I need your help
1. Explain what the results of your calculations say about the overall health of the company and its future value.
2. Describe the data points you found in the annual report that relate to the companys capital constraints and spending trends.
3. Interpret the data points and explain whether or not the company is making appropriate capital expenditure allocations.
ROA + 12) Net 1 Income (A: Sep. 2018 ) 595311 ( (Total Assets ( A: Sep. 2017 ) ( (3753 Total Assets A: Sep. 2018 )) 365725 5725 /2) 19 / 370522 59531 16.07% Accounts Receivable Turnover Ratio Jun 29, 2019 III. Quarter Receivable Turnover 14.63 Ratio (TTM) Dec 29, 2018 I. Quarter 15.02 Operating Cash-Flow Ratio Apple's Share Price of today is $227.01. Apple's Cash Flow from Operations per share for the trailing twelve months (TTM) ended in Jun. 2019 was 4.027 (Sep. 2018 ) + 5.592 (Dec. 2018 ) +2.373 (Mar. 2019 ) + 2.529 (Jun. 2019 ) = $14.52. Pretax Net Profit Margin 2018-12-31 2018-09-30 2018-06-30 2018-03-31 2017-12-31 2017-09-30 2017-06-30 2017-03-31 2016-12-31 $261.61B $265.60B $255.27B $247.42B $239.18B $229.23B $223.51B $220.46B $218.12B $69.78B $72.90B $70.40B $68.42B $66.94B $64.09B $62.36B $61.52B $60.98B 26.67% 27.45% 27.58% 27.65% 27.99% 27.96% 27.90% 27.91% 27.96% Inventory Turnover Inventor Turnove r (A: Sep. 2018) Cost of 1 Goods Sold Cost of 1 Goods Sold (A: 1 Total Inventor ies (Total Inventor ies (A: Sep. 2017 ) (4855 4405.5 Total Inventor ies (A: Sep. 2018 )) 3956) Sep. 2018 ) 163756 163756 37.17 / 1 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 23 September 30, ASSETS $ Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 25.913 40,388 23.186 3.956 25,809 12.087 131 339 20.289 53,892 17,874 4.855 17.799 13.936 126 845 170.799 41300 Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 22 23 234386 366.725 194.714 33.783 18,177 2 466724 375,319 $ LIABILITIES AND SHAREHOLDERS' EQUITY: $ Current abilities Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 55 R 32.687 7543 11.964 8.784 116.886 44.242 30.551 7548 11.977 6.496 100.814 Non-current liabilities: Deferred revenue Term debt Other non-current liabilities Total non-current liabilities Total liabilities 2.797 93.735 45 180 141.712 258,578 2,836 97.207 0415 140.458 241.272 Commitments and contingencies Shareholders' equity: Common stock and additional paid in capital, $0.00001 par value: 12.600.000 shares authorized: 4,754,986 and 5, 126,201 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income loss) Total shareholders' equity Total liabilities and shareholders' equity 40 201 70,400 (3.454) 107.147 365.725 35.867 98.330 (150) 134.047 375,319 $ See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2018 Form 10-K 140 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands and per share amounts) Total Common Stock and Additional Palo- in Capital Shares Amount 5.578,753 $ 27416 Accumulated Retained Comprehensive Shareholders Th.com Equity 92.284 5 (345) $ 119356 45,687 45,687 Earnings 5 979 (12.188) (29.000) (279.609) (12,188) (29,000) 4.262 37,022 (806) (419) (1.225) 5.336.165 379 128.249 48,351 (784) 48351 (12.803) (33,001) Balances as of September 26, 2015 Net income Other comprehensive income (loss) Dividends and dividend equivalents declared at $2.18 per share or RSU 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 at $2.40 per share or RSU 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 Cumulative effect of change in accounting principle Net income Other comprehensive income/(loss) Dividends and dividend equivalents declared at $2.72 per share or RSU Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Balances as of September 29, 2018 (246,496) (12,803) (33,001) 4,309 4909 36.531 (1.494) 620 134.047 5.126,201 278 59.531 59,531 (3.026) 06 (405,549) (13.735) (73,056) (13.735) (73.056) 5.443 34,334 4,754,986 $ (1.109) 40.2015 943) 70.400 $ 3.454) $ (2.057) 107,147 See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Years ended September 29. September 30. September 24. 