“Financial Statement Analysis of Apple Inc.”

association Background orchard apple tree Inc. and its wholly-owned subsidiaries (collectively Apple or the keep company) designs, manu pointures and commercializes mobile communication and media devices, in the flesh(predicate) computers, and portable digital medicinal drug players, and sells a manakin of tie in package, services, peripherals, light upworking solutions, and third-party digital discipline and applications. The associations products and services include iPh unrivaled, i ornament, mackintosh, iPod, Apple TV, a portfolio of consumer and professional softw atomic number 18 applications, the iOS and mac OSX operate systems, iCloud, and a variety of gatewayory, service and support offerings.The bon ton also sells and delivers digital topic and applications done the iTunes stock certificate, App StoreSM, iBookstoreSM, and mac App Store. The Company sells its products worldwide with its retail stores, online stores, and direct gross gross revenue force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and respective(a) other accessories and peripherals, through its online and retail stores.The Company sells to consumers, small and mid-sized businesses (SMB), and education, enterprise and judicature customers. The Companys fiscal year is the 52 or 53-week period that ends on the last Saturday of September. Unless otherwise stated, all information presented in this stimulate 10-K is establish on the Companys fiscal calendar. The Company is a California corpo proportionalityn established in 1977. Business Strategy The Company is committed to rescue the best exploiter experience to its customers through its innovative hardware, software, peripherals, and services.The Companys business strat egy leverages its unique ability to design and develop its own direct systems, hardware, application software, and services to provide its customers un social functiond products and solutions with superior ease-of-use, seamless integ ration, and innovative design. The Company believes continual investment in research and development and marketing and advert is critical to the development and sale of innovative products and technologies. As part of its strategy, the Company continues to expand its broadcast for the dis book bindingy and delivery of hird-party digital content and applications through the iTunes Store. As part of the iTunes Store, the Companys App Store and iBookstore allow customers to discover and download applications and books through either a Mac or Windows-based computer or through iOS devices, namely iPhone, iPad and iPod touch. In January 2011, the Company opened the Mac App Store to allow customers to easily discover, download and install applications for their Macs. The Company also supports a conjunction for the development of third-party software and hardware products and digital content that escort the Companys offerings.The Companys strategy also includes expanding its statistical distribution network to in effect reach more customers and provide them with a high-quality sales and post-sales support experience. Consumer and Small and Mid-Sized Business The Company believes a high-quality buying experience with conditioned salespersons who trick obtain the value of the Companys products and services greatly compounds its ability to attract and retain customers. The Company sells many of its products and resells third-party products in most of its major markets directly to consumers and businesses through its retail and online stores.The Company has also invested in programs to enhance reseller sales by placing high quality Apple fixtures, merchandising materials and other resources within selected third-party reseller locat ions. Through the Apple Premium Reseller Program, certain third-party resellers focus on the Apple platform by providing a high level of product expertise, integration and support services. The Companys retail stores are typically located at high-traffic locations in quality shopping malls and urban shopping districts.By operational its own stores and locating them in delectable high-traffic locations, the Company is better positioned to ensure a high quality customer buying experience and attract juvenile customers. The stores are designed to simplify and enhance the presentation and marketing of the Companys products and related to solutions. To that end, retail store configurations have evolved into various sizes to accommodate market-specific demands. The Company believes providing direct contact with its customers is an in effect(p) look to demonstrate the advantages of its products over those of its competitors.The stores employ experienced and knowledgeable personnel w ho provide product