Use the table below and Apple's financial statements in Appendix A to answer the following. $ millions 2019 2018 2017 Interest expense $ 3,576 $ 3,240 $ 2,323 Compute times interest earned for each of the three years shown. Is Apple in a good or bad position to pay interest obligations? Assume an industry average of 10.
The above consolidated statement of financial position should be read in conjunction with the accompanying notes. (In millions, except share amounts which are reflected in thousands) Google Inc. (Alphabet Inc.) a CONSOLIDATED STATEMENTS OF INCOME (In millions) Samsung Electronics Co., Ltd. and Subsidiaries GONCOI IOATE CTATEMENTC OF FINANCIAI DOCITION Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In thousands of US dollars) Apple Inc. See accompanying Notes to Consolidated Financial Statements. (In millions, except number of shares which are reflected in thousands and par value) \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|l|}{ Financing activities } \\ \hline Proceeds from issuance of common stock & & \multicolumn{2}{|l|}{781} & \multicolumn{2}{|l|}{669} & 555 \\ \hline Payments for taxes related to net share settlement of equity awards & & (2,817) & & \multicolumn{2}{|l|}{(2,527)} & (1,874) \\ \hline Payments for dividends and dividend equivalents & & (14,119) & & \multicolumn{2}{|l|}{(13,712)} & (12,769) \\ \hline Repurchases of common stock & & (66,897) & & \multicolumn{2}{|l|}{(72,738)} & (32,900) \\ \hline Proceeds from issuance of term debt, net & & 6,963 & & \multicolumn{2}{|l|}{6,969} & 28,662 \\ \hline Repayments of term debt & & (8,805) & & \multicolumn{2}{|l|}{(6,500)} & (3,500) \\ \hline Proceeds from (Repayments of) commercial paper, net & & (5,977) & & \multicolumn{2}{|l|}{ (37) } & 3,852 \\ \hline Other & & (105) & & \multicolumn{2}{|l|}{ } & \\ \hline Cash used in financing activities & & (90,976) & & \multicolumn{2}{|l|}{(87,876)} & (17,974) \\ \hline Increase (decrease) in cash, cash equivalents and restricted cash & & 24,311 & & \multicolumn{2}{|l|}{5,624} & (195) \\ \hline Cash, cash equivalents and restricted cash, ending balances & $ & 50,224 & $ & 25,913 & $ & 20,289 \\ \hline \multicolumn{7}{|l|}{ Supplemental cash flow disclosure: } \\ \hline Cash paid for income taxes, net & $ & 15,263 & $ & 10,417 & $ & 11,591 \\ \hline Cash paid for interest & $ & 3,423 & $ & 3,022 & $ & 2,092 \\ \hline \end{tabular} Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS \begin{tabular}{|c|c|c|} \hline For the year ended December 31 & 2019 & 2018 \\ \hline \multicolumn{3}{|l|}{ In thousands of US dollars } \\ \hline \multicolumn{3}{|l|}{ Cash flows from operating activities } \\ \hline Profit for the year & $18,652,605 & $38,049,231 \\ \hline Adjustments & 32,126,956 & 37,414,045 \\ \hline Changes in assets and liabilities arising from operating activities & (2,184,336) & (8,515,406) \\ \hline Cash generated from operations & 48,595,225 & 66,947,870 \\ \hline Interest received & 1,978,962 & 1,534,604 \\ \hline Interest paid & (497,640) & (470,434) \\ \hline Dividends received & 207,473 & 185,328 \\ \hline Income tax paid & (11,344,104) & (10,681,998) \\ \hline Net cash inflow from operating activities & 38,939,916 & 57,515,370 \\ \hline \multicolumn{3}{|l|}{ Cash flows from investing activities } \\ \hline Net increase in short-term financial instruments & (1,742,585) & (10,612,375) \\ \hline Net increase in short-term financial assets at amortized cost & (701,945) & (1,232,856) \\ \hline Net decrease (increase) in short-term financial assets at fair value through profit or loss & 321,746 & (119,839) \\ \hline Disposal of long-term financial instruments & 3,935,450 & 219,527 \\ \hline Acquisition of long-term financial instruments & (10,918,835) & (6,588,518) \\ \hline Disposal of financial assets at amortized cost & 595,974 & \\ \hline Acquisition of financial assets at amortized cost & (707,898) & (136,183) \\ \hline Disposal of financial assets at fair value through other comprehensive income & 1,351 & 13,910 \\ \hline Acquisition of financial assets at fair value through other comprehensive income & (54,719) & (391,377) \\ \hline Disposal of financial assets at fair value through profit or loss & 55,189 & 68,761 \\ \hline Acquisition of financial assets at fair value through profit or loss & (116,543) & (166,327) \\ \hline Disposal of investment in associates and joint ventures & 10,424 & 127 \\ \hline Acquisition of investment in associates and joint ventures & (10,964) & (43,953) \\ \hline Disposal of property, plant and equipment & 440,397 & 477,900 \\ \hline Acquisition of property, plant and equipment & (21,766,303) & (25,360,292) \\ \hline Disposal of intangible assets & 6,213 & 10,241 \\ \hline Acquisition of intangible assets & (2,788,525) & (875,635) \\ \hline Cash outflow from business combinations & (874,680) & (85,038) \\ \hline Cash inflow (outflow) from other investing activities & 39,512 & (1,965) \\ \hline Net cash outflow from investing activities & (34,276,741) & (44,823,892) \\ \hline \end{tabular} Google Inc. (Alphabet Inc.) CONSOLIDATED BALANCE SHEETS (In millions, except share amounts which are reflected in thousands, and par value per share amounts) Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME The above consolidated statement of financial position should be read in conjunction with the accompanying notes. Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions) \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\begin{tabular}{l} Years ended \\ Total shareholders' equity, beginning balances \end{tabular}} & \multicolumn{2}{|c|}{ September 28, 2019} & \multicolumn{2}{|c|}{ September 29, 2018} & \multicolumn{2}{|c|}{ September 30, 2017} \\ \hline & $ & 107,147 & s & 134,047 & $ & 128,249 \\ \hline \multicolumn{7}{|l|}{ Common stock and additional paid-in capital } \\ \hline Beginning balances & & 40,201 & & 35,867 & & 31,251 \\ \hline Common stock issued & & 781 & & 669 & & 555 \\ \hline \begin{tabular}{l} Common stock withheld related to net share settlement of \\ equity awards \end{tabular} & & (2,002) & & (1,778) & & (1,468) \\ \hline Share-based compensation & & 6,194 & & 5,443 & & 4,909 \\ \hline \begin{tabular}{l} Tax benefit from equity awards, including transfer \\ pricing adjustments \end{tabular} & & - & & - & & 620 \\ \hline Ending balances & & 45,174 & & 40,201 & & 35,867 \\ \hline \multicolumn{7}{|l|}{ Retained earnings } \\ \hline Beginning balances & & 70,400 & & 98,330 & & 96,364 \\ \hline Net income & & 55,256 & & 59,531 & & 48,351 \\ \hline Dividends and dividend equivalents declared & & (14,129) & & (13,735) & & (12,803) \\ \hline \begin{tabular}{l} Common stock withheld related to net share settlement of \\ equity awards \end{tabular} & & (1,029) & & (948) & & (581) \\ \hline Common stock repurchased & & (67,101) & & (73,056) & & (33,001) \\ \hline Cumulative effects of changes in accounting principles & & 2,501 & & 278 & & - \\ \hline Ending balances & & 45,898 & & 70,400 & & 98,330 \\ \hline \multicolumn{7}{|l|}{ Accumulated other comprehensive income (loss) } \\ \hline Beginning balances & & (3,454) & & (150) & & 634 \\ \hline Other comprehensive income (loss) & & 2,781 & & (3,026) & & (784) \\ \hline Cumulative effects of changes in accounting principles & & 89 & & (278) & & \\ \hline Ending balances & & (584) & & (3,454) & & (150) \\ \hline Total shareholders' equity, ending balances & $ & 90,488 & $ & 107,147 & $ & 134,047 \\ \hline \end{tabular} See accompanying Notes to Consolidated Financial Statements. Samsung Electronics Co., Ltd. and Subsidiaries CONSOLIDATED STATEMENTS OF PROFIT OR LOSS The above consolidated statement of financial position should be read in conjunction with the accompanying notes. Apple Inc. Notes-continued Cash Equivalents and Marketable Securities All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. The Company's investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in other comprehensive income/(loss) ("OCI"). The Company's investments in marketable equity securities are classified based on the nature of the securities and their availability for use in current operations. The Company's marketable equity securities are measured at fair value with gains and losses recognized in other income/(expense), net ("OI\&E"). The cost of securities sold is determined using the specific identification method. Inventories Inventories are measured using the first-in, first-out method. Property, Plant and Equipment Depreciation on property, plant and equipment is recognized on a straight-line