Chapter Two
Financial Analysis
Exercise
1. The following statements show shows Apple’s comparative income statements prepared
similarly to comparative balance sheets.
APPLE INC.
Comparative Balance Sheets
September 26, 2015, and September 27, 2014
$ millions 2015 2014
Assets
Cash and cash equivalents $ 21,120 $ 13,844
Short-term marketable securities 20,481 11,233
Accounts receivable, net 16,849 17,460
Inventories 2,349 2,111
Deferred tax assets 5,546 4,318
Vendor non-trade receivables 13,494 9,759
Other current assets 9,539 9,806
Total current assets 89,378 68,531
Long-term marketable securities 164,065 130,162
Property, plant and equipment, net 22,471 20,624
Goodwill 5,116 4,616
Acquired intangible assets, net 3,893 4,142
Other assets 5,556 3,764
Total assets $290,479 $231,839
Liabilities
Accounts payable $ 35,490 $ 30,196
Accrued expenses 25,181 18,453
Deferred revenue 8,940 8,491
Commercial paper 8,499 6,308
Current portion of long-term debt 2,500 0
Total current liabilities 80,610 63,448
Deferred revenue—noncurrent 3,624 3,031
Long-term debt 53,463 28,987
Other noncurrent liabilities 33,427 24,826
Total liabilities 171,124 120,292
Stockholders’ Equity
Common stock 27,416 23,313
Retained earnings 92,284 87,152
Accumulated other comprehensive income (345) 1,082
Total stockholders’ equity 119,355 111,547
Total liabilities and stockholders’ equity $290,479 $231,839
APPLE INC.
Comparative Income Statements
For Years Ended September 26, 2015, and September 27, 2014
$ millions, except per share 2015 2014
Net sales $233,715 $182,795
Cost of sales 140,089 112,258
Gross margin 93,626 70,537
Research and development 8,067 6,041
Selling, general and administrative 14,329 11,993
Total operating expenses 22,396 18,034
Operating income 71,230 52,503
Other income, net 1,285 980
Income before provision for income taxes 72,515 53,483
Provision for income taxes 19,121 13,973
Net income $ 53,394 $ 39,510
Basic earnings per share $ 9 28 $ 6 49
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Required
a) Determine the comparative and common size analysis for Apple INC.
b) Compute all the ratio analysis for the company and interpret the result of the analysis
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