advice, service and training. The stores offer a wide selection of third-party hardware, software, and other accessories and peripherals that complement the Companys products. Enterprise and Government The Company also sells its hardware and software products to enterprise and government customers in each of its geographic segments. The Companys products are deployed in these markets because of their power, productivity, ease of use and the simplicity of seamless integration into information technology environments.The Companys products are compatible with thousands of third-party business applications and services, and its tools modify the development and secure deployment of custom applications as well as remote device administration. Business Organization The Company manages its business primarily on a geographic basis. Accordingly, the Company has determined that its reportable operating segments, which are generally based on the nature and location of its cu stomers, consist of the Americas, Europe, Japan, Asia-Pacific and Retail.The results of the Americas, Europe, Japan and Asia-Pacific reportable segments do not include the results of the Retail segment. The Americas segment includes both North and S breakh America. The Europe segment includes European countries, as well as the Middle vitamin E and Africa. The Asia-Pacific segment includes Australia and Asian countries, other than Japan. The Retail segment operates Apple retail stores worldwide. Each reportable operating segment provides identical hardware and software products and similar services.Further information regarding the Companys operating segments whitethorn be found in Part II, Item7 of this Form 10-K under the subheading part Operating Performance, and in Part II, Item8 of this Form 10-K in Notes to Consolidated Financial Statements in Note 8, Segment Information and Geographic Data. Products The Company offers a regurgitate of mobile communication and media devic es, personal computing products, and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions and third-party hardware and software products. In addition, the Company ffers its own software products, including iOS, the Companys proprietary mobile operating system Mac OS X, the Companys proprietary operating system software for the Mac legion software and application software for consumer, SMB, and education, enterprise and government customers. The Companys native products are discussed below. iPhone iPhone combines a mobile phone, an iPod, and an Internet communications device in a single handheld product. Based on the Companys Multi-Touch user interface, iPhone featuresdesktop-class email, web browsing, searching, and maps and is compatible with both Macs and Windows-based computers. Phone automatically syncs content from users iTunes libraries, as well as contacts, bookmarks, and email accounts. iPhone allows customer s to access the iTunes Store to download speech sound and television receiver set files, as well as a variety of other digital content and applications. In October 2011, the Company launched iPhone 4S, its latest version of iPhone, which includes Siri, a voice frantic intelligent assistant. In addition to the Companys own iPhone accessories, third-party iPhone compatible accessories are in stock(predicate) through the Companys online and retail stores and from third parties. Pad iPad is a multi-purpose mobile device for browsing the web, reading and sending email, viewing photos, watching delineations, listening to music, playing games, reading e-books and more. iPad is based on the Companys Multi-Touch technology and allows customers to connect with their applications and content in a more interactive way. iPad allows customers to access the iTunes Store to download audio and video files, as well as a variety of other digital content and applications. In March 2011, the Compan y introduced iPad 2, its second-generation iPad.In addition to the Companys own iPad accessories, third-party iPad compatible accessories are available through the Companys online and retail stores and from third parties. Mac Hardware Products The Company offers a range of personal computing products including desktop and portable computers, related devices and peripherals, and third-party hardware products. The Companys Mac desktop and portable systems feature Intel microprocessors, the Mac OS X Lion operating system and the iLifesuite of software for creation and management of digital photography, music, movies, DVDs and websites.The Companys desktop computers include iMac Mac Pro and Mac mini. The iMac desktop computer has an all-in-one design that incorporates a display, processor, prowess card, storage, memory and other components inside a single