Question

Apple Inc. Apple Inc. designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players and sells a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. Your parents are considering investing in Apple Inc. common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Apple’s financial statements and 10-K file are provided. Question: (2) Make a 3-year trend analysis, using 2011 as the base year, of (1) net sales and (2) net income. Comment on the significance of the trend results. (3) What information outside the annual report may also be useful to your parents in making a decision about Apple? CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands) September 28, 2013 September 29, 2012 $ $ 14,259 26,287 10,746 18,383 13,102 1,764 3,453 7,539 6,882 73,286 106,215 16,597 1,577 4,179 5,146 207,000 10,930 791 2,583 7,762 6,458 57,653 92,122 15,452 1,135 4,224 5,478 176,064 $ $ ASSETS: Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $99 and $98, respectively Inventories Deferred tax assets Vendor non-trade 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 Total current liabilities Deferred revenue -non-current Long-term debt Other non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity: Common stock, no par value; 1,800,000 shares authorized; 899,213 and 939,208 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/(loss) Total shareholders' equity Total liabilities and shareholders' equity $ 22,367 13,856 7,435 43,658 2,625 16,960 20,208 83,451 21,175 11,414 · 5,953 38,542 2,648 0 16,664 57,854 19,764 104,256 (471) 123,549 207,000 16,422 101,289 499 118,210 176,064 $ $ See accompanying Notes to Consolidated Financial Statements.

Answer 1

Trend Analysis
	Amounts	% of Change
Particulars	2013	2012	2011	2013	2012	2011
Net Sales	170910	156508	108249	157.89%	144.58%	100.00%
Net Income	37037	41733	25922	142.88%	160.99%	100.00%
Trend Percentages are calculated based on base year 2011 results.
Comment on Significance of Trend Result
The trend result helps the user to get an overall idea about the financial results of an entity.As it’s a comparative date analysis the performance of each year can be easily analysed.It facilitates the decision making.Also most simple method of analysis of financial information.
The net sales is showing an upward trend in 2012 and 2013comapring with 2011 results, but the rate of increase is less in 2013 compared to the rate of increase in 2012.
The Net income in 2012 has increased with an increase in net sales but the rate of increase in net income is more comapred to the increase in net sales.
The possible reasons for suh chage can be
1	The expenses has decreased compared to 2011 in 2012 or
2	Increased value of closing stock.
The net income in 2013 has fall down to 142.88% comparing with the increase of 161% in 2012
The possible reasons for suh chage can be
1	The expenses has increased compared to 2012 in 2013 or
2	Decreased value of closing stock.
The outside information that can be used by the parent company.
1	Market Value of the share.
2	Position in the Industry
3	Opinion of present shareholders
4	Volatility of transactions in stock market
5	Cases are pending in courts