Your answer is partially correct. Try again. Compute the dollar amount of change and the percentage change in inventories between 2014 and 2015. Compute inventory as a percentage of current assets at September 26, 2015. (Enter dollar amount in millions. Enter all amounts as positive values. Round percentage answers to one decimal place, e.g. 15.2%.) Dollar change in inventories between 2014 and 2015 238 million increase Percentage change in inventories between 2014 and 2015 Inventory as a percentage change of current assets x Your answer is incorrect. Try again. How does Apple value its inventories? Inventories are valued at J of cost or market. LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Which inventory cost flow method does Apple use? (See Notes to the Financial Statements.) method. LINK TO TEXT LINK TO TEXT Your answer is correct. What is the cost of sales (cost of goods sold) reported by Apple for 2015, 2014, and 2013? (Enter your answer Apple (in millions) 2015 2014 2013 Cost of Goods Sold 140089 140089 112258 2258 106606 LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Compute the percentage of cost of sales to net sales in 2015. (Round answer to 1 decimal place, e.g. 15.2%.) Percentage of cost of sales CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 26, 2015 $ 233,715 140,089 93,626 Years ended September 27, 2014 $ 182,795 112,258 70,537 September 28, 2013 $ 170,910 106,606 64,304 Net sales Cost of sales Gross margin Operating expenses: Research and development Selling, general and administrative Total operating expenses Operating income Other income/expense), net Income before provision for income taxes Provision for income taxes Net income 8,067 14,329 22,396 71,230 1,285 72,515 19,121 53,394 6,041 11,993 18,034 52,503 980 53,483 13,973 39,510 4,475 10,830 15,305 48,999 1,156 50,155 13,118 37,037 $ $ $ Earnings per share: Basic Diluted 9.28 9.22 $ $ 6.49 6.45 $ $ 5.72 5.68 Shares used in computing earnings per share: Basic Diluted 5,753,421 5,793,069 6,085,572 6,122,663 6,477,320 6,521,634 Cash dividends declared per share $ 1.98 $ 1.82 $ 1.64 CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 26, 2015 September 27, 2014 ASSETS: $ $ 13,844 11,233 17,460 2,111 4,318 9,759 Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $82 and $86, respectively Inventories Deferred tax assets 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 assets Total assets 9,806 21,120 20,481 16,849 2,349 5,546 13,494 9,539 89,378 164,065 22,471 5,116 3,893 5,556 290,479 68,531 130,162 20,624 4,616 4,142 3,764 231,839 $ $ LIABILITIES AND SHAREHOLDERS' EQUITY: $ 30,196 18,453 8,491 6,308 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 Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,578,753 and 5,866,161 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income Total shareholders' equity Total liabilities and shareholders' equity 35,490 25,181 8,940 8,499 2,500 80,610 3,624 53,463 33,427 171,124 63,448 3,031 28,987 24,826 120,292 27,416 92,284 (345) 119,355 290,479 23,313 87,152 1,082 111,547 231,839 $ $ See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Accumulated Common Stock and Other Total Additional Paid-In Capital Retained Comprehensive Shareholders' Shares Amount Earnings Income/(Loss) Equity 6,574,458 $ 16,422 $ 101,289 $ 499 $ 118,210 37,037 O 37,037 0 (970) (970) 0 (10,676) (10,676) (328,837) 0 (22,950) 0 (22,950) 2,253 0 2,253 48,873 (143) (444) 0 (587) 1,232 1,232 Balances as of September 29, 2012 Net income Other comprehensive income/loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 28, 2013 Net income Other comprehensive income/(loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 27, 2014 6,294,494 19,764 123,549 104,256 39,510 (471) 0 1,553 39,510 1,553 (11,215) (45,000) 2,863 (11,215) (45,000) 0 (488,677) 2,863 ooooo 60,344 (49) (399) (448) 735 23,313 735 111,547 5,866,161 87,152 1,082 5,866,161 23,313 1,082 111,547 0 87,152 53,394 0 (11,627) (36,026) (1,427) 0 0 0 3,586 Balances as of September 27, 2014 Net income Other comprehensive income/(loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 26, 2015 53,394 (1,427) (11,627) (36,026) 3,586 (325,032) O 37,624 (231) (609) (840) 748 748 119,355 5,578,753 $ 27,416 $ 92,284 $ (345) $ See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 26, September 27, September 28, 2015 2014 2013 $ 13,844 $ 14,259 $ 10,746 53,394 39,510 37,037 11,257 3,586 1,382 7,946 2,863 2,347 6,757 2,253 1,141 (4,232) (76) (2,220) 167 Cash and cash equivalents, beginning of the year Operating activities: Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense 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 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 Other Cash used in investing activities 611 (238) (3,735) (179) 5,400 1,042 8,746 81,266 (2,172) (973) 223 1,080 2,340 1,459 4,521 53,666 5,938 1,460 6,010 59,713 (166,402) 14,538 107,447 (343) (11,247) (241) (26) (56,274) (217,128) 18,810 189,301 (3,765) (9,571) (242) 16 (22,579) (148,489) 20,317 104,130 (496) (8,165) (911) (160) (33,774) 543 749 Financing activities: Proceeds from issuance of common stock Excess tax 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 term debt, net Change in commercial paper, net Cash used in financing activities Increase/(decrease) in cash and cash equivalents Cash and cash equivalents, end of the year Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 530 701 (1,082) (10,564) (22,860) 16,896 730 739 (1,158) (11,126) (45,000) 11,960 6,306 (37,549) (415) 13,844 $ (1,499) (11,561) (35,253) 27,114 2,191 (17,716) 7,276 21,120 $ (16,379) 3,513 14,259 $ $ $ 13,252 $ 514 $ 10,026 $ 339 $ 9,128 0 Your answer is partially correct. Try again. Compute the dollar amount of change and the percentage change in inventories between 2014 and 2015. Compute inventory as a percentage of current assets at September 26, 2015. (Enter dollar amount in millions. Enter all amounts as positive values. Round percentage answers to one decimal place, e.g. 15.2%.) Dollar change in inventories between 2014 and 2015 238 million increase Percentage change in inventories between 2014 and 2015 Inventory as a percentage change of current assets x Your answer is incorrect. Try again. How does Apple value its inventories? Inventories are valued at J of cost or market. LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Which inventory cost flow method does Apple use? (See Notes to the Financial Statements.) method. LINK TO TEXT LINK TO TEXT Your answer is correct. What is the cost of sales (cost of goods sold) reported by Apple for 2015, 2014, and 2013? (Enter your answer Apple (in millions) 2015 2014 2013 Cost of Goods Sold 140089 140089 112258 2258 106606 LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Compute the percentage of cost of sales to net sales in 2015. (Round answer to 1 decimal place, e.g. 15.2%.) Percentage of cost of sales CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 26, 2015 $ 233,715 140,089 93,626 Years ended September 27, 2014 $ 182,795 112,258 70,537 September 28, 2013 $ 170,910 106,606 64,304 Net sales Cost of sales Gross margin Operating expenses: Research and development Selling, general and administrative Total operating expenses Operating income Other income/expense), net Income before provision for income taxes Provision for income taxes Net income 8,067 14,329 22,396 71,230 1,285 72,515 19,121 53,394 6,041 11,993 18,034 52,503 980 53,483 13,973 39,510 4,475 10,830 15,305 48,999 1,156 50,155 13,118 37,037 $ $ $ Earnings per share: Basic Diluted 9.28 9.22 $ $ 6.49 6.45 $ $ 5.72 5.68 Shares used in computing earnings per share: Basic Diluted 5,753,421 5,793,069 6,085,572 