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How would you explain in detail the Statement Cash Flow based on the below information? Income Statement Company Apple Inc Horizontal Analysis Comments Income Statement
How would you explain in detail the Statement Cash Flow based on the below information?
Income Statement | Company | Apple Inc | Horizontal Analysis | Comments | Income Statement | Company | Vertical Analysis | Comments | ||||||||||||||||||
All numbers in thousands | All numbers in thousands | |||||||||||||||||||||||||
Revenue | 2022 | 2021 | 2020 | 2019 | 2022 | 2021 | 2020 | The account that has seen the most change is the gross profit from 2021 which rose an extraordinary 33% from 2020. According to Tim Cook, the primary driver for that increase is due to the 26% growth in the service side of the business, including music, video subscriptions, warranties, and licencing (Leswing, 2021). This also led to a substantial increase in the Net Income of Common Shares of 71% in 2021. While 2022 did not see the same significant increase as the previous year, the growth gained in 2021 continued through 2022. Another area that saw substantial changes was Total Other Income/Expenses Net for 2022 which saw a 229% loss. In the 2022 Apple 10K, a note is made that the primary reason for this change is due to higher realized losses on debt securities (Apple Inc., 2022). Given the increase of interest rates from the Fed over the last year, it is understandable why there were such significant losses in debt securities. While this was not a large enough change to affect the net income substantially, it will more than likely be a factor in the years to come, according to notes from management (Apple Inc., 2022). | Revenue | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | The account that has seen the most change, according to the vertical analysis, is the cost of revenue. It is slowly decreasing as a percentage of total revenue year over year while gross profit continues to increase. This is primarily due to the increase in services that Apple is providing. Apple services tend to have less cost associated than the cost of producing products. For example, in 2022, the cost of services was 28% of profit compared to 64% for products (Apple Inc., 2022). Overall, this change significantly impacts Apple's performance, considerably increasing profit. There has also been a steady increase in the Income Tax Expense year over year. This is most likely due to a rise in particular taxes and having less depreciable assets. While this is negatively affecting Apple, the effects are minimal. | ||||||||||
Total Revenue | 394,328 | 365,817 | 274,515 | 260,174 | 7.79% | 33.26% | 5.51% | Total Revenue | 394,328 | 365,817 | 274,515 | 100% | 100% | 100% | ||||||||||||
Cost of Revenue | 223,546 | 212,981 | 169,559 | 161,782 | 4.96% | 25.61% | 4.81% | Cost of Revenue | 223,546 | 212,981 | 169,559 | 56.69% | 58.22% | 61.77% | ||||||||||||
Gross Profit | 170,782 | 152,836 | 104,956 | 98,392 | 11.74% | 45.62% | 6.67% | Gross Profit | 170,782 | 152,836 | 104,956 | 43.31% | 41.78% | 38.23% | ||||||||||||
Operating Expenses | Operating Expenses | |||||||||||||||||||||||||
Research Development | 26,251 | 21,914 | 18,752 | 16,217 | 19.79% | 16.86% | 15.63% | Research Development | 26,251 | 21,914 | 18,752 | 6.66% | 5.99% | 6.83% | ||||||||||||
Selling General and Administrative | 25,094 | 21,973 | 19,916 | 18,245 | 14.20% | 10.33% | 9.16% | Selling General and Administrative | 25,094 | 21,973 | 19,916 | 6.36% | 6.01% | 7.25% | ||||||||||||
Non Recurring | N/A | N/A | N/A | N/A | Nonrecurring | N/A | N/A | N/A | ||||||||||||||||||
Others | N/A | N/A | N/A | N/A | Others | N/A | N/A | N/A | ||||||||||||||||||
