Use Apple’s financial statements to calculate the following ratios and summary measures for fiscal 2020 and 2019 (round to the nearest tenth). Indicate whether the ratio was more favorable in 2020 or 2019. Apple’s stock price was $115 per share on Sept. 30, 2020 and $55 on Sept. 30, 2019. Fiscal 2020 Fiscal 2019 Is the Ratio more favorable in 2020 or 2019? DAYS RECEIVABLE DAYS INVENTORY RETURN ON ASSETS PROFIT MARGIN % GROSS MARGIN % RETURN ON EQUITY CURRENT RATIO QUICK RATIO EBITDA DEBT-TO-EQUITY RATIO n/a DIVIDEND PAYOUT RATIO n/a PE RATIO n/a Apple Inc.Consolidated Income StatementsIn millionsYear endedYear endedYear endedSept. 30, 2019$ 260,174Sept. 30, 2018$ 265,595Sept. 30, 2020Net sales$274,515Cost of goods sold169,559161,782163,756Gross margin104,95698,392101,839Operating expenses:Research and development18,75216,21714,236Depreciation and amortization11,05612,54710,903Other operating expenses8,8605,6985,802Operating income66,28863,93070,898Interest and dividend income3,7634,9615,686Interest expense2,8733,5763,240Other expense/(income), net87(422)441Income before income taxes67,09165,73772,903Income tax expense9,68010,48113,372Net income$57,411$ 55,256$ 59,531Basic earnings per share$3.31$ 2.99$ 3.00Apple Inc.Consolidated Statements of Retained EarningsIn millionsYear endedYear endedYear endedSept. 30, 2020Sept. 30, 2019$ 303,999Sept. 30, 2018Beginning Retained Earnings$346,598$ 258,873Net income57,41155,25659,531Dividends declared(14,087)(14,129)(13,735)(1,740)$ 388,182Other, net1,472(670)Ending Retained Earnings$ 346,598$ 303,999 Apple Inc.Consolidated Balance SheetsIn millionsSept 30, 2020Sept 30, 2019Sept 30, 2018ASSETSCash & cash equivalents$ 38,016$ 48,844$ 25,913Short-term investments52,92751,71340,388Accounts receivable, net16,12022,92623,186Inventories4,0614,1063,956Other current assets32,58935,23037,896Total current assets143,713162,819131,339Long-term investments100,887105,341170,799Property, plant, & equipment, net36,76637,37841,304Other non-current assets42,52232,97822,283Total assets$ 323,888$ 338,516365,725LIABILITIES & STOCKHOLDERS' EQUITYAccounts payable$ 42,296$ 46,236$ 55,888Accrued expenses42,68437,72032,687Unearned revenue6,6435,5227,543Commercial paper4,9965,98011,964Current portion of long-term debt8,77310,2608,784Total current liabilities105,392105,718116,866Long-term debt98,66791,80793,735Other non-current liabilities54,49050,50347,977Total liabilities258,549248,028258,578Common stock and additional paid-in capital50,77945,17440,201Treasury stockRetained earnings(373,216)(300,700)346,598(233,599)388,182303,999Accumulated other comprehensive income(406)(584)(3,454)Total stockholders' equity65,33990,488107,147Total liabilities & stockholders' equity$323,888$ 338,516$ 365,725

Use Apple’s financial statements to calculate the following ratios and summary measures for fiscal 2020 and 2019 (round to the nearest tenth). Indicate whether the ratio was more favorable in 2020 or 2019. Apple’s stock price was $115 per share on Sept. 30, 2020 and $55 on Sept. 30, 2019. Fiscal 2020 Fiscal 2019 Is the Ratio more favorable in 2020 or 2019? DAYS RECEIVABLE DAYS INVENTORY RETURN ON ASSETS PROFIT MARGIN % GROSS MARGIN % RETURN ON EQUITY CURRENT RATIO QUICK RATIO EBITDA DEBT-TO-EQUITY RATIO n/a DIVIDEND PAYOUT RATIO n/a PE RATIO

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter3: The Adjusting Process

Section: Chapter Questions

Problem 3.1ADM

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Question

Use Apple’s financial statements to calculate the following ratios and summary measures for fiscal 2020 and 2019 (round to the nearest tenth). Indicate whether the ratio was more favorable in 2020 or 2019. Apple’s stock price was $115 per share on Sept. 30, 2020 and $55 on Sept. 30, 2019.