enclosure. The Mac Pro desktop computer is targeted at business and professional customers and is designed to meet the performance, expansion, and networking need luxurianty of the most demanding Mac user. The Mac mini is a desktop computer in a compact enclosure. . iPodThe Companys iPod line of portable digital music and media players includes iPod touch, iPod nano, iPod shuffleand iPod classic. All iPods work with iTunes. In addition to the Companys own iPod accessories, third-party iPod compatible accessories are available, through the Companys online and retail stores or from third parties. The iPod touch, based on iOS, is a flash-memory-based iPod with a widescreen display and a Multi-Touch user interface. iPod touch allows customers to access the iTunes Store to download audio and video content, as well as a variety of digital applications.The iPod nano is a flash-memory-based iPod that features the Companys Multi-Touch interface allowing customers to navigate their music charm by tapping or swiping the display. The iPod nano features a polished aluminum and glass enclosure with a built-in clip. The iPod shuffle is a flash-memory-based iPod that features a clickable control pad to control music playback and VoiceOver technology enabling customers to hear song titles, artists and playlist names. The iPod classic is a hard-drive based portable digital music and video player. iTunes Tunes is an application that supports the leverage, download, organization and playback of digital audio and video files and is available for both Mac and Windows-based computers. iTunes 10 is the latest version of iTunes and features AirPlaywireless music playback, Genius Mixes, Home Sharing, and improved syncing functionality with iOS devices. Mac App Store In January 2011, the Company opened the Mac App Store allowing customers to discover, download and install applications for their Macs. The Mac App Store offers applications in education, games, graphics and design, life style, productivity, utilities and other categories.The Companys Mac OS X operating system software and iLife and iWorkapplication software are also available on the Mac App Store. iCloud In October 2011, the Company launched iCloud, its new cloud service, which stores music, photos, applications, contacts, calendars, and documents and wirelessly pushes them to multiple iOS devices, Macs and Windows-based computers. iClouds features include iTunes in the Cloud, Photo Stream, Documents in the Cloud, Contacts, Calendar, Mail,automatic downloads and purchase history for applications and iBooks, and iCloud Backup.Users can sign up for free access to iCloud using a device running iOS 5 or a Mac running Mac OS X Lion. Software Products and Computer Technologies The Company offers a range of software products for consumer, SMB, education, enterprise and government customers, including the Companys proprietary iOS and Mac OS X operating system software server software professional application software and consumer, education, and business oriented application software. Operating System Software iOS OS is the Companys m obile operating system that serves as the foundation for iOS devices. In October 2011, the Company released iOS 5, which supports iCloud and includes new features such as Notification Center, a way to view and manage notifications in one place iMessage, a messaging service that allows users to send text messages, photos and videos between iOS devices and Newsstand, a way to purchase and organize newspaper and magazine subscriptions. Mac OS X Mac OS X, the operating system for Macs, is built on an open-source UNIX-based foundation.Mac OS X Lion is the eighth major release of Mac OS X and became available in July 2011. Mac OS X Lion includes support for new Multi-Touch gestures iCloud integration system-wide support for full screen applications representation Control, a way to view everything running on a users Mac the Mac App Store Launchpad, a new home for a users applications and a redesigned Mail application. Application Software iLife iLife 11 is the latest version of the Compan ys consumer-oriented digital lifestyle application suite included with all Mac computers. Life features iPhoto, iMovie, iDVD, GarageBand, and iWeb. iPhoto is the Companys consumer-oriented digital photo application and iMovie is the Companys consumer-oriented digital video editing software application. iDVD is the Companys consumer-oriented software application that enables customers to turn iMovie files, QuickTime files, and digital pictures into interactive DVDs. GarageBand is the Companys consumer-oriented music creation application that allows customers to play, enter and create music. Web allows customers to create online photo albums, blogs