Give commentary on solvency, liquidity, profitability, and conclusion based on the spreadsheet

Apple Microsoft Interpretation and comparison between the two companies' ratios $($reading Chapter $13$ will help you prepare the commentary$)$

$10/29/2021$ for $9/25/20217/29/2021$ for $6/30/2021$ The comparison of the ratios is an important part of the project. A good approach is to briefly explain what the ratio tells us$.$ Indicate whether a higher or lower ratio is better. Then compare the two companies on this basis. Remember that each ratio below requires a comparison.

Earnings per Share of Common Stock $($basic $-$ common$)$ As given in the income statement $$5\mathrm{.}67$ $$8\mathrm{.}12$

Current Ratio Current assets $$134,836=1\mathrm{.}07$ $$14,224=0\mathrm{.}94$ The current ration compairs a company's current assets against its cuurent liabilities. Apples has a better current ratio than microsoft because their current assets are higher than their current liabilities. This is also not a good position to be in because it is less than $1.$

Current liabilities $$125,481$ $$15,163$

Gross Profit Rate Gross profit $$152,836=41\mathrm{.}8\%$ $$115,856=68\mathrm{.}9\%$ Gross profit rate helps companies determine if the cost of their goods are in line with changes in the cost of inventory. Microsoft has a better gross profit compared to Apples in this category.Although Apple has more sales, microsoft makes a higher profit percentage in comparison before considering cost of operation

Net sales $$365,817$ $$168,088$

Profit Margin Net income $$94,680=25\mathrm{.}9\%$ $$61,271=36\mathrm{.}5\%$

Net sales $$365,817$ $$168,088$

Inventory Turnover Cost of goods sold $$212,981=57\mathrm{.}3$ $$52,23223\mathrm{.}1$

Average inventory $$3,716$ $$2,266$

Days in Inventory $365$ days $365=6365=16$

Inventory turnover $57\mathrm{.}3$ days $23\mathrm{.}1$ days

Accounts Receivable Turnover Net credit sales $$365,817=17\mathrm{.}3$ $$168,088=4\mathrm{.}8$ Accounts receviable turnover measures the average numer of times a company collects receivvables during a given period. Apple

Average net accounts receivable $$21,199$ $$35,027$

Average Collection Period $365$ days $365=21365=76$ Average collection period measure the average amount of time that a receivable is outstanding. Apple is able to convert its accounts receivables into cash $55$ days faster than microsoft & are able to meet its current obligations faster and need less outside financing to meet shortfalls.

Accounts receivable turnover $17\mathrm{.}3$ days $4\mathrm{.}8$ days

Asset turnover Net sales $$365,817=1\mathrm{.}08$ $$168,088=1\mathrm{.}00$

Average total assets $$337,445$ $$167,545$

Return on Assets $($ROA$)$ Net income $$94,680=28\mathrm{.}1\%$ $$61,271=36\mathrm{.}6\%$

Average total assets $$337,445$ $$167,545$

Debt to assets ratio Total Liabilities $$287,912=82\mathrm{.}0\%$ $$191,791=57\mathrm{.}5\%$

Total Assets $$351,002$ $$333,779$

Times$-$Interest Earned Ratio Net income $+$ interest expense $+$ income tax expense $$3,577=347,545=$

interest expense $$335,335$

Dividend Yield Dividend per share of common stock $($Yahoo Finance $12/24/2015)$ $$1\mathrm{.}28=$ $$0\mathrm{.}00=$

$($Please follow the Course Project instructions to calculate the current dividend yield.$)$ Market price per share of common stock $($Yahoo Finance $12/24/2015)$ $$63\mathrm{.}18$ $$81\mathrm{.}20$

Return on Common Stockholders' Equity $($ROE$)$ Net income $-$ preferred dividends $2,693=208,042=$

Average common stockholders' equity $10,952\mathrm{.}501,201,827\mathrm{.}00$

Free cash flow Net cash provided by operating activities minus capital expenditures minus cash dividends $==$

Price$-$Earnings Ratio Market price per share of common stock as of $5/30/2014$ for Apple and $12/31/2014$ for Microsoft $$76\mathrm{.}91=$ $$67\mathrm{.}90=$

$($Please see the Course Project instructions for the dates to use for this ratio.$)$ Earnings per share $$3\mathrm{.}05$ $$0\mathrm{.}98$