Question

Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 28, 2019 Years ended September 29, 2018 September 30, 2017 Net sales: Products $ $ $ Services 2 1 3,8 8 3 46,291 260,1 74 2 2 5,8 4 7 39,7 48 2 6 5,5 95 1 96,5 34 32,700 2 2 9,2 3 4 Total net sales Cost of sales: Products Services Total cost of sales 1.4.4,996 16,78 6 1 61,78 2 98,3 9 2 1 4 8,1 6 4 15,5 9 2 1 6 3,75 6 101,8 39 1 2 6,3 3 7 14,7 1 1 14 1,048 88,1 8 6 Gross margin 16,2 1 7 1 4,2 36 Operating expenses: Research and development Selling, general and administrative Total operating expenses 1 1,581 1 8,2 4 5 16,705 15,261 34,4 6 2 30.9 4 1 26,8 42 63,9 30 Operating income Other income (expense). net 70.8 98 6 1,3 4 4 1,807 2,005 2.7 4 5 Income before provision for Income taxes Provision for income taxes 65.7 3 7 10,4 81 7 2.9 0 3 13,3 7 2 64,0 89 15,7 3 8

Answer 1

Short term solvency or liquidity ratios A Current ratio 1.540 Current Assets Current liabilities 162819 105718 B Quick Ratio 1.501 Current Assets - Inventory Current liabilities = 162819-4106 = 105 718 158713 105 718 C Cash ratio = 0.462 Cash Current liabilities 48844 105718 trade receivable+Other current Notes a Current Assets =Cash and Cash Equivalents+Market Securities+Accounts Receivable+Inventory+vendor =48844+51713+22926+4106+22878+12352 162819 b Current liabilities = Accounts payable+other current liabilities+deferred revenue+commercial paper+term debt =46236+37720+5522+5980+10260 105 718

II Long term solvency or financial leverage ratios A Total debt ratio 0.733 = Total assets - Total equity = 338516 - 90488 = Total assets 338516 248028 = 338516 B Debt Equity ratio 2.741 Total debt Total equity 248028 90488 C Equity multiplier 3.741 Total assets Total equity 338516 90488 D Times Interest Earned ratio 36.521 EBIT Interest 65737 1800 E Cash coverage ratio 0.231 EBIT + Depreciation Interest = 65737 + 12547 = 1800 78284 338516 Notes: a Total Debt = Term Debt + Other non current Liabilities + Current Liabilities =91807+50503+105718 248028 b Total equity 90488 c Total assets 338516 d EBIT 65737 e Interest 1800 f Depreciation 12547 =

DII Asset Utilization, or turnover ratios A Inventory turnover 39.401 Cost of goods sold Inventory 161782 4106 B Days sales in inventory 9.264 days 365 days Inventory turnover 365 39.401 C Receivable turnover 11.348 Sales Accounts receivable 260174 22926 D Days sales in receivables 32.163 days 365 days Receivables turnover 365 11.348 E Total assets turnover 0.769 Sales Total assets 260174 338516 E Capital Intensity = 1.301 Total assets Sales 338516 260174 Notes: a Cost of goods sold b Inventory C Accounts receivable d Sales e Total assets 161782 4106 22926 260174 338516

IV Profitability ratios Profit Margin 0.212 Net Income Sales 55256 260174 Return on assets (ROA) 0.163 Net Income Total assets 55256 338516 Return on equity (ROE) 0.611) Net Income Total equity 55256 90488 ROE Net Income Sales X Sales Assets X Assets Equity 0.611 55256 260174 х 260174 338516 X 338516 90488 a b Notes: Net Income Sales Total assets Total equity 55256 260174 338516 90488 с d =