Refer to Apple's financial statements in Appendix A to answer the following. Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. 2. Compute the current ratio and acid-test ratio as of September 28, 2019, and September 29, 2018. 3. Does Apple's 2019 current ratio outperform or underperform the (assumed) industry average of 1.5? 4. Does Apple's 2019 acid-test ratio outperform or underperform the (assumed) industry average of 1.0? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the year ended September 28, 2019. (Enter your answers in millions of dollars.) Cost of goods purchased Required 1 Required 2 > Current assets Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) 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 Term debt Other non-current liabilities Total non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity ASSETS September 28, 2019 September 29, 2018 48,844 $ 25,913 51,713 40,388 22,926 23.186 4,106 3,956 22.878 25,809 12,352 12,087 162,819 131,339 105,341 170,799 37,378 41,304 32,978 22,283 175,697 234,386 338,516 S 365,725 LIABILITIES AND SHAREHOLDERS' EQUITY 46.236 S 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 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 40,2011 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. APPLE AP Years ended Net sales Products Services Total net sales Cost of sales: (In millions, except number of shares which are reflected in thousands and per share amounts) September 28, 2019 September 29, 2018 September 30, 2017 213,883 225,847 196,534 46,291 39,748 32,700 260,174 265,595 229,234 Products 144,996 148,164 126,337 Services Total cost of sales Gross margin Operating expenses: Research and development Selling, general and administrative Total operating expenses 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 Operating income 63.930 70,898 61,344 Other income (expense), net 1,807 2,005 2,745 Income before provision for income taxes 65,737 72,903 64,089 Provision for income taxes 10,481 13,372 15,738 Net income $ 55,256 $ 59,531 $ 48.351 Earnings per share: Basic $ 11.97 $ 12.01 9.27 Diluted $ 11.89 $ 11.91 S 9.21 Shares used in computing earnings per share: Basic 4,617,834 Diluted 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) i Other comprehensive income (loss): Years ended Net income 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 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) Adjustment for net (gains) losses realized and included in net income 25 (64) Total change in unrealized gains/losses on marketable securities Total other comprehensive income (loss) 3,827 (3,406) (846) 2,781 (3.026) (784) Total comprehensive income 58.037 56,505 $ 47,567 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions) Years ended Total shareholders' equity, beginning balances i 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 Common stock issued 781 35,867 669 31,251 555 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 620 45,174 40,201 35,867 Ending balances Retained earnings Beginning balances 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) (581) Common stock repurchased (67,101) (73,056) (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) (3.454) (150) Total shareholders' equity, ending balances 90,488 107,147 134,047 See accompanying Notes to Consolidated Financial Statements APPLE AFT Years ended 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 Share-based compensation expense Deferred income tax expense (benefit) Other Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables (In millions) September 28, 2019 September 29, 2018 September 30, 2017 $ 25,913 20,289 $ 20,484 59,531 48,351 55,256 12,547 10,903 10,157 6,068 5,340 4,840 (340) (32,590) 5,966 (652) (444) (166) 245 (5.322) (2.093) (289) 828 (2,723) 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 Other current and non-current liabilities Cash generated by operating activities Investing activities Purchases of marketable securities (625) (3) (593) (4,700) 38,449 1,092 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 94,564 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 3531 126 Other (1,078) (745) (124) Cash generated by (used in) investing activities 45,896 16,066 (46,446) Financing activities Proceeds from issuance of common stock 781 669 555 Payments for taxes related to net share settlement of equity awards (2,817) (2,527) (1,874) 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) 3,852 Other (105) Cash used in financing activities (90,976) (87,876) (17,974) Increase (decrease) 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 24,311 5,624 (195) 50,224 25,913 $ 20,289 15,263 10,417 S 11,591 3,423 $ 3,022 $ 2,092