Use the annual financial statements (10K) with a fiscal year end in 2011, if not available use 2010.
Public Companies
Starbucks
WalMart
Sony Group
LG
Coca Cola
Pepsi
Hersheys
Apple
IDC Kodak
Microsoft
Johnson & Johnson
Kraft
Nestle
Safeway
Macy's
Nike
Addidas
Peets Coffee & Tea
Sears
Nordstrom
Kroger
Link to Financial Statements
http://investor.starbucks.com/
http://investors.walmartstores.com
http://www.sony.net/SonyInfo/IR/financial/ar/Archive.html
http://www.lg.com/global/ir/reports/annual-reports.jsp
http://ir.thecoca-colacompany.com/phoenix.zhtml?c=94566&p=irol-financials
http://www.pepsico.com/Investors/Annual-Reports.html
http://www.thehersheycompany.com/ir/
http://investor.apple.com/financials.cfm
http://phx.corporate-ir.net/
http://www.microsoft.com/investor/AnnualReports/default.aspx
http://www.investor.jnj.com/fin-reports
http://www.kraftfoodscompany.com/investor/sec-filings-annual-report/annual_reports.aspx
http://www.nestle.com/Investors/Reports/Pages/Reports.aspx
http://www.safeway.com/IFL/Grocery/Investors#iframetop
http://www.macysinc.com/AboutUs/AnnualReport/default.aspx
http://phx.corporate-ir.net/
http://www.adidas-group.com/en/investorrelations/reports/annualreports.aspx
http://investor.peets.com/annual.cfm
http://www.searsholdings.com/invest/
http://phx.corporate-ir.net/
http://www.thekrogerco.com/finance/
If you would like to choose a different company, you must obtain approval from me first.
Project Questions:
Group Name:
Apple Corp.
Company Name:
Apple Corp
Team Members:
Elizabeth Frantz
Thomas Bacewich
Chris Smith
Mohamed Saadoun
Imad Obeidi
Complete the following information:
Please use N/A if you could not locate an item or feel it does not apply.
1. Basic Company Facts
Page 1 of 12
a. Name of Firm:
Apple Inc.
b. Stock Ticker Symbol:
AAPL
c. Stock exchange where traded:
NASDAQ
d. State of Incorporation
California
e. Independent Auditor
Ernst & Young LLP
f. Company’s Fiscal Year End
September 25, 2011 through September 29, 2012
g. Web site
www.aaple.com
2. List up to five products or services your company sells or provides and customers to whom
those products are sold.
Products
Mac hardware
Customers
Business and professional
ipods
iTunes
iPhone
iPad
Page 2 of 12
3. Use the financial highlights section of your company’s annual report to note the following
information. (Note: FYE may need to be adjusted)
Most Recent
Fiscal Year
Item
Next Most
Recent Year
Net Income
$
25,922m
$
Total Assets
$
116,371m
$
Total Liabilities
$
39,756m
Long-term Debt
$
Dividend per share
Earnings per share
(basic EPS)
14,013m
Additional
years
Additional
Years
$
8,235m
$
6,119m
75,183m
$
47,501m
$
36,171m
$
27,392m
$
15,861m
$
13,874m
10,100m
$
5,531m
$
3,502m
$
1,745m
$
0
$
0
$
0
$
0
$
28.05
$
15.41
$
9.22
$
6.94
4. From Management’s Discussion and Analysis (MD&A), answer the following:
a. Does your company’s MD&A section have the following major sections?
(Note: All companies may not have these sections or use the exact terminology.)
Yes
Overview
Yes
Results of operations
Yes
Financial condition and liquidity
Yes
Market risk management
Yes
Critical accounting policies
Yes
Caution concerning forward-looking information
Yes
Other:
Page 3 of 12
No
b. What is the general tone of management’s comments in this section? Was the most recent
year a positive or negative experience for the company? Is management optimistic or
pessimistic about the future? Discuss.
5. Locate the Statement Management Responsibility and the Report of the Independent
Accountants (or Auditor’s Report) and read them carefully to answer the following questions.
a. Who is responsible for the preparation and content of the financial statements?
Ernst & Young LLP
b. Does the company have an Audit Committee?
X
Yes
No
c. What is (are) the responsibility(s) of the audit committee?
Provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles
d. Which financial statements are covered by the audit report?
the accompanying consolidated balance sheets of Apple Inc. as of September 24, 2011 and
September 25,2010, and the related consolidated statements of operations, shareholders’
equity and cash flows for each of the three years in the period ended September 24, 2011.
Page 4 of 12
e. Who is responsible for assessing that the financial statements are fairly stated?
f. To whom is the audit report addressed?
g. Did your company receive an unqualified opinion?
Yes
No
h. If your firm did not receive an unqualified opinion, what reason(s) was (were) given?
6. Review the Basic Company Facts and other parts of the Annual Report to find the following
information:
a.
Name of CEO
Tim Cook
b.
Name of Chairman of the Board
c.
When will the annual stockholder’s meeting be held?
e.
List other interesting information/facts, if any, disclosed in this section?
