September 27,2014 September 28,2013 ASSETS: Current assets: Cash and cash equivalents Short-term marketable securitics Accounts receivable, less allowances of $86 and $99, respectively 3,844 S 11,233 17,460 13,102 3,453 7,539 6,882 ,318 9,759 Deferred tax assets Other current asscts Total current assets 130,162 Long-term marketable securities Property, plant and equipment, net 106,215 16,597 1,577 4,179 4.616 Acquired intangible assets, net Other assets 4,142 3-764 Total assets 207,000 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities 30,196 $ Accounts payable Accrucd expenses 22,367 13,856 7,435 0 43,658 18.453 8491 6.308 Commercial paper Total current liabilities 3,031 28,987 16,960 20,208 Long-term debt Total liabilities Shareholders equity Common stock and additional paid-in capital, $0.00001 par value; 12,600,000 shares authorized 5,866,161 and 6,294,494 shares issaod and outstanding, respectively Retained earnings 19,764 (471) 207.000 23,313 87,152 Total shareholders' equity Total liabilities and sharcholders' equity See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended Net sales Cost of sales 182,795 112,.258 0.537 156 508 87,846 70,910 106,606 Gross margin Operating expenses: 4,475 10,830 Selling, general and administrative 11,993 18,034 10,040 13.421 48,999 Other income, net Income before provision for income Provision for income taxes Net income 522 55,763 14.030 41.733 53,483 3,973 39 510 50,155 13.118 37,037 Earnings per 5.72 S 6.38 Shares used in computing carnings per share: Basic 6,085 572 6,122,663 1.82 6477.320 6,521,634 6,543,726 6,617,483 Cash dividends declared per common share Apple Inc CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME In millions) Years ended Net incom 9510$ 37,037 41.733 Change in foreign curency translation, net of tax effects of $S0, $35 137) (112) and $13, respectively (15) Change in unrecognizod gainslosses on derivative instruments Change in fair valuc of derivatives, net of tax benefiv expense) of (297),S(351) and $73, respectively 1,390 149 1,539 522 (131) Adjustment for net losses gains) realizod and included in net income, (458) (399) net of tax expenselbencfit) of S(36), $255 and $220, respectively Total change in unrecognized gainslosses on derivative 64 instruments, net of tax Change in unrealized gains/losses on markctable securities: Change in fair valuc of marketable securitics, net of tax bencfit 791) 131 (922) 36,067 715 114) 601 41,789 expense) of S(153),$458 and $421), respectively 285 (134 151 1,063 S Adjustment for net losses/gains) realized and included in net income, net of tax expense(benefit) of $71, $82 and S68, respectively Total change in unrealized gain/losses on marketable securitics, net of tax Total other comprehensive income/(loss) Total comprehensive income See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY In millions, except number of shares which are reflected in thousands) Accumulated Other Common Stock and Total Additional Paid-In CapitalRetained Comprehensive Shareholders' arningsIncome/Loss)Equity Shares Amount Balances as of September 24, 2011 76.615 504.937 3331 S 62,841 S 443 S Net income Other comprehensive incomeloss) Dividends and dividend equivalents (2.523) (2.523) 1.740 Share-based compensation Common stock issued, net of shares 1,740 withheld for employee tates Tax benefit from equity awards,including 69,521 transfer pricing adjustments 1.151 16.422 1.151 118.210 37,037 Balances as of September 29, 2012 101,289 499 Net income other comprehensive incomeloss) Dividends and dividend equivalents (970) 10.676 (22.950) 10.676) (22.950) Repurchase of common stock Share-based compensation Common stock issued, net of shares (328,837) withheld for employee taxes Tax benefit from equity awards,including (444) transfer pricing adjustments Balances as of September 28, 2013 104 494 39510 1.553 9,510 Net income Other comprehensive incomekloss) Dividends and dividend equivalents 1553 11,215 (45,000) 11,.215 (45,000) Repurchase of common stock Share-based compensation Common stock issued, net of shares (488,677) withheld for employee tates 60,344 (49) (448) (399) Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 27, 2014 735 0 See accompanying Notes to Consolidated Financial Statements. nc. CONSOLIDATED STATEMENTS OF CASH FLOWS In millions Years ended Cash and cash equivalents,beginning of the year Operating activities: September 27.2014 September 28,2013 September 29. 