1
Financial Analysis Report
Steven Ganjikhanshan
Financial Management
Dr. Yvan Nezerwe
January, 09 2023
2
Income Statement
TotalRevenue
OperatingRevenue
CostOfRevenue
GrossProfit
OperatingExpense
SellingGeneralAndAdministration
ResearchAndDevelopment
DepreciationAmortizationDepletionIncomeStatement
DepreciationAndAmortizationInIncomeStatement
OtherOperatingExpenses
OperatingIncome
NetNonOperatingInterestIncomeExpense
InterestIncomeNonOperating
InterestExpenseNonOperating
TotalOtherFinanceCost
OtherIncomeExpense
GainOnSaleOfSecurity
EarningsFromEquityInterest
SpecialIncomeCharges
RestructuringAndMergernAcquisition
OtherSpecialCharges
OtherNonOperatingIncomeExpenses
PretaxIncome
TaxProvision
NetIncomeCommonStockholders
NetIncome
NetIncomeIncludingNoncontrollingInterests
NetIncomeContinuousOperations
NetIncomeExtraordinary
NetIncomeFromTaxLossCarryforward
DilutedNIAvailtoComStockholders
BasicEPS
DilutedEPS
BasicAverageShares
DilutedAverageShares
TotalOperatingIncomeAsReported
TotalExpenses
NetIncomeFromContinuingAndDiscontinuedOperation
NormalizedIncome
InterestIncome
InterestExpense
NetInterestIncome
EBIT
EBITDA
ReconciledCostOfRevenue
ReconciledDepreciation
NetIncomeFromContinuingOperationNetMinorityInterest
TotalUnusualItemsExcludingGoodwill
TotalUnusualItems
NormalizedEBITDA
TaxRateForCalcs
TaxEffectOfUnusualItems
9/30/2021
365,817,000,000
365,817,000,000
212,981,000,000
152,836,000,000
43,887,000,000
21,973,000,000
21,914,000,000
108,949,000,000
198,000,000
2,843,000,000
2,645,000,000
60,000,000
60,000,000
109,207,000,000
14,527,000,000
94,680,000,000
94,680,000,000
94,680,000,000
94,680,000,000
94,680,000,000
5.67
5.61
16,701,272,000
16,864,919,000
108,949,000,000
256,868,000,000
94,680,000,000
94,680,000,000
2,843,000,000
2,645,000,000
198,000,000
111,852,000,000
212,981,000,000
11,284,000,000
94,680,000,000
123,136,000,000
0.133
0
3
Balance Sheet
TotalAssets
CurrentAssets
CashCashEquivalentsAndShortTermInvestments
CashAndCashEquivalents
CashFinancial
CashEquivalents
OtherShortTermInvestments
Receivables
AccountsReceivable
GrossAccountsReceivable
AllowanceForDoubtfulAccountsReceivable
OtherReceivables
Inventory
RawMaterials
WorkInProcess
FinishedGoods
PrepaidAssets
CurrentDeferredAssets
CurrentDeferredTaxesAssets
OtherCurrentAssets
TotalNonCurrentAssets
NetPPE
GrossPPE
Properti es
LandAndImprovements
BuildingsAndImprovements
MachineryFurnitureEquipment
OtherProperti es
Leases
AccumulatedDepreciati on
GoodwillAndOtherIntangibleAssets
Goodwill
OtherIntangibleAssets
InvestmentsAndAdvances
Investmenti nFinancialAssets
AvailableForSaleSecuriti es
OtherInvestments
NonCurrentDeferredAssets
NonCurrentDeferredTaxesAssets
NonCurrentPrepaidAssets
OtherNonCurrentAssets
TotalLiabilitiesNetMinorityInterest
CurrentLiabiliti es
PayablesAndAccruedExpenses
Payables
AccountsPayable
TotalTaxPayable
IncomeTaxPayable
OtherPayable
CurrentAccruedExpenses
PensionandOtherPostReti rementBenefitPlansCurrent
CurrentDebtAndCapitalLeaseObligati on
CurrentDebt
CurrentNotesPayable
CommercialPaper
OtherCurrentBorrowings
CurrentDeferredLiabiliti es
CurrentDeferredRevenue
OtherCurrentLiabiliti es
TotalNonCurrentLiabiliti esNetMinorityInterest
LongTermDebtAndCapitalLeaseObligati on
LongTermDebt
