Please answer all questions and make answers very clear. Thank you so much and I will make sure to give a good rating!!!
Use the information contained in these financial statements and notes to complete this case. All answers should be for the most current year (September 24, 2016) unless asked otherwise. Many companies show amounts in the thousands or millions please state amounts as shown on the financial statements. Do not add zeros. You do not need to include dollar signs. Selected financial statements of Apple, Inc. follow. CONSOLIDATED STATEMENTS OF OPERATIONS (In milions, except number of shares which are refiectsd in thousands and per sharn amourts Yeara ended September 27 2014 September 24, 2016 September 2 201s 233715 S Nat sales 215,639 S 182,795 140089 9362 Cost of sales 131,378 112258 84 203 74537 Gross margin Operating expenses: Research and development 10,045 8067 6,041 Selling, general and administractive Total operating axpansos 14,194 14329 11,993 24239 22.390 18034 Operating inoome Other inoometexpense), net 60,024 71230 52,503 980 1348 1285 61,372 Income before provision for income taxes 72515 53483 Provision for income taxes 15,685 19.121 13973 45,687 S Net income 53394 39510 Earnings par share: Baso 8.35 S 9.28 6.49 Diluted 8.31 S 9.22 6.45 Shares used in computing eamings per share: Basic 5470,820 5,753421 6,085,572 Dilutod 5500,281 5,793069 6,122,663 Cash dividends declared per sharo 2.18 S 1.98 182 CONSOUDATED BAL ANCE SHEETS CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflectod in thousands and par value) September 24, 2016 September 26. 2015 ASSETS Cumrent assets Cash and cash equivalents S 20,484 S 21,120 Short-tem marketable securities 46,671 20,481 Accounts receivable, less allowances of S53 and S63, respectively 15,754 16,849 2,132 2,349 Inventories Vendor non-trade receivables 13,545 13,494 8,283 Other current ansets 15,085 Total aument assets 106,869 89,378 164,065 Long-tem marketable securities 170,430 27,010 Proparty, plant and equipment, net 22,471 Goodwill 5,414 5,116 3,206 Acquired intangible assets, net 3,893 Other non-cumrent assets 8,757 5,422 321,686 S 290,345 Total assets LIABILITIES ANDD SHAREHOLDERS EQUITY Current liabilities: Accounts payable Acoued expenses 37,294 S 35,490 25,181 22,027 Defered revenue 8,080 8,940 Commercial paper 8,105 8,499 Curent portion of long-tem debt 3,500 2,500 80,610 Total aurent liabilities 79,006 Defemed navenue, non-cument 2,930 3,624 Long-tem debt 75,427 53,329 Other non-current liabilities Total liabilities 33,427 170,990 36,074 193,437 Commitments and oontingencies Shaneholders' equity: Common stock and additional paid-in capital, sa.00001 par value: 12,600,000 shares authorized; 5,336,166 and 5,578,753 shares issued and outstanding, respectively 31,251 27,416 Retained eamings Accumulated other comprehensive incomeloss) Total shareholders' equity Total liabilities and shareholders' equity 96,364 92,284 634 (345 128,249 119,355 290,345 321,686 S cONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millians, except number of shares which are reflected in thousands) Accumulated Other Comprehenaive Income/(Loss) Common Stock and Additional Paid- In Capital Total Sharehokders Equity Retained Earnings Sharea Amount Balances as of Septembar 26, 2015 119,355 5,578,753 27,416 92,284 (345) 45,687 Net income 45,687 Other comprehensive income/(loss) Dividends and dividend equivalents 979 979 declared (12,188) (12,188) Repurchase of comman stock (279,609) (29,000) (29,000) Share-based compensation 4,262 4,262 Common stock issued, net of shares withheld for employee taxes 37,022 (806) (419) (1,225) Tax benefit from equity awards, including transfer pricing adjustments 379 379 5,336,166 S 31,251 S 96,364 S Balances as of September 24, 2016 634 128,249 Financial Statement Analysis Ratios -Must show your work for all ratios. Calculate each ratio to three declmal places. (Page numbers are for referencing the formulas in your textbook.) I Current Ratio & Profit Margin (pages 561-562, 563,565) (24 Points) a. Calculate