“Financial Statement Analysis of Apple Inc.”

troupe Background apple Inc. and its wholly- receiveed subsidiaries (collectively Apple or the confede symmetryn) de compacts, reconciles and markets mobile conference and media devices, ad hominem ready reck one(a)rs, and movable digital music players, and carry ons a com equalitytmentalization of cogitate parcel, go, peripherals, winningsworks solutions, and third- affairy digital means and coats. The connections harvests and benefits imply iPhone, iinking pad, mack, iPod, Apple TV, a portfolio of consumer and passkey bundle package screenings, the iOS and mack OSX ope dimensionnal establishments, iCloud, and a variety of annoyory, attend and second reach discloseings.The come with also switchs and delivers digital gist and applications finished and finished the iTunes blood, App blood lineSM, iBookstoreSM, and mackintosh App Store. The fellowship sells its harvestings worldwide through its sell stores, online stores, and direct gross sales force, as soundly as through third-party cellular meshworkwork carriers, wholesalers, retailers, and appreciate-added resellers. In addition, the community sells a variety of third-party iPhone, iPad, mackintosh and iPod compatible products, including application softw are, printers, fund devices, speakers, head call backs, and various some other(a)wise accessories and peripherals, through its online and retail stores.The ships company sells to consumers, small and mid-sized bloodes (SMB), and education, enterprise and g all overnment customers. The go withs pecuniary year is the 52 or 53-week result that ends on the last Saturday of September. Unless differently stated, all information presented in this Form 10-K is based on the lodges fiscal calendar. The corporation is a California corporation complete in 1977. Business Strategy The accompany is committed to bringing the trump drug user experience to its customers through its ripe hardware, packet , peripherals, and work.The fellowships headache strategy leverages its unique baron to design and ramp up its feature in operation(p)(a) systems, hardware, application software, and work to provide its customers peeled products and solutions with superior ease-of-use, seamless integrating, and advanced(a) design. The conjunction believes continual enthronization in research and ripening and merchandise and advertising is unfavorable to the development and sale of innovative products and technologies. As part of its strategy, the caller-out continues to expand its program for the discovery and delivery of hird-party digital satiate and applications through the iTunes Store. As part of the iTunes Store, the Companys App Store and iBookstore stick out customers to discover and download applications and books through either a macintosh or Windows-based computer or through iOS devices, namely iPhone, iPad and iPod touch. In January 2011, the Company opened the macin tosh App Store to allow customers to easily discover, download and prove applications for their Macs. The Company also fight backs a community for the development of third-party software and hardware products and digital content that complement the Companys whirls.The Companys strategy also includes expanding its scattering network to effectively reach much customers and provide them with a elevated-quality sales and post-sales support experience. Consumer and Small and Mid-Sized Business The Company believes a high-quality buying experience with knowledgeable salespersons who solelyt joint broadcast the value of the Companys products and services greatly sharpens its ability to attract and admit customers. The Company sells many of its products and resells third-party products in most of its major markets directly to consumers and backinges through its retail and online stores.The Company has also invested in programs to enhance reseller sales by placing high quality Ap ple fixtures, merchandising materials and other resources within selected third-party reseller locations. by means of the Apple Premium Reseller mastergram, certain third-party resellers focus on the Apple platform by providing a high level of product expertise, desegregation and support services. The Companys retail stores are typically located at high-traffic locations in quality shopping malls and urban shopping districts.By operating its own stores and locating them in desirable high-traffic locations, the Company is better positioned to ensure a high quality customer buying experience and attract unfermented customers. The stores are designed to simplify and enhance the presentation and marketing of the Companys products and related solutions. To that end, retail store configurations suck in evolved into various sizes to curb market-specific demands. The Company believes providing direct contact