Part 2 i Check my work Required: 1. Using fiscal 2017 as the base year, compute trend percents for fiscal years 2017, 2018, and 2019 for total net sales, total cost of sales, operating income, other income (expense) net, provision for income taxes, and net income. 2. Compute common-size percents for fiscal years 2018 and 2019 for the following categories of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) accounts receivable, net. 3. Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less liquid in 2019? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using fiscal 2017 as the base year, compute trend percents for fiscal years 2017, 2018, and 2019 for total net sales, total cost of sales (expense) net, provision for income taxes, and net income. (Input all the values as positive numbers. Enter your answers in millions. R 1 decimal place.) Net Sales Cost of sales Operating income Other income (expense) Provision for income taxes Net income Fiscal 2019 113.5 % $ 295,298 Fiscal 2018 % Fiscal 2017 % % % % % % % % % % % % % % % % Required Required 2 > Required 1 Required 2 Required 3 Compute common-size percents for fiscal years 2018 and 2019 for the following categories of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) accounts receivable, net. (Enter your answers in millions. Round your percentage answers to 1 decimal place.) 2019 Total current assets % Property, plant and equipment, net % Accounts receivable, net % 2018 % % % Complete this question by entering your answers in the tabs below. ces Required 1 Required 2 Required 3. Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less. liquid in 2019? Apple's asset makeup become in 2019. Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) I ASSETS September 28, 2019 September 29, 2018 Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets 48,844 25.913 51,713 40,388 22,926 23,186 4,106 3.956 22,878 25.809 12,352 12,087 Total current assets 162,819 131,339 Non-current assets Marketable securities 105,341 170,799 Property, plant and equipment, net 37,378 41,304 Other non-current assets 32,978 22,283 Total non-current assets Total assets 175.697 234,386 338,516 $ 365,725 Term debt Current liabilities: Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities: Non-current liabilities Other non-current liabilities Total non-current liabilities Total liabilities 46,236 55,888 37,720 33,327 5,522 5.966 5.980 11,964 10,260 8,784 105,718 115.929 91,807 93,735 50,503 48,914 142,310 142,649 248,028 258,578 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,986 shares issued and outstanding, respectively 45,174 40,201 Retained earnings 45,898 70,400 Accumulated other comprehensive income (loss) (584) (3,454) Total shareholders' equity 90,488 107,147 Total liabilities and shareholders' equity 338,516 365,725 See accompanying Notes to Consolidated Financial Statements. Years ended Net sales: Products Services Total net sales Cost of sales: Products Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Services Total 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: September 28, 2019 213,883 46,291 260,174 September 29, 2018 September 30, 2017 196,534 225,847 39,748 265,595 32,700 229,234 144,996 148,164 126,337 16,786 15,592 14,711 161,782 163,756 141,048 98,392 101,839 88,186 16,217 14,236 11,581 18,245 16,705 15,261 34,462 30,941 26,842 63,930 70,898 61,344 1,807 2,005 2,745 65.737 72,903 64,089 10,481 13,372 15,738 55,256 59,531 48,351 Basic 11.97 $ 12.01 $ 9.27 Diluted $ 11.89 $ 11.91 $ 9.21 Shares used in computing earnings per share: Basic Diluted 4,617,834 4,648,913 4,955,377 5,000,109 5,217,242 5,251,692 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended Net income Other comprehensive income (loss): Change in foreign currency translation, net of tax Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivatives Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on derivative instruments Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on marketable securities Total other comprehensive income (loss) Total comprehensive income September 28, 2019 September 29, 2018 September 30, 2017 $ 55,256 $ 59,531 $ 48,351 (408) (525) 224 (661) 523 1,315 23 382 (1,477) (638) 905 (162) 3,802 (3,407) (782) 25 (64) 3,827 (3,406) (846) 2,781 (3,026) (784) 58,037 $ 56,505 $ 47,567 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended Net income Other comprehensive income (loss): Change in foreign currency translation, net of tax Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivatives Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on derivative instruments Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on marketable securities Total other comprehensive income (loss) Total comprehensive income September 28, 2019 September 29, 2018 September 30, 2017 $ 55,256 $ 59,531 $ 48,351 (408) (525) 224 (661) 523 1,315 23 382 (1,477) (638) 905 (162) 3,802 (3,407) (782) 25 (64) 3,827 (3,406) (846) 2,781 (3,026) (784) 58,037 $ 56,505 $ 47,567 See accompanying Notes to Consolidated Financial Statements. Years ended Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Total shareholders' equity, beginning balances (In millions) September 28, 2019 107,147 September 29, 2018 134,047 September 30, 2017 $ 128,249 Common stock and additional paid-in capital Beginning balances 40,201 35,867 31,251 Common stock issued 781 669 555 Common stock withheld related to net share settlement of equity awards (2,002) (1,778) (1,468) Share-based compensation 6,194 5,443 4,909 Tax benefit from equity awards, including transfer pricing adjustments Ending balances Retained earnings Beginning balances 620 45,174 40,201 35,867 70,400 98,330 96.364 Net income 55,256 59.531 48,351 Dividends and dividend equivalents declared (14,129) (13,735) (12,803) Common stock withheld related to net share settlement of equity awards (1,029) (948) Common stock repurchased (67,101) (73,056) (581) (33,001) Cumulative effects of changes in accounting principles 2,501 278 Ending balances 45,898 70,400 98,330 Accumulated other comprehensive income (loss) Beginning balances Other comprehensive income (loss) (3,454) (150) 634 2,781 (3,026) (784) Cumulative effects of changes in accounting principles 89 (278) Ending balances (584) (354) (150) Total shareholders' equity, ending balances 90,488 107,147 134,047 See accompanying Notes to Consolidated Financial Statements. Years ended Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS Cash, cash equivalents and restricted cash, beginning balances Operating activities Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization (In millions) September 28, 2019 September 29, 2018 September 30, 2017 25,913 $ 20,289 20,484 55,256 59,531 48,351 12,547 10,903 10,157 Share-based compensation expense 6,068 5,340 4,840 Deferred income tax expense (benefit) (340) (32.590) 5,966 Other (652) (444) (166) Changes in operating assets and liabilities: Accounts receivable, net 245 (5.322) (2,093) Inventories (289) 828 (2,723) Vendor non-trade receivables 2,931 (8.010) (4,254) Other current and non-current assets 873 (423) (5,318) Accounts payable (1.923) 9,175 8,966 Deferred revenue (625) (3) (593) Other current and non-current liabilities (4.700) 38,449 1,092 Cash generated by operating activities Investing activities Purchases of marketable securities 69.391 77,434 64,225 (39,630) (71,356) (159,486) Proceeds from maturities of marketable securities 40,102 55.881 31,775 Proceeds from sales of marketable securities 56,988 47,838 94,364 Payments for acquisition of property, plant and equipment (10,495) (13,313) (12,451) Payments made in connection with business acquisitions, net (624) (721) (329) Purchases of non-marketable securities (1,001) (1.871) (521) Proceeds from non-marketable securities 1,634 353 126 Other (1,078) (745) Cash generated by (used in) investing activities 45,896 16,066 (124) (46,446) Financing activities Proceeds from issuance of common stock 781 669 555 Payments for taxes related to set share settlement of equity awards (2.817) (2.527) (1874) Payments for dividends and dividend equivalents (14,119) (13,712) (12,769) Repurchases of common stock (66,897) (72,738) (32,900) Proceeds from issuance of term debt, net 6,963 6,969 28,662 Repayments of term debt (8,805) (6,500) (3.500) Proceeds from (Repayments of) commercial paper, net (5,977) (37) 3.352 Other (105) Cash used in financing activities (90,976) (87,876) Increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cath, ending balances (17,974) 24,311 50,224 $ 5,624 25,913 (195) 20,289 Supplemental cash flow closure Cash paid for income taxes, se Cash paid for in 15.263 $ 3,423 $ 10,417 $ 11,591 3.022 2092 See accompanying Notes to Consolidated Financial Statements. MacBook Air