and podcasts, and to customize websites using editing tools. iWork iWork 09 is the latest version of the Companys integrated productivity suite designed to help users create, present, and publish documents, presentations, and spreadsheets. iWork 09 includes Pages09 for word processing and page layout, Keynote09 for presentations, and Numbe rs09 for spreadsheets. The Company also has a Multi-Touch version of each iWork application designed specifically for use on iOS devices. Other Application SoftwareThe Company also sells various other application software, including Final Cut Pro, system of logic Studio,LogicExpress 9, Logic StudioPro, and its FileMakerPro database software. Displays& Peripheral Products The Company manufactures the Apple LED Cinema Display and Thunderbolt Display. The Company also sells a variety of Apple-branded and third-party Mac-compatible and iOS-compatible peripheral products, including printers, storage devices, computer memory, digital video and still cameras, and various other computing products and supplies.Apple TV Apple TV allows customers to watch movies and television shows on their high definition television. Content from iTunes, Netflix, YouTube, and Flickr as well as music, photos, videos, and podcasts from a Mac or Windows-based computer can also be wirelessly streamed to a telev ision through Apple TV. With the release of iCloud in October 2011, content purchased on Apple TV can be re-downloaded on iOS devices. Product Support and Services AppleCareoffers a range of support options for the Companys customers.These options include assistance that is built into software products, printed and electronic product manuals, online support including comprehensive product information as well as technical assistance, and the AppleCare Protection Plan (APP). APP is a fee-based service that typically includes two to three years of phone support and hardware repairs and dedicate web-based support resources. Markets and Distribution The Companys customers are primarily in the consumer, SMB, and education, enterprise and government markets.The Company uses a variety of direct and indirect distribution channels, such as its retail stores, online stores, and direct sales force, and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. Th e Company believes that sales of its innovative and differentiated products are enhanced by knowledgeable salespersons who can convey the value of the hardware and software integration, and demonstrate the unique solutions that are available on its products.The Company further believes providing direct contact with its targeted customers is an effective way to demonstrate the advantages of its products over those of its competitors and providing a high-quality sales and after-sales support experience is critical to attracting new and retaining existing customers. To ensure a high-quality buying experience for its products in which service and education are emphasized, the Company continues to expand and improve its distribution capabilities by expanding the number of its own retail stores worldwide.Additionally, the Company has invested in programs to enhance reseller sales by placing high quality Apple fixtures, merchandising materials and other resources within selected third-part y reseller locations. Through the Apple Premium Reseller Program, certain third-party resellers focus on the Apple platform by providing a high level of integration and support services, and product expertise. No single customer accounted for more than 10% of net sales in 2011 or 2010. One of the Companys customers accounted for 11% of net sales in 2009. CompetitionThe markets for the Companys products and services are highly competitive and the Company is confronted by aggressive competition in all areas of its business. These markets are characterized by frequent product introductions and rapid technological advances that have substantially increased the capabilities and use of mobile communication and media devices, personal computers, and other digital electronic devices. The Companys competitors who sell mobile devices and personal computers based on other operating systems have aggressively cut prices and lowered their product borders to gain or maintain market share.The Comp anys financial condition and operating results can be adversely affected by these and other industriousness-wide downward pressures on gross margins. Principal competitive factors important to the Company include price, product features, sexual intercourse price/performance, product quality and reliability, design innovation, a strong third-party software and peripherals ecosystem, marketing and distribution capability, service and support, and corporate reputation.The