Question

AA 6-1 Company Analysis LO C2, A3

Use Apple's financial statements in Appendix A to answer the following.

Required:

1. What amount of inventories did Apple report as a current asset (a) on September 30, 2017? (b) On September 24, 2016?

2. Inventories make up what percent of total assets (a) on September 30, 2017? (b) On September 24, 2016?

3. Assuming Apple has enough inventory to meet demand, does Apple prefer inventory to be a lower or higher percentage of total assets?

4. Compute (a) inventory turnover for fiscal year ended September 30, 2017, and (b) days' sales in inventory as of September 30, 2017 .

Answer 1

	Answer-1 :	Inventories reported by Apple Inc., as a current asset
			Amount
		September 30, 2017	$ 4,855 millions
		September 24, 2017	$ 2,132 millions
	Answer-2 :	Inventories as a percentage of Total Assets
	Particulars	September 30, 2017	September 24, 2017
	Inventories	$ 4,855 millions	$ 2,132 millions
	Total Assets	$ 375,319 millions	$ 321,686 millions
	Percent of inventory as total of sales	1.29%	0.66%
	Answer-4 :
	PARTICULARS		Amt in millions
	Average inventory                   =	(4855+2132)/2         =	$                 3,493.50
	Cost of Goods sold	=	$              141,048.00
a	Inventory Turnover ratio on Sep 30	0.025 times
b	Days in Sales Inventory	12.56 days

Answer- 3

The cost of goods sold for the period ending September30, 2017, is $ 141,048 million which means it is the total demand for the period, whereas the closing inventory for the same period was $ 4,855 million which means the inventory is lower than the demanded supply, if the company increases the inventory level then it leads to higher percentage of TOTAL ASSETS