basis over the estimated useful lives of the assets, which for buildings is the lesser of 30 years or the remaining life of the underlying building; between one and five years for machinery and equipment, including product tooling and manufacturing process equipment; and the shorter of lease term or useful life for leasehold improvements. Capitalized costs related to internal-use software are amortized on a straight-line basis over the estimated useful lives of the assets, which range from three to five years. Depreciation and amortization expense on property and equipment was $11.3 billion, $9.3 billion and $8.2 billion during 2019, 2018 and 2017, respectively. Google Inc. (Alphabet Inc.) a CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) The above consolidated statements of cash flows should be read in conjunction with the accompanying notes. Apple Inc. Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) \begin{tabular}{|c|c|c|c|} \hline \begin{tabular}{l} Years ended \\ Net sales: \end{tabular} & September 28, 2019 & September 29, 2018 & September 30, 2017 \\ \hline Products & 213,883 & 225,847 & 196,534 \\ \hline Services & 46,291 & 39,748 & 32,700 \\ \hline Total net sales & 260,174 & 265,595 & 229,234 \\ \hline \multicolumn{4}{|l|}{ Cost of sales: } \\ \hline Products & 144,996 & 148,164 & 126,337 \\ \hline Services & 16,786 & 15,592 & 14,711 \\ \hline Total cost of sales & 161,782 & 163,756 & 141,048 \\ \hline Gross margin & 98,392 & 101,839 & 88,186 \\ \hline \multicolumn{4}{|l|}{ Operating expenses: } \\ \hline Research and development & 16,217 & 14,236 & 11,581 \\ \hline Selling, general and administrative & 18,245 & 16,705 & 15,261 \\ \hline Total operating expenses & 34,462 & 30,941 & 26,842 \\ \hline Operating income & 63,930 & 70,898 & 61,344 \\ \hline Other income (expense), net & 1,807 & 2,005 & 2,745 \\ \hline Income before provision for income taxes & 65,737 & 72,903 & 64,089 \\ \hline Provision for income taxes & 10,481 & 13,372 & 15,738 \\ \hline Net income & 55,256 & 59,531 & 48,351 \\ \hline \multicolumn{4}{|l|}{ Earnings per share: } \\ \hline Basic & 11.97 & 12.01 & 9.27 \\ \hline Diluted & 11.89 & 11.91 & 9.21 \\ \hline \multicolumn{4}{|l|}{ Shares used in computing earnings per share: } \\ \hline Basic & 4,617,834 & 4,955,377 & 5,217,242 \\ \hline Diluted & 4,648,913 & 5,000,109 & 5,251,692 \\ \hline \end{tabular} Year Ended December 31 Operating activities Net income 2017 Adjustments: Depreciation and impairment of property and equipment Amortization and impairment of intangible assets Stock-based compensation expense Deferred income taxes (Gain) loss on debt and equity securities, net Other $12,662 Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable Income taxes, net Other assets Accounts payable Accrued expenses and other liabilities Accrued revenue share Deferred revenue Net cash provided by operating activities Investing activities Purchases of property and equipment Purchases of marketable securities Maturities and sales of marketable securities Purchases of non-marketable investments Maturities and sales of non-marketable investments Acquisitions, net of cash acquired, and purchases of intangible assets Proceeds from collection of notes receivable Other investing activities Net cash used in investing activities 2018 2019 $34,343 6,103 8,164 10,856 812 7,679 87 , 258 9,353 925 778 173 (6,650) (2,798) (189) (592) 294 (3,768) (2,169) (4,340) (3,128) 8,21 (2,251) (621) (1,207) 428 731 1,067 7,170 4,891 8,614 1,273 955 483 37520 39037,091 37147,971 3754,520(23,548) (25,139) (100,315) (50,158) 97,825 48,507 (1,932) (1,745) (2,073) 405 (287) (1,491) (2,515) 1,419 (1,491) 0 (2,515) 0 Financing activities Net payments related to stock-based award activities Repurchases of capital stock Proceeds from issuance of debt, net of costs Repayments of debt Proceeds from sale of interest in consolidated entities Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental disclosures of cash flow information Cash paid for taxes, net of refunds \begin{tabular}{rr} 98 & 589 \\ (28,504) & (29,491) \end{tabular} (4,166) (4,993) (4,765) (18,396) (4,846) (9,075) 317 (4,377) (6,827) (585) Supplemental disclosures of cash flow information Cash paid for taxes, net of refunds $ 6,191 s 5,671 8,203
