1 Company Overview Amber Scott Grand Canyon University: ACC-502 July 29, 2020 2 Introduction The fortune 500 company selected for the project is Apple, a technology company dealing with iPhone, Mac, iPad, home accessories, and wearables. This paper will provide an overview of Apple, describing relevant information about the company. Will also include the reports Apple uses between IFRS and GAAP. A form-10k and a press release is used to obtain the relevant information. Company Overview Apple is a company designing, manufacturing, and marketing PCs, wearables, smartphones, tablets, and sells various related services. Their product items are iPhone, Mac, iPad, Home and Accessories, and wearables. They sell a variety of services, including streaming options, iCloud, among other services. Competitors confront Apple in all its areas of business. Apple has competition from other companies selling PCs and mobile devices designed with other operating systems like windows and android and are at a lower cost. Their services also face competition from other companies that have established the same services as them and other business models providing content to end-users for free. Apple is located in the United States with it headquarter located in Cupertino, Calif. Its market ecosystem is at a global level (Apple Inc., 2019). Supply of Apple products happens through network carriers (Verizon, Sprint, and others), retailers, wholesalers, and resellers. Apple also markets its products and resells third-party products in its market ecosystem directly to end-users, government, small-scale businesses, and enterprises, among others. The business cycles of apple rely on availability to third-party digital content, which is not constantly available. Apple's future performance relies partly on third party 3 programmers since they believe customer preference depends on the availability of third-party services and software. Services and products of apple are, at times, affected by defects associated with design and manufacturing. Since there is no assurance that the company can always detect the defect, this is marked as a risk (Apple Inc., 2019). IFRS is based on principles, while GAAP is based on rues. The difference is manifested in the specific details in the Form-10k. Generally, IFRS gives fewer details compared to GAAP, hence Apple is utilizing GAAP or General Accounting Accepted Principles as it's standard for financial reporting. GAAP can be identified in the form-10k as the financial statements provide follow the rules by U.S and exchange commissions (Apple Inc., 2019). Also, GAAP tends to deals with things such as balance sheets, revenue recognition, and classification of items that are available in the Form-10k provided by apple. IFRS, on the other hand, is a principle followed by the European Union and various countries in Asia. Press Release, (2020), on 30th April 2020, Apple reported a revenue of 58.3 billion dollars in the second quarter, which was an increase with 1% from last year's quarter. Global sales were recorded to be sixty-two per cent of the quarter's revenue (Press Release, 2020). The increase in revenue was reported despite the unprecedented global challenge of Covid-19. The CEO reported that during the difficult time of Covid-19, apple products have been useful in assisting individuals to remain connected, productive, and informed. Apples CFO, Luca Maestri, indicated that Apple is satisfied in their future and that Apple will continue making important investments in their area of business so as to enrich their end-users and establish long-term strategies (Press Release, 2020). Conclusion 4 Apple is among the fortune 500 company and is a technology company designing, manufacturing, and selling its products which include, iPhone, iPad, Mac, and various services. By using networks carriers like Verizon and Sprint assist helps with the distrubtion of just some of Apple products other retailers, wholesalers, and resellers also assist with disturbutions of Apple produts. Apple uses GAAP for reporting. Apple has a promising future and has performed well during the period of Covid-19. 