Make a 5-year trend analysis, using 2014 as the base year, of (1) net sales and (2) net income. (To satisfy this requirement you must access information regarding performance in prior years. This information is provided in the complete annual report available on the company's website.) (Round percentages to O decimal places, e.g. 15% and enter amounts in millions.) APPLE INC. Trend Analysis of Net Sales and Net Income For the Three Years Ended 2018 (1) Net sales $ Trend 2018 265595 2017 2016 229234 $ 144 % 126 % (2) Net income $ 59531 Trend eTextbook and Media 215639 118 % 48351 $ 45687 151 % 123 % Screenshot 116 % Question 3 of 3 > 6.67/20 Make a 5-year trend analysis, using 2014 as the base year, of (1) net sales and (2) net income. (To satisfy this requirement you must access information regarding performance in prior years. This information is provided in the complete annual report available on the company's website.) (Round percentages to O decimal places, e.g. 15% and enter amounts in millions.) 2017 APPLE INC. Trend Analysis of Net Sales and Net Income For the Three Years Ended 2018 229234 2016 215639 2015 233715 126 % 118 % 128 % 48351 45687 2014 182795 100 % 53394 $ 39510 123 % 116 % 135 % 100 % Question 3 of 3 (b1) Your answer is incorrect. 6.67/20 Compute for 2018 and 2017 the (1) debt to assets ratio and (2) times interest earned. (Round debt to assets ratio to O decimal places, e.g. 125% and times interest earned to 1 decimal place, e.g. 15.2.) 1. Debt to Assets Ratio 2. Times Interest Earned 2018 % Text times 2017 % times eTextbook and Media Save for Later Last saved 56 seconds ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. Attempts: unlimited Submit Answer Specimen Financial Statements: Apple Inc. Appendix A Once each year, a corporation communicates to its stockholders and other interested parties by issuing a complete set of audited financial statements. The annual report, as this com- munication is called, summarizes the financial results of the company's operations for the year and its plans for the future. Many annual reports are attractive, multicolored, glossy pub- lic relations pieces, containing pictures of corporate officers and directors as well as photos and descriptions of new products and new buildings. Yet the basic function of every annual report is to report financial information, almost all of which is a product of the corporation's accounting system. The content and organization of corporate annual reports have become fairly standardized. Excluding the public relations part of the report (pictures, products, etc.), the following are the traditional financial portions of the annual report: Financial Highlights .Letter to the Stockholders Management's Discussion and Analysis Financial Statements Notes to the Financial Statements . Management's Responsibility for Financial Reporting Management's Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Selected Financial Data The official SEC filing of the annual report is called a Form 10-K, which often omits the public relations pieces found in most standard annual reports. On the following pages, we present Apple Inc.'s financial statements taken from the company's 2018 Form 10-K. The complete Form 10-K, including notes to the financial statements, is available at the company's website. A-1 A-2 APPENDIX A Specimen Financial Statements: Apple Inc. Apple Inc. Consolidated Statements of Operations (in millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 29, September 30, September 24, Net sales Cost of sales Gross margin Operating expenses: Research and development Selling, general and administrative Total operating expenses Operating income Other income/(expense), net Income before provision for income taxes Provision for income taxes Net income Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted 2018 2017 2016 S 265,595 $ 229,234 $ 215,639 163,756 141,048 101,839 88,186 131,376 84,263 14,236 11,581 10,045 16.705 15.261 14.194 30,941 26,842 24,239 70,898 61,344 60,024 2,005 2,745 1,348 72,903 64,089 61,372 13,372 15,738 15,685 S 59,531 $ 48,351 $ 45,687 S 12.01 S 9.27 $ 8.35 S 11.91 S 9.21 $ 8.31 4.955,377 5.217,242 5,470,820 5.000,109 5.251.692 5,500,281 See accompanying Notes to Consolidated Financial Statements. Net income Other comprehensive income/(loss): APPENDIX A Specimen Financial Statements: Apple Inc. A-3 Apple Inc. Consolidated Statements of Comprehensive Income (in millions) Change in foreign currency translation, net of tax effects of S(1), S(77) and S8, respectively Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(149), $(478) and $(7), respectively September 29, 2018 Years ended September 30, 2017 $59,531 $48,351 September 24, 2016 $45,687 (525) 224 75 523 1,315 7 Adjustment for net (gains)/losses realized and included in net income. net of tax expense/(henefit) of S(104), $475 and $131, respectively Total change in unrealized gains/losses on derivative instruments, net of tax 382 (1,477) (741) 905 (162) (734) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit/ (expense) of $1,156, $425 and $(863), respectively Adjustment for net (gains)/losses realized and included in net income, net of tax expense/(benefit) of $21, $35 and $(31), respectively