Your parents are considering Investing in Apple Inc common stock They ask you, as an accounting expert, to make an analysis of the company for them Financial statements of Apple are presented in Appendix A The complete annual report, including the notes to its financial statements, is available at the company's website Click here to view Appendix A Answer the following questions, Make a 5 year trend analysis, using 2013 as the base year, of (1) net sales and (2) net income (Round percentages to O decimal places, eg 15 and enter amounts in millions ) APPLE INC Trend Analysis of Net Sales and Net Earnings For the Five Years Ended 2017 2016 2015 2017 $ (1) Net saps Trend (2) Net Incomes Trend e Textbook and Media Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned (Round percentages to decimal places, 68 15 and times to 1 decimal place, eg 15 2 ) Your parents are considering investing in Apple Inc common stock They ask you, as an accounting expert, to make an analysis of the company for them Financial statements of Apple are presented in Appendix A The complete annual report, including the notes to its financial statements, is available at the company's website Click here to view Appendix A Answer the following questions income (Round percentages to O decimal places, eg 15 and enter Make a 5 year trend analysis, using 2013 as the base year, of amounts in millions ) es and Net Earnings 2017 2016 2013 e Textbook and Media Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned (Round percentages to decimal places 68 15 and times to 1 decimal place, e g 15 2 ) Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned (Round percentages to decimal places, eg 15 and times to 1 decimal place, e g 15 2 ) 2017 2016 Debt to Assets Ratio Times Interest Earned times times eTextbook and Media Compute for 2017 and 2016 the (1) profit margin, (2) asset turnover (3) return on assets, and (4) return on common stockholders' equity Total assets at September 26, 2015, were $290,345 million and total stockholders' equity at September 26, 2015, was $119,355 million (Round Percentages to 1 decimal places, es 15 2 and all other answers to 2 decimal places e 15 25) 2016 Profit Margin Asset Turnover times times Return on Assets Return on Common Stockholders' Equity e Textbook and Media Apple Inc CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except number of shares which are reflected in thousands and per share amounts) September 30, 2017 229,234 141,048 88 186 $ Years ended September 24, 2016 215,639 131 376 84 263 Net sales Cost of sales Gross margin September 26, 2015 1 233,715 140 089 93 626 10 045 Operating expenses Research and development Selling, general and administrative Total operating expenses 8,067 14,329 22,396 24,239 61,344 Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Net Income 60,024 1 348 01,372 71,230 1 285 72,615 19 121 53,394 1918 15,685 45,687 $ Earnings per share Basic Diluted 35 $ 9 28 9 22 to Shares used in computing eamings per share Basic Diluted 5,470,820 5,500 281 5,251,692 5,753,421 5,793,069 Cash dividends declared per share 1 00 1 98 See accompanying Notes to Consolidated Financial Statements Apple Inc Apple Inc CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Years ended September 24 September 30, September 26 48,351 $ 45,687 53 394 Net income Other comprehensive income (loss) Change in foreign currency translation, net of tax effects of $(77) $8 and $201 respectively 224 (411) Change in unrealized gains losses on derivative Instruments Change in fair value of derivatives, net of tax benefi(expense) of $(478), 5(7) and S(441), respectively Adjustment for net (gains Mosses realized and included in net income, net of tax expense benefit of $475, $131 and 5630, respectively Total change in unrealized gainslosses on derivative Instruments, net of tax 1 315 2,905 (1,477) (162) (741) (734) (3 497) (592) Change in unrealized gains losses on marketable securities Change in fair value of marketable securities, net of tax benefit (expense of $425, 8(863) and $264, respectively Adjustment for not (gainalossos realized and included in net income, net of tax expense benefit of $35, 8(31) and S(32), respectively Total change in unrealized gainalosses on marketable securities, net of tax (782) 1 582 (483) (64) (846) 59 1 638 (424) Total other comprehensive income foss) Total comprehensive income (784) 47,567 979 46,666 (1 427) 51 967 $ See accompanying Notes to Consolidated Financial Statements Apple Inc CONSOLIDATED BALANCE SHEETS (in millions, except number of shares which are reflected in thousands and par value) September 30, 2017 September 24, 2016 Apple Inc CONSOLIDATED BALANCE SHEETS (in Millions, except number of shares which are reflected in thousands and par value) September 30, Sep 2017 September 