with its customers is an effective instruction to demonstrate the advantages of its products over those of its competitors.The stores employ experienced and knowledgeable personnel who provide product advice, service and training. The stores mangleer a wide selection of third-party hardware, software, and other accessories and peripherals that complement the Companys products. Enterprise and Government The Company also sells its hardware and software products to enterprise and organisation customers in each of its geographic constituents. The Companys products are deployed in these markets because of their power, productivity, ease of use and the simplicity of seamless desegregation into information technology environments.The Companys products are compatible with thousands of third-party business applications and services, and its tools enable the development and secure deployment of custom applications as well as remote device administration. Business Organization The Company manages its business principally on a geographic basis. Accordingly, the Co mpany has de endpointined that its re take-away operating segments, which are by and large based on the nature and location of its customers, harp of the Americas, Europe, Japan, Asia-Pacific and Retail.The results of the Americas, Europe, Japan and Asia-Pacific re movable segments do not include the results of the Retail segment. The Americas segment includes both(prenominal) North and South America. The Europe segment includes European countries, as well as the Middle East and Africa. The Asia-Pacific segment includes Australia and Asian countries, other than Japan. The Retail segment operates Apple retail stores worldwide. severally reportable operating segment provides similar hardware and software products and similar services.Further information regarding the Companys operating segments whitethorn be found in voice II, Item7 of this Form 10-K under the subheading member in operation(p) Performance, and in Part II, Item8 of this Form 10-K in remarks to coalesced Finan cial Statements in Note 8, Segment Information and Geographic data. professional personducts The Company offers a range of mobile communication and media devices, personal computation products, and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions and third-party hardware and software products. In addition, the Company ffers its own software products, including iOS, the Companys proprietary mobile operating system Mac OS X, the Companys proprietary operating system software for the Mac server software and application software for consumer, SMB, and education, enterprise and government customers. The Companys primary products are discussed below. iPhone iPhone combines a mobile phone, an iPod, and an derive communications device in a single handheld product. establish on the Companys Multi-Touch user interface, iPhone features background signal-class e-mail, web browsing, searching, and maps and is compatible wit h both Macs and Windows-based computers. Phone automatically syncs content from users iTunes libraries, as well as contacts, bookmarks, and email accounts. iPhone allows customers to access the iTunes Store to download audio frequency and video files, as well as a variety of other digital content and applications. In October 2011, the Company launched iPhone 4S, its up-to-the-minute interpretation of iPhone, which includes Siri, a voice activated good assistant. In addition to the Companys own iPhone accessories, third-party iPhone compatible accessories are uncommitted through the Companys online and retail stores and from third parties. Pad iPad is a multi-purpose mobile device for browsing the web, reading and sending email, regard photos, watching videos, listening to music, playing games, reading e-books and more(prenominal). iPad is based on the Companys Multi-Touch technology and allows customers to connect with their applications and content in a more interactive way. iPad allows customers to access the iTunes Store to download audio and video files, as well as a variety of other digital content and applications. In March 2011, the Company introduced iPad 2, its second-generation iPad.In addition to the Companys own iPad accessories, third-party iPad compatible accessories are available through the Companys online and retail stores and from third parties. Mac Hardware professionalducts The Company offers a range of personal computing products including desktop and portable computers, related devices and peripherals, and third-party hardware products. The Companys Mac desktop and portable systems feature Intel microprocessors, the Mac OS X Lion operating system and the iLife rooms of software for creation and forethought of digital photography, music, movies, DVDs and websites.The Companys desktop computers include