Question

Use Apple's financial statements in Appendix A to answer the following. Required: 1. Using fiscal 2014 as the base year, compute trend percents for fiscal years 2014, 2015, and 2016 for net sales, cost of sales, operating income, other income (expense) net, provision for income taxes, and net income. 2. Compute common-size percents for fiscal years 2015 and 2016 for the following categories of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) goodwill plus acquired intangible assets, net. 3. Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less liquid in 2016

Answer 1

Answer:

                               2014               2015                      2016

Net Sales               182,795         233,715 (+27.9%)    215,639 (+18.0%)

Cost of Sales         112,258          140,089 (+24.8%)   131,376 (+17.0%)

operating income  52,503           71,230 (+35.7%)      60,024 (+14.3%)

other income

(expense) net             980              1,285 (+31.1%)            1,348 (37.5%)

net income              39,510            53,394 (+35.1%)       45,687 (15.6%)

                                2015                   2016

Total assets            290,345              321,686

Current assets

(% of total assets)   89,378 (30.8%)   106,689 (33.2%)

PP&E                         22,471 (7.7%)        27,010 (25.3%)

goodwill plus

intangible assets     9,009 (10.1%)       8,620 (8.0%)

3. Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less liquid in 2016

Apple became more liquid in 2016, because current assets as % of total assets were 30.8% in 2015, and 33.2% in 2016.