2016 $ 20.289 $ 20.434 $ 21,120 59,531 48.351 10,903 5.340 (32.590) 10.157 4840 10 Sos 4210 4,938 486 (5,322) (8010) (423) 9,175 (44) 38.490 77,434 (2.093) (2.723 (4.254) (5.318 8.966 1626) 1.125 64 225 217 (51) 1,055 2.117 (1.554) (1,906) 66.231 Cash and cash equivalents, beginning of the year Operating activities Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense benefit 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 for acquisition of property, plant and equipment Payments made in connection with business acquisitions.net Purchases of non-marketable securities Proceeds from non-marketable securities Other Cash generated by used in investing activities Financing activities: Proceeds from issuance of common stock Payments for taxes related to net share settlement of equity awards Payments for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net Repayments of term debt Change in commercial paper.net Cash used in financing activities Increase/Decrease in cash and cash equivalents Cash and cash equivalents, end of the year (71,356) 55.881 47.838 (13,313) (721) (1,871) (159.486) 31.775 94.564 (12.451) (329) (521) (142428) 21.258 90.536 (12.734) (297) (1.388) 353 (745) 16.066 (924) (45.977) (46.446 669 (2.527) (13.712) (72.738) 555 (1.874) (12.789 (32.900 28.652 3.500 3.852 (17974) 11.570) (12.150) (29,722) 24.954 2.500) 0397 (20 890 16,500) (87.876) 5.624 25 913 5 000 20.484 $ 20299 $ Supplemental cash flow disclosure Cash paid for income taxes, net Cash paid for interest $ 50 10.417 3.022 $ $ 11 591 $ 2.0925 1316 See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2018 Form 10-K142 ROA + 12) Net 1 Income (A: Sep. 2018 ) 595311 ( (Total Assets ( A: Sep. 2017 ) ( (3753 Total Assets A: Sep. 2018 )) 365725 5725 /2) 19 / 370522 59531 16.07% Accounts Receivable Turnover Ratio Jun 29, 2019 III. Quarter Receivable Turnover 14.63 Ratio (TTM) Dec 29, 2018 I. Quarter 15.02 Operating Cash-Flow Ratio Apple's Share Price of today is $227.01. Apple's Cash Flow from Operations per share for the trailing twelve months (TTM) ended in Jun. 2019 was 4.027 (Sep. 2018 ) + 5.592 (Dec. 2018 ) +2.373 (Mar. 2019 ) + 2.529 (Jun. 2019 ) = $14.52. Pretax Net Profit Margin 2018-12-31 2018-09-30 2018-06-30 2018-03-31 2017-12-31 2017-09-30 2017-06-30 2017-03-31 2016-12-31 $261.61B $265.60B $255.27B $247.42B $239.18B $229.23B $223.51B $220.46B $218.12B $69.78B $72.90B $70.40B $68.42B $66.94B $64.09B $62.36B $61.52B $60.98B 26.67% 27.45% 27.58% 27.65% 27.99% 27.96% 27.90% 27.91% 27.96% Inventory Turnover Inventor Turnove r (A: Sep. 2018) Cost of 1 Goods Sold Cost of 1 Goods Sold (A: 1 Total Inventor ies (Total Inventor ies (A: Sep. 2017 ) (4855 4405.5 Total Inventor ies (A: Sep. 2018 )) 3956) Sep. 2018 ) 163756 163756 37.17 / 1 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 23 September 30, ASSETS $ Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 25.913 40,388 23.186 3.956 25,809 12.087 131 339 20.289 53,892 17,874 4.855 17.799 13.936 126 845 170.799 41300 Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 22 23 234386 366.725 194.714 33.783 18,177 2 466724 375,319 $ LIABILITIES AND SHAREHOLDERS' EQUITY: $ Current abilities Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 55 R 32.687 7543 