Use Apple's financial statements in Appendix A to answer the following. Required: 1. Using fiscal 2015 as the base year, compute trend percents for fiscal years 2015, 2016, and 2017 for net sales, cost of sales, operating income, other income (expense) net, provision for income taxes, and net income. 2. Compute common-size percents for fiscal years 2016 and 2017 for the following categories of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) goodwill plus acquired intangible assets, net. 3. Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less liquid in 2017?

Appendix A Financial Statement Information APPLE Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 30, 2017 ASSETS September 24, 2016 Current assets Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $58 and $53, respectively Inventories Vendor non-trade receivables Other current assets Total current assets Long-term marketable securities Property, plant and equipment, net Goodwill Acquired intangible assets, net Other non-current assets Total assets 20,289 53,892 17,874 4,855 17.799 13,936 128,645 194,714 33,783 5,717 2,298 10,162 375,319 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 Appendix A Financial Statement Information APPLE September 26, 2015 233,715 140,089 93,626 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 30, 2017 September 24, 2016 Net sales 229,234 215,639 Cost of sales 141,048 131,376 Gross margin 88,186 84,263 Operating expenses Research and development 11,581 10,045 Selling, general and administrative 15.261 14,194 Total operating expenses 26,842 24,239 Operating income 61,344 60,024 Other income (expense), net 2,745 1,348 Income before provision for income taxes 64,089 61,372 Provision for income taxes 15,738 15,685 Net income $ 48,351 $ 45,687 8,067 14,329 22,396 71.230 1,285 72,515 19.121 53,394 $ 9.27 9.21 $ S 8.35 8.31 $ $ 9.28 9.22 Earnings per share: Basic Diluted Shares used in computing earnings per share: Basic Diluted Cash dividends declared per share 5.217.242 5,251,692 2.40 5,470,820 5,500,281 2.18 5,753,421 5,793,069 $ $ 1.98 See accompanying Notes to Consolidated Financial Statements. September 26, 2015 $ 53,394 224 (411) 2,905 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 Net income $ 48,351 $ 45,687 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77), $8 and $201, respectively 75 Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit (expense) of $(478), $(7) and $(441), respectively 1,315 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit) of $475, $131 and $630, respectively (1,477) Total change in unrealized gains/losses on derivative instruments, net of tax (162) (734) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $425, $(863) and $264, respectively (782) 1,582 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit) of $35, $(31), and $(32), respectively Total change in unrealized gains/losses on marketable securities, net of tax (846) 1,638 Total other comprehensive income (loss) (784) 979 Total comprehensive income 47,567 46,666 See accompanying Notes to Consolidated Financial Statements. (3,497) (592) (483) 56 59 (424) (1,427) 51.967 APPLE 748 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number 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 5,866,161 $ 23,313 $ 87,152 1,082 $ 111,547 Net income 53,394 53,394 Other comprehensive income (loss) (1,427) (1,427) Dividends and dividend equivalents declared (11,627) (11,627) Repurchase of common stock (325,032) (36,026) (36,026) Share-based compensation 3,586 - 3,586 Common stock issued, net of shares withheld for employee taxes 37,624 (231) (609) (840) Tax benefit from equity awards, including transfer pricing adjustments 748 Balances as of September 26, 2015 5,578,753 $ 27,416 $ 92,284 $ (345) $ 119,355 Net income 45,687 45,687 Other comprehensive income (loss) 979 979 Dividends and dividend equivalents declared (12,188) (12,188) Repurchase of common stock (279,609) (29,000) (29,000) Share-based compensation 4,262 4,262 Common stock issued, net of shares withheld for employee taxes 37,022 (806) (419) (1,225) Tax benefit from equity awards, including transfer pricing adjustments 379 Balances as of September 24, 2016 5,336,166 $ 31,251 $ 96,364 634 S 128,249 Net income 48,351 48,351 Other comprehensive income (loss) (784) (784) Dividends and dividend equivalents declared (12,803) (12,803) Repurchase of common stock (246,496) (33,001) (33.001) Share-based compensation 4,909 4,909 Common stock issued, net of shares withheld for employee taxes 36,531 (913) (581) (1,494) Tax benefit from equity awards, including transfer pricing adjustments 620 620 Balances as of September 30, 2017 5,126,201 $ 35,867 $ 98,330 $ (150) S 134,047 379 See accompanying Notes to Consolidated Financial Statements. APPLE September 26, 2015 53,394 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS dis million Years ended September 30, 2017 September 24, 2016 Cash and cash equivalents, beginning of the year 20484 Operating activities: 48,351 Adjustments to reconcile net income to cash generated by operating activities 10.157 10.50S Share used to expense 4.210 Deferred income tax expense Other 486 Changes in operating s andalities: Accounts receivable, net 12.09 11.257 1.382 14.254) Vendor non-trade receivables Other current and non-current assets 1,055 1.637 (1.554) 9.615 (626) (150) 63.596 65.624 Derede Other current and correntilities 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, met Payment for acquisition of property, plant and equipment Payments for acquisition of intangible assets Payments for strategic investments. Det 1159486) 31,775 142.428) 21,25 90.536 (16601 14,538 (12,451) 01.2471 195) 11.18 (46446) (45.9771 (56,270) Cash used in investing activities Financing activities: Excess at benefits from equity awards Payments for taxes related to be share settlement of equity awards Payment for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net (1.8 (12,769) (2.900 (1.0991 (11.561) (1.520 (12, 1501 (29,7221 24.954 12.00 3,500) (17.147) (20,4839 Change in commercial paper, net Cash used in financing activities Incre decrease in cash and cash equivales Cash and cash equivalents, end of the year 20.289 30,484 21.120 Supplemental cash flow disclosure Cash paid for increases, it Cash paid for interest 11.5915 10,444 5 13,252 See accompanying Notes to Canselidated Financial Statements, Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less liquid in 2017? Apple's asset makeup become in 2017. Required 2 Required 3 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using fiscal 2015 as the base year, compute trend percents for fiscal years 2015, 2016, and 2017 for net sales, cost of sales, operating income, other income (expense) net, provision for income taxes, and net income. (Input all the values as positive numbers. Enter your answers in millions. Round your percentage answers to 1 decimal place.) Fiscal 2017 Fiscal 2016 Fiscal 2015 Net Sales Cost of sales Operating income Other income/expense) Income taxes (provision for income taxes) Net income Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute common-size percents for fiscal years 2016 and 2017 for the following categories of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) goodwill plus acquired intangible assets, net. (Enter your answers in millions. Round your percentage answers to 1 decimal place.) Sep. 30, 2017 Sep. 24, 2016 Total current assets Property, plant and equipment, net Goodwill and other intangible assets Required 1 Required 3 >