2012 10,746 S 4,259 S 39.510 37,037 1.733 3,277 ,405 5.551) 1,414) 4,467 Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense 6,757 2.253 Changes in operating assets and liabilities Accounts receivable, net 2.172 4.232) (76) (2.220 973) 1,080 1,459 endor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities ,938 2,824 6,010 Cash generated by operating activities Investing activities Purchases of marketable securities Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments made in connection with business acquisitions, net Payments for acquisition of property, plant and equipment Payments for acquisition of intangible assets (217,128) 18,810 189,301 3,765 9571) (151.232) 13,035 99,770 (350) (8,295) 1,107) (148.489) 20317 104,130 (496) (8,165) 16 22.579 (1 33.774 Cash used in investing activities (48.227 Financing activities: Proceeds from issuance of common stock Excess tar benefits from equity awards Taxes paid related to net share settlement of equity awards Dividends and dividend equivalents paid Repurchase of common stock Proceeds from issuance of long-term debt, net Proceeds from issuance of commercial paper, net 730 701 1.082 (10,564) 1,351 1,226) (2.488) 0 0 0 1,158 (11,126) 45,000) 11.960 6306 37 549) 16,896 0 Cash used in financing activities Increase/ decrease) in cash and cash equivalents Cash and cash equivalents, end of the year 3.513 13,844 4.259 S Supplemental cash flow disclosure: 7,682 0 Cash paid for income tates, net Cash paid for interest 0,026$ 339 S 9,128S Analyzing Financial Statements: Refer to Apple's financial statements in Appendix A to answer the following. g fiscal 2012 as the base year, compute trend percents for fiscal years 2012, 2013, and 2014 for net sales, cost of sales, operating income, other income (expense) net, provision for income taxes, and net income. (Round percents to one decimal.) 2) Compute common-size percents for fiscal years 2013 and 2014 for the following categories 3) Comment on any notable changes across the years for the income statement trends ) Compute the following ratios for 2014 and 2013 using the Apple financial statements found of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) goodwill plus acquired intangible assets, net. (Round percents to one decim computed in part 1 and the balance sheet percents computed in part 2 in the Appendix and attached to this project: a) Current ratio b) Quick (or acid-test) ratio c) Profit margin d) Return on total assets (ROA) [Sept 29, 2012, total assets equaled $176,064.] e) Price-earnings ratio i) Stock price-9/27/14: $100.75 i) Stock price-9/28/13: $68.96 5) Comment on the change in the ratios from 2013 to 2014 computed above. Did something happen during those years to cause the change in the ratios? September 27,2014 September 28,2013 ASSETS: Current assets: Cash and cash equivalents Short-term marketable securitics Accounts receivable, less allowances of $86 and $99, respectively 3,844 S 11,233 17,460 13,102 3,453 7,539 6,882 ,318 9,759 Deferred tax assets Other current asscts Total current assets 130,162 Long-term marketable securities Property, plant and equipment, net 106,215 16,597 1,577 4,179 4.616 Acquired intangible assets, net Other assets 4,142 3-764 Total assets 207,000 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities 30,196 $ Accounts payable Accrucd expenses 22,367 13,856 7,435 0 43,658 18.453 8491 6.308 Commercial paper Total current liabilities 3,031 28,987 16,960 20,208 Long-term debt Total liabilities Shareholders equity Common stock and additional paid-in capital, $0.00001 par value; 12,600,000 shares authorized 5,866,161 and 6,294,494 shares issaod and outstanding, respectively Retained earnings 19,764 (471) 207.000 23,313 87,152 Total shareholders' equity Total liabilities and sharcholders' equity See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended Net sales Cost of sales 182,795 112,.258 0.537 156 508 87,846 70,910 106,606 Gross margin Operating expenses: 4,475 10,830 Selling, general and administrative 11,993 18,034 10,040 13.421 48,999 Other income, net Income before provision for income Provision for income taxes Net income 522 55,763 14.030 41.733 53,483 3,973 39 510 50,155 13.118 37,037 Earnings per 5.72 S 6.38 Shares used in computing carnings per share: Basic 6,085 572 6,122,663 1.82 6477.320 6,521,634 6,543,726 6,617,483 Cash dividends declared per common share Apple Inc CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME In millions) Years ended Net incom 9510$ 37,037 41.733 Change in foreign curency translation, net of tax effects of $S0, $35 137) (112) and $13, respectively (15) Change in unrecognizod gainslosses on derivative instruments Change in fair valuc of derivatives, net of tax benefiv expense) of (297),S(351) and $73, respectively 1,390 149 1,539 522 (131) Adjustment for net losses gains) realizod and included in net income, (458) (399) net of tax expenselbencfit) of S(36), $255 and $220, respectively Total change in unrecognized gainslosses on derivative 64 instruments, net of tax Change in unrealized gains/losses on markctable securities: Change in fair valuc of marketable securitics, net of