Total Operating Expenses | 51,345 | 43,887 | 38,668 | 34,462 | 16.99% | 13.50% | 12.20% | Total Operating Expenses | 51,345 | 43,887 | 38,668 | 13.02% | 12.00% | 14.09% | ||||||||||||
Operating Income or Loss | 119,437 | 108,949 | 66,288 | 63,930 | 9.63% | 64.36% | 3.69% | Operating Income or Loss | 119,437 | 108,949 | 66,288 | 30.29% | 29.78% | 24.15% | ||||||||||||
Income from Continuing Operations | Income From Continuing Operations | |||||||||||||||||||||||||
Total Other Income/Expenses Net | -334 | 258 | 803 | 1,807 | -229.46% | -67.87% | -55.56% | Total Other Income/Expenses Net | -334 | 258 | 803 | -0.08% | 0.07% | 0.29% | ||||||||||||
Earnings Before Interest and Taxes | 119,103 | 109,207 | 67,091 | 65,737 | 9.06% | 62.77% | 2.06% | Earnings Before Interest and Taxes | 119,103 | 109,207 | 67,091 | 30.20% | 29.85% | 24.44% | ||||||||||||
Interest Expense | 2,931 | 2,645 | 2,873 | 3,576 | 10.81% | -7.94% | -19.66% | Interest Expense | 2,931 | 2,645 | 2,873 | 0.74% | 0.72% | 1.05% | ||||||||||||
Income Before Tax | 119,103 | 109,207 | 67,091 | 65,737 | 9.06% | 62.77% | 2.06% | Income Before Tax | 119,103 | 109,207 | 67,091 | 30.20% | 29.85% | 24.44% | ||||||||||||
Income Tax Expense | 19,300 | 14,527 | 9,680 | 10,481 | 32.86% | 50.07% | -7.64% | Income Tax Expense | 19,300 | 14,527 | 9,680 | 4.89% | 3.97% | 3.53% | ||||||||||||
Minority Interest | N/A | N/A | N/A | N/A | Minority Interest | N/A | N/A | N/A | ||||||||||||||||||
Net Income From Continuing Ops | 99,803 | 94,680 | 57,411 | 55,256 | 5.41% | 64.92% | 3.90% | Net Income From Continuing Ops | 99,803 | 94,680 | 57,411 | 25.31% | 25.88% | 20.91% | ||||||||||||
Nonrecurring Events | Nonrecurring Events | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||
Discontinued Operations | N/A | N/A | N/A | N/A | Discontinued Operations | N/A | N/A | N/A | ||||||||||||||||||
Extraordinary Items | N/A | N/A | N/A | N/A | Extraordinary Items | N/A | N/A | N/A | ||||||||||||||||||
Effect of Accounting Changes | N/A | N/A | N/A | N/A | Effect of Accounting Changes | N/A | N/A | N/A | ||||||||||||||||||
Other Items | N/A | N/A | N/A | N/A | Other Items | N/A | N/A | N/A | ||||||||||||||||||
Net Income | 99,803 | 94,680 | 57,411 | 55,256 | 5.41% | 64.92% | 3.90% | Net Income | 99,803 | 94,680 | 57,411 | 25.31% | 25.88% | 20.91% | ||||||||||||
Net Income | Net Income | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||
Preferred Stock and Other Adjustments | N/A | N/A | N/A | N/A | Preferred Stock and Other Adjustments | N/A | N/A | N/A | ||||||||||||||||||
Net Income Applicable to Common Shares | 6.15 | 5.67 | 3.31 | 2.99 | 8.47% | 71.30% | 10.70% | Net Income Applicable to Common Shares | 6.15 | 5.67 | 3.31 | 0.00% | 0.00% | 0.00% | ||||||||||||
Balance Sheet | Horizontal Analysis | Comments | Balance Sheet | Vertical Analysis | Comments | |||||||||||||||||||||
All numbers in millions | All numbers in millions | |||||||||||||||||||||||||
Period Ending | 2022 | 2021 | 2020 | 2019 | 2022 | 2021 | 2020 | Period Ending | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||
Current Assets | In analyzing Apple's balance sheet, we will take 2022, 2021 & 2020 to be the base years. The company's Total Current Assets decreased by 12.15% in 2022 compared to 2020 to close at $135,405,000. The most valuable year for apple was in 2020 with a total current asset of $143,713,000. The company's total assets had an increase by 3.82% in 2022 compared to the year of 2020. Most changes occurred due to Long-Term Investments & Property Plant and Equipment where most significant long-term investment took place in 2021 with the amount of $127,877,000. Apple's Total Current Liabilities had a significant increase of 22.4% on