24, 2016 ASSETS $ 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 20,289 53,892 17,874 4,855 17 799 13,936 128,645 20 484 46,671 15 754 2,132 13,545 8,283 106,869 Long term marketable securities Property, plant and equipment, net Goodwill Acquired intangible assets, net Other non current assets Total assets 194,714 33,783 5,717 2 298 10,162 375,319 170,430 27 010 5,414 3 206 8,757 321,686 $ LIABILITIES AND SHAREHOLDERS' EQUITY $ Current liabilities Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long term debt Total current liabilities 49,049 25 744 7,548 11,977 6,496 100,814 37,294 22 027 8,080 8,105 3,500 79 006 2 888 LIABILITIES AND SHAREHOLDERS' EQUITY $ Current liabilities Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long term debt Total current liabilities 49,049 25,744 7,548 11,977 6,496 100,814 37 294 22,027 8,080 8,105 3,500 79,006 Totalci Deferred revenue, non current Long term debt Other non current liabilities Total liabilities 2,836 97,207 40,415 241,272 2 930 75,427 36,074 193,437 Commitments and contingencies Shareholders' equity Common stock and additional paid in capital, $0 00001 par value 12,600,000 shares authorized 5,126,201 and 5,336,166 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Total liabilities and shareholders' equity 35,867 98,330 (150) 134,047 375,319 31 251 96,364 634 128,249 321,686 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) Common Stock and Additional Pald In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders Equity Shares Amount Apple Inc CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in Millions, except number of shares which are reflected in thousands) Common Stock and Additional Paid in Capital Shares Amount 5,866,161 $ 23,313 Accumulated Other Comprehensive income (Loss) $ Retained Earnings 87,152 53394 1 082 (1 427) Total Shareholders Equity 111,547 53,394 (1 427) (11 627) (36,026) 3 586 (11 627) (36,026) (325 032) 31586 37 624 (231) 16091 (840) 748 5,578,753 27 416 92 284 45,687 119,355 45,687 970 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 om equity awards, including transfer pricing adjustments Balances as of September 26, 2015 Not income Other comprehensive incoma floss) 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 24, 2016 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 (12 138) (29,000) (270 600) (12 188) (20 000) 4 262 42 37 022 (306) (419) 379 31 251 5 336,166 96,364 48,351 379 128 249 48,351 (784) (12,803) (33,001) 4,900 (12,803) (33,001) (246,496) 4,909 4,909 4,909 36,531 (913) (581) (1 494) 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 30, 2017 620 35,867 620 134,047 5 120, 201 $ S 98,330 S (150) See accompanying Notes to Consolidated Financial Statements Apple Inc CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 24, September 30 September 26, 2015 20 484 $ 21 120 $ 13,044 45 7 53,394 10 505 4210 4,938 11 257 3 580 4,840 (166 Cash and cash equivalents, beginning of the year Operating activities Not income Adjustments to reconcile net income to cash generated by operating activities Depreciation and amortization Share based compensation expense Deferred income tax expense Other Changes in operating assets and liabilities Accounts receivable, not 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 matable securities 417 (51) (3,735) (2 093) (2 723) (4 254) (5,318) 9,618 (626) (154) 63,598 1 055 1,837 (1 554) (2 033) 65,824 5 001 1 042 9,058 81 266 (3 735) (283 5 001 1 042 (1 554 9058 65 824 81 266 82 (142,428) 21 258 90,536 (166,402) 14,538 107 447 (343) (11 247) (241) 2017 (12 734) (1 388) 28 (110) 15977) (66 274) Vendor non trade receivables Other current and non current assets (5,318) Accounts payable 9,618 Deferred revenue Other current and non current liabilities Cash generated by operating activities 83,598 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 Payments for strategic investments, net Other Cash used in investing activities Financing activities Proceeds from issuance of common stock Excess tax benefits from equity awards Payments for taxes related to not share settlement of equity awards Payments for dividends and dividend equivalents (12 760) Repurchases of common stock (32,900) Proceeds from issuance of term debt, net 28,662 Repayments of term debt (3 500) Change in commercial paper, net Cash used in financing activities (17,347) increase Decrease in cash and cash equivalents (195) Cash and cash equivalents, end of the year 20 289 Supplemental cash flow disclosure Cash paid for income taxes, net Cash paid for interest See accompanying Notes to Consolidated Financial Statements 107 (1 874) 1 570) (12 150) (20 722) 24 954 (2 500) (307) 543 749 (1,400) (11,561) (35,253) 27 114 3 852 2 191 (17 716) 20 483) (636) 20 484 7 276 21,120 5 1591 10 444 13 252 514

