Annual Report Assignment – Apple, Inc.
Obtain the 2012 annual report of Apple, Inc. from the investor relations portion of its website (the report is also available on EMBANET). After reviewing the annual report, respond to the following questions:
a. On what date did Apple’s fiscal year end? Was this date different from the previous year? If so, why?
The date of Apple’s fiscal year end is September 29, 2012.
It was different form previous year 2011 is September 24, 2011.
The Company’s fiscal year is the 52 or 53-week period that ends on the last Saturday of September. The Company’s fiscal years 2012, 2011 ended on September 29, 2012, September 24, 2011, respectively. Fiscal year 2012 spanned 53 weeks, with a 14th week included in the first quarter of 2012, as is done approximately every six years to realign the Company’s fiscal quarters more closely to calendar quarters. Inclusion of the additional week in 2012 increased the Company’s overall net sales and operating expenses for the year. Fiscal years 2011 spanned 52 weeks each. Unless otherwise stated, references to particular years or quarters refer to the Company’s fiscal years ended in September and the associated quarters of those fiscal years.
b. What amounts did Apple report as revenues, expenses, and net income for 2012? Do you detect any trends with regard to these items?
Revenues: $156,508 millions
Expense: $87,846 millions
Net come: $ 41,733 millions
The efficiency ratio, a ratio that typically applies to banks, in simple terms is defined as expenses as a percentage of revenue (expenses / revenue), with a few variations. A lower percentage is better since that means expenses are low and earnings are high. It relates to operating leverage, which measures the ratio between fixed costs and variable costs. For this case the efficiency ratio is 87846/156508=0.56. It shows the nice trend in the future.
c. With regard to the balance sheet: i. What amounts did Apple report as total assets, liabilities, and stockholders’ equity for 2012? Total assets: $176,064 millions Liabilities: $57,854 millions Stockholders’ equity: $118,210 millions ii. What amounts were reported as current assets and current liabilities for the years presented?
Current assets: $57653 millions
Current liabilities: $57854 millions iii. Provide an assessment of Apple’s liquidity based on this information?
Liquidity ratios are used to determine a company’s ability to meet its short-term debt obligations. Investors often take a close look at liquidity ratios when performing fundamental analysis on a firm. Since a company that is consistently having trouble meeting its short-term debt is at a higher risk of bankruptcy, liquidity ratios are a good measure of whether a company will be able to comfortably continue as a going concern.
Foe the Apple’s company 2012, current ration=current assets/current liabilities=57653/57854=0.99, Apple can pay debts due within one year out of the current assets.
d. What amount did Apple report for cash flow from operating activities for 2012? Is the trend in cash flow from operating activities consistent with the trends in net income?
Cash, cash equivalents and marketable securities : $121,251
Accounts receivable, net : $ 10,930 millions
Inventories: $ 791 millions
Working capital: $ 19,111 millions
Annual operating cash flow: $ 50,856 millions
e. Who were Apple’s auditors? What does Apple’s audit report say about the company’s financial statements? Answer:
Report of Ernst & Young LLP, Independent Registered Public Accounting