Question

The following summarized data (amounts in millions) are taken from the September 27, 2014, and September 28, 2013, comparative financial statements of Apple Inc., a manufacturer of mobile communication and media devices, personal computers, portable digital music players, and seller of a variety of related software, services, accessories, networking solutions, and third-party digital content and applications: 2014 $ 108,400 64,580 33,950 $ 26,050 2013 $ 65,370 39,690 18,530 $ 14,160 $ 9,580 16.280 5,520 930 2.170 $ 10,630 14,510 5,670 1,200 1,780 4,560 3,590 41,940 6,500 4,680 45,660 85,770 25,540 (Amounts Expressed in Millions) For the Fiscal Years Ended September 27 and September 28, respectively: Net sales Costs of sales Operating income Net income At Year End: Assets Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $84 and $99, respectively Inventories Deferred tax assets Vendor nontrade receivables Other current assets Total current assets Long-term marketable securities Property, plant, and equipment, net Goodwill Acquired intangible assets, net Other assets Total assets Liabilities and Shareholders' Equity Current liabilities: Accounts payable Accrued expenses Deferred revenue Commercial paper Total current liabilities Deferred revenue—noncurrent Long-term debt Other noncurrent liabilities Total liabilities Shareholders' Equity Common stock and additional paid-in capital, $0.00001 par value, 1,900,000 shares authorized; 929,430 and 916,130 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Total liabilities and shareholders' equity 7,930 1,060 3,690 3,710 22,670 890 490 2,410 $ 93,940 $ 147,820 $ 14,780 9,400 4,250 6,548 34,978 1,840 23,452 10.260 70,530 $ 12,160 5,870 3,130 0 21,160 1,290 17,760 5,680 45,890 13,490 63,200 600 77,290 $ 147,820 10,810 37,320 (-80) 48,050 $ 93,940 At September 29, 2012, total assets were $47,820 and total shareholders' equity was $31,800.

Answer 1

a.	Working capital=Total current assets-Total current liabilities
					2014	2013
	Total current assets			a	45660	41940
	Total current liabilities			b	34978	21160
	Working capital			a-b	10682	20780
	Current ratio=Total current assets/Total current liabilities
					2014	2013
	Total current assets			a	45660	41940
	Total current liabilities			b	34978	21160
	Current ratio			a/b	1.3	2.0
	Acid-test ratio=Quick assets/Current liabilities
					2014	2013
	Total current assets				45660	41940
	Less:
	Inventories				930	1200
	Deferred tax assets				2170	1780
	Vendor non-trade receivables				6500	4560
	Quick assets			a	36060	34400
	Total current liabilities			b	34978	21160
	Acid-test ratio			a/b	1.0	1.6
b.	ROE=Net income/Average shareholder's equity
	Average shareholder's equity=(Beginning shareholder's equity+Ending shareholder's equity)/2
					2014	2013
	Net income			a	26050	14160
	Beginning shareholder's equity			b	48050	31800
	Ending shareholder's equity			c	77290	48050
	Average shareholder's equity			d=(b+c)/2	62670	39925
	ROE			a/d	41.6%	35.5%
c.	Margin=Net income/Net sales
					2014	2013
	Net income			a	26050	14160
	Net sales			b	108400	65370
	Margin			a/b	24.0%	21.7%
	Turnover=Net sales/Average total assets
	Average total assets=(Beginning total assets+Ending total assets)/2
					2014	2013
	Net sales			a	108400	65370
	Beginning total assets			b	93940	47820
	Ending total assets			c	147820	93940
	Average total assets			d=(b+c)/2	120880	70880
	Turnover			a/d	0.90	0.92
	ROI=Margin*Turnover
					2014	2013
	ROI			a*b	21.6%	20.0%
	Margin			a	24.0%	21.7%
	Turnover			b	0.90	0.92