my company is on Apple.

Objective: To analyze the financial statements of a publicly traded company

Obtain an annual report from a publicly traded corporation that is interesting to you. Be sure the companys financial statements include deferred taxes, postretirement benefits, dilutive securities, and share-based compensation.

Using techniques you have learned in the previous weeks, respond to the following questions.

What amount of deferred tax assets or deferred tax liabilities are on the two most recent years on the balance sheet? What gives rise to these deferred taxes? What information is disclosed in the footnotes related to deferred taxes? Please define a deferred tax asset and deferred tax liability.

What temporary and permanent differences does the company disclose in their footnotes? What are some other examples of temporary and permanent differences?

What is the amount of income tax provision in the two most recent years on the income statement? What information is disclosed in the footnotes relating to income tax expense? Does the company have a net operating loss carry-forward or carry-back? What are the guidelines for carry-forwards and carry-backs?

Does the company have a defined benefit or defined contribution plan? What are the key elements of the plan discussed in the footnotes? What amounts on the balance sheet relate to this plan? What are the differences between defined benefit and defined contribution plans?

What are the earnings per share amounts disclosed on the income statement for the most recent year? What dilutive securities are discussed in the footnotes? Please identify and describe other examples of dilutive securities. How do these impact earnings per share?

What kind of share-based compensation does the company have? What was compensation expense for the two most recent years? What are the key elements of this plan discussed in the footnotes? Please identify and describe other types of share-based compensation.

Does the company use the direct or indirect cash flow presentation method? What is the difference between these two methods? How does the cash flow statement agree to the other financial statements?

What investing and financing activities does the company have? What are some other examples of investing and financing activities?

What noncash transactions does the company have on its cash flow statement? What are some other examples of noncash transactions?

