Question: The financial statements of Apple Inc. are
The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company’s website.
Instructions
a. What was the amount of net cash provided by operating activities for the year ended September 26, 2015? For the year ended September 27, 2014?
b. What was the amount of increase or decrease in cash and cash equivalents for the year ended September 26, 2015? For the year ended September 27, 2014?
c. Which method of computing net cash provided by operating activities does Apple use?
d. From your analysis of the 2015 statement of cash flows, did the change in accounts receivable increase or decrease cash? Did the change in inventories increase or decrease cash? Did the change in accounts payable increase or decrease cash?
e. What was the net outflow or inflow of cash from investing activities for the year ended September 26, 2015?
f. What was the amount of income taxes paid in the year ended September 26, 2015?
Apple’s financial statements from Appendix A:
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CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 26, 2015 September 27, 2014 September 28, 2013 Net sales $ 233,715 182,795 170,910 Cost of sales 140,089 112,258 106,606 Gross margin 93,626 70,537 64,304 Operațing expenses: Research and development 8,067 6,041 4,475 Selling, general and administrative 14,329 11,993 10,830 Total operating expenses 22,396 18,034 15,305 Operating income 71,230 52,503 48,999 Other income/(expense), net 1,285 980 1,156 Income before provision for income taxes 72,515 53,483 50,155 Provision for income taxes 19,121 13,973 13,118 Net income $ 53,394 $ 39,510 $ 37,037 Earnings per share: Basic 9.28 $ 6.49 5.72 Diluted 2$ 9.22 $ 6.45 5.68 Shares used in computing earnings per share: Basic 5,753,421 6,085,572 6,477,320 Diluted 5,793,069 6,122,663 6,521,634 Cash dividends declared per share $ 1.98 1.82 1.64 See accompanying Notes to Consolidated Financial Statements. %24 24 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 26, September 27, 2015 September 28, 2013 2014 Net income $ 53,394 $ 39,510 $ 37,037 Other comprehensive income/loss): Change in foreign currency translation, net of tax effects of $201, $50 and $35, respectively (411) (137) (112) Change in unrealized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(441), $(297) and $(351), respectively 2,905 1,390 522 Adjustment for net (gains)losses realized and included in net income, net of tax expense/(benefit) of $630, S(36) and $255, respectively (3,497) 149 (458) Total change in unrealized gains/losses on derivative instruments, net of tax (592) 1,539 64 Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit/(expense) of $264, $(153) and $458, respectively (483) 285 (791) Adjustment for net (gains)losses realized and included in net income, net of tax expense/(benefit) of $(32), $71 and $82, respectively (131) (922) 59 (134) Total change in unrealized gains/losses on marketable securities, net of tax (424) 151 Total other comprehensive income/(loss) (1,427) 1,553 (970) Total comprehensive income $ 51,967 $ 41,063 $ 36,067 See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 26, 2015 September 27, 2014 ASSETS: Current assets: Cash and cash equivalents 21,120 13,844 Short-term marketable securities 20,481 11,233 Accounts receivable, less allowances of $82 and $86, respectively 16,849 17,460 Inventories 2,349 2,111 Deferred tax assets 5,546 4,318 Vendor non-trade receivables 13,494 9,759 Other current assets 9,539 9,806 Total current assets 89,378 68,531 Long-term marketable securities 164,065 130,162 Property, plant and equipment, net 22,471 20,624 Goodwill 5,116 4,616 Acquired intangible assets, net 3,893 4,142 Other assets 5,556 3,764 Total assets $ 290,479 $ 231,839 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $ 35,490 30,196 Accrued expenses 25,181 18,453 Deferred revenue 8,940 8,491 Commercial paper 8,499 6,308 Current portion of long-term debt 2,500 Total current liabilities 80,610 63,448 Deferred revenue, non-current 3,624 3,031 Long-term debt 53,463 28,987 Other non-current liabilities 33,427 24,826 Total liabilities 171,124 120,292 Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,578,753 and 5,866,161 shares issued and outstanding, respectively 27,416 23,313 Retained earnings 92,284 87,152 Accumulated other comprehensive income (345) 1,082 Total shareholders' equity 119,355 111,547 Total liabilities and shareholders' equity $ 290,479 $ 231,839 See accompanying Notes to Consolidated Financial Statements. 24
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