Question

Your parents are considering Investing in Apple Inc  common stock  They ask you, as an accounting expert, to make an analysis of the company for them  Financial statements of Apple are presented in Appendix A  The complete annual report, including the notes to its financial statements, is available at the company's website  Click here to view Appendix A  Answer the following questions, Make a 5 year trend analysis, using 2013 as the base year, of (1) net sales and (2) net income  (Round percentages to O decimal places, eg  15  and enter amounts in millions ) APPLE INC  Trend Analysis of Net Sales and Net Earnings For the Five Years Ended 2017 2016 2015 2017 $ (1) Net saps Trend (2) Net Incomes Trend e Textbook and Media Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned  (Round percentages to decimal places, 68  15  and times to 1 decimal place, eg  15 2 ) Your parents are considering investing in Apple Inc  common stock  They ask you, as an accounting expert, to make an analysis of the company for them Financial statements of Apple are presented in Appendix A  The complete annual report, including the notes to its financial statements, is available at the company's website  Click here to view Appendix A  Answer the following questions  income  (Round percentages to O decimal places, eg  15  and enter Make a 5 year trend analysis, using 2013 as the base year, of amounts in millions ) es and Net Earnings 2017 2016 2013 e Textbook and Media Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned  (Round percentages to decimal places  68  15  and times to 1 decimal place, e g  15 2 ) Compute for 2017 and 2016 the (1) debt to assets ratio and (2) times interest earned  (Round percentages to decimal places, eg  15  and times to 1 decimal place, e g  15 2 ) 2017 2016 Debt to Assets Ratio Times Interest Earned times times eTextbook and Media Compute for 2017 and 2016 the (1) profit margin, (2) asset turnover (3) return on assets, and (4) return on common stockholders' equity  Total assets at September 26, 2015, were $290,345 million and total stockholders' equity at September 26, 2015, was $119,355 million  (Round Percentages to 1 decimal places, es 15 2  and all other answers to 2 decimal places  e  15 25) 2016 Profit Margin Asset Turnover times times Return on Assets Return on Common Stockholders' Equity e Textbook and Media Apple Inc CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except number of shares which are reflected in thousands and per share amounts) September 30, 2017 229,234 141,048 88 186 $ Years ended September 24, 2016 215,639 131 376 84 263 Net sales Cost of sales Gross margin September 26, 2015 1 233,715 140 089 93 626 10 045 Operating expenses  Research and development Selling, general and administrative Total operating expenses 8,067 14,329 22,396 24,239 61,344 Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Net Income 60,024 1 348 01,372 71,230 1 285 72,615 19 121 53,394 1918 15,685 45,687 $ Earnings per share  Basic Diluted 35 $ 9 28 9 22 to Shares used in computing eamings per share  Basic Diluted 5,470,820 5,500 281 5,251,692 5,753,421 5,793,069 Cash dividends declared per share 1 00 1 98 See accompanying Notes to Consolidated Financial Statements  Apple Inc  Apple Inc  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Years ended September 24 September 30, September 26 48,351 $ 45,687 53 394 Net income Other comprehensive income (loss)  Change in foreign currency translation, net of tax effects of $(77) $8 and $201  respectively 224 (411) Change in unrealized gains losses on derivative Instruments  Change in fair value of derivatives, net of tax benefi(expense) of $(478), 5(7) and S(441), respectively Adjustment for net (gains Mosses realized and included in net income, net of tax expense benefit of $475, $131 and 5630, respectively Total change in unrealized gainslosses on derivative Instruments, net of tax 1 315 2,905 (1,477) (162) (741) (734) (3 497) (592) Change in unrealized gains losses on marketable securities  Change in fair value of marketable securities, net of tax benefit (expense of $425, 8(863) and $264, respectively Adjustment for not (gainalossos realized and included in net income, net of tax expense benefit of $35, 8(31) and S(32), respectively Total change in unrealized gainalosses on marketable securities, net of tax (782) 1 582 (483) (64) (846) 59 1 638 (424) Total other comprehensive income foss) Total comprehensive income (784) 47,567 979 46,666 (1 427) 51 967 $ See accompanying Notes to Consolidated Financial Statements  Apple Inc  CONSOLIDATED BALANCE SHEETS (in millions, except number of shares which are reflected in thousands and par value) September 30, 2017 September 24, 2016 Apple Inc  CONSOLIDATED BALANCE SHEETS (in Millions, except number of shares which are reflected in thousands and par value) September 30, Sep 2017 September 24, 2016 ASSETS  $ 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 20,289 53,892 17,874 4,855 17 799 13,936 128,645 20 484 46,671 15 754 2,132 13,545 8,283 