The purpose of this assignment is to analyze asset ratios to make recommendations for generating revenue and increasing company profitability through asset utilization.

Assume that the chief financial officer (CFO) has asked you to analyze the use of company assets and make recommendations for revenue generation and increasing profitability. The CFO has requested you summarize your findings in a 250-500 word memo addressed to the CFO, but one that could be shared with other stakeholders.

In the Form 10-K for Apple Inc selected , review and study the assets as reported for the past 3 years 2017,2018,2019. Using the correct formulas and a separate tab for each analysis, calculate the following ratios using Excel.

Receivables turnover

Average collection period

Inventory turnover

Average days in inventory

Asset turnover

Using the results of your ratio calculations, provide recommendations about how to improve one of these assets: receivables, inventory, or property, plant, and equipment for the company, as a means of generating revenue and increasing profitability. Include discussion and explanation of the following within the memo.

Summarize how well the company is collecting on its receivables based upon the type(s) of products the company sells and the industry in which it competes. Justify your speculation by using supporting facts from the income statement, balance sheet, or other resources.

Summarize how effective the company is in managing inventory based upon the type(s) of products the company sells and the industry in which it competes. Include discussion about whether the inventory turnover ratio is increasing or decreasing, what is causing the ratio increase/decrease, and whether the total value of inventory is increasing or decreasing on the balance sheet.

Summarize how well Apple Inc is utilizing its assets to generate net income. Justify your assessment with examples of other ratios and values on the income statement and balance sheet.

Make a recommendation to improve one of these assets: receivables, inventory, or property, plant, and equipment. Use information from the ratio calculations, income statement, balance sheet, or other resources to justify your recommendation and explain how accepting the recommendation will generate revenue and increase company profitability.

Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 28, 2019 September 29, 2018 ASSETS: Current assets: Cash and cash equivalents $ 48,844 $ 25,913 Marketable securities 51,713 40,388 Accounts receivable, net 22,926 23,186 Inventories 4,106 3,956 Vendor non-trade receivables 22,878 25,809 Other current assets 12,352 12,087 Total current assets 162,819 131,339 Non-current assets: Marketable securities 105,341 170,799 Property, plant and equipment, net 37,378 41,304 Other non-current assets 32,978 22,283 Total non-current assets 175,697 234,386 Total assets $ 338,516 $ 365,725 LIABILITIES AND SHAREHOLDERS EQUITY: Current liabilities: Accounts payable $ 46,236 $ 55,888 Other current liabilities 37,720 33,327 Deferred revenue 5,522 5,966 Commercial paper 5,980 11,964 Term debt 10,260 8,784 Total current liabilities 105,718 115,929 Non-current liabilities: Term debt 91,807 93,735 Other non-current liabilities 50,503 48,914 Total non-current liabilities 142,310 142,649 Total liabilities 248,028 258,578 Commitments and contingencies Shareholders equity: 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 40,201 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 Inc. | 2019 Form 10-K | 31 Apple Inc. | 2019 Form 10-K | 32 rm 10-K | 39 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 29, 2018 September 30, 2017 ASSETS: Current assets: Cash and cash equivalents $ 25,913 $ 20,289 Marketable securities 40,388 53,892 Accounts receivable, net 23,186 17,874 Inventories 3,956 4,855 Vendor non-trade receivables 25,809 17,799 Other current assets 12,087 13,936 Total current assets 131,339 128,645 Non-current assets: Marketable securities 170,799 194,714 Property, plant and equipment, net 41,304 33,783 Other non-current assets 22,283 18,177 Total non-current assets 234,386 246,674 Total assets $ 365,725 $ 375,319 LIABILITIES AND SHAREHOLDERS EQUITY: Current liabilities: Accounts payable $ 55,888 $ 44,242 Other current liabilities 32,687 30,551 Deferred revenue 7,543 7,548 Commercial paper 11,964 11,977 Term debt 8,784 6,496 Total current liabilities 116,866 100,814 Non-current liabilities: Deferred revenue 2,797 2,836 Term debt 93,735 97,207 Other non-current liabilities 45,180 40,415 Total non-current liabilities 141,712 140,458 Total liabilities 258,578 241,272 Commitments and contingencies Shareholders equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,754,986 and 5,126,201 shares issued and outstanding, respectively 40,201 35,867 Retained earnings 70,400 98,330 Accumulated other comprehensive income/(loss) (3,454 ) (150 ) Total shareholders equity 107,147 134,047 Total liabilities and shareholders equity $ 365,725 $ 375,319 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2018 Form 10-K | Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 28, 2019 September 29, 2018 September 30, 2017 Cash, cash equivalents and restricted cash, beginning balances $ 25,913 $ 20,289 $ 20,484 Operating activities: Net income 55,256 59,531 48,351 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 12,547 10,903 10,157 Share-based compensation expense 6,068 5,340 4,840 Deferred income tax expense/(benefit) (340 ) (32,590 ) 5,966 Other (652 ) (444 ) (166 ) Changes in operating assets and liabilities: Accounts receivable, net 245 (5,322 ) (2,093 ) Inventories (289 ) 828 (2,723 ) Vendor non-trade receivables 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 (625 ) (3 ) (593 ) Other current and non-current liabilities (4,700 ) 38,449 1,092 Cash generated by operating activities 69,391 77,434 64,225 Investing activities: Purchases of marketable securities (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 1,634 353 126 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 24,311 5,624 (195 ) Cash, cash equivalents and restricted cash, ending balances $ 50,224 $ 25,913 $ 20,289 Supplemental cash flow disclosure: Cash paid for income taxes, net $ 15,263 $ 10,417 $ 11,591 Cash paid for interest $ 3,423 $ 3,022 $ 2,092 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2019 Form 10-K | 33

