Question: The following summarized data (amounts in millions)
The following summarized data (amounts in millions) are taken from the September 27, 2008, and September 29, 2007, comparative financial statements of Apple Inc. , a manufacturer of personal computers, portable digital music players, and mobile communications devices, along with a variety of related software, services, peripherals, and networking solutions.
At September 30, 2006, total assets were $17,205 and total shareholders’ equity was $9,984.
Required:
a. Calculate Apple Inc.’s working capital, current ratio, and acid-test ratio at September 27, 2008, and September 29, 2007. Round your ratio answers to one decimal place.
b. Calculate Apple’s ROE for the years ended September 27, 2008, and September 29, 2007. Round your percentage answers to one decimal place.
c. Calculate Apple’s ROI, showing margin and turnover, for the years ended September 27, 2008, and September 29, 2007. Round your turnover calculations to two decimal places. Round your margin and ROI percentages to one decimal place.
d. Evaluate the company’s overall liquidity and profitability.
The following historical data were derived from Apple Inc.’s consolidated financial statements (in millions).
Note: Past data are not necessarily indicative of the results of future operations.
e. Calculate Apple Inc.’s total liabilities for each year presented above.
f. Are the trends expressed in these data generally consistent with each other?
g. In your opinion, which of these trends would be most meaningful to a potential investor in common stock of Apple Inc.? Which trend would be least meaningful?
h. What other data (trend or otherwise) would you like to have access to before making an investment in Apple Inc.?
Transcribed Image Text:
(Amounts Expressed in Millions) For the Fiscal Years Ended September 27 and September 29, respectively 2008 2007 Net sales.... $32,479 $24,006 Costs of sales 21,334 15,852 Operating income 6,275 4,409 Net income .. $ 4,834 $ 3,496 At Year End Assets Cash and cash equivalents. $11,875 $ 9,352 Short-term investments.. 12,615 6,034 Accounts receivable, net. Inventories... 2,422 1,637 509 346 1,447 5,822 Deferred tax assets 782 Other current assets 3,805 Property, plant, and equipment, net. 2,455 1,832 Goodwill . 207 38 Acquired intangible assets, net 285 299 1,935 $39,572 1,222 $25,347 Other assets Total assets. Liabilities and Shareholders' Equity $ 5,520 $ 4,970 Accounts payable .. Accrued expenses. 8,572 4,310 Non-current liabilities 4,450 1,535 7,177 5,368 Common stock, no par value. Retained earnings .. 13,845 9,101 Accumulated other comprehensive income 63 Total liabilities and shareholders' equity. $39,572 $25,347
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