Apple

Apple inc. has done really well for its self in
the past couple of years. The company is very
profitable and it shows through the increase
in net income and the increase of stock sales.
Apple’s stock is at a very high price now
proving that many investors trust that Apple
can sustain profitability. Apple’s success
could be credited to its iproducts. The
increased popularity of the iPod, iPhone, and
iPad have rocketed sales.
Apple inc. Annual Report

Introduction
Apple’s founder and chief
executive officer is Steve Jobs.
His office is located at 1 Infinite
loop Cupertino, California 95014.
Apple’s ending date of the last
fiscal year was September 25,
2010. Apples primary products
are iPhones, iPods, computers
and computer software. Their
main geographic area of activity
is in the Americas, Europe,
Japan, and Asia.

Audit Report
Apple’s independent auditor is Ernst and young
LLP. They said that the financial statements are
presented fairly in all the material with respect
to the consolidated financial position of Apple.
The results of its operations and cash flows are
in conformity with the generally accepted
accounting principles of the U.S.

Stock Market
Information
The most recent price of the
company’s stock is $372.5
The twelve month trading
range of the company’s stock
is from $281.82 to $422.86
Dividend per share are 0
Date of the above information
October 5, 2011
In my opinion about Apple’s
stock I would have to say sell
because its stock is really high
right now and it will not last
for long especially since the
death of Steve Jobs.

Apples future plan is to develop operating systems that are easy to use, well
integrated, with a well industrialized design. Apple continues to stay ahead of
competition with new innovations and products that capture our interests.
With the introduction of the new iPad many other companies have followed in
their footsteps to try and enter the tablet market. The iPhone another one of
Apples biggest success is one of the best selling smart phones in the U.S. and
apple will continue to produce iPhones that are truly innovative.
http://www.apple.com/ipad/
http://www.apple.com/iphone/#

•Format most like a multistep format.
•Gross profit, income from operations, and net
income all increased but net income stood out
the most because it had a staggering increase of
about 70%.
Gross Profit Income
From
Operations
2009 $17,222 $12,066 $8,235
Net Income
2010 $25,684 $18,540 $14,013

Assets= Liabilities+ Stockholder’
s Equity
2009 $47,501 $15,861 $31,640
2010 $75,183 $27,395 $47,791
•All of Apple’s balance sheet accounts have
increased but assets showed the biggest increase.

•Cash flows from operations have been more than
net income for the past two years.
•The company growing through investing
activities.
•The company’s primary source of financing is
stock sales.
•Overall, has cash increased over the past two
years by almost doubling.

•Revenue Recognition- Net sales is derived primarily
from revenues through the sale of software,
hardware, digital content, peripherals, and service
and support contracts. Apple recognizes revenue in
accordance with industry specific software
accounting guidance.
•Cash- All highly liquid investments with maturities
of there months or less are counted as cash
equivalents.

Accounting Policies
• Short-term investments- Marketable securities with
maturities of less than 12 months are classified as
short- term while marketable securities with maturities
of more than 12 months are classified as long term.
• Inventories- are computed using the first in first out
method. The companies inventories consist of
components and finished goods.
• Property and Equipment- Depreciation is computed by
straight line method over the useful lives of the asset.

Topics of the Notes to Financial
Statements.
1)Summary of Significant Accounting Policies
2)Financial Instruments
3)Fair Value Measurements
4)Consolidated Financial Statements Details
5)Goodwill and other Intangible Assets
6)Income Taxes
7)Shareholder’s Equity and Stock-Based Compensation
8)Commitment and Contingencies
9)Segment information and Geographic Data
10)Selected Quarterly Financial Information (Unaudited)

Financial Analysis
Liquidity Ratios 2009 2010
Working Capitol $14,286 $20,049
Current Ratio 2.7 1.5
Receivables Turnover
Average Day’s Sales
uncollected
16.1 11.07
7.98 11.97
Inventory Turnover 48.2 62.3
Average Day’s Inventory
on Hand
7.62 5.98

Financial Analysis
Liquidity Ratios
Working capital increased because total assets increased.
Current ratio has decreased because current liabilities have
almost doubled in the year.
Receivables turnover has decreased because net sales increased
substantially while accounts receivable only increased by a little
bit.
Average day’s sales uncollected has increased because receivables
turnover had decreased.
Inventory turnover has increased because inventory for 2010 has
increased.
Average day’s inventory on hand has decreased because
inventory turnover has increased showing that Apple is selling
more inventory and is having less inventory on hand.

Financial Analysis
Profitability Ratios
2009 2010
Profit Margin 19.2% 21.5%
Asset Turnover .96 1.1
Return on Assets 25.5% 23.8%
Return on Equity 20.7% 35.3%

Financial Analysis
Profitability Ratios
Profit margin rose in 2010 because sales
increased.
Asset turnover increased because assets
were increased.
Return on assets decrease because net
income increased.
Return on equity has increased because
more stockholders have invested in Apple.

Financial Analysis
Solvency Ratio
For the past two years debt to equity has increased because
liabilities has increased substantially.
2009 2010
Debt to equity 0.50 0.57

Financial Analysis
Market Strength Ratios
Price/earnings per
share
2009 2010
20.08 18.65
Dividends Yield 0 0
Apple stock price/ earnings per share decreased over the
year because the price of the stock rose greatly within
that year. The company did not pay out dividends
because they anticipated that for the foreseeable future
they will retain any earnings and use it for operations
of its business.