iMac Mac Pro and Mac mini. The iMac desktop computer has an all-in-one design that incorporates a display, processor, graphics card , storage, storage and other components inside a single enclosure. The Mac Pro desktop computer is targeted at business and professional customers and is designed to meet the performance, expansion, and networking necessitate of the most demanding Mac user. The Mac mini is a desktop computer in a compact enclosure. . iPodThe Companys iPod line of portable digital music and media players includes iPod touch, iPod nano, iPod shuffleand iPod classic. All iPods work with iTunes. In addition to the Companys own iPod accessories, third-party iPod compatible accessories are available, through the Companys online and retail stores or from third parties. The iPod touch, based on iOS, is a flash-memory-based iPod with a widescreen display and a Multi-Touch user interface. iPod touch allows customers to access the iTunes Store to download audio and video content, as well as a variety of digital applications.The iPod nano is a flash-memory-based iPod that features the Companys Multi-Touch int erface allowing customers to navigate their music allurement by tapping or swiping the display. The iPod nano features a elegant aluminum and glass enclosure with a make-in clip. The iPod shuffle is a flash-memory-based iPod that features a clickable control pad to control music playback and VoiceOver technology change customers to hear song titles, artists and playlist names. The iPod classic is a hard-drive based portable digital music and video player. iTunes Tunes is an application that supports the get, download, organization and playback of digital audio and video files and is available for both Mac and Windows-based computers. iTunes 10 is the latest version of iTunes and features AirPlaywireless music playback, Genius Mixes, Home Sharing, and improved syncing functionality with iOS devices. Mac App Store In January 2011, the Company opened the Mac App Store allowing customers to discover, download and pitch applications for their Macs. The Mac App Store offers applicat ions in education, games, graphics and design, lifestyle, productivity, utilities and other categories.The Companys Mac OS X operating system software and iLife and iWorkapplication software are also available on the Mac App Store. iCloud In October 2011, the Company launched iCloud, its new cloud service, which stores music, photos, applications, contacts, calendars, and documents and wirelessly pushes them to multiple iOS devices, Macs and Windows-based computers. iClouds features include iTunes in the Cloud, Photo Stream, Documents in the Cloud, Contacts, Calendar, Mail,automatic downloads and purchase history for applications and iBooks, and iCloud Backup.Users pot sign up for free access to iCloud using a device hurry iOS 5 or a Mac running Mac OS X Lion. Software Products and Computer Technologies The Company offers a range of software products for consumer, SMB, education, enterprise and government customers, including the Companys proprietary iOS and Mac OS X operating sys tem software server software professional application software and consumer, education, and business oriented application software. Operating arranging Software iOS OS is the Companys mobile operating system that serves as the foundation for iOS devices. In October 2011, the Company released iOS 5, which supports iCloud and includes new features such as Notification Center, a way to belief and manage notifications in one place iMessage, a messaging service that allows users to send text messages, photos and videos betwixt iOS devices and Newsstand, a way to purchase and organize newspaper and magazine subscriptions. Mac OS X Mac OS X, the operating system for Macs, is built on an open-source UNIX-based foundation.Mac OS X Lion is the eighth major release of Mac OS X and became available in July 2011. Mac OS X Lion includes support for new Multi-Touch gestures iCloud integration system-wide support for full screen applications Mission Control, a way to view everything running on a users Mac the Mac App Store Launchpad, a new home for a users applications and a redesigned Mail application. Application Software iLife iLife 11 is the latest version of the Companys consumer-oriented digital lifestyle application cortege included with all Mac computers. Life features iPhoto, iMovie, iDVD, GarageBand, and iWeb. iPhoto is the Companys consumer-oriented digital photo application and iMovie is the Companys consumer-oriented digital video redact software application. iDVD is the Companys consumer-oriented software application that enables customers to turn iMovie files, QuickTime files, and digital pictures into interactive DVDs. GarageBand is the Companys consumer-oriented music creation application that