Apple Inc Financial Statements - Search sign Layout References Mailings Review View Help Apple Inc. CONSOLIDATED BALANCE SHEETS in millions, except number of shares which are reflected in thousands and par value) September 28, 2019 September 29, 2018 ASSETS: $ urrent assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 48 844 51,713 22.926 4,106 22.878 12,352 162.819 25.913 40,388 23 186 3.956 25 809 12,087 131.339 on-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: $ urrent 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 8.794 115,929 on-current liabilities: Term debt Other non-current liabilities 91807 50:503 93.735 48 914 D Focus o te F12 O Search 9 Apple Inc Financial Statements Mailings Review View Help Design Layout References C iar paper Term debt Total current liabilities 5,980 10,260 105.718 11,964 8.784 115 929 on-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 ommitments and contingencies hareholders' equity Common stock and additional paid in capital, SO 00001 par value: 12,600,000 shares authorized: 4,443.236 and 4,754,986 shares issued and outstanding, respectively 45,174 40 201 Retained earnings 45,898 Accumulated other comprehensive income (loss) (584) Total shareholders' equity 90.488 Total liabilities and shareholders' equity 338,516 See accompanying Notes to Consolidated Financial Statements 70.400 (3.454) 107.147 365,725 $ Apple Inc 1 2019 Form 10-K131 Apple Inc. 2019 Form 10 K132 mm 10- K 39 Focus O UO - Apple Inc Financial Statements Search Layout References Mailings Review View Help Apple Inc. CONSOLIDATED BALANCE SHEETS (in Millions, except number of shares which are reflected in thousands and par value) September 29, 2018 September 30, 2017 ASSETS: urrent assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 25,913 $ 40,388 23.186 3,956 25.809 12,087 131339 20 289 53,892 17 874 4,855 17.799 13 936 128,645 on-current assets Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 170.799 41 304 22,283 234 386 365,725 194.714 33.783 18,177 246,674 375,319 $ $ LIABILITIES AND SHAREHOLDERS' EQUITY: $ urrent liabilities Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 55.888 32,687 7.543 11,964 8.784 116.866 44,242 30.551 7.548 11.977 6.496 100,814 on-current liabilities Deferred revenue Term debt 2.797 93.735 2,838 97 207 D Focus LS - Apple Inc Financial Statements Search Logi esign Layout References Mailings Review View Help Other non-current liabilities Total non current liabilities Total liabilities 45,180 141.712 258,578 40,415 140.458 241,272 ommitments and contingencies hareholders' equity Common stock and additional paid-in capital, SO 00001 par value: 12,600,000 shares authorized: 4,754,986 and 5,126,201 shares issued and outstanding, respectively 40 201 Retained earnings 70.400 Accumulated other comprehensive income/floss) (3.454) Total shareholders' equity 107 147 Total liabilities and shareholders' equity 365,725 See accompanying Notes to Consolidated Financial Statements 35 867 98,330 (150) 134.047 375,319 $ Apple Inc. 2018 Form 10-KI September 30. 2017 $ 20.484 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 28, September 29. 2019 2018 ash, cash equivalents and restricted cash, beginning balances 25 913 $ 20,289 perating activities Net income 55,256 59,531 Adjustments to reconcile net income to cash generated by operating activities Depreciation and amortization 12 547 10 903 Share-based compensation expense 6,068 5,340 Deferred income tax expense/benefit (340) 132.590) Other 1652) Changes in operating assets and liabilities Accounts receivable, net 245 (5,322) 48,351 10.157 4,840 5.966 D Focus O en MON Logan Apple Inc Financial Statements - O Search Sign View Help Layout References Mailings Review DO (340) 3.340 (32.590) (444) 5.966 (166) (652) Deferred income tax expense/(benefit) Other Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities Cash generated by operating activities vesting activities Purchases of marketable securities 245 (289) 2,931 873 (1.923) (625) (4.700) 