the Current ratio. (4) Does this ratio appear favorable or unfavorable? (4) Why? (4) 1. b. Calculate the Profit Margin ratio. (4) Does this ratio appear favorable or unfavorable? (4) Why? (4) Accounts Receivable Turnover and Days' Sales Uncollected (pages 561, 565) (18 Points) a. Calculate the Accounts Receivable Tunover ratio. (8) 2. b. Calculate the Days' Sales Uncollected ratio. (6) Does this ratio appear favorable or unfavorable? Why? (4 Total Asset Turnover (pages 561, 565) (6 Points) a. Calculate the Total Asset Turnover ratio. (6) 3. Debt ratio(pages 562, 565) (8 Points) 4. a. Calculate the Debt ratio. (4) What does this ratio tell you about Apple's risk? (4) 4 Debt-to-Equity Ratio (pages 562, 565) (8 Points) a. Calculate the Debt-to-Equity Ratio. (4) 5. b. What does this ratio tell you about Apples' capital structure and risk? (4) Market Price, Dividend Yield & Price-Earnings Ratio (pages 564, 565) (20 Points) 6. a. What is the current market price of the stock? This is not in the financial statements provided. It is noted on Apple's website or go to www.yahoofinance.com to get the quote. The ticker symbol for Apple is AAPL Price (4) Date found: (2) b. Calculate the Dividend Yield. (4) c. Calculate the Price-Earnings Ratio. (4) d. If analyst give a range of higher than 20-25 for a stock to be considered overpriced and less than 5-8 for a stock to be considered underpriced, how is Apple doing? (6) Inventory turnover &Days' Sales in Inventory (page 561, 565) (16 Points) 7. Calculate the Inventory turnover ratio. (6) a. 5 b. Calculate the Days' Sales in Inventory ratio. (6) Is this favorable or unfavorable? Why? (4) c. b. Calculate the Days' Sales in Inventory ratio. (6) Is this favorable or unfavorable? Why? (4) c. . Summary (20 Points) Your superior asks you to analyze Apple's financial condition (liquidity, efficiency, solvency, profitability) based on the financial statements and ratios presented in this case. Would you recommend it as a worthy investment (yes or no)? Support your opinion using five answers from part I (#1-7) above. Use the information contained in these financial statements and notes to complete this case. All answers should be for the most current year (September 24, 2016) unless asked otherwise. Many companies show amounts in the thousands or millions please state amounts as shown on the financial statements. Do not add zeros. You do not need to include dollar signs. Selected financial statements of Apple, Inc. follow. CONSOLIDATED STATEMENTS OF OPERATIONS (In milions, except number of shares which are refiectsd in thousands and per sharn amourts Yeara ended September 27 2014 September 24, 2016 September 2 201s 233715 S Nat sales 215,639 S 182,795 140089 9362 Cost of sales 131,378 112258 84 203 74537 Gross margin Operating expenses: Research and development 10,045 8067 6,041 Selling, general and administractive Total operating axpansos 14,194 14329 11,993 24239 22.390 18034 Operating inoome Other inoometexpense), net 60,024 71230 52,503 980 1348 1285 61,372 Income before provision for income taxes 72515 53483 Provision for income taxes 15,685 19.121 13973 45,687 S Net income 53394 39510 Earnings par share: Baso 8.35 S 9.28 6.49 Diluted 8.31 S 9.22 6.45 Shares used in computing eamings per share: Basic 5470,820 5,753421 6,085,572 Dilutod 5500,281 5,793069 6,122,663 Cash dividends declared per sharo 2.18 S 1.98 182 CONSOUDATED BAL ANCE SHEETS CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflectod in thousands and par value) September 24, 2016 September 26. 