Company is focused on expanding its market opportunities related to mobile communication and media devices. These industries are highly competitive and include several large, well-funded and experienced participants. The Company expects competition in these industries to intensify significantly as competitors attempt to imitate some of the features of the Companys products and applications within their own products or, alternatively, collaborate with each other to offer solutions that are more competitive than those they presently offer.These industries are characterized by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses. The Companys digital content services have faced significant competition from other companies promoting their own digital music and content products and services, including those offering free peer-to-peer music and video services.The Company believes it offers superior innovation and integration of the entire solution including the hardware (iPhone, iPad, Mac, and iPod), software (iTunes), and distribution of digital content and applications (iTunes Store, App Store, iBookstore and Mac App Store). Some of the Companys modern and potential competitors have substantial resources and may be able to provide such products and services at little or no profit or even at a loss to compete wi th the Companys offerings.The Companys coming(prenominal) financial condition and operating results depend on the Companys ability to continue to develop and offer new innovative products and services in each of the markets it competes in. Research and Development Because the industries in which the Company competes are characterized by rapid technological advances, the Companys ability to compete successfully depends to a great extent upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace.The Company continues to develop new technologies to enhance existing products and to expand the range of its product offerings through research and development, licensing of intellectual property and acquisition of third-party businesses and technology. core research and development expense was $2. 4 one thousand thousand, $1. 8 billion and $1. 3 billion in 2011, 2010 and 2009, respectively. Patents, Trademarks, Copyrights and Licenses The Company currently holds rights to unmingleds and copyrights relating to certain aspects of its iPhone, iPad, Mac and iPod devices, peripherals, software and services.The Company has registered or has applied for sightmarks and service marks in the U. S. and a number of strange countries. Although the Company believes the self-will of such patents, copyrights, trademarks and service marks is an important factor in its business and that its success does depend in part on the ownership thereof, the Company relies primarily on the innovative skills, technical competence and marketing abilities of its personnel. The Company regularly files patent applications to protect inventions arising from its research and development, and is currently pursuing thousands of patent applications around the world.Over time, the Company has accumulated a large portfolio of issued patents in the U. S. and worldwide. The Company holds copyrights relating to certain aspects of its produ cts and services. No single patent or copyright is solely trusty for protecting the Companys products. The Company believes the duration of its patents is adequate relative to the expected lives of its products. Due to the fast pace of innovation and product development, the Companys products are often obsolete before the patents related to them expire, and sometimes are obsolete before the patents related to them are even granted.Many of the Companys products are designed to include intellectual property obtained from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of its products and business methods, based upon past experience and patience practice, the Company believes such licenses generally could be obtained on commercially reasonable terms however, there is no guarantee that such licenses could be obtained at all.Because of technological changes in the industries in which the Company competes, current extensive pa tent insurance coverage, and the rapid rate of issuance of new patents, it is possible that certain components of the Companys products and business methods may unknowingly infringe existing patents or intellectual property rights of others. From time to time, the Company has been notified that it may be infringing certain patents or other intellectual property rights of third parties. Foreign and Domestic Operations and Geographic Data The U. S. epresents the Companys largest geographic market. Approximately 39% of the Companys net sales in 2011 came from sales to