69,391 (5,322) 828 (8.010) (423) 9.175 (3) 38 449 77.434 (2,093) (2.723) (4.254) (6,318) 8.966 (593) 1,092 64 225 (39,630) (71,356) (159.486) 40,102 56,988 (10.4951 (624) 55,881 47.838 (13,313) (721) (1,871) 353 (745) 16.066 Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments for acquisition of property, plant and equipment Payments made in connection with business acquisitions, net Purchases of non-marketable securities Proceeds from non-marketable securities Other Cash generated by used in investing activities nancing activities Proceeds from issuance of common stock Payments for taxes related to nel share settlement of equity awards Payments for dividends and dividend equivalents 31.775 94.564 (12,451) (329) (521) 125 (124) (46.446) (1.001) 1.634 (1,078) 45,896 781 669 555 2,8171 (14.1191 11.874) (12.769) (13.7123 Focus RO O e MOI. 19 Apple Inc Financial Statements Search Logan sign Layout (745) 16056 (124) (46.446) References Mailings Review View Help Other (1,078) Cash generated by used in) investing activities 45,896 nancing activities: Proceeds from issuance of common stock 781 Payments for taxes related to net share settlement of equity awards (2,817) Payments for dividends and dividend equivalents (14.119) Repurchases of common stock (66,897) Proceeds from issuance of term debt, net 6,963 Repayments of term debt (8.805) Proceeds from (Repayments on commercial paper, net (5,977) Other (105) Cash used in financing activities (90.976) Increase/Decrease in cash, cash equivalents and restricted cash 24.311 ash, cash equivalents and restricted cash, ending balances 50,224 $ upplemental cash flow disclosure: Cash paid for income taxes, net 15.253 $ Cash paid for interest 3,423 $ See accompanying Notes to Consolidated Financial Statements 669 (2,527) (13.712) (72.738) 6,969 16.500) (37) 555 (1,874) 112.7691 (32.900) 28 662 (3.500) 3,852 (87 876) (17 974) 5624 25,913 (195) 20.289 S 10.417 3,022 $ $ 11,591 2,092 Apple Inc 1 2019 Form 10-K 33 Focus O e MOI Apple Inc Financial Statements - Search sign Layout References Mailings Review View Help Apple Inc. CONSOLIDATED BALANCE SHEETS in millions, except number of shares which are reflected in thousands and par value) September 28, 2019 September 29, 2018 ASSETS: $ urrent assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 48 844 51,713 22.926 4,106 22.878 12,352 162.819 25.913 40,388 23 186 3.956 25 809 12,087 131.339 on-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: $ urrent 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 8.794 115,929 on-current liabilities: Term debt Other non-current liabilities 91807 50:503 93.735 48 914 D Focus o te F12 O Search 9 Apple Inc Financial Statements Mailings Review View Help Design Layout References C iar paper Term debt Total current liabilities 5,980 10,260 105.718 11,964 8.784 115 929 on-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 ommitments and contingencies hareholders' equity Common stock and additional paid in capital, SO 00001 par value: 12,600,000 shares authorized: 4,443.236 and 4,754,986 shares issued and outstanding, respectively 45,174 40 201 Retained earnings 45,898 Accumulated other comprehensive income (loss) (584) Total shareholders' equity 90.488 Total liabilities and shareholders' equity 338,516 See accompanying Notes to Consolidated Financial Statements 70.400 (3.454) 107.147 365,725 $ Apple Inc 1 2019 Form 10-K131 Apple Inc. 2019 Form 10 K132 mm 10- K 39 Focus O UO - Apple Inc Financial Statements Search Layout References Mailings Review View Help Apple Inc. CONSOLIDATED BALANCE SHEETS (in Millions, except number of shares which are reflected in thousands and par value) September 29, 2018 September 30, 2017 ASSETS: urrent assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 25,913 $ 40,388 23.186 3,956 25.809 12,087 131339 20 289 53,892 17 874 4,855 17.799 13 936 128,645 on-current assets Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 170.799 41 304 22,283 234 386 365,725 194.714 