allows customers to play, render and create music. Web allows customers to create online photo albums, blogs and podcasts, and to customize websites using alter tools. iWork iWork 09 is the latest version of the Companys integrated productivity suite designed to help users create, present, and publish documents, presentations, and spreadsheets. iWork 09 includes Pages09 for word processing and page layout, restorative09 for presentations, and Numbers09 for spreadsheets. The Company also has a Multi-Touch version of each iWork application designed specifically for use on iOS devices. Other Application SoftwareThe Company also sells various other application software, including Final Cut Pro, Logic Studio,LogicExpress 9, Logic StudioPro, and its FileMakerPro database software. scuppers& Peripheral Products The Company manufactures the Apple LED Cinema Display and Thunderbolt Display. The Company also sells a variety of Apple-branded and third-party Mac-compatible and iOS-compatible peripheral products, including printers, storage devices, computer memory, digital video and still cameras, and various other computing products and supplies.Apple TV Apple TV allows customers to watch movies and picture shows on their high definition televis ion. Content from iTunes, lettuceflix, YouTube, and Flickr as well as music, photos, videos, and podcasts from a Mac or Windows-based computer rout out also be wirelessly streamed to a television through Apple TV. With the release of iCloud in October 2011, content purchased on Apple TV can be re-downloaded on iOS devices. Product Support and go AppleCareoffers a range of support options for the Companys customers.These options include assistance that is built into software products, printed and electronic product manuals, online support including comprehensive product information as well as technical assistance, and the AppleCare Protection forge (APP). APP is a fee-based service that typically includes two to three years of phone support and hardware repairs and dedicated web-based support resources. Markets and Distribution The Companys customers are primarily in the consumer, SMB, and education, enterprise and government markets.The Company uses a variety of direct and indi rect distribution channels, such as its retail stores, online stores, and direct sales force, and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. The Company believes that sales of its innovative and differentiated products are enhanced by knowledgeable salespersons who can convey the value of the hardware and software integration, and demonstrate the unique solutions that are available on its products.The Company further believes providing direct contact with its targeted customers is an effective way to demonstrate the advantages of its products over those of its competitors and providing a high-quality sales and after-sales support experience is critical to attracting new and retaining existing customers. To ensure a high-quality buying experience for its products in which service and education are emphasized, the Company continues to expand and improve its distribution capabilities by expanding the number of its own retail stores worldwi de.Additionally, the Company has invested in programs to enhance reseller sales by placing high quality Apple fixtures, merchandising materials and other resources within selected third-party reseller locations. Through the Apple Premium Reseller Program, certain third-party resellers focus on the Apple platform by providing a high level of integration and support services, and product expertise. No single customer accounted for more than 10% of net sales in 2011 or 2010. One of the Companys customers accounted for 11% of net sales in 2009. CompetitionThe markets for the Companys products and services are exceedingly competitive and the Company is confronted by predatory contender in all areas of its business. These markets are characterized by frequent product introductions and speedy expert advances that encounter substantially change magnitude the capabilities and use of mobile communication and media devices, personal computers, and other digital electronic devices. The Co mpanys competitors who sell mobile devices and personal computers based on other operating systems require aggressively cut prices and lowered their product margins to gain or state market share.The Companys financial condition and operating results can be adversely affected by these and other intentness-wide downward pressures on gross margins. Principal competitive federal agents important to the Company include price, product features, copulation price/performance, product quality and reliability, design innovation, a stiff third-party software and peripherals ecosystem, marketing and distribution capability, service and support, and