customers inside the U. S. Final assembly of the Companys products is currently performed in the Companys manufacturing facility in Ireland, and by outsourcing partners, primarily located in Asia. The supply and manufacture of a number of components is performed by sole-sourced outsourcing partners in the U. S. , Asia and Europe. Single-sourced outsourcing partners in Asia perform final assembly of substantially all of t he Companys hardware products.Margins on sales of the Companys products in foreign countries, and on sales of products that include components obtained from foreign suppliers, can be adversely affected by foreign currency exchange rate fluctuations and by international trade regulations, including tariffs and antidumping penalties. Information regarding financial data by geographic segment is set forth in Part II, Item7 and Item8 of this Form 10-K and in Notes to Consolidated Financial Statements in Note 8, Segment Information and Geographic Data. Seasonal BusinessThe Company has historically experienced increased net sales in its first fiscal quarter compared to other quarters in its fiscal year due to increased holiday seasonal demand. This historical number should not be considered a reliable indicator of the Companys future net sales or financial performance. Warranty The Company offers a limited parts and labor warranty on most of its hardware products. The basic warranty per iod is typically one year from the date of purchase by the original end-user. The Company also offers a 90-day basic warranty for its service parts used to repair the Companys hardware products.In addition, consumers may purchase the APP, which extends service coverage on many of the Companys hardware products in most of its major markets. Employees As of September24, 2011, the Company had approximately 60,400 full-time equivalent employees and an additional 2,900 full-time equivalent temporary employees and contractors. APPLE INC. (Exact name of registrant as specified in its charter) symmetry Analysis 2008 2009 2010 2011 Liquidity Ratios a. accredited RatioA liquid state ratio that cadences a companys ability to pay short-term obligations. The Current Ratio formula isAlso known as liquidity ratio, cash asset ratio and cash ratio. Current Asset/Current Liability 32311/14092 36265/19282 41678/20722 44988/27970 2. 293 1. 881 2. 011 1. 609 industry middling 2. 00 1. 8 2. 1 1 . 5 Current Ratio Comparisons Ratio is stronger than the industry clean. b. Acid Test RatioA stringent indicator that determines whether a firm has enough short-term assets to cover its immediate liabilities without selling memorial. The acid-test ratio is far more strenuous than the working capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets.Calculated by (Current Asset- Average inventory)/Current Liability (32311-509)/14092 (36265-482)/19282 (41678-753)/20722 (44988-913. 5)/27970 2. 257 1. 86 1. 961 1. 581 industry reasonable 2. 20 1. 80 2. 00 1. 50 Acid Test Ratio Comparisons Ratio is weaker than the industry sightly in first 3 years but stringer at last year. Summary of the Liquidity Ratio Comparisons * Strong current ratio and weak acid-test ratio indicates a potential problem in the inventories account. * Note that this industry has a relatively high level of inventories. Financial Leverage Ratios a.Debt to candor A measure of a companys financial leverage calculated by dividing its total liabilities by stockholders equity. It indicates what proportion of equity and debt the company is using to finance its assets. Note Sometimes hardly concern-bearing, long-term debt is used instead of total liabilities in the calculation. Also known as the Personal Debt/Equity Ratio, this ratio can be applied to personal financial statements as well as corporate ones. Total debt/Shareholders Equity 18542/21030 26019/27832 27392/47791 39756/76615 0. 882 0. 935 0. 573 0. 519 industry fair . 89 . 95 . 5 . 50 Debt to equity Ratio Comparisons Has average debt utilization relative to the industry average. b. Debt to total assetA metric used to measure a companys financial risk by ascertain how much of the companys assets have been financed by debt. Calculated by adding short-term and long-term debt and then dividing by the companys total assets. Total debt/Total asset 18542/39572 26019/53851 27392/75183 39756/116371 0. 469 0. 483 0. 364 0. 342 industry average . 45 . 50 . 35 . 35 Debt to total asset Ratio Comparisons Has average debt utilization relative to the industry average. c. Total CapitalizationThe capitalization ratio measures the debt component of a companyscapital structure, or capitalization (i. e. , the sum of long-term debtliabilitiesandshareholders equity) to support a companys operations and growth. Debt/capitalization 18542/25480 26019/34569 27392/54461 39756/88401 . 