tax bencfit 791) 131 (922) 36,067 715 114) 601 41,789 expense) of S(153),$458 and $421), respectively 285 (134 151 1,063 S Adjustment for net losses/gains) realized and included in net income, net of tax expense(benefit) of $71, $82 and S68, respectively Total change in unrealized gain/losses on marketable securitics, net of tax Total other comprehensive income/(loss) Total comprehensive income See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY In millions, except number of shares which are reflected in thousands) Accumulated Other Common Stock and Total Additional Paid-In CapitalRetained Comprehensive Shareholders' arningsIncome/Loss)Equity Shares Amount Balances as of September 24, 2011 76.615 504.937 3331 S 62,841 S 443 S Net income Other comprehensive incomeloss) Dividends and dividend equivalents (2.523) (2.523) 1.740 Share-based compensation Common stock issued, net of shares 1,740 withheld for employee tates Tax benefit from equity awards,including 69,521 transfer pricing adjustments 1.151 16.422 1.151 118.210 37,037 Balances as of September 29, 2012 101,289 499 Net income other comprehensive incomeloss) Dividends and dividend equivalents (970) 10.676 (22.950) 10.676) (22.950) Repurchase of common stock Share-based compensation Common stock issued, net of shares (328,837) withheld for employee taxes Tax benefit from equity awards,including (444) transfer pricing adjustments Balances as of September 28, 2013 104 494 39510 1.553 9,510 Net income Other comprehensive incomekloss) Dividends and dividend equivalents 1553 11,215 (45,000) 11,.215 (45,000) Repurchase of common stock Share-based compensation Common stock issued, net of shares (488,677) withheld for employee tates 60,344 (49) (448) (399) Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 27, 2014 735 0 See accompanying Notes to Consolidated Financial Statements. nc. CONSOLIDATED STATEMENTS OF CASH FLOWS In millions Years ended Cash and cash equivalents,beginning of the year Operating activities: September 27.2014 September 28,2013 September 29. 2012 10,746 S 4,259 S 39.510 37,037 1.733 3,277 ,405 5.551) 1,414) 4,467 Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense 6,757 2.253 Changes in operating assets and liabilities Accounts receivable, net 2.172 4.232) (76) (2.220 973) 1,080 1,459 endor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities ,938 2,824 6,010 Cash generated by operating activities Investing activities Purchases of marketable securities Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments made in connection with business acquisitions, net Payments for acquisition of property, plant and equipment Payments for acquisition of intangible assets (217,128) 18,810 189,301 3,765 9571) (151.232) 13,035 99,770 (350) (8,295) 1,107) (148.489) 20317 104,130 (496) (8,165) 16 22.579 (1 33.774 Cash used in investing activities (48.227 Financing activities: Proceeds from issuance of common stock Excess tar benefits from equity awards Taxes paid related to net share settlement of equity awards Dividends and dividend equivalents paid Repurchase of common stock Proceeds from issuance of long-term debt, net Proceeds from issuance of commercial paper, net 730 701 1.082 (10,564) 1,351 1,226) (2.488) 0 0 0 1,158 (11,126) 45,000) 11.960 6306 37 549) 16,896 0 Cash used in financing activities Increase/ decrease) in cash and cash equivalents Cash and cash equivalents, end of the year 3.513 13,844 4.259 S Supplemental cash flow disclosure: 7,682 0 Cash paid for income tates, net Cash paid for interest 0,026$ 339 S 9,128S Analyzing Financial Statements: Refer to Apple's financial statements in Appendix A to answer the following. g fiscal 2012 as the base year, compute trend percents for fiscal years 2012, 2013, and 2014 for net sales, cost of sales, operating income, other income (expense) net, provision for income taxes, and net income. (Round percents to one decimal.) 2) Compute common-size percents for fiscal years 2013 and 2014 for the following categories 3) Comment on any notable changes across the years for the income statement trends ) Compute the following ratios for 2014 and 2013 using the Apple financial statements found of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) goodwill plus acquired intangible assets, net. (Round percents to one decim computed in part 1 and the balance sheet percents computed in part 2 in the Appendix and attached to this project: a) Current ratio b) Quick (or acid-test) ratio c) Profit margin d) Return on total assets (ROA) [Sept 29, 2012, total assets equaled $176,064.] e) Price-earnings ratio i) Stock price-9/27/14: $100.75 i) Stock price-9/28/13: $68.96 5) Comment on the change in the ratios from 2013 to 2014 computed above. Did something happen during those years to cause the change in the ratios