corporate reputation.The Company is pore on expanding its market opportunities related to mobile communication and media devices. These industries are highly competitive and include several fully grown, well-funded and experienced participants. The Company expects competition in these industries to intensify significantly as competitors atte mpt to imitate some of the features of the Companys products and applications within their own products or, alternatively, col choreate with each other to offer solutions that are more competitive than those they soon offer.These industries are characterized by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses. The Companys digital content services have faced significant competition from other companies promoting their own digital music and content products and services, including those offering free peer-to-peer music and video services.The Company believes it offers superior innovation and integration of the entire solution including the hardware (iPhone, iPad, Mac, and iPod), software (iTunes), and distribution of digital content and applications (iTunes Store, App Store, iBookstore and Mac App Store). Some of the Companys catamenia and potential competitors have substantial resources and may be able to provide such products and services at little or no profit or notwithstanding at a loss to compete with the Companys offerings.The Companys future financial condition and operating results depend on the Companys ability to continue to develop and offer new innovative products and services in each of the markets it competes in. Research and Development Because the industries in which the Company competes are characterized by rapid technological advances, the Companys ability to compete successfully depends heavily upon its ability to ensure a continual and quantifyly flow of competitive products, services and technologies to the marketplace.The Company continues to develop new technologies to enhance existing products and to expand the range of its product offerings through research and development, licensing of quick-witted property and acquisition of third-party businesses and technology. summate research and development expense was $2. 4 billion, $1. 8 billion and $1. 3 billion in 2011, 2010 and 2009, respectively. Patents, Trademarks, Copyrights and Licenses The Company up-to-the-minutely holds rights to patents and copyrights relating to certain aspects of its iPhone, iPad, Mac and iPod devices, peripherals, software and services.The Company has registered or has applied for change overmarks and service marks in the U. S. and a number of outside(prenominal) countries. Although the Company believes the ownership of such patents, copyrights, trademarks and service marks is an important factor in its business and that its success does depend in part on the ownership thereof, the Company relies primarily on the innovative skills, technical competency and marketing abilities of its personnel. The Company regularly files patent applications to protect inventions arising from its research and development, and is surely pursuing thousands o f patent applications around the world.Over sequence, the Company has accumulated a large portfolio of issued patents in the U. S. and worldwide. The Company holds copyrights relating to certain aspects of its products and services. No single patent or copyright is solely responsible for protecting the Companys products. The Company believes the duration of its patents is adequate copulation to the expected lives of its products. Due to the fast rate of innovation and product development, the Companys products are often archaic before the patents related to them expire, and sometimes are obsolete before the patents related to them are even granted.Many of the Companys products are designed to include intellectual property obtained from third parties. While it may be demand in the future to seek or renew licenses relating to various aspects of its products and business methods, based upon past(a) experience and perseverance practice, the Company believes such licenses generall y could be obtained on commercially reasonable terms however, there is no guarantee that such licenses could be obtained at all.Because of technological changes in the industries in which the Company competes, current extensive patent reportage, and the rapid rate of effect of new patents, it is possible that certain components of the Companys products and business methods may unknowingly infringe existing patents or intellectual property rights of others. From time to time, the Company has been notified that it may be infringing certain patents or other intellectual property rights of third parties. Foreign and Domestic Operations and Geographic Data The U. S. epresents the Companys largest geographic