as a Percent: 2017 (%) Microsoft 43.9 Apple Inc. 27.7 As a Percent 2017 (%) Microsoft 18 2

Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter13: Financial Statement Analysis
Section: Chapter Questions
Problem 13.8E
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4. Andrew Potter is comparing the cash- flow- generating ability of Microsoft with that of Apple Inc. He
collects information from the companies' annual reports and prepares the following table.
Cash Flow from Operating Activities
as a Percentage of Total Net Revenue
2017 (%)
2016 (%)
2015 (%)
Microsoft
43.9
39.1
31.7
Apple Inc.
27.7
30.5
34.8
As a Percentage of Average Total Assets
2016 (%)
2017 (%)
2015 (%)
Microsoft
18.2
18.1
17.1
Apple Inc.
18.2
21.5
31.1
What is Potter likely to conclude about the relative cash- flow- generating ability of these two companies?
Transcribed Image Text:4. Andrew Potter is comparing the cash- flow- generating ability of Microsoft with that of Apple Inc. He collects information from the companies' annual reports and prepares the following table. Cash Flow from Operating Activities as a Percentage of Total Net Revenue 2017 (%) 2016 (%) 2015 (%) Microsoft 43.9 39.1 31.7 Apple Inc. 27.7 30.5 34.8 As a Percentage of Average Total Assets 2016 (%) 2017 (%) 2015 (%) Microsoft 18.2 18.1 17.1 Apple Inc. 18.2 21.5 31.1 What is Potter likely to conclude about the relative cash- flow- generating ability of these two companies?
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