Financial Reporting Problem: Apple Inc. CT4.1 The financial statements or Apple Inc. are presented in Appendix A at the end of this textbook. The complete annual report, including the notes to the financial statements, is available at the company's website Instructions Answer the questions below using Apple's Consolidated Balance Sheets. a. What were Apple's total current assets at September 26, 2015, and September 27, 2014? 6. Are assets that Apple included under current assets listed in proper onder? Explain. c. How are Apple's assets classified? d. What was Apple's Cash and cash equivalents" at September 26, 2015? .. What were Apple's total current liabilities at September 26, 2015, and September 27, 2014? CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 26, September 27. September 28, 2015 2014 2013 Net sales $ 233,715 $ 182,795 $ 170,910 Cost of sales 140,089 112,258 106,606 Gross margin 93,626 70,537 64,304 Operating expenses: Research and development 8,067 6.041 4,475 Seling, general and administrative 14,329 11,993 10,830 Total operating expenses 22.396 18,034 15,305 Operating income 71,230 52,503 48.999 Other income/(expense), net 1.285 980 1,156 Income before provision for income taxes 72,515 53,483 50,155 Provision for income taxes 19,121 13,973 13.118 Net income $ 53,394 $ 39,510 $ 37,037 Earnings per share: Basic Diluted 9.28 $ 9.22$ 6.49 $ 6.45 $ 5.72 5.68 $ Shares used in computing earnings per share: Basic Diluted 5,753,421 5,793,060 6,085,572 6,122,663 6,477,320 6,521,634 1.82 $ 1.64 Cash dividends declared per share 1.98 $ See accompanying Notes to Consolidated Financial Statements. 2014 522 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in Millions) Years ended September 26, September 27, September 28, 2015 2013 Net income $ 53,394 $ 39,510 $ 37,037 Other comprehensive income/loss): Change in foreign currency translation, not of tax effects of $201, S50 and $35, respectively (411) (137) (112) Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(441). $(297) and $(351), respectively 2,905 1,390 Adjustment for net (gains/losses realized and included in net income, net of tax expense/(benefit) of $630, S(36) and $255, respectively (3,497) (458) Total change in unrealized gains/losses on derivative instruments, net of tax (592) 1,539 Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit/(expense) of S264, $(153) and $458, respectively (483) 285 (791) Adjustment for net (gains/losses realized and included in net income, net of tax expense/(benefit of $(32). $71 and $82, respectively (134) (131) Total change in unrealized gainslosses on marketable securities, net of tax (424) 151 (922) Total other comprehensive income/(loss) (1,427) 1,553 Total comprehensive income $ 51,967 $ 41,063 $ 36,067 See accompanying Notes to Consolidated Financial Statements. 149 64 59 (970) 2015 CONSOLIDATED BALANCE SHEETS In milions, except number of shares which are reflected in thousands and par value) September 26, September 27, 2014 ASSETS: Current assets: Cash and cash equivalents 21,120 $ 13,844 Short-term marketable securities 20,481 11,233 Accounts receivable, less allowances of $82 and $86, respectively 16,849 17,460 Inventories 2,349 2,111 Deferred tax assets 5,546 4,318 Vendor non-trade receivables 13,494 9.750 Other current assets 9,530 9,806 Total current assets 89,378 68,531 Long-term marketable securities 164,065 130,162 Property, plant and equipment, net 22,471 20,624 Goodwill 5,116 4,616 Acquired intangible assets, net 3,893 4,142 Other assots 5,556 3.764 Total assets $ 290,479 231.839 $ LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long-term debt Total current liabilities Deferred revenue, non-current Long-term debt Other non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, 90.00001 par value: 12,600,000 shares authorized: 5,578,753 and 5,866,161 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income Total shareholders' equity Total liabilities and shareholders' equity 35,490 25,181 8.940 8,499 2,500 80,610 3,624 53,463 33,427 171,124 30, 196 18,453 8,491 6,308 0 63,448 3,031 28,987 24,826 120.202 27,416 92,284 (345 119,355 290,479 23,313 87,152 1,082 111,547 231,839 $ $ See accompanying Notes to Consolidated Financial Statements. Other 0 0 0 0 0 0 0 0 0 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY In millions, excopt number of shares which are reflected in thousands) Common Stock and Accumulated Additional Paid In Capital Total Retained Comprehensive Shareholders' Shares Amount Earnings Income/(Loss) Equity Balances as of September 20, 2012 6,574,458 $ 16,422 $ 101,289 $ 499 $ 118,210 Not income 0 0 37,037 0 37,037 Other comprehensive income foss) 0 0 0 (970) (970) Dividends and dividend equivalents declared 0 0 (10,676) 0 (10,676) Repurchase of common stock (328,837) 0 (22,950) (22,950) Share-based compensation 2,253 2.253 Common stock issued, net of shares withheld for employee taxes 48,873 (143) (444) 0 (587) Tax bonofit from equity awards, including transfer pricing adjustments 1.232 1.232 Balances as of September 28, 2013 6.294,494 19,764 104,256 (471) 123,549 Not incomo 0 30,510 30,510 Other comprehensive income/loss) 0 0 1,553 1,553 Dividends and dividend equivalents declared 0 0 (11,215) 0 (11,215) Ropurchase of common stock (488,677) (45,000) 0 (45,000) Sharo-based compensation 2,863 2,863 Common stock issued, net of shares withhold for employee taxes 60,344 (40) (300) 0 (448) Tax benefit from equity awards, including transfer pricing adjustments 0 735 735 Balances as of September 27, 2014 5,866,161 23,313 87.152 1,082 111,547 Net income 53,304 53,304 Other comprehensive income/loss) (1,427) (1.427 Dividends and dividend equivalents declared (11,627) (11,627) Ropurchase of common stock (325,032) (36,026) (36,026) Share-based compensation 3,586 3,586 Common stock issued, net of shares withheld for employee tascos 37,624 (231) (609) 0 (840) Tax benefit from equity awards, including transfer pricing adjustments 748 0 0 748 Balances as of September 26, 2015 5,578,753 $ 27,416 $ 92.284 $ (345) S 119,355 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1.382 2,347 1,141 611 (238) (3,735) (179) 5,400 1,042 8,746 81,266 (4.232) (76) (2,220) 167 5,938 1,460 6,010 50,713 (2.172) (973) 223 1,080 2,340 1,459 4,521 53,666 Deferred income tax expense 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 Other Cash used in investing activities Financing activities: Proceeds from issuance of common stock Excess tax benefits from equity awards Taxes paid related to net share settlement of equity awards Dividends and dividend equivalents paid Repurchase of common stock Proceeds from issuance of term debt, net Change in commercial paper, not Cash used in financing activities Increase/(decrease) in cash and cash equivalents Cash and cash equivalents, end of the year Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest (166,402) 14,538 107,447 (343) (11,247) (241) (26) (56,274) (217,128) 18,810 189,301 (3,765) (9,571) (242) 16 (22,579) (148,489) 20,317 104,130 (496) (8,165) (911) (160) (33,774) 730 730 543 749 (1,499) (11,561) (35,253) 27.114 2,191 (17.716) 7,276 21,120 $ (1,158) (11,126) (45,000) 11,960 6,306 (37,549) (415) 13,844 $ 530 701 (1,082) (10,564) (22,860) 16,896 0 (16,370) 3,513 14,250 $ $ 13,252 $ 514 $ 10,026 $ 339 $ 9,128 0 See accompanying Notes to Consolidated Financial Statements