Question

Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 28, September 29, September 30, 2019 2018 2017 55,256 $ 59,531 $ 48,351 Net income Other comprehensive income/loss): Change in foreign currency translation, net of tax (408) (525) 224 (661) 523 1,315 Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivatives Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on derivative instruments 23 382 (1,477) (638) 905 (162) 3,802 (3,407) (782) Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities Adjustment for net (gains)/losses realized and included in net income Total change in unrealized gains/losses on marketable securities 25 (64) 3,827 (3,406) (846) Total other comprehensive income/loss) Total comprehensive income 2,781 58,037 (3,026) 56,505 S S (784) 47,567 $ See accompanying Notes to Consolidated Financial Statements.
Choose annual report of the APPLE Inc to gain a general understanding of the company's primary business segments and products. Write a report addressing the following questions based on your research. What products or services are provided by the company? How does the financial information provided in the annual report (focus on the income statement) differ from financial information used for managerial accounting purposes? As a manager making business decisions within the company, what additional information would you need? (Remember that the income statement may be referred to using different terminology such as statement of earnings or statement of operations.)

Answer 1

The primary products being manufactured and sold by the company are smartphones, personal computers, tablets, wearables and accessories. The company sells a host of services along with these products. The main brands being sold are iPhone, Mac, iPad, AirPods, Apple TV, Apple Watch, Beats products etc. In terms of services Apple sells digital content stores and streaming services, fee based coverage for protection of devices (under the name AppleCare), icloud, licensing and other services.

The financial statements provided in the annual report differ from the financial information used for managerial accounting purposes. For instance the income statement in the annual report will shed light on the company’s revenue and its different expenses over a period of time (it is one year in case of an annual report). This provides information on the company’s financial performance over a period of time. On the other hand the financial information used for managerial accounting purposes emphasizes on inside information received through financial accounting. For instance the income statement provides information about revenue generation the managerial accounting information will use this information to determine top-line growth trends on a segment wise basis, do a comparative analysis, make flexible budgets etc.

As a manager making business decisions I will need additional information like required rate of return, cost of capital, growth rate (all these for capital budgeting purposes), activity and spending variances (for the purpose of making flexible budgets), and other such information that will be derived from income statement, balance sheet and cash flow statement.