11.964 8.784 116.886 44.242 30.551 7548 11.977 6.496 100.814 Non-current liabilities: Deferred revenue Term debt Other non-current liabilities Total non-current liabilities Total liabilities 2.797 93.735 45 180 141.712 258,578 2,836 97.207 0415 140.458 241.272 Commitments and contingencies Shareholders' equity: Common stock and additional paid in capital, $0.00001 par value: 12.600.000 shares authorized: 4,754,986 and 5, 126,201 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income loss) Total shareholders' equity Total liabilities and shareholders' equity 40 201 70,400 (3.454) 107.147 365.725 35.867 98.330 (150) 134.047 375,319 $ See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2018 Form 10-K 140 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands and per share amounts) Total Common Stock and Additional Palo- in Capital Shares Amount 5.578,753 $ 27416 Accumulated Retained Comprehensive Shareholders Th.com Equity 92.284 5 (345) $ 119356 45,687 45,687 Earnings 5 979 (12.188) (29.000) (279.609) (12,188) (29,000) 4.262 37,022 (806) (419) (1.225) 5.336.165 379 128.249 48,351 (784) 48351 (12.803) (33,001) Balances as of September 26, 2015 Net income Other comprehensive income (loss) Dividends and dividend equivalents declared at $2.18 per share or RSU 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 at $2.40 per share or RSU 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 Cumulative effect of change in accounting principle Net income Other comprehensive income/(loss) Dividends and dividend equivalents declared at $2.72 per share or RSU Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Balances as of September 29, 2018 (246,496) (12,803) (33,001) 4,309 4909 36.531 (1.494) 620 134.047 5.126,201 278 59.531 59,531 (3.026) 06 (405,549) (13.735) (73,056) (13.735) (73.056) 5.443 34,334 4,754,986 $ (1.109) 40.2015 943) 70.400 $ 3.454) $ (2.057) 107,147 See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Years ended September 29. September 30. September 24. 2016 $ 20.289 $ 20.434 $ 21,120 59,531 48.351 10,903 5.340 (32.590) 10.157 4840 10 Sos 4210 4,938 486 (5,322) (8010) (423) 9,175 (44) 38.490 77,434 (2.093) (2.723 (4.254) (5.318 8.966 1626) 1.125 64 225 217 (51) 1,055 2.117 (1.554) (1,906) 66.231 Cash and cash equivalents, beginning of the year Operating activities Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense benefit 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 for acquisition of property, plant and equipment Payments made in connection with business acquisitions.net Purchases of non-marketable securities Proceeds from non-marketable securities Other Cash generated by used in investing activities Financing activities: Proceeds from issuance of common stock Payments for taxes related to net share settlement of equity awards Payments for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net Repayments of term debt Change in commercial paper.net Cash used in financing activities Increase/Decrease in cash and cash equivalents Cash and cash equivalents, end of the year (71,356) 55.881 47.838 (13,313) (721) (1,871) (159.486) 31.775 94.564 (12.451) (329) (521) (142428) 21.258 90.536 (12.734) (297) (1.388) 353 (745) 16.066 (924) (45.977) (46.446 669 (2.527) (13.712) (72.738) 555 (1.874) (12.789 (32.900 28.652 3.500 3.852 (17974) 11.570) (12.150) (29,722) 24.954 2.500) 0397 (20 890 16,500) (87.876) 5.624 25 913 5 000 20.484 $ 20299 $ Supplemental cash flow disclosure Cash paid for income taxes, net Cash paid for interest $ 50 10.417 3.022 $ $ 11 591 $ 2.0925 1316 See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2018 Form 10-K142