Apple Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In millions, except number of shares which are reflected in thousands and per share amounts) Three Months Ended Six Months Ended March 30, March 31, March 30, March 31, 2019 2018 2019 2018 Net sales: Products 46,565 $ 51,287 $ 120,000 $ 130,451 Services 11,450 9,850 22,325 18,979 Total net sales (1) 58,015 61,137 142,325 149,430 Cost of sales: Products 32,047 33,936 80,285 84,511 Services 4,147 3,779 8,188 7,585 Total cost of sales 36,194 37,715 88,473 92,096 Gross margin 21,821 23,422 53,852 57,334 Operating expenses: Research and development Selling, general and administrative Total operating expenses 3,948 4,458 8,406 3,378 4,150 7,528 7,850 9,241 17,091 6,785 8.381 15.166 Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Notlacoma 13,415 378 13,793 2,232 11.561 15,894 274 16,168 2,346 12.822$ 36,761 938 37,699 6,173 11.526 $ 42,168 1,030 43,198 9.311 33.887 Net income $ 11,561 $ 13,822 $ 31,526 $ 33,887 2.47 $ 2.46 $ 2.75 $ 2.73 $ Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted 6.70 $ 6.66 $ 6.69 I 6.63 4,674,071 4,700,646 5,024,877 5,068,493 4,704,945 4,736,949 5,068,877 5,113,140 $ (1) Net sales by reportable segment: Americas Europe Greater China Japan Rest of Asia Pacific Total net sales 25,596 $ 13,054 10.218 5,532 3,615 58,015 $ 24,841 $ 13,846 13,024 5,468 3,958 61,137 $ 62,536 $ 33,417 23,387 12,442 10,543 142.325 $ 60,034 34,900 30,980 12,705 10,811 149,430 $ (1) Net sales by category: iPhone Mac iPad Wearables, Home and Accessories Services Total net sales 31.051 $ 5,513 4,872 5,129 11,450 58,015 $ 37,559 $ 5,776 4,008 3,944 9,850 61,137 $ 83,033 $ 12,929 11,601 12,437 22,325 142,325 $ 98,663 12,600 9,763 9,425 18,979 149.430 $ ASSETS: Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 37,988 $ 42,104 15,085 4,884 11,193 12,092 123,346 25,913 40,388 23,186 3,956 25,809 12,087 131,339 Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 145,319 38,746 34,587 218,652 341,998 $ 170,799 41,304 22,283 234,386 365,725 LIABILITIES AND SHAREHOLDERS' EQUITY: $ Current liabilities: Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 30,443 $ 35,368 5,532 11,924 10,505 93,772 55,888 33,327 5,966 11,964 8,784 115,929 Non-current liabilities: Term debt Other non-current liabilities Total non-current liabilities Total liabilities 90,201 52,165 142,366 236,138 93,735 48,914 142,649 258,578 Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,607,284 and 4,754,986 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/(loss) Total shareholders' equity Total liabilities and shareholders' equity 42,801 64,558 (1,499) 105,860 341,998 $ 40,201 70,400 (3.454) 107,147 365,725 $ I March 30, 2019 March 31, 2018 25,913 $ 20,289 31,526 33,887 6,435 3,073 (124) (215) 5,484 2,644 (34,235) (151) sh, cash equivalents and restricted cash, beginning balances erating activities: Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax benefit Other Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables Other current and non-current assets I 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 8,094 (1,006) 14,616 (717) (20,024) (540) (3,273) 37,845 3,523 (2,807) 9,715 (1,053) (12,004) 394 38,026 43,423 (13,854) 16,880 22,635 (5,718) (291) (490) (48,449) 31,884 38,942 (7,005) (305) (163) 16,880 22,635 (5,718) (291) (490) 30 19,192 31,884 38,942 (7,005) (305) (163) 216 15,120 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 Other Cash generated by 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 issuarlce of term debt, net Repayments of term debt Other Cash used in financing activities Increase in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, ending balances Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 390 (1,427) (7,011) (32,498) (2,500) (87) (43,133) 13,904 39,817 $ 327 (1,190) (6,529) (32,851) 6,969 (500) 1 (33,773) 24,770 45,059 $ $ $ 9,497 $ 1,762 $ 6,340 1,356 Apple Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In millions, except number of shares which are reflected in thousands and per share amounts) Three Months Ended Six Months Ended March 30, March 31, March 30, March 31, 2019 2018 2019 2018 Net sales: Products 46,565 $ 51,287 $ 120,000 $ 130,451 Services 11,450 9,850 22,325 18,979 Total net sales (1) 58,015 61,137 142,325 149,430 Cost of sales: Products 32,047 33,936 80,285 84,511 Services 4,147 3,779 8,188 7,585 Total cost of sales 36,194 37,715 88,473 92,096 Gross margin 21,821 23,422 53,852 57,334 Operating expenses: Research and development Selling, general and administrative Total operating expenses 3,948 4,458 8,406 3,378 4,150 7,528 7,850 9,241 17,091 6,785 8.381 15.166 Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Notlacoma 13,415 378 13,793 2,232 11.561 15,894 274 16,168 2,346 12.822$ 36,761 938 37,699 6,173 11.526 $ 42,168 1,030 43,198 9.311 33.887 Net income $ 11,561 $ 13,822 $ 31,526 $ 33,887 2.47 $ 2.46 $ 2.75 $ 2.73 $ Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted 6.70 $ 6.66 $ 6.69 I 6.63 4,674,071 4,700,646 5,024,877 5,068,493 4,704,945 4,736,949 5,068,877 5,113,140 $ (1) Net sales by reportable segment: Americas Europe Greater China Japan Rest of Asia Pacific Total net sales 25,596 $ 13,054 10.218 5,532 3,615 58,015 $ 24,841 $ 13,846 13,024 5,468 3,958 61,137 $ 62,536 $ 33,417 23,387 12,442 10,543 142.325 $ 60,034 34,900 30,980 12,705 10,811 149,430 $ (1) Net sales by category: iPhone Mac iPad Wearables, Home and Accessories Services Total net sales 31.051 $ 5,513 4,872 5,129 11,450 58,015 $ 37,559 $ 5,776 4,008 3,944 9,850 61,137 $ 83,033 $ 12,929 11,601 12,437 22,325 142,325 $ 98,663 12,600 9,763 9,425 18,979 149.430 $ ASSETS: Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 37,988 $ 42,104 15,085 4,884 11,193 12,092 123,346 25,913 40,388 23,186 3,956 25,809 12,087 131,339 Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 145,319 38,746 34,587 218,652 341,998 $ 170,799 41,304 22,283 234,386 365,725 LIABILITIES AND SHAREHOLDERS' EQUITY: $ Current liabilities: Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 30,443 $ 35,368 5,532 11,924 10,505 93,772 55,888 33,327 5,966 11,964 8,784 115,929 Non-current liabilities: Term debt Other non-current liabilities Total non-current liabilities Total liabilities 90,201 52,165 142,366 236,138 93,735 48,914 142,649 258,578 Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,607,284 and 4,754,986 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/(loss) Total shareholders' equity Total liabilities and shareholders' equity 42,801 64,558 (1,499) 105,860 341,998 $ 40,201 70,400 (3.454) 107,147 365,725 $ I March 30, 2019 March 31, 2018 25,913 $ 20,289 31,526 33,887 6,435 3,073 (124) (215) 5,484 2,644 (34,235) (151) sh, cash equivalents and restricted cash, beginning balances erating activities: Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax benefit Other Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables Other current and non-current assets I 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 8,094 (1,006) 14,616 (717) (20,024) (540) (3,273) 37,845 3,523 (2,807) 9,715 (1,053) (12,004) 394 38,026 43,423 (13,854) 16,880 22,635 (5,718) (291) (490) (48,449) 31,884 38,942 (7,005) (305) (163) 16,880 22,635 (5,718) (291) (490) 30 19,192 31,884 38,942 (7,005) (305) (163) 216 15,120 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 Other Cash generated by 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 issuarlce of term debt, net Repayments of term debt Other Cash used in financing activities Increase in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, ending balances Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 390 (1,427) (7,011) (32,498) (2,500) (87) (43,133) 13,904 39,817 $ 327 (1,190) (6,529) (32,851) 6,969 (500) 1 (33,773) 24,770 45,059 $ $ $ 9,497 $ 1,762 $ 6,340 1,356