Total change in unrealized gains/losses on marketable securities, net of tax (3,407) (782) 1,582 (64) 56 (3.406) (846) 1,638 Total other comprehensive income/(loss) Total comprehensive income (3,026) (784) 979 $56,505 $47.567 546.666 See accompanying Notes to Consolidated Financial Statements. A-4 APPENDIX A Specimen Financial Statements: Apple Inc. Apple Inc. Consolidated Balance Sheets (in millions, except number of shares which are reflected in thousands and par value) Current assets: Cash and cash equivalents Marketable securities Accounts receivable.net Inventories Vendor non-trade receivables Other current assets Total current assets Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets Current liabilities: Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities Non-current liabilities: Deferred revenue Term debt Other non-current liabilities Total non-current liabilities Total liabilities Commitments and contingencies ASSETS: September 29, 2018 September 30, 2017 S 25.913 40,388 $ 20,289 23.186 53,892 17,874 3.956 4,855 25,809 17,799 12.087 13,936 131,339 128,645 170,799 194,714 41,304 33,783 22,283 18,177 234,386 246,674 $365,725 $375,319 LIABILITIES AND SHAREHOLDERS' EQUITY: $ 55,888 $ 44,242 32.687 30,551 7.543 7,548 11.964 11,977 8.784 6.496 116,866 100,814 2,797 2,836 93,735 97,207 45,180 40,415 141,712 140,458 258,578 241,272 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 40,201 35,867 Retained earnings 70,400 98,330 Accumulated other comprehensive income/(loss) (3,454) (150) Total shareholders' equity 107,147 134,047 Total liabilities and shareholders' equity $365,725 $375,319 See accompanying Notes to Consolidated Financial Statements. APPENDIX A Specimen Financial Statements: Apple Inc. A-5 Apple Inc. Consolidated Statements of Shareholders' Equity (in millions, except number of shares which are reflected in thousands and per share amounts) Accumulated Other Comprehensive Income/(Loss) Common Stock and Additional Paid-In Capital Retained Shares Amount Earnings Balances as of September 26, 2015 5.578,753 $27,416 Net income $92.284 45,687 $ (345) Other comprehensive incume/(loss) Dividends and dividend equivalents declared at $2.18 per share or RSU Repurchase of common stock Share-based compensation (279,609) (12,188) (29,000) 4,262 Common stock issued, net of shares 37,022 (806). (419) Total Shareholders' Equity $119,355 979 45,687 979 | g| | | | (12,188) (29,000) 4,262 (1,225) withheld for employee taxes Tax benefit from equity awards. including transfer pricing adjustments 379 379 Balances as of September 24, 2016 5,336,166 31,251 Net income 96,364 48,351 634 128,249. 48,351 Other comprehensive income/(loss) (784) (784) Dividends and dividend equivalents declared at $2.40 per share or KSU Share-based compensation Repurchase of common stock Common stock issued, net of shares 36,531 (913) (581) (246,496)) (12,803) (33,001) (12,803) (33,001) 4,909 4.909 (1.494) 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 620 620 5.126,201 35,867 98,330 (150) 134,047 278 (278) 59,531 - 59,531 (3,026) (3,026) (405,549) (13,735) (73,056) (13,735) (73,056) 5,443 5,443 34,334 4.754,986 (1.109) $40,201 (948) $70,400 (2,057) 5(3,454) $107.147 See accompanying Notes to Consolidated Financial Statements. A-6 APPENDIX A Specimen Financial Statements: Apple Inc. Apple Inc. Consolidated Statements of Cash Flows (in millions) Years ended September 29, September 30, September 24, 2018 2017 2016 $20,289 $20,484 $21,120 Cash and cash equivalents, beginning of the year Operating activities: Net income 59.531 48,351 45,687 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 10,903 10,157 10,505 Share based compensation expense 5,340 4,840 4,210 Deferred income tax expense/(benefit) (32,590) 5,966 4,938 Other (444) (166) 486 Changes in operating assets and liabilities: Accounts receivable, net (5,322) (2,093) 527 Inventories 828 (2,723) 217 Vendor non-trade receivables (8,010) (4,254) (51) Other current and non current assets (423) (5,318) 1,055 Accounts payable 9.175 8,966 2,117 Deferred revenue (44) (626) (1,554) Other current and non-current liabilities 38,490 1,125 (1,906) 77,434 64,225 66,231 Cash generated by operating activities Investing activities: Purchases of marketable securities (71,356) Proceeds from maturities of marketable securities 55,881 (159,486) 31,775 (142,428) 21,258 Proceeds from sales of marketable securities 47.838 94,564 90,536 Payments for acquisition of property, plant and equipment (13,313) (12,451) (12,734) Payments made in connection with business acquisitions, net (721) (329) (297) Purchases of non-marketable securities (1.871) (521) (1,388) Proceeds from non-marketable securities 353 126 Other (745) (124) Cash generated by/(used in) investing activities 16.066 (46,446) (924) (45,977) 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 Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 669 555 495 (2.527) (1,874) (1,570) (13,712) (12,769) (12,150) (72,738) (32,900) (29,722) 6,969 28,662 24,954 (6.500) (3,500) (2,500) (37) (87,876) 3,852 (17,974) (397) (20,890) 5,624 $25.913 (195) $20,289 (636) $20,484 $10,417 $11,591 $10,444 $ 3.022 $ 2,092 $ 1,316 See accompanying Notes to Consolidated Financial Statements