Focus on Financials Apple Inc.
LO 1, 2, 3, 4, 5
(Learning Objectives 1, 2, 3, 4, 5: Calculate standard financial ratios; measure liquidity and profitability; analyze earnings quality; vertical and horizontal analysis) Use the consolidated financial statements and the data in Apple Inc.’s annual report in Appendix A and online in the filings section of www.sec.gov to evaluate the company’s comparative performance for 2016 versus 2015.
Requirements
1. Perform a horizontal and a vertical analysis of the following information on the company’s comparative income statements for 2016 and 2015:
a. Net sales
b. Gross margin
c. Operating income
d. Net income
Did the company appear to be performing better or worse on these dimensions in 2016, relative to 2015? Explain.
2. Perform horizontal and vertical analysis of the company’s balance sheets for 2016 and 201 5. In what areas did the company’s balance sheet appear to be improving? Deteriorating? Explain.
3. Calculate the trends in the major elements of the company’s
4. Describe the information in Apple’s annual report that can be used to analyze the company’s earnings quality. What is your overall evaluation of Apple’s earnings quality?
Want to see the full answer?
Check out a sample textbook solutionChapter 12 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
- Ay 1. Using your financial analysis of Gap Clothing company, Refer to the Annual Reports located in the Class Resources. You will use information in the Form 10-K to complete this assignment. Using the correct formulas and a separate tab for each analysis, calculate the following ratios using Microsoft Excel: Three liquidity ratios for the past 2 years Three solvency ratios for the past 2 years Three profitability ratios for the past 2 yearsarrow_forwardEvaluation: Financial Statements Analysis and Interpretations Instructions: 1. Using the provided data below, prepare a Statement of Financial Position - Vertical Analysis. 2. Compute for the following financial ratios and provide interpretation for each item. a. Current Ratio b. Working Capital c. Debt-to-Equity Ratio d. Debt Ratio e. Asset Turnover Ratio 3. You may use any desired business name. 4. Use the space provided for your answer. Given: 2017 2016 P 358,950.00 P 184,560.00 P 365,450.00 P 450,355.00 P 252,260.00 P 653,550.00 P 300,000.00 P 800,000.00 P 943,105.00 P 65,000.00 P 277,145.00 P 68,505.00 P 285,000.00 P 235,000.00 P 345,650.00 P 745,000.00 P 150,000.00 P 700,000.00 P 800,000.00 85,000.00 Accounts Payable Accrued Expenses Accounts Receivable Cash Inventory Fixed Assets Marketable Securities Mortgage Payable Owner's Capital Prepaid Insurancearrow_forwardS15-7 Computing rate of return on total assets Godhi's 2014 financial statements reported the following items-with 2013 figures given for comparison: Learning GODHI, INC. Balance Sheet As of December 31, 2014 and 2013 2014 2013 $ 33,538 $ 29,562 Total Assets 17,100 14,962 Total Liabilities Total Stockholders' Equity (all common) 16,438 14,600 $ 33,538 $ 29,562 Total Liabilities and Stockholders' Equity Net income for 2014 was $3,890 and interest expense was $210. Compute Godhi's rate of return on total assets for 2014. (Round to the nearest percent.)arrow_forward
- SOUTH EAST-ASIA INSTITUTE OF TRADE AND TECHNOL0GY LL LEARNING MODULE FOR 1 SEMESTER GRADE 12 BUSINESS FINANCE STUDENT'S NAME: STRAND & SECTION: PART 4: ACTIVITY/APPLICATION Suppose: The following income Statements and Cash Flow Statements of company A, B and C were presented to you. Which do you think is a more attractive company? Why? O STAED rasoplastarrow_forwardAssignment 1 : Select a company. It is advised to choose the organization ( if it is listed ) where you are employed for this assignment. If your organization is not listed you may choose any other listed company from your industry or related industry. · Download last 3 years annual report. · Compute the financial ratios for last 3 years and see the trend [ Profitability ratios, Liquidity ratios, Activity Ratios, Financing Ratios, and Market Ratios ] . You need to do this exercise on an excel file. · Provide explanation on the strategic implications of these ratios on your company ’ s financial standing and strategy. You may explain in 2 - 3 lines for each category of ratios. [ Profitability ratios, Liquidity ratios, Activity Ratios, Financing Ratios, and Market Ratios ] . Use the same company as the one mentioned in Assignment 1 . • Part A: Strategic Analysis • Conduct a strategic analysis using PESTLE and Porter ’ s 5 forces tools for understanding the…arrow_forwardSpecialty Department Stores chief executive officer (CEO) has asked you to compare the company's profit performance and financial position with the average for the industry. The CEO has given you the company's income statement and balance sheet, as well as the industry average data for retailers. Assets \table[[Current assets, %,.71.1%arrow_forward