market. Approximately 39% of the Companys net sales in 2011 came from sales to customers inside the U. S. Final hookup of the Companys products is currently performed in the Companys manufacturing installment in Ireland, and by outsourcing partners, primarily located in Asia. The s upply and manufacture of a number of components is performed by sole-sourced outsourcing partners in the U. S. , Asia and Europe. Single-sourced outsourcing partners in Asia perform closing assembly of substantially all of the Companys hardware products.Margins on sales of the Companys products in foreign countries, and on sales of products that include components obtained from foreign suppliers, can be adversely affected by foreign currency exchange rate fluctuations and by international trade regulations, including tariffs and antidumping penalties. Information regarding financial data by geographic segment is raiment forth in Part II, Item7 and Item8 of this Form 10-K and in Notes to Consolidated Financial Statements in Note 8, Segment Information and Geographic Data. Seasonal BusinessThe Company has historically experienced increased net sales in its first fiscal quarter compared to other quarters in its fiscal year due to increased holiday seasonal demand. This historical p attern should not be considered a undeviating indicator of the Companys future net sales or financial performance. Warranty The Company offers a limited move and labor warranty on most of its hardware products. The basic warranty period is typically one year from the date of purchase by the veritable end-user. The Company also offers a 90-day basic warranty for its service parts employ to repair the Companys hardware products.In addition, consumers may purchase the APP, which extends service coverage on many of the Companys hardware products in most of its major markets. Employees As of September24, 2011, the Company had slightly 60,400 full-time equivalent employees and an additional 2,900 full-time equivalent temporary employees and contractors. apple INC. (Exact name of registrant as specified in its charter) proportion Analysis 2008 2009 2010 2011 liquid state proportions a. certain RatioA liquidity ratio that prises a companys ability to pay short-term obligations. T he Current Ratio formula is withal cognise as liquidity ratio, change asset ratio and hard currency ratio. Current Asset/Current Liability 32311/14092 36265/19282 41678/20722 44988/27970 2. 293 1. 881 2. 011 1. 609 industry ordinary 2. 00 1. 8 2. 1 1. 5 Current Ratio Comparisons Ratio is stronger than the industry come. b. Acid Test RatioA stringent indicator that determines whether a watertight has enough short-term assets to cover its immediate liabilities without selling inventory. The acid-test ratio is far more strenuous than the working capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets.Calculated by (Current Asset- Average inventory)/Current Liability (32311-509)/14092 (36265-482)/19282 (41678-753)/20722 (44988-913. 5)/27970 2. 257 1. 86 1. 961 1. 581 industry average 2. 20 1. 80 2. 00 1. 50 Acid Test Ratio Comparisons Ratio is weaker than the industry average in first 3 years but stringer at last year. abrid gment of the Liquidity Ratio Comparisons * Strong current ratio and weak acid-test ratio indicates a potential line of work in the inventories account. * Note that this industry has a relatively high level of inventories. Financial Leverage Ratios a.Debt to palenessA measure of a companys financial leverage work out by dividing its lend liabilities by stockholders equity. It indicates what proportion of equity and debt the company is using to finance its assets. Note Sometimes only stakes-bearing, long debt is used instead of total liabilities in the calculation. Also known as the Personal Debt/Equity Ratio, this ratio can be applied to personal financial statements as well as corporate ones. hit debt/Shareholders Equity 18542/21030 26019/27832 27392/47791 39756/76615 0. 882 0. 935 0. 573 0. 519 industry average . 89 . 95 . 5 . 50 Debt to equity Ratio Comparisons Has average debt utilization relative to the industry average. b. Debt to total assetA metric used to measur e a companys financial risk by determining how much of the companys assets have been financed by debt. Calculated by adding short-term and long-term debt and then dividing by the companys total assets. arrive debt/Total asset 18542/39572 26019/53851 27392/75183 39756/116371 0. 469 0. 483 0. 364 0. 342 industry average . 45 . 50 . 35 . 35 Debt to total asset Ratio Comparisons Has average debt utilization relative to the industry average. c. Total CapitalizationThe capitalization ratio measures the debt component of a companyscapital structure, or capitalization (i. e. , the sum of long-term debtliabilitiesandshareholders equity) to support a companys operations and growth. Debt/capitalization 18542/25480 26019/34569 27392/54461 39756/88401 . 