the year of 2022 with a total amount of $153,982,000 compared to the year of 2020. The current liabilities refer to short-term obligations that a company must settle within one year. This impacts the fincial analysis since it affects the companies debt and liquidity which can negativley impact the company risk. The two main accounts that are affecting this is Accounts Payable which has increased due to the amount of purchases made by Apples to supliers and the Short Term debt increase. This can be seen as an influence in investmnet growth but could also suggest that Apple is taking over more credit which could lead to higher interest expences. The perception from investors may also heavily affect the companies perfromance. As far as the Total Liabilities there was a slight increase of 0.68% ending with a balance of $302,083,000 for the year of 2022. Lastly, the Stockholder's Equity reflects a decrease of 8.11% for the year of 2022 compared to 2020 due to the Net Income increase. | Current Assets | From this calculation, we can see that the account payables, total current liabilities, common stock, total current assets, cash has increased in the year 2022 while long-term debt had a decreased. The significant decrease in cash and short-term investments is due to the total current liabilities and total liabilities. The company is not utilizing the assets accordingly to meet the current liabilities which is not good for the business. Correspondingly, the result of vertical analysis shows that the Cash and Cash Equivalents, Short-Term Investments, and Inventory expressed in terms as percentage of total assets has lower value in 2022 compared to 2020. On the other hand, total current liabilities, and common stock have increased value. This indicates the company is performing well but it should focus in settling the current liabilities to maximize the profits. | |||||||||||||||||||||||
Cash and Cash Equivalents | 23,646 | 34,940 | 38,016 | 48,844 | -32.32% | -8.09% | -22.17% | Cash And Cash Equivalents | 23,646 | 34,940 | 38,016 | 6.70% | 9.95% | 11.74% | ||||||||||||
Short-Term Investments | 24,658 | 27,699 | 52,927 | 51,713 | -10.98% | -47.67% | 2.35% | Short-Term Investments | 24,658 | 27,699 | 52,927 | 6.99% | 7.89% | 16.34% | ||||||||||||
Net Receivables | 28,184 | 26,278 | 16,120 | 22,926 | 7.25% | 63.01% | -29.69% | Net Receivables | 28,184 | 26,278 | 16,120 | 7.99% | 7.49% | 4.98% | ||||||||||||
Inventory | 4,946 | 6,580 | 4,061 | 4,106 | -24.83% | 62.03% | -1.10% | Inventory | 4,946 | 6,580 | 4,061 | 1.40% | 1.87% | 1.25% | ||||||||||||
Other Current Assets | 53,971 | 39,339 | 32,589 | 35,230 | 37.19% | 20.71% | -7.50% | Other Current Assets | 53,971 | 39,339 | 32,589 | 15.30% | 11.21% | 10.06% | ||||||||||||
Total Current Assets | 135,405 | 134,836 | 143,713 | 162,819 | 0.42% | -6.18% | -11.73% | Total Current Assets | 135,405 | 134,836 | 143,713 | 38.38% | 38.41% | 44.37% | ||||||||||||
Long Term Investments | 120,805 | 127,877 | 100,887 | 105,341 | -5.53% | 26.75% | -4.23% | Long-Term Investments | 120,805 | 127,877 | 100,887 | 34.25% | 36.43% | 31.15% | ||||||||||||
Property Plant and Equipment | 42,117 | 39,440 | 36,766 | 37,378 | 6.79% | 7.27% | -1.64% | Property Plant and Equipment | 42,117 | 39,440 | 36,766 | 11.94% | 11.24% | 11.35% | ||||||||||||
Goodwill | N/A | N/A | N/A | N/A | Goodwill | N/A | N/A | N/A | ||||||||||||||||||
Intangible Assets | N/A | N/A | N/A | N/A | Intangible Assets | N/A | N/A | N/A | ||||||||||||||||||
Accumulated Amortization | N/A | N/A | N/A | N/A | Accumulated Amortization | N/A | N/A | N/A | ||||||||||||||||||
Other Assets | 54,428 | 48,849 | 42,522 | 32,978 | 11.42% | 14.88% | 28.94% | Other Assets | 54,428 | 48,849 | 42,522 | 15.43% | 13.92% | 13.13% | ||||||||||||
