September 24, 2016 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 30, 2017 ASSETS Current assets Cash and cash equivalents 20,289S Short-term marketable securities 53,892 Accounts receivable, less allowances of $58 and $53, respectively 17,874 Inventories 4,855 Vendor non-trade receivables 17,799 Other current assets 13,936 Total current assets 128,645 Long-term marketable securities 194,714 Property, plant and equipment, net 33,783 Goodwill 5,717 Acquired intangible assets, net 2,298 Other non-current assets 10,162 Total assets 375,319 20,484 46,671 15,754 2,132 13,545 8,283 106,869 170,430 27,010 5,414 3,206 8,757 321,686 $ LIABILITIES AND SHAREHOLDERS' EQUITY S $ Current liabilities Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long-term debt Total current liabilities Deferred revenue, non-current Long-term debt Other non-current liabilities Total liabilities Commitments and contingencies 49,049 25,744 7,548 11,977 6,496 100,814 2,836 97,207 40,415 241,272 37,294 22,027 8,080 8,105 3,500 79,006 2,930 75,427 36,074 193,437 Shareholders' equity Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,126,201 and 5,336,166 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Total liabilities and shareholders' equity See accompanying Notes to Consolidated Financial Statements. 35,867 98,330 (150) 134,047 375,319 31,251 96,364 634 128,249 321,686 ) September 26, 2015 201715 140,089 9376 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS millim, cep mumber of shares which are reflected in thousand s Year ended September 30, 2017 September 24, 2016 Net sales 229.2365 215.639 Cost of sales 141.08 131,376 88.186 84263 Operating expenses Research and development 11.581 10.045 Selling general and administrative 14.196 Total operating expertise 20362 24.230 Operating income 61.366 6 Other income expense, et 2.745 Income before provision for income taxes 64089 61,372 Provision for increases 15.738 15,685 Net income 48,351 45,687 15.261 8,067 14329 222196 71.230 1,348 725S 19,121 8.35 9.28 Earnings per share Basic Diluted Shares used in computing camnings per share 9,275 9.215 9.22 5.217.242 5.251,692 5,470,820 5.500,281 2.18 5,753,421 5,793,069 Diluted Cash dividends declared per share 2.40 See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 September 26, 2015 Net income 5 251 45.687553,394 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of 77), 58 and 5201, respectively 224 Change in realized gain losses on derivative instruments Change in fair value of derivatives, net of tax benefit (expense) of 478), 5(7) and 5641). respectively 1.315 2.905 Adjustment for net ains) losses realized and included in net income, net of tax expense benefit of $475, SI31 and 5630, respectively (1.477) 0,497) Total change in una redan/losses on derivative Instruments, net of tax (592) Change in realized gain losses on marketable securities: Change in fair value of marketable securities, met of tax benefit expense of $425.863) and 5264, respectively Adjustment for net (ans) losses realized and included in net income met of tax expense benefit of $35. SCI) and 32. respectively (65) Total change in unrealiodailosses on marketable securities met of tax (846) Total other comprehensive income (los) 979 (1.427) Totalcohesive income 15.666 51.987 See accompanying Notes to Consolidated Financial Sutements Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except her of shares which are reflected in thousands) Accumulated Other Common Stock and Comprehensive Total Additional Paid-In Capital Retained Income Shareholders Shares Amount Earnings (Loss) Equity Balances as of September 27, 2014 S866,161 $ 23313 S 87,1525 111.547 Net Income S1194 Other comprehensive income (los) (1.427) (1.427) Dividends and dividend equivalents declared (11.627) (11.627) Repurchase of common stock (325.032) (36.626 (16.026) Share-based compensation 356 156 Commonweck issued, net of shares withheld for employee taxes 37.624 (840) Tax benefit from equity awards, including transfer pricing adjustments 743 Balances as of September 26, 2015 5.578.753 $ 27,416 $ (145) S 119.155 Net income 45.667 Other comprehensive income (los) Dividends and dividend equivalents declared (12.188) (12,188) Repurchase of common stock (279.609) (29.000) (29,000) Share-based compensation 4.262 Commonweck issued, net of shares withheld for employee taxes 37,022 (NOS) (419) Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 24, 2016 5336,166 $ 31.251 96.364 $ 1239 Net income 4R 151 Other comprehensive income (los) Dividends and dividend equivalents declared (12803) (12.00) Repurchase of common stock 246 496 100) (3001) Share-based compensation 4.900 Common stock issued, net of shares withheld for employee taxes Tux benefit from equity awards, including transfer pricing austments Balances as of September 30, 2017 5.126201 $ 35867 $ 98,330 S (150) S 134,047 See accompanying Notes to Consolidated Financial Statements 979 179 20 September 26, 2015 $1.996 11.257 3.586 1.382 385 6 527 (51) 0.735) 3,001 1,042 2,054 81.266 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS ho Year ended September 30, 2017 September 24, 2016 Cash and cash equivalents, beginning of the year 21.120 Operating activities Net income 351 45. 