QUESTION 31 Accounts Receivable Turnover and Days' Sales Uncollected (text book pages 561, 565) a. Calculate the Accounts Receivable Turnover ratio. (SHOW YOUR WORK Calculate ratio to three decimal places) b. Calculate the Days' Sales Uncollected ratio. (SHOW YOUR WORK Calculate ratio to three decimal places.) Does this ratio appear favorable or unfavorable? Why? Apple Inc. CONSOLIDATED BALANCE SHEETS (in milions, except number of shares which are reflected in thousands and par value) September 28, September 20 ASSETS: Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 48,344 $ 51,713 (22,926 ) 4 106 22,878 12 352 C162,819) 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 105,341 37,378 32.978 175 697 338,516 170,799 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 46,236 37.720 5,522 5,980 10,260 105,718 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 91,807 50,503 142,310 248,028 93.735 48,914 142.649 258,578 Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, S0.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,986 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/loss) Total shareholders' equity Total liabilities and shareholders' equity 45,174 45,898 (584) 90.488 338,516 40,201 70.400 (3.454) 107,147 365,725 $ $ See accompanying Notes to Consolidated Financial Statements Apple Inc. 2019 Form 10-K12 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 23, September 30, 2019 28. Net sales: Products Services Total net sales $ $ 213,883 46,291 260,174 225,847 39,748 265,595 196,534 32,700 229,234 ) Cost of sales: Products Services Total cost of sales Gross margin 144,996 16,786 161,782 98,392 148,164 15,592 163,756 101,839 126,337 14,711 141,048 88,186 Operating expenses: Research and development Selling, general and administrative Total operating expenses 16,217 (18,245 34,462 14,236 16,705 30,941 11,581 15,261 26,842 Operating income Other income/(expense), net Income before provision for income taxes Provision for income taxes Net income 63.930 1,807 65,737 10,481 55,256 70,898 2005 72,903 13,372 59,531 S 61,344 2,745 64,089 15,738 48,351 S Eamings per share: Basic Diluted 11.97 11.89 $ $ 12.01 $ 11.91 $ 9.27 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. TUTUS Inventory Turnover and Days' Sales in Inventory (text book pages 561,565) a. Calculate the Inventory Turnover ratio. (SHOW YOUR WORK Calculate ratio to three decimal places.) b. Calculate the Days' Sales in Inventory ratio. (SHOW YOUR WORK Calculate ratio to three decimal places.) Does this ratio appear favorable or unfavorable? Why? Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except per share amounts) Years ended September 28, September 29, September 30, 2019 2018 2017 $ 107,147 $) 134,047 $ 128,249 Total shareholders' equity, beginning balances 40.2012 31,251 555 781 669 Common stock and additional paid-in capital: Beginning balances Common stock issued Common stock withheld related to net share settlement of equity awards Share-based compensation Tax benefit from equity awards, including transfer pricing adjustments Ending balances (2002) (6,194 (1,778) 5,443 (1,468) 4,909 620 35,867 45,174 40,201 98,330 59,531 (13,735) Retained earnings: Beginning balances Net income Dividends and dividend equivalents declared Common stock withheld related to net share settlement of equity awards Common stock repurchased Cumulative effects of changes in accounting principles Ending balances 70,400 55,256 (14,129) (1,029) (67,101) 2,501 45,898 96,364 48,351 (12,803) (581) (33,001) (948) (73,056) 2 78 70,400 98,330 (3,454) 2,781 634 (784) Accumulated other comprehensive income (loss): Beginning balances Other comprehensive income/loss) Cumulative effects of changes in accounting principles Ending balances (150) (3,026) (278) (3,454) 89 (584) (150) $ 90,488 $ 107,147 $ 134,047 Total shareholders' equity, ending balances $ 3.00 $ 2.72 $ 2.40 Dividends and dividend equivalents declared per share or RSU See accompanying Notes to Consolidated Financial Statements. Total Asset Turnover (text book pages 561, 565) Calculate the Total Asset Turnover ratio. (SHOW YOUR WORK Calculate ratio to three decimal places.) TT T Arial 3 (12pt) v1.3 .15. 2 QUESTION 34 Debt Ratio: (text book pages 562, 565) a. Calculate the Debt ratio. (SHOW YOUR WORK. Calculate ratio to three decimal places.) b. What does this ratio tell you about Apple's risk? QUESTION 35 Debt-to-Equity Ratio: (text book pages 562, 565) a. Calculate the Debt-to-Equity ratio. (SHOW YOUR WORK. Calculate ratio to three decimal places.) b. What does this ratio tell you about Apple's capital structure and risk? Market Price Dividend Yield & Price-Earnings Ratios (pages 564, 565) a. What is the current market price of the stock? (Give the date that you found this price) (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. b. Calculate the Dividend Yield (SHOW YOUR WORK Calculate ratio to three decimal places.) c. Calculate the Price-Earnings Ratio (SHOW YOUR WORK Calculate ratio to three decimal places.) d. If analysts 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