Use financial statements on that page for the most recent September fiscal year-end. Youll be using them
Question:
Use financial statements on that page for the most recent September fiscal year-end. You’ll be using them to answer some questions.
Requirements:
Address each of the following five (5) requirements.
(NOTE: the most recent year-end numbers ("this year") are always in the left-hand column, closest to the account name, so it's easiest for users to read. The prior year-end numbers ("last year") are in the next column to the right, because it's less relevant).
Requirement 1 - Statement of Operations (Income Statement) Summary: For the two most recent fiscal years, provide the following income statement amounts. (Review the multi-step income statement in chapter 3, if necessary):
- 1. Gross Margin
- 2. Net Income
Requirement 2 - Basic Accounting Equation: Show that the total assets of the company are equal to its total liabilities plus its total stockholders’ equity as of the balance sheet date for the most recent fiscal year. Do not recreate the company’s balance sheet.
Requirement 3 - Statement of Cash Flows: Review the statement of cash flows for the most recent fiscal year, and identify following in your response:
- 1. Did more cash come in, or go out in the most recent year? State whether cash increased or decreased overall and by how much (dollars).
- 2. How much cash is generated by operating activities? Is it more or less than net income?
Requirement 4 - Financial Ratio Analysis: For the most recent fiscal year, compute the following ratios. (Ratios are explained in detail in your textbook, near the end of Chapter 13). Show your computations:
- 1. Working capital
- 2. Current ratio
- 3. Profit margin
- 4. Inventory Turnover (see Chapter 13, and my explanation in the Chapter 5 module).
- 5. Days Sales in Inventory (industry average is approx. 9 days)
The example response format for Requirements 1 - 4:
“…..I identified the following results during my review of Apple’s financial statements:
Rqmt. 1a) Gross Margin: $_______ (This year) $_________ (Last year)
Rqmt. 1b) Net Income $_______ (This year) $__________ (Last year)
Rqmt. 2) The accounting equation for Apple’s most recent year: $_______ = $_________+$_________
Rqmt. 3a) More cash came in/went out (pick one). Cash increased/decreased by $_______________
Rqmnt. 3b) Cash generated by operating activities in the current year was $__________. It was more/less (pick one) than net income of $____________
Rqmnt. 4a) Working capital = current assets - current liabilities = $________ - $________ = $________
Continue your responses for requirements (4b) to (4e)…..”
Requirement 5 - Reflect on your findings: What did you find interesting as you reviewed Apple’s financial results? What other approaches could you take to help you determine whether Apple is performing as well as its competitors? (Hint: Who could you talk to about the company, what comparisons can you make to measure performance, and where else can you find information about the company's industry and its prospects? Please also see your textbook, Chapter 13 – Financial Statement Analysis.)