- Financial Statements Analysis and Interpretations Instructions: 1. Using the provided data below, prepare a Statement of Financial Position - Vertical Analysis. 2. Compute for the following financial ratios and provide interpretation for each item. a. Current Ratio b. Working Capital c. Debt-to-Equity Ratio d. Debt Ratio e. Asset Turnover Ratio 3. You may use any desired business name. 4. Use the space provided for your answer. Given: 2017 2016 P 358,950.00 P 184,560.00 P 365,450.00 P 450,355.00 P 252,260.00 P 653,550.00 P 300,000.00 P 600,000.00 P 943,105.00 P 65,000.00 P 277,145.00 P 68,505.00 P 285,000.00 P 235,000.00 P 345,650.00 P 745,000.00 P 150,000.00 P 700,000.00 P 800,000.00 Accounts Payable Accrued Expenses Accounts Receivable Cash Inventory Fixed Assets Marketable Securities Mortgage Payable Owner's Capital Prepaid Insurance 85,000.00arrow_forwardThe Accountant of All is Well Enterprise who is an HND Graduate prepared a trend report for his CEO who is a non accountant and required your assistance to provide a seasoned analysis with explanatory comments on the Statement of Financial Position from 2009 to 2013 as shown below. TREND ANALYSIS 2009-10 2010-11 2011-12 2012-13 2009-10 2010-11 2011-12 2012-13 GHC GHC GHC GHC % % % % CURRENT ASSETS CASH 200 240 400 220 100 120 200 110 BANK 260 300 200 240 100 115 76.9 92 DEBTORS 400 600 1000 1600 100 150 250 400 STOCK 800 1200 1800 2000 100 150 225 250 NON CURENT ASSETS Building 1000 1200 1200 1200 100 120 120 120 Plant and Machinery 2000 2400 2400 2800 100 120 120 140 4660 5940 7000 8060 100.00 127 150 173 Required; As a financial analyst you are required to produce a detailed commentary on the TREND shown in the statement of financial position above.arrow_forwardProblem 1: Viance Queen Company Required: Compute for the company’s profitability and operating efficiency ratios for 2019 Compute for the financial health ratios of the company for 2019 A.Profitability ratio a.Gross Profit Ratio b. Operating income margin c. Net profit margin d. Return on Assets: ROA (NI/Total Assets) ROA (NI/Average Assets) ROA (EBIT/Total Assets) ROA (EBIT/Average Assets) ROE (NI/Capital) ROE (NI/Average Capital B.Operating Efficiency a. Asset Turnover b. Fixed Asset Turnover c. Inventory Turnover d. Days in Inventory e. AR Turnover f. Days in AR C.Financial Health/ (Solvency and Liquidity) Solvency ratio: a. Debt to equity ratio b. Debt Ratio c. Equity Ratio d. Interest Coverage Ratio Liquidity ratio: a. Current Ratio b. Quick Ratioarrow_forward
- TASK 6 FINANCIAL RATIOS Required: a. Compute for the company's profitability and operating efficiency ratios in 2014. b. Compute for the financial health ratios of the company in 2014 and 2013. Very Berry Company Very Berry Company Statement of Comprehensive Income Statement of financial Position For the year ended December 31 For the year ended December 31 2014 2013 2014 2013 Cash 400,000 180,000 Short-term Investments 5,600,000 1,800,000 Sales 10,040,000 8,760,000 5,860,000 2,800,000 1,680,000 1,480,000 1,380,000 8,860,000 Accounts Receivable 1,060,000 Cost of Goods Sold 5,680,000 4,360,000 1,160,000 Inventory 1,640,000 Gross Profit Other Current Assets 4,680,000 Operating Expenses Operating Income Interest Expense Total Current Assets 10,860,000 5,040,000 1,20,000 Equipment 6,800,000 5,200,000 10,240,000 3,200,000 100,000 28,000 Total Assets 17,660,000 3,100,000 1,192,000 Accounts Payable Notes Payable – long term Owner, Capital Total Liabilities and Capital Net Income 6,660,000…arrow_forwardIdentifying Key Numbers from Financial Statements Access Apple Inc.'s 10-K provided on SEC's EDGAR database for financial reports (www.sec.gov). Click link to access a copy of Apple's 2020 10-K: View Apple's 201 What are Apple's dollar amounts for assets, liabilities, and equity at September 26, 2020? Confirm that the accounting equation holds in this case. $ Assets 365,725 x Liabilities + $ 258,578 * $ Equity 107,147 x Round to one decimal place (i.e. 34.5%) What percent of Apple's assets is financed from creditor financing sources? 70.7 X %arrow_forwardSales SOLVE IT ON MS EXCEL or GOOGLE SPREADSHEET (please send the file) Ziegen, Inc. Income Statement for 2013 Make a Proforma Income Statement and ProForma Balance Sheet using the Financial Planning attached. Use 15% as the Sales Growth Rate of the 2013 base year, all other data remain the same. Net Income Ziegen, Inc. Balance Sheet for 2013 Current assets Net fixed assets Total Total Accounts payable Accrued expenses Notes payable Current liabilities Long-term debt Total liabilities Common stock (par) Paid-in capital Retained earnings Common equity $10,000,000 $ 500,000 $ 2,000,000 4,000,000 $ 6,000,000 $ 1,000,000 1,000,000 500,000 $ 2,500,000 2,000,000 $ 4,500,000 100,000 200,000 1,200,000 $ 1,500,000 $6,000,000 Calculation $.5m/$10m = Calculation $2m/$10m = $4m/$10m = $1m/$10m = $1m/$10m = Ziegen, Inc. Pro Forma Income % of 2013 Sales Statement for 2014 5.0% % of 2013 Sales 20.0% 40.0% 10.0% 10.0% NAª NA NA" NA" Calculation 20% Sales growth rate = Sales Net Income Ziegen, Inc. Pro…arrow_forward
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage