Key figures for Apple and Google follow.

Required

1. Compute the recent two years’ cash flow on total assets ratios for Apple and Google.

2. For the current year, which company has the better cash flow on total assets ratio?

3. For the current year, does cash flow on total assets outperform or underperform the industry (assumed) average of 15% for (a)Apple and (b) Google?

Data from Apple’s

 

Data from Google's

Transcribed Image Text:

Apple Google Current Year 1 Year Prior 2 Years Prior Current Year 1 Year Prior 2 Years Prior $ millions Operating cash flows. Total assets... $ 63,598 375,319 $ 65,824 321,686 $ 81,266 290,345 $ 37,091 197,295 $ 36,036 167,497 $ 26,572 147,461 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 30, 2017 September 24, 2016 ASSETS Current assets Cash and cash equivalents 24 20,289 20,484 Short-term marketable securities 53,892 46,671 Accounts receivable, less allowances of $58 and $53, respectively 17,874 15,754 Inventories 4,855 2,132 Vendor non-trade receivables 17,799 13,545 Other current assets 13,936 8,283 Total current assets 128,645 106,869 Long-term marketable securities 194,714 170,430 Property, plant and equipment, net 33,783 27,010 Goodwill 5,717 5,414 Acquired intangible assets, net 2.298 3,206 Other non-current assets 10,162 8,757 Total assets 375,319 321,686 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities 37,294 Accounts payable Accrued ex penses 49,049 25,744 22,027 De ferred revenue 7,548 8,080 Commercial paper 11,977 8,105 Current portion of long-term debt 6,496 3,500 Total current liabilities 100,814 79,006 Deferred revenue, non-current 2,836 2,930 Long-term debt 97,207 75,427 Other non-current liabilities 40,415 36,074 Total liabilities 241,272 193,437 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, S0.00001 par value: 12,600,000 shares authorized; 5,126,201 and 5,336,166 shares issued and outstanding, respectively Retained earnings 35,867 31,251 98,330 96,364 Accumulated other comprehensive income (loss) Total shareholders' equity (150) 634 134,047 128,249 Total liabilities and shareholders' equity 375,319 321,686 See accompanying Notes to Consolidated Financial Statements.