Chapter 10, Problem 1FF

(Learning Objectives 2, 3, 4, 5: Analyze common stock, retained earnings, return on equity, and return on assets) Apple Inc.’s consolidated financial statements appear in Appendix A and online in the filings sec lion of www.sec.gov.

Requirements

1. 1. Refer to Apple’s Consolidated Balance Sheets and Note 7 (Shareholders’ Equity). Describe the class of stock that Apple has authorized. How many shares of that stock had been issued as of September 24. 2016? How many shares were outstanding as of that date?
2. 2. Refer to the Consolidated Balance Sheets and the Consolidated Statements of Stockholders’ Equity. How many shares of treasury stock did the company purchase during the year ended September 24. 2016? What was the cost of the treasury stock? How much per share?
3. 3. Examine Apple’s Consolidated Statement of Stockholders’ Equity. Analyze the change that occurred in the company’s Retained Earnings account during the year ended September 24, 2016. Can you trace the change to any of its other financial statements? Is this a good thing or a bad thing?
4. 4. Use DuPont Analysis to calculate Apple’s return on equity and return on assets for 2016. Pick a company that is a competitor of Apple and calculate these ratios for the competitor. Which ratios are similar? Which are different? Which company do you think is more profitable? Explain.