	Fiscal 2020	Fiscal 2019	Is the Ratio more favorable in 2020 or 2019?

DAYS RECEIVABLE

DAYS INVENTORY

RETURN ON ASSETS

PROFIT MARGIN %

GROSS MARGIN %

RETURN ON EQUITY

CURRENT RATIO

QUICK RATIO

EBITDA

DEBT-TO-EQUITY RATIO			n/a

DIVIDEND PAYOUT RATIO			n/a

PE RATIO			n/a

Apple Inc.
Consolidated Income Statements
In millions
Year ended
Year ended
Year ended
Sept. 30, 2019
$ 260,174
Sept. 30, 2018
$ 265,595
Sept. 30, 2020
Net sales
$274,515
Cost of goods sold
169,559
161,782
163,756
Gross margin
104,956
98,392
101,839
Operating expenses:
Research and development
18,752
16,217
14,236
Depreciation and amortization
11,056
12,547
10,903
Other operating expenses
8,860
5,698
5,802
Operating income
66,288
63,930
70,898
Interest and dividend income
3,763
4,961
5,686
Interest expense
2,873
3,576
3,240
Other expense/(income), net
87
(422)
441
Income before income taxes
67,091
65,737
72,903
Income tax expense
9,680
10,481
13,372
Net income
$57,411
$ 55,256
$ 59,531
Basic earnings per share
$3.31
$ 2.99
$ 3.00
Apple Inc.
Consolidated Statements of Retained Earnings
In millions
Year ended
Year ended
Year ended
Sept. 30, 2020
Sept. 30, 2019
$ 303,999
Sept. 30, 2018
Beginning Retained Earnings
$346,598
$ 258,873
Net income
57,411
55,256
59,531
Dividends declared
(14,087)
(14,129)
(13,735)
(1,740)
$ 388,182
Other, net
1,472
(670)
Ending Retained Earnings
$ 346,598
$ 303,999

Apple Inc.
Consolidated Balance Sheets
In millions
Sept 30, 2020
Sept 30, 2019
Sept 30, 2018
ASSETS
Cash & cash equivalents
$ 38,016
$ 48,844
$ 25,913
Short-term investments
52,927
51,713
40,388
Accounts receivable, net
16,120
22,926
23,186
Inventories
4,061
4,106
3,956
Other current assets
32,589
35,230
37,896
Total current assets
143,713
162,819
131,339
Long-term investments
100,887
105,341
170,799
Property, plant, & equipment, net
36,766
37,378
41,304
Other non-current assets
42,522
32,978
22,283
Total assets
$ 323,888
$ 338,516
365,725
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable
$ 42,296
$ 46,236
$ 55,888
Accrued expenses
42,684
37,720
32,687
Unearned revenue
6,643
5,522
7,543
Commercial paper
4,996
5,980
11,964
Current portion of long-term debt
8,773
10,260
8,784
Total current liabilities
105,392
105,718
116,866
Long-term debt
98,667
91,807
93,735
Other non-current liabilities
54,490
50,503
47,977
Total liabilities
258,549
248,028
258,578
Common stock and additional paid-in capital
50,779
45,174
40,201
Treasury stock
Retained earnings
(373,216)
(300,700)
346,598
(233,599)
388,182
303,999
Accumulated other comprehensive income
(406)
(584)
(3,454)
Total stockholders' equity
65,339
90,488
107,147
Total liabilities & stockholders' equity
$323,888
$ 338,516
$ 365,725

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