73 . 75 . 50 . 45 industry average . 75 . 75 . 50 . 45 Total Capitalization Ratio Comparisons Has average long-term debt utilization relative to the industry average. Coverage Ratios a. Interest CoverageA ratio used to determine how ea sily a company can ay beguile on outstanding debt. The interest coverage ratio is calculated by dividing a companys earnings before interest and assesses (EBIT) of one period by the companys interest expenses of the same period EBIT/Interest charges 6895/2242 7984/2360 18540 34205 3. 075 3. 383 - - industry average 3. 2 3. 5 - - Interest Coverage Ratio Comparisons Has below average interest coverage relative to the industry average. compendium of the Coverage Trend Analysis * The interest coverage ratio for Apple Inc. has been falling since 2008. It has been below industry averages for the past two years. This indicates that low earnings (EBIT) may be a potential problem for BW. * Note, we know that debt levels are in line with the industry averages. employment ratios a. Receivable dollar volumeAn accounting measure used to quantify a firms effectiveness in extending credit as well as collect debts. The receivables swage ratio is an activity ratio, measuring how efficien tly a firm uses its assets. Formula Some companies reports will only show sales this can affect the ratio depending on the size of cash sales. Annual net credit sales/ Average receivables 32497/2422 36537/3361 65225/5510 108249/5369 13. 17 10. 871 11. 838 20. 162 industry average 15 10 13 20 Receivable Turnover Ratio Comparisons Ratio is stronger than the industry average. b. Average collection periodThe approximate amount of time that it takes for a business to receive payments owed, in terms of receivables, from its customers and clients. Calculated as Where Days = Total amount of days in period AR = Average amount of accounts receivables Credit Sales = Total amount of net credit sales during period Days in year/receiveable turnover 365/13. 417 365/10. 871 365/11. 838 365/20. 62 27. 204 33. 576 30. 833 18. 103 industry average 25 36 30 20 Average collection period Ratio Comparisons Has improved the average collection period to that of the industry average. c. history turn overA ratio cover how many times a companys inventory is sold and replaced over a period. The days in the period can then be divide by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or inventory turnover days. court of goods sold/Average inventory 21334/509 25683/482 39541/753 64431/913. 5 41. 914 53. 8 52. 51 70. 53 industry average 42 53 53 70 Inventory turnover Ratio Comparisons Has relatively good turnover. d. Total asset turnoverThe amount of sales generated for every dollars worth of assets. It is calculated by dividing sales in dollars by assets in dollars. Formula This ratio is more profitable for growth companies to check if in fact they are growing taxation in proportion to sales. Also known as the Asset Turnover Ratio. Net sales/ total asset 32479/39571 42905/53851 65225/75183 108249/116371 . 821 . 797 . 868 . 930 industry average . 2 . 80 . 85 . 90 Total asset turnover Ratio Comparisons Has relatively strong turnov er. gainfulness Ratios a. Net profit marginA ratio of favourableness calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings. Net profit after tax/Net sales 4834/32479 8235/42905 14013/65225 25922/108249 . 149 . 192 . 215 . 239 industry average . 15 . 20 . 20 . 24 Net profit margin Ratio Comparisons Has average Net Profit Margin. b. get on investment provide on investment(ROI)rate of return(ROR), also known as rate of profit or sometimes just return, is the ratio of currencygained or befuddled (whether realized or unrealized) on aninvestmentrelative to the amount of money invested. Similar financial measures with variations on how investment is defined * fork out on assets(ROA), * Return on net assets(RONA), * Return on capital employed(ROCE) * Return on invested capital(ROIC) * Social return on investment(SROI) NPAT/Total asset 4834/39572 8235/53851 14013/75183 259 22/116371 . 122 . 153 . 87 . 223 industry average . 125 . 15 . 18 . 20 Return on investment Ratio Comparisons Has strong Return on Investment. c. Return on equityThe amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporations profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is expressed as a percentage and calculated as Return on Equity = Net Income/Shareholders Equity Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock. Shareholders equity does not include preferred shares. Also known as return on net worth (RONW). NPAT/Shareholders equity 25922/21030 8235/27832 14013/477931 25922/76615 . 229 . 296 . 293 . 338 industry average . 23 . 29 . 29 . 