6,122,663 6,477,320 6,521,634 Cash dividends declared per share $ 1.98 $ 1.82 $ 1.64 CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 26, 2015 September 27, 2014 ASSETS: $ $ 13,844 11,233 17,460 2,111 4,318 9,759 Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $82 and $86, respectively Inventories Deferred tax assets 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 assets Total assets 9,806 21,120 20,481 16,849 2,349 5,546 13,494 9,539 89,378 164,065 22,471 5,116 3,893 5,556 290,479 68,531 130,162 20,624 4,616 4,142 3,764 231,839 $ $ LIABILITIES AND SHAREHOLDERS' EQUITY: $ 30,196 18,453 8,491 6,308 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 Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,578,753 and 5,866,161 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income Total shareholders' equity Total liabilities and shareholders' equity 35,490 25,181 8,940 8,499 2,500 80,610 3,624 53,463 33,427 171,124 63,448 3,031 28,987 24,826 120,292 27,416 92,284 (345) 119,355 290,479 23,313 87,152 1,082 111,547 231,839 $ $ See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Accumulated Common Stock and Other Total Additional Paid-In Capital Retained Comprehensive Shareholders' Shares Amount Earnings Income/(Loss) Equity 6,574,458 $ 16,422 $ 101,289 $ 499 $ 118,210 37,037 O 37,037 0 (970) (970) 0 (10,676) (10,676) (328,837) 0 (22,950) 0 (22,950) 2,253 0 2,253 48,873 (143) (444) 0 (587) 1,232 1,232 Balances as of September 29, 2012 Net income Other comprehensive income/loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 28, 2013 Net income Other comprehensive income/(loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 27, 2014 6,294,494 19,764 123,549 104,256 39,510 (471) 0 1,553 39,510 1,553 (11,215) (45,000) 2,863 (11,215) (45,000) 0 (488,677) 2,863 ooooo 60,344 (49) (399) (448) 735 23,313 735 111,547 5,866,161 87,152 1,082 5,866,161 23,313 1,082 111,547 0 87,152 53,394 0 (11,627) (36,026) (1,427) 0 0 0 3,586 Balances as of September 27, 2014 Net income Other comprehensive income/(loss) Dividends and dividend equivalents declared Repurchase of common stock Share-based compensation Common stock issued, net of shares withheld for employee taxes Tax benefit from equity awards, including transfer pricing adjustments Balances as of September 26, 2015 53,394 (1,427) (11,627) (36,026) 3,586 (325,032) O 37,624 (231) (609) (840) 748 748 119,355 5,578,753 $ 27,416 $ 92,284 $ (345) $ See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 26, September 27, September 28, 2015 2014 2013 $ 13,844 $ 14,259 $ 10,746 53,394 39,510 37,037 11,257 3,586 1,382 7,946 2,863 2,347 6,757 2,253 1,141 (4,232) (76) (2,220) 167 Cash and cash equivalents, beginning of the year Operating activities: Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense 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 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 Other Cash used in investing activities 611 (238) (3,735) (179) 5,400 1,042 8,746 81,266 (2,172) (973) 223 1,080 2,340 1,459 4,521 53,666 5,938 1,460 6,010 59,713 (166,402) 14,538 107,447 (343) (11,247) (241) (26) (56,274) (217,128) 18,810 189,301 (3,765) (9,571) (242) 16 (22,579) (148,489) 20,317 104,130 (496) (8,165) (911) (160) (33,774) 543 749 Financing activities: Proceeds from issuance of common stock Excess tax 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 term debt, net Change in commercial paper, net Cash used in financing activities Increase/(decrease) in cash and cash equivalents Cash and cash equivalents, end of the year Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 530 701 (1,082) (10,564) (22,860) 16,896 730 739 (1,158) (11,126) (45,000) 11,960 6,306 (37,549) (415) 13,844 $ (1,499) (11,561) (35,253) 27,114 2,191 (17,716) 7,276 21,120 $ (16,379) 3,513 14,259 $ $ $ 13,252 $ 514 $ 10,026 $ 339 $ 9,128 0