106,869 Long term marketable securities Property, plant and equipment, net Goodwill Acquired intangible assets, net Other non current assets Total assets 194,714 33,783 5,717 2 298 10,162 375,319 170,430 27 010 5,414 3 206 8,757 321,686 $ LIABILITIES AND SHAREHOLDERS' EQUITY  $ Current liabilities  Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long term debt Total current liabilities 49,049 25 744 7,548 11,977 6,496 100,814 37,294 22 027 8,080 8,105 3,500 79 006 2 888 LIABILITIES AND SHAREHOLDERS' EQUITY  $ Current liabilities  Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long term debt Total current liabilities 49,049 25,744 7,548 11,977 6,496 100,814 37 294 22,027 8,080 8,105 3,500 79,006 Totalci Deferred revenue, non current Long term debt Other non current liabilities Total liabilities 2,836 97,207 40,415 241,272 2 930 75,427 36,074 193,437 Commitments and contingencies Shareholders' equity  Common stock and additional paid in capital, $0 00001 par value  12,600,000 shares authorized  5,126,201 and 5,336,166 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Total liabilities and shareholders' equity 35,867 98,330 (150) 134,047 375,319 31 251 96,364 634 128,249 321,686 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) Common Stock and Additional Pald In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders Equity Shares Amount Apple Inc  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in Millions, except number of shares which are reflected in thousands) Common Stock and Additional Paid in Capital Shares Amount 5,866,161 $ 23,313 Accumulated Other Comprehensive income (Loss) $ Retained Earnings 87,152 53394 1 082 (1 427) Total Shareholders Equity 111,547 53,394 (1 427) (11 627) (36,026) 3 586 (11 627) (36,026) (325 032) 31586 37 624 (231) 16091 (840) 748 5,578,753 27 416 92 284 45,687 119,355 45,687 970 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 om equity awards, including transfer pricing adjustments Balances as of September 26, 2015 Not income Other comprehensive incoma floss) 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 24, 2016 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 (12 138) (29,000) (270 600) (12 188) (20 000) 4 262 42 37 022 (306) (419) 379 31 251 5 336,166 96,364 48,351 379 128 249 48,351 (784) (12,803) (33,001) 4,900 (12,803) (33,001) (246,496) 4,909 4,909 4,909 36,531 (913) (581) (1 494) 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 30, 2017 620 35,867 620 134,047 5 120, 201 $ S 98,330 S (150) See accompanying Notes to Consolidated Financial Statements  Apple Inc  CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 24, September 30  September 26, 2015 20 484 $ 21 120 $ 13,044 45  7 53,394 10 505 4210 4,938 11 257 3 580 4,840 (166 Cash and cash equivalents, beginning of the year Operating activities  Not income Adjustments to reconcile net income to cash generated by operating activities Depreciation and amortization Share based compensation expense Deferred income tax expense Other Changes in operating assets and liabilities  Accounts receivable, not 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 matable securities 417 (51) (3,735) (2 093) (2 723) (4 254) (5,318) 9,618 (626) (154) 63,598 1 055 1,837 (1 554) (2 033) 65,824 5 001 1 042 9,058 81 266 (3 735) (283 5 001 1 042 (1 554 9058 65 824 81 266 82 (142,428) 21 258 90,536 (166,402) 14,538 107 447 (343) (11 247) (241) 2017 (12 734) (1 388) 28 (110) 15977) (66 274) Vendor non trade receivables Other current and non current assets (5,318) Accounts payable 9,618 Deferred revenue Other current and non current liabilities Cash generated by operating activities 83,598 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 Payments for strategic investments, net Other Cash used in investing activities Financing activities Proceeds from issuance of common stock Excess tax benefits from equity awards Payments for taxes related to not share settlement of equity awards Payments for dividends and dividend equivalents (12 760) Repurchases of common stock (32,900) Proceeds from issuance of term debt, net 28,662 Repayments of term debt (3 500) Change in commercial paper, net Cash used in financing activities (17,347) increase Decrease in cash and cash equivalents (195) Cash and cash equivalents, end of the year 20 289 Supplemental cash flow disclosure Cash paid for income taxes, net Cash paid for interest See accompanying Notes to Consolidated Financial Statements 107 (1 874) 1 570) (12 150) (20 722) 24 954 (2 500) (307) 543 749 (1,400) (11,561) (35,253) 27 114 3 852 2 191 (17 716) 20 483) (636) 20 484 7 276 21,120 5 1591 10 444 13 252 514

Accepted Answer

The Answer is in the image, click to view ...

Question

Your parents are considering Investing in Apple Inc. common stock. They ask you, as an accounting expert, to make an analysis of the company for

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

Intermediate Accounting

Students also viewed these Accounting questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question