350 Return on equity Ratio Comparisons Has average Return on equity. Summary of the Profitability Trend Analyses * The profitability ratios for Apple In c. have ALL been average since 2008. Each has been below the industry averages for the past four years. * This indicates that COGS and administrative costs may both be too high and a potential problem for Apple Inc. Note, this result is consistent with the low interest coverage ratio. Summary of Ratio Analyses * Inventories are too high. * May be paying off creditors (accounts collectible) too soon. * COGS may be too high. * Selling, general, and administrative costs may be too high. Common Size Analysis- Particulars 2008 2009 2010 2011 2008 2009 2010 2011 Assets Current assets Cash cash equivalents 11875 5263 11261 9815 30. 01 9. 77 14. 98 8. 43 Short term marketable securities 10236 18201 14359 16137 25. 87 33. 80 19. 10 13. 7 A/R 2422 3361 5510 5369 6. 12 6. 24 7. 33 4. 61 Inventories 509 455 1051 776 1. 29 . 85 1. 40 . 67 Differed tax assets gross7 2101 1636 2014 3. 66 3. 90 2. 18 1. 73 Vendor non-trade receivables - - 4414 6348 - - 5. 87 5. 46 Other current assets 5822 6884 3447 4529 14. 71 12. 78 4. 59 3. 89 Total current assets 32311 36265 41678 44988 81. 04 67. 34 55. 435 38. 659 long-run marketable securities 2379 10528 5391 55618 6. 01 19. 55 7. 171 47. 794 Property, plant and equipment, net 2455 2954 4786 7777 6. 20 5. 486 6. 336 6. 83 state of grace 207 206 741 896 . 52 . 383 . 986 . 769 Acquired intangible assets, net 285 247 342 3536 . 72 . 495 . 455 3. 039 Other assets 1935 3651 2263 3556 4. 890 6. 780 3. 010 3. 056 Total assets 39572 53851 75183 116371 c hundred ascorbic acid 100 LIABILITIES AND SHAREHOLDERS truth Current liabilities Accounts payable 5520 5601 12015 14632 13. 942 10. 401 15. 981 12. 574 Accrued expenses 3719 3376 5723 9247 9. 398 6. 269 7. 612 7. 946 Deferred revenue 4853 10305 2984 4091 12. 64 19. 136 3. 969 3. 516 Total current liabilities 14092 19282 20722 27970 35. 611 35. 806 27. 562 24. 035 Deferred revenue non-current 3029 4485 1139 1686 7. 654 8. 329 1. 515 1. 449 Other non-current liabilities 1421 2252 5531 10100 3. 591 4. 182 7. 357 8. 679 Total liabilities 18542 26019 27392 39756 46. 856 48. 317 36. 434 34. 163 Commitments and contingenciesShareholders equity Common stock, no par value 1,800,000 shares countenance 929,277 and 915,970 shares issued and outstanding, respectively 7177 8210 10668 13331 18. 37 15. 246 14. 189 11. 456 Retained earnings 13845 19538 37169 62841 34. 987 36. 282 49. 438 54. 001 salt away other comprehensive income/(loss) 8 84 (46) 443 . 020 . 156 (. 061) . 381 Total shareholders equity 21030 27832 47791 76615 53. 144 51. 683 63. 566 65. 837 Total liabilities and shareholders equity 39572 53851 75183 116371 100 100 100 100 indicator Analysis- Particulars 2008 2009 2010 2011 2008 2009 2010 2011 Assets Current assets Cash cash equivalents 11875 5263 11261 9815 100 14. 13 27. 019 21. 897 Short term marketable securities 10236 18201 14359 16137 100 39. 204 34. 452 35. 870 A/R 2422 3361 5510 5369 100 9. 27 13. 221 11. 934 Inventories 509 455 1051 776 100 1. 26 2. 522 1. 752 Differed tax assets 1447 2101 1636 2014 100 5. 79 3. 925 4. 477 Vendor non-trade receivables - - 4414 6348 - - 10. 591 14. 111 Other current assets 5822 6884 3447 4529 100 18. 983 8. 271 10. 067 Total current assets 32311 36265 41678 44988 100 67. 34 55. 435 38. 59 Long-term marketable securities 2379 10528 5391 55618 100 19. 55 7. 171 47. 794 Property, plant and equipment, net 2455 2954 4786 7777 100 5. 486 6. 336 6. 683 Goodwill 207 206 741 896 100 . 383 . 986 . 769 Acquired intangible assets, net 285 247 342 3536 100 . 495 . 455 3. 039 Other assets 1935 3651 2263 3556 100 6. 780 3. 010 3. 056 Total assets 39572 53851 75183 116371 100 100 100 100 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities Accounts payable 5520 5601 12015 14632 100 10. 401 15. 981 12. 574 Accrued expenses 3719 3376 5723 9247 100 6. 269 7. 612 7. 94 6 Deferred revenue 4853 10305 2984 4091 100 19. 136 3. 969 3. 516 Total current liabilities 14092 19282 20722 27970 100 35. 806 27. 562 24. 035 Deferred revenue non-current 3029 4485 1139 1686 100 8. 329 1. 515 1. 449 Other non-current liabilities 1421 2252 5531 10100 100 4. 182 7. 357 8. 679 Total liabilities 18542 26019 27392 39756 100 48. 317 36. 434 34. 63 Commitments and contingenciesShareholders equity Common stock, no par value 1,800,000 shares authorized 929,277 and 915,970 shares issued and outstanding, respectively 7177 8210 10668 13331 100 15. 246 14. 189 11. 456 Retained earnings 13845 19538 37169 62841 100 36. 282 49. 438 54. 001 Accumulated other comprehensive income/(loss) 8 84 (46) 443 100 . 156 (. 061) . 381 Total shareholders equity 21030 27832 47791 76615 100 51. 683 63. 566 65. 837 Total liabilities and shareholders equity 39572 53851 75183 116371 100 100 100 100