NonCurrentDeferredLiabiliti es
NonCurrentDeferredTaxesLiabiliti es
NonCurrentDeferredRevenue
TradeandOtherPayablesNonCurrent
OtherNonCurrentLiabiliti es
TotalEquityGrossMinorityInterest
StockholdersEquity
CapitalStock
PreferredStock
CommonStock
Additi onalPaidInCapital
RetainedEarnings
GainsLossesNotAffecti ngRetainedEarnings
ForeignCurrencyTranslati onAdjustments
OtherEquityAdjustments
OtherEquityInterest
TotalCapitalization
PreferredStockEquity
CommonStockEquity
NetTangibleAssets
WorkingCapital
InvestedCapital
TangibleBookValue
TotalDebt
NetDebt
ShareIssued
OrdinarySharesNumber
9/30/2021
351,002,000,000
134,836,000,000
62,639,000,000
34,940,000,000
17,305,000,000
17,635,000,000
27,699,000,000
51,506,000,000
26,278,000,000
25,228,000,000
6,580,000,000
14,111,000,000
216,166,000,000
39,440,000,000
109,723,000,000
0
20,041,000,000
78,659,000,000
11,023,000,000
-70,283,000,000
127,877,000,000
127,877,000,000
127,877,000,000
127,877,000,000
48,849,000,000
287,912,000,000
125,481,000,000
54,763,000,000
54,763,000,000
54,763,000,000
15,613,000,000
15,613,000,000
6,000,000,000
9,613,000,000
7,612,000,000
7,612,000,000
47,493,000,000
162,431,000,000
109,106,000,000
109,106,000,000
24,689,000,000
28,636,000,000
63,090,000,000
63,090,000,000
57,365,000,000
57,365,000,000
5,562,000,000
163,000,000
172,196,000,000
63,090,000,000
63,090,000,000
9,355,000,000
187,809,000,000
63,090,000,000
124,719,000,000
89,779,000,000
16,426,786,000
16,426,786,000
4
2. Perform a vertical financial analysis incorporating
1. Debt ratio - It measures the amount of leverage used by a company in terms of total debt to
total assets. If the ratio is great than 1.0, it means the company has more debt than assets.
Debt Ratio = Total debt/Total assets = 124,719,000,000/351,002,000,000 = 0.355
This means Apple does not acquire much debt which can be good or bad. If the company isn’t
acquiring debt that mean the company is taking full advantage of interest expense tax break or
not expanding.
2. Debt to equity ratio – Measures the total liabilities with its shareholders equity. It is used to
compare to direct competitors for a better analysis.
Debt to equity ratio = Total liabilities/Total Shareholders’ Equity =
287,912,000,000/63,090,000,000= $4.56
It means Apple has $4.56 of debt for every dollar of equity. A higher ration suggests more risk
but at the same time it means the company is taking advantage of debt to expand.
3. Return on assets – Measures company’s profitability in relations to its total assets. It can be
used by investors to see if a company is using its assets efficiently to generate profit.
ROA = Net Income/Total Assets = 94,680,000,000/351,002,000,000 = 23%
The higher the ROA, the better. That means Apple is able to earn more money with a smaller
investment and more asset efficiency.
4. Return on equity – Measures the company’s net income divided by its shareholders equity. The
higher the ROE, the better the company is using equity financing into profits.
ROE = Net income/Shareholders’ equity = 94,680,000,000/63,090,000,000 = 150%
The ROE is over 100% because the pandemic had a big impact on many companies such as Apple
and the value of stock dropped while the income exceeded.
