Question
Google Inc. Consolidated Statements of Income (in millions, except per share amounts) Revenues 2012 2013 Google (advertising and other) $ 46,039 $ 55,519 Motorola Mobile
Google Inc.
Consolidated Statements of Income
(in millions, except per share amounts)
Revenues 2012 2013
Google (advertising and other) $ 46,039 $ 55,519
Motorola Mobile (hardware and other) $ 4,136 $ 4,306
Total revenues $ 50,175 $ 59,825
Cost of revenues
Cost of revenues - Google (advertising and other)* $ 17,176 $ 21,993
Cost of revenues - Motorola Mobile (hardware and other)* $ 3,458 $ 3,865
Total cost of revenues $ 20,634 $ 25,858
Gross Profit $ 29,541 $ 33,967
Operating expenses
Research and development $ 6,793 $ 7,952
Sales and marketing $ 6,143 $ 7,253
General and administrative $ 3,845 $ 4,796
Total opearating expenses $ 16,781 $ 20,001
Income from operations $ 12,760 $ 13,96
Interests and other income, net $ 626 $ 530
Income from continuing operations before income taxes $ 13,386 $ 14,496
Income taxes $ 2,598 $ 2,282
Net income $ 10,788 $ 12,214
*Includes stock-based compensation expenses
Requirements:
1. Calculate the $ change and % change from 2012 to 2013. (15 points)
2. Calculate the common size % for each year using total revenues as your base amount (15 points)
3. In what year, was the company able to retain a higher % of gross profit? Why do you think that was the case? (10 points)
4. In what year, was the company able to retain a higher % of net income? Why do you think that is the case? (10 points)
Source: Google's 10K
http://investor.google.com/pdf/20131231_google_10K.pdf
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares which are reflected in thousands and per share amount)
September 29, 2012 September 28, 2013
Net sales 156,508 170,910
Cost of sales 87,846 106,606
Gross margin 68,662 64,304
Operating expenses:
Research and development 3,381 4,475
Selling, general and
administrative 10,040 10,830
Total operating expenses 13,421 15,305
Operating income 55,241 48,999
Other income/(expense), net 522 1,156
Income before provision for
income taxes 55,763 50,155
Provision for income taxes 14,030 13,118
Net income 41,733 37,037
Requirements:
1. Calculate the $ change and % change from 2012 to 2013 (15 Points)
2. Calculate the common size % for each year using total revenues as your base amount (15 Points) 3. In what year, was the company able to retain a higher % of gross profit? Why do you think that was the case? (10 Points)
4. In what year, was the company able to retain a higher % of net income? Why do you think that was the case? (10 Points)
Source: Apple's 10K
http://files.shareholder.com/downloads/AAPL/3548470834x0xS1193125-13-416534/320193/filing.pdf
Presented below is Apple's 3 Year Financial Results taken from their 2013 10K (annual report) which can be found on their website under SEC filings and annual reports:
http://investor.apple.com/sec.cfm#filings
All the figures below are presented in millions except for the per share data. So yes, Apple generated $170 billion dollars in net sales in 2013.
2013 2012 2011
Net sales $ 170,910 $ 156,508 $ 108,249
Net income $ 37,037 $ 41,733 $ 25,922
Earnings per share:
Basic $ 40.03 $ 44.64 $ 28.05
Diluted $ 39.75 $ 44.15 $ 27.68
Cash dividends declared per share $ 11.40 $ 2.65 $0
Shares used in computing earnings
per share:
Basic 925,331 934,818 924,258
Diluted 931,662 945,355 936,645
Total cash, cash equivalents and
marketable securities $ 146,761 $ 121,251 $ 81,570
Total assets $ 207,000 $ 176,064 $ 116,371
Long-term debt $ 16,960 $0 $0
Long-term obligations (a) $ 20,208 $ 16,664 $ 10,100
Total liabilities $ 83,451 $ 57,854 $ 39,756
Total shareholders' equity $ 123,549 $ 118,210 $ 76,615
1. Compute the Debt Ratio and the Equity Ratio for all of the years. Explain the ratios. (15 points)
2. Why would a company so cash rich like Apple ($146 billion dollars reported in cash and cash equivalents and marketable securities) take on more long-term debt in 2013? (10 points)
4. Google vs. Apple Competitor Analysis (25 Points)
Requirements:
1. Which company retained a higher % of gross profit in 2013 and why do you think the company was successful in doing that?
2. Which company retained a higher % of net income in 2013 and why do you think the company was successful in doing that?
3. If you had $1 million to invest, which companys stock would you buy and why?
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