73 . 75 . 50 . 45 industry average . 75 . 75 . 50 . 45 Total Capitalization Ratio Comparisons Has average long-term debt utilization relative to the industry average. reporting Ratios a. Interest CoverageA ratio used to determine how easily a company can ay interest on outstanding debt. The interest coverage ratio is calculated by dividing a companys earnings before interest and taxes (EBIT) of one period by the companys interest expenses of the same period EBIT/Interest charges 6895/2242 798 4/2360 18540 34205 3. 075 3. 383 - - industry average 3. 2 3. 5 - - Interest Coverage Ratio Comparisons Has below average interest coverage relative to the industry average. Summary of the Coverage move Analysis * The interest coverage ratio for Apple Inc. has been falling since 2008. It has been below industry averages for the past two years. This indicates that low earnings (EBIT) may be a potential problem for BW. * Note, we know that debt levels are in line with the industry averages. Activity ratios a. Receivable TurnoverAn accounting measure used to quantify a firms effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets. ruler Some companies reports will only show sales this can affect the ratio depending on the size of cash sales. Annual net credit sales/ Average receivables 32497/2422 36537/3361 65225/5510 108249/5369 13. 17 10. 871 11. 838 20. 162 industry average 15 10 13 20 Receivable Turnover Ratio Comparisons Ratio is stronger than the industry average. b. Average collection periodThe approximate amount of time that it takes for a business to receive payments owed, in terms of receivables, from its customers and clients. Calculated as Where Days = Total amount of old age in period AR = Average amount of accounts receivables Credit Sales = Total amount of net credit sales during period Days in year/receiveable turnover 365/13. 417 365/10. 871 365/11. 838 365/20. 62 27. 204 33. 576 30. 833 18. 103 industry average 25 36 30 20 Average collection period Ratio Comparisons Has improved the average collection period to that of the industry average. c. Inventory turnoverA ratio showing how many times a companys inventory is sold and replaced over a period. The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or inventory turnover days. Cost of good s sold/Average inventory 21334/509 25683/482 39541/753 64431/913. 5 41. 914 53. 8 52. 51 70. 53 industry average 42 53 53 70 Inventory turnover Ratio Comparisons Has relatively good turnover. d. Total asset turnoverThe amount of sales generated for every dollars worth of assets. It is calculated by dividing sales in dollars by assets in dollars. Formula This ratio is more useful for growth companies to check if in fact they are growing revenue in proportion to sales. Also known as the Asset Turnover Ratio. Net sales/ total asset 32479/39571 42905/53851 65225/75183 108249/116371 . 821 . 797 . 868 . 930 industry average . 2 . 80 . 85 . 90 Total asset turnover Ratio Comparisons Has relatively strong turnover. Profitability Ratios a. Net profit marginA ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings. Net profit after tax/Net sales 4834/3247 9 8235/42905 14013/65225 25922/108249 . 149 . 192 . 215 . 239 industry average . 15 . 20 . 20 . 24 Net profit margin Ratio Comparisons Has average Net Profit Margin. b.Return on investmentReturn on investment(ROI)rate of return(ROR), also known as rate of profit or sometimes just return, is the ratio of goldgained or lost (whether realized or unrealized) on aninvestmentrelative to the amount of money invested. Similar financial measures with variations on how investment is defined * Return on assets(ROA), * Return on net assets(RONA), * Return on capital employed(ROCE) * Return on invested capital(ROIC) * Social return on investment(SROI) NPAT/Total asset 4834/39572 8235/53851 14013/75183 25922/116371 . 122 . 153 . 87 . 223 industry average . one hundred twenty-five . 15 . 18 . 20 Return on investment Ratio Comparisons Has strong Return on Investment. c. Return on equityThe amount of net income returned as a percentage of shareholders equity. Return on equity measures a corpo rations profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is expressed as a percentage and calculated as Return on Equity = Net Income/Shareholders Equity Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock. Shareholders equity does not include preferred shares. Also known as return on net worth (RONW). NPAT/Shareholders equity 25922/21030 8235/27832 14013/477931 25922/76615 . 229 . 296 . 293 . 338 industry average . 23 . 29 . 29 . 