33.783 18,177 246,674 375,319 $ $ LIABILITIES AND SHAREHOLDERS' EQUITY: $ urrent liabilities Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 55.888 32,687 7.543 11,964 8.784 116.866 44,242 30.551 7.548 11.977 6.496 100,814 on-current liabilities Deferred revenue Term debt 2.797 93.735 2,838 97 207 D Focus LS - Apple Inc Financial Statements Search Logi esign Layout References Mailings Review View Help Other non-current liabilities Total non current liabilities Total liabilities 45,180 141.712 258,578 40,415 140.458 241,272 ommitments and contingencies hareholders' equity Common stock and additional paid-in capital, SO 00001 par value: 12,600,000 shares authorized: 4,754,986 and 5,126,201 shares issued and outstanding, respectively 40 201 Retained earnings 70.400 Accumulated other comprehensive income/floss) (3.454) Total shareholders' equity 107 147 Total liabilities and shareholders' equity 365,725 See accompanying Notes to Consolidated Financial Statements 35 867 98,330 (150) 134.047 375,319 $ Apple Inc. 2018 Form 10-KI September 30. 2017 $ 20.484 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 28, September 29. 2019 2018 ash, cash equivalents and restricted cash, beginning balances 25 913 $ 20,289 perating activities Net income 55,256 59,531 Adjustments to reconcile net income to cash generated by operating activities Depreciation and amortization 12 547 10 903 Share-based compensation expense 6,068 5,340 Deferred income tax expense/benefit (340) 132.590) Other 1652) Changes in operating assets and liabilities Accounts receivable, net 245 (5,322) 48,351 10.157 4,840 5.966 D Focus O en MON Logan Apple Inc Financial Statements - O Search Sign View Help Layout References Mailings Review DO (340) 3.340 (32.590) (444) 5.966 (166) (652) Deferred income tax expense/(benefit) Other Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities Cash generated by operating activities vesting activities Purchases of marketable securities 245 (289) 2,931 873 (1.923) (625) (4.700) 69,391 (5,322) 828 (8.010) (423) 9.175 (3) 38 449 77.434 (2,093) (2.723) (4.254) (6,318) 8.966 (593) 1,092 64 225 (39,630) (71,356) (159.486) 40,102 56,988 (10.4951 (624) 55,881 47.838 (13,313) (721) (1,871) 353 (745) 16.066 Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments for acquisition of property, plant and equipment Payments made in connection with business acquisitions, net Purchases of non-marketable securities Proceeds from non-marketable securities Other Cash generated by used in investing activities nancing activities Proceeds from issuance of common stock Payments for taxes related to nel share settlement of equity awards Payments for dividends and dividend equivalents 31.775 94.564 (12,451) (329) (521) 125 (124) (46.446) (1.001) 1.634 (1,078) 45,896 781 669 555 2,8171 (14.1191 11.874) (12.769) (13.7123 Focus RO O e MOI. 19 Apple Inc Financial Statements Search Logan sign Layout (745) 16056 (124) (46.446) References Mailings Review View Help Other (1,078) Cash generated by used in) investing activities 45,896 nancing activities: Proceeds from issuance of common stock 781 Payments for taxes related to net share settlement of equity awards (2,817) Payments for dividends and dividend equivalents (14.119) Repurchases of common stock (66,897) Proceeds from issuance of term debt, net 6,963 Repayments of term debt (8.805) Proceeds from (Repayments on commercial paper, net (5,977) Other (105) Cash used in financing activities (90.976) Increase/Decrease in cash, cash equivalents and restricted cash 24.311 ash, cash equivalents and restricted cash, ending balances 50,224 $ upplemental cash flow disclosure: Cash paid for income taxes, net 15.253 $ Cash paid for interest 3,423 $ See accompanying Notes to Consolidated Financial Statements 669 (2,527) (13.712) (72.738) 6,969 16.500) (37) 555 (1,874) 112.7691 (32.900) 28 662 (3.500) 3,852 (87 876) (17 974) 5624 25,913 (195) 20.289 S 10.417 3,022 $ $ 11,591 2,092 Apple Inc 1 2019 Form 10-K 33 Focus O e MOI