sales and Net Earnings For the Five Years Ended 2017 2017 (1) Net sales $ Trend (2) Net incomes Trend e Textbook and Media Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned. (Round percentages to decimal places, s. 15% and times to 1 decimal place, eg. 15.2.) Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned. (Round percentages to decimal places, s. 15% and times to decimal place, eg. 15.2.) 2017 2016 Debt to Assets Ratio Times Interest Earned eTextbook and Media Compute for 2017 and 2016 the (1) profit margin. (2) asset turnover, (3) return on assets, and (4) return on common stockholders' equity. Total assets at September 26, 2015, were $290,345 million and total stockholders'equity at September 26, 2015, was $119,355 million (Round Percentages to 1 decimal places, eg. 15.2% and all other answers to 2 decimal places, es 15.25.) 2017 Profit Margin Asset Turnover times Return on Assets Return on Common Stockholders' Equity e Textbook and Media View Policies Current Attempt in Progress Determine the missing manufacturing costs for Carson Company for selected months are as follows April July October $88,000 Beginning work in process Direct materials used Direct labor $80,000 280,000 195,000 155,000 $190,000 170,000 Manufacturing overhead 90,000 450,000 860,000 150,000 510,000 640,000 Total manufacturing costs Total cost of work in process lo) Ending work in process 75,000 (0) Cost of goods manufactured 515,000 385,000 Beginning finished goods 38,000 (m) Cost of goods available for sale 960,000 480,000 Ending finished goods 75,000 (n) Cost of goods sold 820,000 355,000 e Textbook and Media FCUVUN PUPUYO10118494/99ZFUPSYZF Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 24, 2016 215,639 131,376 September 30, 2017 229,234 141.048 $ Net sales Cost of sales Gross margin $ September 26, 2015 233,715 140,089 93,626 88,186 84.263 Operating expenses: Research and development Selling, general and administrative Total operating expenses 1.581 15.261 26,842 10,045 14,194 24.239 8,067 14,329 22,396 Operating income Other income/expense), net Income before provision for income taxes Provision for income taxes Net income 61,344 2,745 64,089 15,738 48,351 60,024 1,348 61,372 15,685 45,687 71.230 1,285 72,515 19,121 53,394 Earnings per share: Basic Diluted 9.27 $ 9.21 8.35 8.31 $ $ 9.28 9.22 $ Shares used in computing earnings per share: Basic Diluted 5.217.242 5,251,692 5,470,820 5,500,281 5,753,421 5,793,069 Cash dividends declared per share 2.18 $ 1.98 Cash dividends declared per share 2.40 $ 2.18 $ 1.98 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) September 30, 2017 48,351 Years ended September 24, 2016 45.687 September 26, 2015 53,394 $ $ $ Net Income Other comprehensive income/loss): Change in foreign currency translation, net of tax effects of $(77) $8 and $201. respectively 1.315 2,905 Change in unrealized gains/losses on derivative Instruments: Change in fair value of derivatives, net of tax benefit (expense) of $(478). $(7) and $(441), respectively Adjustment for not (gainslosses realized and included in net income, net of tax expense/benefit of $475, $131 and 5630, respectively Total change in unrealized gins/losses on derivative Instruments, net of tax (1.477) (162) (3,497) (502) (782) 1,582 (483) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $425, $(863) and $264, respectively Adjustment for net (gains/losses realized and included in net income, net of tax expense benefit of $35, S(31) and $(32), respectively Total change in unrealized gains/losses on marketable securities, net of tax 59 (64) (846) 1.638 (424) Total other comprehensive income foss) Total comprehensive income (784) 47,567 979 46.666 (1.427) 51.967 $ $ See accompanying Notes to Consolidated Financial Statements Apple Inc. Apple Inc. CONSOLIDATED BALANCE SHEETS (in Millions, except number of shares which are reflected in thousands and par value) September 30, 2017 September 24, 2016 ASSETS: $ Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $58 and $53, respectively Inventories Vendor non-trade receivables Other current assets Total current assets 20,289 53,892 17,874 4,855 17,799 20,484 46,671 15,754 2,132 13,545 8,283 106,869 13.936 128,645 Long-term marketable securities Property, plant and equipment, net Goodwill Acquired intangible assets, net Other non-current assets Total assets 194714 33,783 5.717 2,298 10,162 375 319 170,430 27,010 5,414 3.206 8,757 321,686 LIABILITIES AND SHAREHOLDERS' EQUITY: $ Current liabilities: Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long-term debt 49,049 25.744 7,548 11,977 6,496 37.294 22,027 8,080 8,105 3,500 Current portion of long-term debt Total current liabilities 6,496 100,814 3.500 79.006 Deferred revenue, non-current Long-term debt Other non-current liabilities Total liabilities 2,836 97,207 40,415 241,272 2.930 75,427 36,074 193.437 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, 50.00001 par value: 12,600,000 shares authorized 5,126,201 and 5.336,166 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income foss) Total shareholders' equity Total liabilities and shareholders' equity 35,867 98.330 (150) 134,047 31.251 96,364 634 128,249 321,686 375,319 Soo accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in millions, except number of shares which are reflected in thousands) Common Stock and Additional Paid-in Capital Shares 5,866,161 Amount 23,313 $ Accumulated Other Comprehensive Income (Loss) 1,082 Retained Earnings 87,152 53,394 $ Balances as of September 27, 2014 Net income Other comprehensive income/loss) Dividends and dividend equivalents declared Total Shareholders Equity 111,547 53,394 (1.427) (1.427) (11.6271 (11,627) (36,026) (325,032) (11,627) (36,026) 3,586 3,586 37,624 (231) (609) (840) 748 27,416 5,578,753 9 (345) 2.284 45,687 119,355 45.687 979 (12,188) (29,000) 4,262 (12,188) (29,000) (279.609) 4,262 Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 26, 2015 Net Income Other comprehensive income (loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 24, 2016 Net Income Other comprehensive income (loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 30, 2017 37,022 (806) (419) (1.225) 379 379 31.251 5,336,166 96,364 48,351 128,249 48,351 (784) (12.803) (33,001) 4,909 (12,803) (33,001) (246,496) 4,909 36,531 (913) (581) (1.494) 5,126.201 $ 620 35,867 $ 620 134.047 (150) $ See accompanying Notes to Consolidated Financial Statements Apple Inc. Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) September 30, 2017 Years ended September 24, 2016 21,120 September 26, 2015 Cash and cash equivalents, beginning of the year 20,484 $ 13,844 48,351 45,687 53,394 10.157 4,840 5,966 (166) 10.505 4.210 4,938 486 11,257 3,586 1.382 385 527 217 Operating activities: Not income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense Other Changes in operating assets and liabilities: Accounts receivable.net Inventories Vendor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities Cash generated by operating activities Investing activities: Purchases of marketable securities Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments made in connection with business acquisitions, net Payments for acquisition of property, plant and equipment Payments for acquisition of intangible assets Payments for strategic investments, net (2,093) (2.723) (4.254) (5,318) 9.618 (626) (51) 1,055 1.837 (1.554) (2,033) 65 824 (238) (3.735) (203) 5,001 1.042 0.058 81.266 (154) 63 598 (150.486) 31.775 94,564 (329) (12,451) (344) (395) (142,428) 21,258 90,536 (297) (12,734) (814) (1.388) (166,402) 14,538 107 447 (343) (11.247) 1,837 (1,554) (2,033) 65,824 5,001 1,042 9.058 B1 266 (142,428) 21,258 90,536 (297) (12,734) (814) (1,388) (166,402) 14,538 107,447 (343) (11,247) (241) 1110) (26) (56.274) 145,977) Deferred revenue Other current and non-current liabilities Cash generated by operating activities 63.598 Investing activities: Purchases of marketable securities 1159.486) Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments made in connection with business acquisitions, net Payments for acquisition of property, plant and equipment Payments for acquisition of intangible assets Payments for strategic investments, net Other Cash used in investing activities Financing activities: Proceeds from issuance of common stock Excess tax benefits from equity awards Payments for taxes related to not share settlement of equity awards (1.874) Payments for dividends and dividend equivalents (12,769) Repurchases of common stock (32,900) Proceeds from issuance of term debl, net 28,662 Repayments of term debt (3.500) Change in commercial paper, net 3,852 Cash used in financing activities (17,347) Increase/Decrease) in cash and cash equivalents (195) Cash and cash equivalents, end of the year 20,289 Supplemental cash flow disclosure: Cash paid for income taxes, net 11,591 Cash paid for interest 2,092 See accompanying Notes to Consolidated Financial Statements 407 (1.570) (12,150) (29,722) 24,954 (2,500) (397) (20,483) (636) 20,484 543 749 (1.499) (11,561) (35.253) 27.114 2,191 (17.716) 7,276 21.120 $ $ $ 10,444 1.316 $ $ 13.252 514 Your parents are considering investing in Apple Inc. common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Financial statements of Apple are presented in Appendix A. The complete annual report, including the notes to its financial statements, is available at the company's website. Click here to view Appendix A. Answer the following questions. Make a 5-year trend analysis, using 2013 as the base year, of (1) net sales and (2) net income. (Round percentages to decimal places, e.g. 15% and enter amounts in millions.) APPLE INC. Trend Analysis of Net Sales and Net Earnings For the Five Years Ended 2017 2017 (1) Net sales $ Trend (2) Net incomes Trend e Textbook and Media Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned. (Round percentages to decimal places, s. 15% and times to 1 decimal place, eg. 15.2.) Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned. (Round percentages to decimal places, s. 15% and times to decimal place, eg. 15.2.) 2017 2016 Debt to Assets Ratio Times Interest Earned eTextbook and Media Compute for 2017 and 2016 the (1) profit margin. (2) asset turnover, (3) return on assets, and (4) return on common stockholders' equity. Total assets at September 26, 2015, were $290,345 million and total stockholders'equity at September 26, 2015, was $119,355 million (Round Percentages to 1 decimal places, eg. 15.2% and all other answers to 2 decimal places, es 15.25.) 2017 Profit Margin Asset Turnover times Return on Assets Return on Common Stockholders' Equity e Textbook and Media View Policies Current Attempt in Progress Determine the missing manufacturing costs for Carson Company for selected months are as follows April July October $88,000 Beginning work in process Direct materials used Direct labor $80,000 280,000 195,000 155,000 $190,000 170,000 Manufacturing overhead 90,000 450,000 860,000 150,000 510,000 640,000 Total manufacturing costs Total cost of work in process lo) Ending work in process 75,000 (0) Cost of goods manufactured 515,000 385,000 Beginning finished goods 38,000 (m) Cost of goods available for sale 960,000 480,000 Ending finished goods 75,000 (n) Cost of goods sold 820,000 355,000 e Textbook and Media