350 Return on equity Ratio Comparisons Has average Return on equity. Summary of the Profitability Trend Analyses * The profitability ratios for Apple Inc. have ALL been average since 2008. Each has been below the industry averages for the past quadruple years. * This indicates that COGS and administrative be may both be too high and a potential problem for Apple Inc. Note, this result is consistent with the low interes t coverage ratio. Summary of Ratio Analyses * Inventories are too high. * May be paying off creditors (accounts payable) too soon. * COGS may be too high. * Selling, general, and administrative costs may be too high. honey oil Size Analysis- Particulars 2008 2009 2010 2011 2008 2009 2010 2011 Assets Current assets Cash cash equivalents 11875 5263 11261 9815 30. 01 9. 77 14. 98 8. 43 small term marketable securities 10236 18201 14359 16137 25. 87 33. 80 19. 10 13. 7 A/R 2422 3361 5510 5369 6. 12 6. 24 7. 33 4. 61 Inventories 509 455 1051 776 1. 29 . 85 1. 40 . 67 Differed tax assets 1447 2101 1636 2014 3. 66 3. 90 2. 18 1. 73 Vendor non-trade receivables - - 4414 6348 - - 5. 87 5. 46 Other current assets 5822 6884 3447 4529 14. 71 12. 78 4. 59 3. 89 Total current assets 32311 36265 41678 44988 81. 04 67. 34 55. 435 38. 659 Long-term marketable securities 2379 10528 5391 55618 6. 01 19. 55 7. 171 47. 794 Property, plant and equipment, net 2455 2954 478 6 7777 6. 20 5. 486 6. 336 6. 83 Goodwill 207 206 741 896 . 52 . 383 . 986 . 769 Acquired intangible assets, net 285 247 342 3536 . 72 . 495 . 455 3. 039 Other assets 1935 3651 2263 3556 4. 890 6. 780 3. 010 3. 056 Total assets 39572 53851 75183 116371 vitamin C coulomb atomic number 6 100 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities Accounts payable 5520 5601 12015 14632 13. 942 10. 401 15. 981 12. 574 accumulated expenses 3719 3376 5723 9247 9. 398 6. 269 7. 612 7. 946 Deferred revenue 4853 10305 2984 4091 12. 64 19. 136 3. 969 3. 516 Total current liabilities 14092 19282 20722 27970 35. 611 35. 806 27. 562 24. 035 Deferred revenue non-current 3029 4485 1139 1686 7. 654 8. 329 1. 515 1. 449 Other non-current liabilities 1421 2252 5531 10100 3. 591 4. 182 7. 357 8. 679 Total liabilities 18542 26019 27392 39756 46. 856 48. 317 36. 434 34. 163 Commitments and contingenciesShareholders equity Common stock, no par value 1 ,800,000 shares authorized 929,277 and 915,970 shares issued and outstanding, respectively 7177 8210 10668 13331 18. 37 15. 246 14. 189 11. 456 Retained earnings 13845 19538 37169 62841 34. 987 36. 282 49. 438 54. 001 Accumulated other comprehensive income/(loss) 8 84 (46) 443 . 020 . 156 (. 061) . 381 Total shareholders equity 21030 27832 47791 76615 53. 144 51. 683 63. 566 65. 837 Total liabilities and shareholders equity 39572 53851 75183 116371 100 100 100 100 Index Analysis- Particulars 2008 2009 2010 2011 2008 2009 2010 2011 Assets Current assets Cash cash equivalents 11875 5263 11261 9815 100 14. 13 27. 019 21. 897 Short term marketable securities 10236 18201 14359 16137 100 39. 204 34. 452 35. 870 A/R 2422 3361 5510 5369 100 9. 27 13. 221 11. 934 Inventories 509 455 1051 776 100 1. 26 2. 522 1. 752 Differed tax assets 1447 2101 1636 2014 100 5. 79 3. 925 4. 477 Vendor non-trade receivables - - 4414 6348 - - 10. 591 14. 111 Other current assets 5822 6884 3447 4529 100 18. 983 8. 271 10. 067 Total current assets 32311 36265 41678 44988 100 67. 34 55. 435 38. 59 Long-term marketable securities 2379 10528 5391 55618 100 19. 55 7. 171 47. 794 Property, plant and equipment, net 2455 2954 4786 7777 100 5. 486 6. 336 6. 683 Goodwill 207 206 741 896 100 . 383 . 986 . 769 Acquired intangible assets, net 285 247 342 3536 100 . 495 . 455 3. 039 Other assets 1935 3651 2263 3556 100 6. 780 3. 010 3. 056 Total assets 39572 53851 75183 116371 100 100 100 100 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities Accounts payable 5520 5601 12015 14632 100 10. 401 15. 981 12. 574 Accrued expenses 3719 3376 5723 9247 100 6. 269 7. 612 7. 946 Deferred revenue 4853 10305 2984 4091 100 19. 136 3. 969 3. 516 Total current liabilities 14092 19282 20722 27970 100 35. 806 27. 562 24. 035 Deferred revenue non-current 3029 4485 1139 1686 100 8. 329 1. 515 1. 449 Other non-current liabilities 1421 2252 5531 1 0100 100 4. 182 7. 357 8. 679 Total liabilities 18542 26019 27392 39756 100 48. 317 36. 434 34. 63 Commitments and contingenciesShareholders equity Common stock, no par value 1,800,000 shares authorized 929,277 and 915,970 shares issued and outstanding, respectively 7177 8210 10668 13331 100 15. 246 14. 189 11. 456 Retained earnings 13845 19538 37169 62841 100 36. 282 49. 438 54. 001 Accumulated other comprehensive income/(loss) 8 84 (46) 443 100 . 156 (. 061) . 381 Total shareholders equity 21030 27832 47791 76615 100 51. 683 63. 566 65. 837 Total liabilities and shareholders equity 39572 53851 75183 116371 100 100 100 100