5 References Apple Inc. (2019, September). FORM 10-K (No. 001–36743). www.sec.gov. https://www.sec.gov/ix?doc=/Archives/edgar/data/320193/000032019319000119/a10k20199282019.htm Press Release. (2020, 10th July). Apple Reports Second Quarter Results. https://www.apple.com/newsroom/2020/04/apple-reports-second-quarter-results/. 2019 (Values in millions of Dollars) 2018 (Values in millions of Dollars) Receivables turnover ratio = (Net Credit Sales/Average Account 1 Recievable) Net Credit Sales Beginning Accounts Receivable Ending Accounts Receivable) Net Credit Sales = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2) Average account recievable Average collection period = (Days in the period * Average account recievable)/Net 2 credit sales Inventory turnover = Cost of goods 3 sold/Average inventory COGS Year-end inventory Average inventory 260174 48995 45804 265.595 1,37 1,57 47399,5 42334 35673 48995 66,49710386 58,17846722 161.782 4.106 4.031 163.756 3.956 4.406 40,1 37,2 9,26 8,82 Average days in inventory= (Average inventory/COGS)*365 4 Asset turnover= revenue/Average 5 assets Assets Average Assets Revenue 338.516 365.725 352120,5 260174 0,74 370522 265.595 0,72 2017 (Values in millions of Dollars) 229234 29299 35673 1,76 32486 51,7261401 141.048 4.855 3.494 40,4 12,56 2.132 375.319 375319 229234 0,61 375.319 Format: Annual Annual Data | Millions of US $ except per share data Net Income/Loss Total Depreciation And Amortization - Cash Flow 9/30/2019 $55,256 $12,547 Other Non-Cash Items $5,076 Total Non-Cash Items $17,623 Change In Accounts Receivable Change In Inventories $245 ($289) Change In Accounts Payable ($1,923) Change In Assets/Liabilities ($1,521) Total Change In Assets/Liabilities ($3,488) Cash Flow From Operating Activities $69,391 Net Change In Property, Plant, And Equipment Net Change In Intangible Assets Net Acquisitions/Divestitures ($10,495) ($624) Net Change In Short-term Investments $57,460 Net Change In Long-Term Investments $633 Net Change In Investments - Total $58,093 Investing Activities - Other ($1,078) Cash Flow From Investing Activities $45,896 Net Long-Term Debt ($1,842) Net Current Debt ($5,977) Debt Issuance/Retirement Net - Total ($7,819) Net Common Equity Issued/Repurchased ($66,116) Net Total Equity Issued/Repurchased ($66,116) Total Common And Preferred Stock Dividends Paid ($14,119) Financial Activities - Other ($2,922) Cash Flow From Financial Activities ($90,976) View Annual Reports 9/30/2018 $59,531 9/30/2017 $48,351 9/30/2016 $45,687 9/30/2015 $53,394 9/30/2014 $39,5 $10,903 $10,157 $10,505 $11,257 $7,9 ($27,694) $10,640 $9,634 $5,353 $5,2 ($16,791) $20,797 $20,139 $16,610 $13,1 ($5,322) ($2,093) $527 $417 $-4,2 $828 ($2,723) $217 ($238) $- $9,175 $8,966 $2,117 $5,001 $5,9 $30,013 ($9,073) ($2,456) $6,082 $5,4 $34,694 ($4,923) $405 $11,262 $7,0 $77,434 $64,225 $66,231 $81,266 $59,7 ($13,313) ($12,451) ($12,734) ($11,247) $-9,5 - - ($297) ($241) ($2) ($721) ($329) - ($343) $-3,7 $32,363 ($33,147) ($30,634) ($44,417) $-9,0 ($1,518) ($395) ($1,388) - $- $30,845 ($33,542) ($32,022) ($44,417) $-9,0 ($745) ($124) ($924) ($26) $ $16,066 ($46,446) ($45,977) ($56,274) $-22,5 $469 $25,162 $22,454 $27,114 $11,9 ($37) $3,852 ($397) $2,191 $6,3 $432 $29,014 $22,057 $29,305 $18,2 ($72,069) ($32,345) ($30,797) ($34,710) $-44,2 ($72,069) ($32,345) ($30,797) ($34,710) $-44,2 ($13,712) ($12,769) ($12,150) ($11,561) $-11,1 ($2,527) ($1,874) - ($750) ($4) ($87,876) ($17,974) ($20,890) ($17,716) $-37,5 "Macrotrends". (2020). Apple cash flow statement 2005-2020| AAPL. Retrieved from Macrotrends: https://w acrotrends: https://www.macrotrends.net/stocks/charts/AAPL/apple/cash-flow-statement Course Code ACC-502 Class Code ACC-502-O500 Criteria Content Percentage 75.0% Proposed Change 25.0% Information for Analysis 25.0% Scope of Analysis and Parameters for Proposed Change 25.0% Organization, Effectiveness, and Format 25.0% Thesis Development and Purpose 5.0% Argument Logic and Construction 5.0% Mechanics of Writing (includes spelling, punctuation, grammar, language use) 5.0% Paper Format (use of appropriate style for the major and assignment) 5.0% Documentation of Sources (citations, footnotes, references, bibliography, etc., as appropriate to assignment and style) 5.0% Total Weightage 100% Assignment Title Managerial Accounting Conceptual Model Unsatisfactory (0.00%) Summary of the proposed change is not included. Discussion