Millard S. Drexler
Page 5 of 12
7. Does your firm prepare consolidated financial statements? (check one)
Often, the financial statement will have the word “consolidated” in its title to indicate that the
corporation owns one or more subsidiaries and that the financial results of the subsidiaries
have been combined with those of the parent company to produce a single set of financial
statements.
X
Yes
No
When the company and the subsidiaries are combined, all transactions between the company
and its subsidiaries must first be eliminated. Why do you think this is necessary?
The guiding principle of consolidated financial statements is that of the 'single entity' group
principle. The aim of consolidated financial statement is to show the performance of the
as if it were a single entity. This means that all transactions need to be eliminated as
otherwise the consolidated financial statements would double count these balances.
8. What format was used to prepare your firm’s income statement? (check one)
Hint: If gross margin (also called gross profit) is reported on the income statement, it’s the
multiple step format.
Single-step
X
Multiple step
Page 6 of 12
9. For each of the selected items on the income statement, determine its percentage relative to
sales revenue for the most recent year and the next most recent year. If an item is not reported
draw a line through it.
Income Statement Line
Most Recent
Year
Percent
of
Sales
Sales or Revenue
108,249
100
Cost of Sales
64,431
59.5%
25,541
60.6%
Gross Profit/Margin
43,818m
40.5%
25,684m
39.4%
Operating Expenses
10,028m
9%
7,299m
11%
Income before Tax
34,205
31.60%
18,540
28.42%
Provision for tax
8,283
7.65%
4,527
6.94%
Net Income
25,922
23.95
14,013
21.48%
Other Major Items
415
0.38%
155
0.24%
Next Most
Recent Year
% 65,225
Percent
of
Sales
100
%
10. Based on the common-size analysis above, which item(s) appear to be the most significant in
explaining the change in net income (profitability) from the next most recent year to the most
recent year (i.e., which items changed most relative to sales revenue)? Discuss below.
Provision for tax has increased by 80% since the most recent year. Taxes are deducted
from income and reduce profitability. This high compared to the 30% increase in
operating expenses.
Page 7 of 12
11. Which of the following terms describes the balance sheet as reported by your firm? (check
those that apply.)
Classified balance sheet (Assets are segregated into categories)
X
Comparative balance sheet (More than one year of data is presented)
12. Identify the amounts that your firm reported for each of the following categories and the
percentage of total assets that each represents.
Amount
Percent
Current Assets
$
44,988m
38.66
Property, Plant & Equipment
$
7,777m
6.68
Goodwill and other intangible assets
$
Other long term assets
$
59,174
50.85
$
116,371
100%
Current Liabilities
$
27,970
24.03
Long-term liabilities
$
11,786
10.13
Contributed capital
$
13774
11.84
Retained Earnings
$
62,841
54
Total
$
116371
100%
Total
4,432m
3.81
13. If you were a creditor of a firm you would be interested in whether the firm had enough
resources to pay you when you bill came due, which can be determined by two indicators:
A. The amount of working capital, the cushion by which total current assets exceed total
current liabilities
WC = current assets – current liabilities
WC= 44,988-27,970
WC=17,018
B. The current ratio, which reveals how many dollars of current assets are available to pay
off each dollar of current liabilities.
CR = Current Assets
= 44988/27970=1.61
Current Liabilities
Page 8 of 12
What amount of working capital did your company have as of the date of its two most recent
balance sheets? What was the current ratio at the end of the two most recent years?
Most Recent
Balance Sheet
Working Capital
$
Current Ratio
Next Most Recent
Balance Sheet
17,018m
$
20,956
1.61
%
2.01
%
14. For comparison to other firms, check with three other groups to see what their working
capital results were. Record the results below and on the next page.
Working Capital
Most Recent
Balance Sheet
Name of Firm
Next Most Recent
Balance Sheet
Microsoft
74,918$ 28,774=46144
Sony
$
LG
8153774$ 8871191=-717417
8094379$ 9352984=-1258605
Name of Firm
Most Recent
Balance Sheet
Next Most Recent
Balance Sheet
Microsoft
2.60
%
2.13
%
Sony
0.93
%
1.02
%
LG
0.92
%
0.87
%
3,844,0464,126,979=-282933
55,676$ 26,147=29529
$
4,132,8724,059,925=72947
Current Ratio
15. How does your firm compare to the other firms you listed regarding its ability to pay current
liabilities as they become due?
Page 9 of 12
16. Using the posted ratios in the course contents of D2L compute the following ratios for you
company.
Most Recent
Balance Sheet
Next Most Recent
Balance Sheet
Profit Margin
23.95
%
22.52
%
Return on Asset
22
%
19
%
Return on Equity
42
%
35
%
17. What does the profit margin ratio indicate about your company’s ability to convert sales into
profit? Discuss.
18. What does the return on assets ratio indicate about your company’s using its assets
profitably? Discuss.
19. What does the return on equity ratio indicate about how well your company has performed
for its stockholders? Discuss.
Page 10 of 12
Page 11 of 12
20. Final Analysis:
Page 12 of 12