67 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and actition 10.157 10.505 Share based compensation expense 4,840 4,210 Deferred income tax expertise 5.966 4,938 Other (166) Changes in operating assets and liabilities: Accounts receivable, et (2,093) L ories (2.723) 217 Vendor non-trade receivables (4,254) Other current and current assets (5.318) 1.OSS Accounts payable 9.618 1,837 Deferred revenue (626) (1.554) Other current and non-current liabilities (156) (2,033) Cash generated by operating activities 63.598 65,824 Investing activities: Purchases of marketable securities (159,486) (142,428) Proceeds from maturities of marketable wcurities 31.775 21.258 Proceeds from sales of marketable securities 94.564 90,536 Payments made in connection with business acquisitions, net (329) (297) Payments for acquisition of property, plant and equipment (12.451) (12,734) Payments for acquisition of intangible assets (364) (14) Payments for strategic investments, met (395) (1.388) Other (110) Cash used in investing activities (46,646) (45,977) Financing activities: Proceeds from inance of common stock 555 495 Excess tax benefits from equity awards Payments for taxes related to not share settlement of equity awards (1,874) (1.570 Payments for dividends and dividend equivalents (12,769) (12.150) Repurchases of common stock 32.900) Proceeds from imance of term debt, net 28.662 24,95 Repayments of term debe 3.500) 2.500) Change in commercial paper, net 3352 97 Cashed in financing activities (1737) 20,483) Increase (decrease in cash and cash equivalents (195) Cash and cash equivalents, end of the year S 20.289 20.4545 (166,402) 14,538 107,447 (343) (11.247) (241) (26) (56,274) 543 (1.499) (11.561) 35.253) 27.114 2.191 (17,716) 516) Supplemental cash flow disclosure Cash paid for income taxes, et Cash paid for interest 11.595 20925 10. 1,316 13.252 514 5 See accompanying Notes to Consolidated Financial Statements Google Inc. (Alphabet Inc.) CONSOLIDATED BALANCE SHEETS (In millions, except share and par value amounts which are reflected in thousands, and par value per share amounts) As of December 31, 2016 December 31, 2017 12,918 73,415 86,333 14,137 10,715 91,156 101,871 18,336 268 4,575 105,40K 5,878 383 749 2,983 124,30 7,813 680 42,383 2,692 16,747 2,672 197,295 34,234 3,307 16,468 1,819 167,492 $ Assets Current assets Cash and cash equivalents Marketable securities Total cash, cash equivalents, and marketable securities Accounts receivable, net of allowance of $467 and $674 Income taxes receivable, net Inventory Other current assets Total current assets Noo-marketable investments Deferred income taxes Property and equipment, net Intangible assets, net Goodwill Other non-current assets Tocal assets Llabilities and Stockholders' Equity Current liabilities Accounts payable Accrued compensatice and benefits Accrued expenses and other current liabilities Accrued revenue share Deferred revenue Income taxes payable, net Total current liabilities Long-term deht Deferred revenue, non-current Income taxes pavable, non-current Deferred income taxes Other long-term liabilities Tocal liabilities Commitments and contingencies Stockholders' equity: Convertible preferred stock. S0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding Class A and Class common stock, and Class C capital stock and additional paid-in capital, 50.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000 Class C 3.000.000 91,293 (Class A 296.992. Class B 47,437, Class C 346.864) and 694,783 (Class A 296, 470, Class B 46.972 Class C 349,141) shares issued and outstanding Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total libilities and stockholders' equity 2,041 3,976 6,144 2942 1,099 3.137 4,581 10,177 1,432 881 24,183 16,756 3.935 2012 4,677 300 12,812 430 159 2,665 28,461 (992) 36,307 (2402) 105,131 139,036 167,497 113,247 152.502 197,295 'Google is part of Alphabet, but we loosely refer to Alphabet as "oogle" because of its global familiarity and that Google provides 99% of Alphabet's $110.855 billion in revenues See accompanying notes Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF INCOME (In millions) 2015 74,989 2016 90.272 2017 110,855 S S S 28,164 12.282 9,047 6,136 35,138 13.948 10,45 6,985 45.53 16.625 12,893 6,872 2.736 Year Ended December 31 Revenues Costs and expenses Cost of revenues Research and developenent Sales and marketing General and administrative European Commission fine Total costs and expenses [come from operations Other income (expense), net Lecome before income taxes Provision for income taxes Net income Less: Adjustment Payment to Class C capital stockholders Net income available to all stockholders S5.629 19.360 66.SS6 23,716 84,709 26,146 291 19,651 24.150 4,672 27.193 14,531 12,662 19,478 15,826 S 19.478 $ 12,662 "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's S110,855 billion in revenues See accompanying notes. 2016 19,478 2017 12.662 (599) 1.543 Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31 2015 Net Income 5 16,348 $ Other comprehensive income (loss): Change in foreign currency translation adjustment (1,067) Available for sale investments: Change in met unrealized gains (losses) (715) Less: reclassification adjustment formel (gains) losses included in net income Net change (net of tax effect of S29. SO, and 50) (507) Cash flow hedges: Change in ret unrealized gains (losses) Less: reclassification adjustment for me (gains) losses included in net income (1,003) Net change (net of tax effect of SI15, 561, and S247) (327) Other comprehensive income (loss) (1,901) Comprehensive income 14,447 S 014) 208 221 (93) 307 105 412 676 515 (638) (351) (545 1.410 (528) 18,950 $ 14,072 "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's SI10,855 billion in revenues See accompanying notes. Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions, except share amounts which are reflected in thousands) Class A and Class Common Stock, Class C Accumulated Capital Stack and Other Additional Paid In Capital Comprehensive Shares Amount Income (Loss) Balance as of December 31, 2014 601,1725 28,767 $ 27 $ Come and capital sock issued ,714 Stock-based compensation expense 5,151 Stock-based compensation tax benefits 815 Tax withholding related to vesting of restricted stock units (2,779) Repurchases of capital stock (111) Adjustment Payment to Class capital stockholders Net income Other comprehensive lass (1.901) Balance as of December 31, 2015 687,348 32.982 (1,874) Total Retained Stockholders Earnings Equity 25.006S 103, 5,151 N15 (2.779) (1,7 ) (47) (522) 16,148 16,148 (1,901) 19.223 12031 190 (133) 9,106 20N Cumulative effect of accounting change Common and capical stock issued Stock-based compensation expense Tax withholding related to vesting of restricted stock units Repurchases of capital stock Net income Other comprehensive loss Balance as of December 31, 2016 298 6.72 (3,597) (256) 6.70 (1.597) (3,693) 19,478 (5,161) (3,437) 19,478 (528) 36,2017 105,131 119,036 (15) 8,652 212 Cumulative effect of accounting change Common and capital stock issued Stock-based compensation expense Tax withholding related to vesting of restricted stock units Repurchases of capital stock Sale of sidiary shares Net income Other comprehensive loss Balance as of December 31, 2017 (15) 212 796 (4,373) (4,866) (5,162) (4,373) (315 722 (451) 12.662 1,410 992) $ 12.562 1.410 152,502 694,783 40,247 113,247 S Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's $110.855 billion in restes See accompanying hos 2016 2017 19,478 5 12.662 5.267 6,103 812 6,703 (38) 7.679 258 194 137 (2.096) (2.578) 3,125 312 (3.768) 8,211 (2.166) 1.515 4,891 593 36,036 390 37.091 Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31 2015 Operating activities Net income S 16.348 5 Adjustments: Depreciation and impairment of property and equipment 4,132 Amortization and impairment of intangible assets Stock-based compensation expense 5.203 Deferred income taxes (179) Loss on marketable and non-marketable investments, net Other Changes in assets and liabilities, set of cffects of acquisitions: Accounts receivable Income taxes.net (179) Other assets (318) Accounts payable Accrued expenses and other liabilities 1.997 Accrued revenue share Deferred revenue Net cash provided by operating activities 26,572 Imesting activities Purchases of property and equipment (9,950) Proceeds from disposals of peoperty and equipment Purchases of marketable securities (74,368) Maturities and sales of marketable securities 62,905 Purchases of marketable investments (2.326) Maturities -dules of non-marketable investments Cash collateral related to securities lending (350) Investments in reverse repurchase agreements Acquisitions, net of cash acquired, and purchases of intangible assets (236) Proceeds from collection of notes receivable Net cash used in investing activities (23,711) Financing activities Net payments related to stock-based award activities (2,375) Adjustment Payment to Class C capital stockholders Repurchases of capital stock (1.780) Proceds from issuance of deb, net of costs 13,705 Repayments of debt (13,728) Proceeds from sale of subsidiary shares Net cash used in financing activities ( 225) Effect of exchange rate changes on cash and cash equivalents (436) Net decrease in cash and cash equivalents (1.798) Cash and cash equivalents at beginning of period 18.347 Cash and cash equivalents at end of period 16.549 (10,212) (13,184) 200 (84,509) 66,895 (1.109) (92,195) 73.959 (1.745) 533 (2.428) (986) (287) 1.419 (31,401) (31,165) (3,304) (4.166) (3,693) 8,729 (10.066) (4,846) 4.29) (8.298) (8,332) (170) (3.631) 16.540 12,918 (21203) 12.918 10.715 Supplemental disclosures of cash flow information Cash paid for taxes, net of refunds Cash paid for interest, net of amounts capitalized S 3,651 S 1 ,643 5 6 .191 S96 584 584 'Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's SI10,855 billion in revenues Required: 1. What is the amount of Apple's accounts receivable as of September 30, 2017? 2. Compute Apple's accounts receivable turnover as of September 30, 2017 3. How long does it take, on average, for the company to collect receivables for fiscal year ended September 30, 2017? 4. Apple's most liquid assets include (a) cash and cash equivalents, (b) short-term marketable securities, (c) accounts receivable, and (d) inventory. Compute the percentage that these liquid assets (in total) make up of current liabilities as of September 30, 2017, and as of September 24, 2016. 5. Did Apple's liquid assets as a percentage of current liabilities improve or worsen as of its fiscal 2017 year-end compared to its fiscal 2016 year-end