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a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?

a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends?

b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business?

c. Compare general and administrative expenses to similar companies. Are they reasonable?

d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?

 

 

APPLE INC Income statement horizontal analysis 2 quarters 1st quarter 2nd quarter dessuobs 25,2021 December 26.2020 26,2021 27,2020 Net sales praducts 104429 95678 63948 46529 services 19516 15761 17486 13156 tatal net sales 123945 111439 81434 59685 Cast of sales Products 64309 62130 40899 32693 Services 5393 4981 5280 4312 Total cost of sales 69702 67111 46179 37005 Grass margin 54243 44328 35255 22680 Operating expenses Research and development 6306 5163 5717 4758 Selling, general and administrative Total operating expenses 6449 5631 5412 4831 12755 10794 11129 9589 Operating income ather income(expense), net 41488 33534 24126 13091 -247 45 243 46 income before provision for income taxes pravision for income taxes 41241 33579 24369 13137 6611 4824 2625 1884 net income 34630 28755 21744 11253 earnings per share Basic 2.11 1.7 1.31 0.65 Diluted 2.1 1.68 1.3 0.65
Transcribed Image Text:APPLE INC Income statement horizontal analysis 2 quarters 1st quarter 2nd quarter dessuobs 25,2021 December 26.2020 26,2021 27,2020 Net sales praducts 104429 95678 63948 46529 services 19516 15761 17486 13156 tatal net sales 123945 111439 81434 59685 Cast of sales Products 64309 62130 40899 32693 Services 5393 4981 5280 4312 Total cost of sales 69702 67111 46179 37005 Grass margin 54243 44328 35255 22680 Operating expenses Research and development 6306 5163 5717 4758 Selling, general and administrative Total operating expenses 6449 5631 5412 4831 12755 10794 11129 9589 Operating income ather income(expense), net 41488 33534 24126 13091 -247 45 243 46 income before provision for income taxes pravision for income taxes 41241 33579 24369 13137 6611 4824 2625 1884 net income 34630 28755 21744 11253 earnings per share Basic 2.11 1.7 1.31 0.65 Diluted 2.1 1.68 1.3 0.65
APPLE INC BALANCE SHEET" DECEMBER 25TH 2021 amount ins first quarter Second quarter 25-Dec-21 25-Sep-21 june 26,20 26-Sep-20 ASSETS Current assets Cash and cash equivalents Mariet securities Accounts receivable, net Inventories Vendor non trade receivables Other current assets Tetal curent asets 37119 34940 34050 38016 26794 27699 27646 52927 30213 26278 17475 16120 5876 6580 5178 4061 35040 25228 16433 21325 18112 14111 13641 11264 153154 134836 114423 143713 Non current assets Marketable securities Property,plant and equipment,net Other non current assers Tetal non current assets Tetal assets 138683 127877 131948 100887 39245 39440 38615 36766 S0109 48849 44854 42522 228037 216166 215417 180175 381191 351002 329840 32388 LIABILITIES AND STAKEHOLDERS EQUITY Current liabilities Acoounts payable 74362 54763 40409 42296 Other current liabilities 49167 47493 43625 42684 Deffered revenue 7876 7612 7681 6643 Commercial paper 5000 6000 8000 4996 Term debt 11169 9613 B039 8773 Total current liabilities 147574 125481 107754 105392 Non curret liabilies Term debt 106529 109106 105752 98667 Other non current liabilities 55056 53325 52054 54490 Tatal non current liabilitis 161685 162431 157806 153157 Total liabilities 309259 287912 265560 258549 SHAREHOLDERS EQUITY Common stpck 58424 57365 54989 50779 Retained earnings 14435 5562 9233 14996 Accumulated other comprehensive income 927 163 58 406 Total shareholdersequity 71932 63090 64280 65369 Totalliabilities and shareholders equity 381191 351002 329840 323918
Transcribed Image Text:APPLE INC BALANCE SHEET" DECEMBER 25TH 2021 amount ins first quarter Second quarter 25-Dec-21 25-Sep-21 june 26,20 26-Sep-20 ASSETS Current assets Cash and cash equivalents Mariet securities Accounts receivable, net Inventories Vendor non trade receivables Other current assets Tetal curent asets 37119 34940 34050 38016 26794 27699 27646 52927 30213 26278 17475 16120 5876 6580 5178 4061 35040 25228 16433 21325 18112 14111 13641 11264 153154 134836 114423 143713 Non current assets Marketable securities Property,plant and equipment,net Other non current assers Tetal non current assets Tetal assets 138683 127877 131948 100887 39245 39440 38615 36766 S0109 48849 44854 42522 228037 216166 215417 180175 381191 351002 329840 32388 LIABILITIES AND STAKEHOLDERS EQUITY Current liabilities Acoounts payable 74362 54763 40409 42296 Other current liabilities 49167 47493 43625 42684 Deffered revenue 7876 7612 7681 6643 Commercial paper 5000 6000 8000 4996 Term debt 11169 9613 B039 8773 Total current liabilities 147574 125481 107754 105392 Non curret liabilies Term debt 106529 109106 105752 98667 Other non current liabilities 55056 53325 52054 54490 Tatal non current liabilitis 161685 162431 157806 153157 Total liabilities 309259 287912 265560 258549 SHAREHOLDERS EQUITY Common stpck 58424 57365 54989 50779 Retained earnings 14435 5562 9233 14996 Accumulated other comprehensive income 927 163 58 406 Total shareholdersequity 71932 63090 64280 65369 Totalliabilities and shareholders equity 381191 351002 329840 323918
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