Question

I need help with the following.

Re: Apple 2018 Financial Statement

a. Analyze the most recent statement of cash flows for the company. Summarize the results of all three sections; operating, investing, and financing. Describe the companies overall cash position and compare to the previous year.

Note:

using images

(see images attached)

link provided

(see pages 37-65 for reference if needed)

https://s22.q4cdn.com/396847794/files/doc_financials/quarterly/2018/Q4/10-K-2018-(As-Filed).pdf#page40

Apple Inc CONSOLIDATED STATEMENTS OF CASH FLOWS In millions) 2016 Cash and cash equivalents, beginning of the year Adjustments to reconcile net income to cash generated by operatng activites: Defersed income tax expense benefit Other current and non-current iablities Proceeds from maturities of markotable securities Pioceeds from sales of marketable secutties Payments for aoquisition of property, plant and equipment Payments made in connection with business acquisitions, net Cash generated byKused in) investing actviies Proceeds from issuance of common stock Payments for taxes related to nat share setliement of equity awards Pioceeds from issuance of term debt net Cash used in financing activities Increase/Decrease) in cash and cash equivalents Cash and cash equvalents, end of the year 3,022$ 2,092 S Notes to Consolidated Financial Statements. Apple he 1 2018 Fom 10-KI42

Answer 1

As per the above question,I would like to tell you that company is maintaining huge cash flows as compared to past years .

OPERATING:

The company is having an increasing trend in their net income. Here , after looking at the trade recievables , it can be concluded that the company is blocking amount of cash in trade recievables than that of inventory. Secondly, the company is trying to gain a lot of customers by their credit policy. The company is also having a huge variation in its current liabilities , it means that it is maintaining its cash position by taking small term debts or by any other instruments.

As a result the cash is so much increased from the previous years in operating activities.

INVESTING:

After looking towards the investing activities,it can be seen that the company has invested a lot in marketable securities and selling them at their maturities or the case may be . The apple inc. is also investing in plants and business acquisitions for the business expansion as compatible with other years . In other words , company is selling the securities and mainting the cash inflow besides.

FINANCING:

Here the company is issuing its share capital each year but more that the previous year . As the company is investing for expansion, they are taking the money through share capital . The company is also paying high dividends to its shareholders due to issuance of more share capital , but the dividend rate is far low than the previous year of 2016 and 2017 . The above organisation is also preferring issuance of debt to take tax advantage but not as much that of year 2017 , the reason is the burden to repay the debt amount and the interest amount on time . It is also repaying more of its debts so as to maintain its profits more equity driven .

Due to repayment of debts and repurchasing of common stock , the company is having negative cash flows is financing activities as compared to the year 2017 and 2016 .

At last , by looking at the cash flows of all the activities , it can be looked that the company is maintaining a huge cash flow . The reason may be that it is spending too much amount in its daily operations or activities .