5. Current ratio – Measure the current assets to current liabilities. There are usually assets that will
turn into cash or liabilities that will be paid less than a year. It enables investors to understand if
a company can pay off its current debt with current liabilities.
Current ratio = Current assets/Current liabilities = 134,836,000,000/125,481,000,000 = 1.07
The current ratio suggests that Apple is using its assets efficiently and it can cover its currents
liabilities with current assets.
6. Quick ratio – Measures capacity to pay its current liabilities with cash and equivalent and
without needing to sell its inventory or obtaining additional financing.
Quick ratio = (Current assets - Inventory – Prepaid expenses)/Current liabilities =
(134,836,000,000 - 6,580,000,000 - 39,440,000,000)/ 125,481,000,000 = 0.71
The quick ratio suggests that Apple may struggle paying its current debt but that is only if using
cash and cash equivalent that has high solvency.
7. Inventory turnover – Measures how efficiently a company uses its inventory and it is useful to
compare to competitors in the market.
5
Inventory turnover = COGS/Average Inventory (Beg Inv. + end Inv.)/2 = 212,981,000,000/
[(4,061,000,000 + 6,580,000,000)/2] = 212,981,000/5,320,500 = 40.03
This means that the company may be over stocking but also can be a sign of high sales. As Apple
has high sales during new release, these calculations can be misinterpreted.
8. Days in inventory – It measures how long it takes a business generates sales equal to its
inventory. The longer the inventory stays on hand, the longer cash is held on hand and sales
maybe slowing down.
Days in inventory = (Avg. Inv./COGS) * 365 = (5,320,500/212,981,000) * 365 = 9.12
This is relatively a really good number, but it can also mean that the company is not producing
as fast but overall, a great number as Apple clears inventory every 9 days.
9. Accounts receivable turnover = Its used to measure company’s efficiency collecting receivable
from its clients. It’s the measurement of how many times receivables are converted to cash in a
certain period.
Accounts receivable turnover = Net annual credit sales/average accounts receivable =
10. Accounts receivable cycle in days – A high account receivable cycle in days means that the
company is inefficient in collecting debt and processing payments. This means that the company
is too lenient in debt collection practices.
(Accounts receivable/Total revenue) * 365 = (26,278,000,000/365,817,000,000) * 365 = 26.22
It takes on average 26 days for Apple to collect debt and it is a good number.
11. Accounts payable turnover – This is a short-term liquidity ratio measured to understand how
fast a company pays its supplier.
AP Turnover = (Total supply purchases/ [(Beg AP + End AP)/2] = 54,763,000,000 /
[(42,296,000,000 + 54,763,000,000)/2] = 1.12
This means the company is stretching its payables to pay for its operations.
12. Accounts payable cycle in days – Computes the average number of days a company needs to pay
its bills and obligations. Businesses that have a high DPO can delay making payments and use
the available cash for short-term investments.
Accounts payable cycle in days = (AP * Number of day)/COGS = (54,763,000,000 *365)/
212,981,000,000 = 93.85 days
13. Earnings per share – It is the portion of the company’s income available to shareholders and
allocated to each share.
EPS = (Net income – Preferred dividends)/ Average outstanding common shares =
94,680,000,000 /16,426,786,000 = 5.76
14. Price to earnings ratio – Share price to its earning per share. Holds the most value to analyst
when compared to similar companies.
PE ratio = Market value per share/ Earnings per share = 130.15 / 5.76 = 22.59
6
References:
Yahoo! (n.d.). Yahoo Finance - Stock Market Live, quotes, Business & Finance News. Yahoo! Finance.
Retrieved January 9, 2023, from https://finance.yahoo.com/
Parrino, R. (2022). Fundamentals of Corporate Finance. John Wiley & Sons, Inc.
Lukic, J., Olexová, C., & Kudlová, Z. (2022). Factors predicting companies’ crisis in the engineering
industry from the point of view of financial analysis. PLoS ONE, 17(2), 1–21. https://doiorg.usu.idm.oclc.org/10.1371/journal.pone.0264016