Deferred Long-Term Asset Charges | N/A | N/A | N/A | N/A | Deferred Long-Term Asset Charges | N/A | N/A | N/A | ||||||||||||||||||
Total Assets | 352,755 | 351,002 | 323,888 | 338,516 | 0.50% | 8.37% | -4.32% | Total Assets | 352,755 | 351,002 | 323,888 | 100.00% | 100.00% | 100.00% | ||||||||||||
Current Liabilities | Current Liabilities | |||||||||||||||||||||||||
Accounts Payable | 64,115 | 54,763 | 42,296 | 46,236 | 17.08% | 29.48% | -8.52% | Accounts Payable | 64,115 | 54,763 | 42,296 | 18.18% | 15.60% | 13.06% | ||||||||||||
Short/Current Long-Term Debt | 29,022 | 1 | 20,412 | 21,762 | 3424076.29% | -100.00% | -6.20% | Short-/Current Long-Term Debt | 29,022 | 23,225 | 20,412 | 8.23% | 6.62% | 6.30% | ||||||||||||
Other Current Liabilities | 60,845 | 47,493 | 42,684 | 37,720 | 28.11% | 11.27% | 13.16% | Other Current Liabilities | 60,845 | 47,493 | 42,684 | 17.25% | 13.53% | 13.18% | ||||||||||||
Total Current Liabilities | 153,982 | 125,481 | 105,392 | 105,718 | 22.71% | 19.06% | -0.31% | Total Current Liabilities | 153,982 | 125,481 | 105,392 | 43.65% | 35.75% | 32.54% | ||||||||||||
Long-Term Debt | 98,959 | 109,106 | 98,667 | 91,807 | -9.30% | 10.58% | 7.47% | Long-Term Debt | 98,959 | 109,106 | 98,667 | 28.05% | 31.08% | 30.46% | ||||||||||||
Other Liabilities | 49,142 | 53,325 | 54,490 | 50,503 | -7.84% | -2.14% | 7.89% | Other Liabilities | 49,142 | 53,325 | 54,490 | 13.93% | 15.19% | 16.82% | ||||||||||||
Deferred Long-Term Liability Charges | N/A | N/A | N/A | N/A | Deferred Long-Term Liability Charges | N/A | N/A | N/A | ||||||||||||||||||
Minority Interest | N/A | N/A | N/A | N/A | Minority Interest | N/A | N/A | N/A | ||||||||||||||||||
Negative Goodwill | N/A | N/A | N/A | N/A | Negative Goodwill | N/A | N/A | N/A | ||||||||||||||||||
Total Liabilities | 302,083 | 287,912 | 258,549 | 248,028 | 4.92% | 11.36% | 4.24% | Total Liabilities | 302,083 | 287,912 | 258,549 | 85.64% | 82.03% | 79.83% | ||||||||||||
Stockholders' Equity | Stockholders' Equity | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||
Misc. Stocks Options Warrants | N/A | N/A | N/A | N/A | Misc. Stocks Options Warrants | N/A | N/A | N/A | ||||||||||||||||||
Redeemable Preferred Stock | N/A | N/A | N/A | N/A | Redeemable Preferred Stock | N/A | N/A | N/A | ||||||||||||||||||
Preferred Stock | N/A | N/A | N/A | N/A | Preferred Stock | N/A | N/A | N/A | ||||||||||||||||||
Common Stock | 64,849 | 57,365 | 50,779 | 45,174 | 13.05% | 12.97% | 12.41% | Common Stock | 64,849 | 57,365 | 50,779 | 18.38% | 16.34% | 15.68% | ||||||||||||
Retained Earnings | -3,068 | 5,562 | 14,966 | 45,898 | -155.16% | -62.84% | -67.39% | Retained Earnings | -3,068 | 5,562 | 14,966 | -0.87% | 1.58% | 4.62% | ||||||||||||
Treasury Stock | N/A | N/A | N/A | N/A | Treasury Stock | N/A | N/A | N/A | ||||||||||||||||||
Capital Surplus | N/A | N/A | N/A | N/A | Capital Surplus | N/A | N/A | N/A | ||||||||||||||||||
Other Stockholder Equity | -11,109 | 163 | -406 | -584 | -6915.34% | -140.15% | -30.48% | Other Stockholder Equity | -11,109 | 163 | -406 | -3.15% | 0.05% | -0.13% | ||||||||||||
Total Stockholder Equity | 50,672 | 63,090 | 65,339 | 90,488 | -19.68% | -3.44% | -27.79% | Total Stockholder Equity | 50,672 | 63,090 | 65,339 | 14.36% | 17.97% | 20.17% | ||||||||||||
Net Tangible Assets | Net Tangible Assets | |||||||||||||||||||||||||
Total Common Equity | 352,755 | 351,002 | 323,888 | 100.00% | 100.00% | 100.00% | ||||||||||||||||||||
Apple Inc. (2022, September 24). SEC. Retrieved from https://www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata%2F0000320193%2F000032019322000108%2Faapl-20220924.htm |
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