2015 ASSETS Cumrent assets Cash and cash equivalents S 20,484 S 21,120 Short-tem marketable securities 46,671 20,481 Accounts receivable, less allowances of S53 and S63, respectively 15,754 16,849 2,132 2,349 Inventories Vendor non-trade receivables 13,545 13,494 8,283 Other current ansets 15,085 Total aument assets 106,869 89,378 164,065 Long-tem marketable securities 170,430 27,010 Proparty, plant and equipment, net 22,471 Goodwill 5,414 5,116 3,206 Acquired intangible assets, net 3,893 Other non-cumrent assets 8,757 5,422 321,686 S 290,345 Total assets LIABILITIES ANDD SHAREHOLDERS EQUITY Current liabilities: Accounts payable Acoued expenses 37,294 S 35,490 25,181 22,027 Defered revenue 8,080 8,940 Commercial paper 8,105 8,499 Curent portion of long-tem debt 3,500 2,500 80,610 Total aurent liabilities 79,006 Defemed navenue, non-cument 2,930 3,624 Long-tem debt 75,427 53,329 Other non-current liabilities Total liabilities 33,427 170,990 36,074 193,437 Commitments and oontingencies Shaneholders' equity: Common stock and additional paid-in capital, sa.00001 par value: 12,600,000 shares authorized; 5,336,166 and 5,578,753 shares issued and outstanding, respectively 31,251 27,416 Retained eamings Accumulated other comprehensive incomeloss) Total shareholders' equity Total liabilities and shareholders' equity 96,364 92,284 634 (345 128,249 119,355 290,345 321,686 S cONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millians, except number of shares which are reflected in thousands) Accumulated Other Comprehenaive Income/(Loss) Common Stock and Additional Paid- In Capital Total Sharehokders Equity Retained Earnings Sharea Amount Balances as of Septembar 26, 2015 119,355 5,578,753 27,416 92,284 (345) 45,687 Net income 45,687 Other comprehensive income/(loss) Dividends and dividend equivalents 979 979 declared (12,188) (12,188) Repurchase of comman stock (279,609) (29,000) (29,000) Share-based compensation 4,262 4,262 Common stock issued, net of shares withheld for employee taxes 37,022 (806) (419) (1,225) Tax benefit from equity awards, including transfer pricing adjustments 379 379 5,336,166 S 31,251 S 96,364 S Balances as of September 24, 2016 634 128,249 Financial Statement Analysis Ratios -Must show your work for all ratios. Calculate each ratio to three declmal places. (Page numbers are for referencing the formulas in your textbook.) I Current Ratio & Profit Margin (pages 561-562, 563,565) (24 Points) a. Calculate the Current ratio. (4) Does this ratio appear favorable or unfavorable? (4) Why? (4) 1. b. Calculate the Profit Margin ratio. (4) Does this ratio appear favorable or unfavorable? (4) Why? (4) Accounts Receivable Turnover and Days' Sales Uncollected (pages 561, 565) (18 Points) a. Calculate the Accounts Receivable Tunover ratio. (8) 2. b. Calculate the Days' Sales Uncollected ratio. (6) Does this ratio appear favorable or unfavorable? Why? (4 Total Asset Turnover (pages 561, 565) (6 Points) a. Calculate the Total Asset Turnover ratio. (6) 3. Debt ratio(pages 562, 565) (8 Points) 4. a. Calculate the Debt ratio. (4) What does this ratio tell you about Apple's risk? (4) 4 Debt-to-Equity Ratio (pages 562, 565) (8 Points) a. Calculate the Debt-to-Equity Ratio. (4) 5. b. What does this ratio tell you about Apples' capital structure and risk? (4) Market Price, Dividend Yield & Price-Earnings Ratio (pages 564, 565) (20 Points) 6. a. What is the current market price of the stock? This is not in the financial statements provided. It is noted on Apple's website or go to www.yahoofinance.com to get the quote. The ticker symbol for Apple is AAPL Price (4) Date found: (2) b. Calculate the Dividend Yield. (4) c. Calculate the Price-Earnings Ratio. (4) d. If analyst give a range of higher than 20-25 for a stock to be considered overpriced and less than 5-8 for a stock to be considered underpriced, how is Apple doing? (6) Inventory turnover &Days' Sales in Inventory (page 561, 565) (16 Points) 7. Calculate the Inventory turnover ratio. (6) a. 5 b. Calculate the Days' Sales in Inventory ratio. (6) Is this favorable or unfavorable? Why? (4) c. b. Calculate the Days' Sales in Inventory ratio. (6) Is this favorable or unfavorable? Why? (4) c. . Summary (20 Points) Your superior asks you to analyze Apple's financial condition (liquidity, efficiency, solvency, profitability) based on the financial statements and ratios presented in this case. Would you recommend it as a worthy investment (yes or no)? Support your opinion using five answers from part I (#1-7) above