of the information that must be collected to perform the analysis on the proposed change is not included. Discussion of the scope of the analysis and what parameters will be used to determine whether proposed change should be made is not included. Paper lacks any discernible overall purpose or organizing claim. Statement of purpose is not justified by the conclusion. The conclusion does not support the claim made. Argument is incoherent and uses noncredible sources. Surface errors are pervasive enough that they impede communication of meaning. Inappropriate word choice or sentence construction is used. Template is not used appropriately, or documentation format is rarely followed correctly. Sources are not documented. Total Points 95.0 Less Than Satisfactory (74.00%) Summary of the proposed change the company is considering is incomplete or incorrect. Discussion of the information that must be collected to perform the analysis on the proposed change is incomplete or incorrect. Discussion of the scope of the analysis and what parameters will be used to determine whether proposed change should be made is incomplete or incorrect. Thesis is insufficiently developed or vague. Purpose is not clear. Sufficient justification of claims is lacking. Argument lacks consistent unity. There are obvious flaws in the logic. Some sources have questionable credibility. Frequent and repetitive mechanical errors distract the reader. Inconsistencies in language choice (register) or word choice are present. Sentence structure is correct but not varied. Appropriate template is used, but some elements are missing or mistaken. A lack of control with formatting is apparent. Documentation of sources is inconsistent or incorrect, as appropriate to assignment and style, with numerous formatting errors. Satisfactory (79.00%) Summary of the proposed change the company is considering is included but lacks explanation and relevant supporting details. Discussion of the information that must be collected to perform the analysis on the proposed change is included but lacks explanation and relevant supporting details. Discussion of the scope of the analysis and what parameters will be used to determine whether proposed change should be made is included but lacks explanation and relevant supporting details. Thesis is apparent and appropriate to purpose. Argument is orderly but may have a few inconsistencies. The argument presents minimal justification of claims. Argument logically, but not thoroughly, supports the purpose. Sources used are credible. Introduction and conclusion bracket the thesis. Some mechanical errors or typos are present, but they are not overly distracting to the reader. Correct and varied sentence structure and audience-appropriate language are employed. Appropriate template is used. Formatting is correct, although some minor errors may be present. Sources are documented, as appropriate to assignment and style, although some formatting errors may be present. Good (87.00%) Summary of the proposed change the company is considering is complete and includes explanation and relevant supporting details. Discussion of the information that must be collected to perform the analysis on the proposed change is complete and includes explanation and relevant supporting details. Discussion of the scope of the analysis and what parameters will be used to determine whether proposed change should be made is complete and includes explanation and relevant supporting details. Thesis is clear and forecasts the development of the paper. Thesis is descriptive and reflective of the arguments and appropriate to the purpose. Argument shows logical progressions. Techniques of argumentation are evident. There is a smooth progression of claims from introduction to conclusion. Most sources are authoritative. Prose is largely free of mechanical errors, although a few may be present. The writer uses a variety of effective sentence structures and figures of speech. Appropriate template is fully used. There are virtually no errors in formatting style. Sources are documented, as appropriate to assignment and style, and format is mostly correct. Excellent (100.00%) Summary of the proposed change the company is considering is extremely thorough and includes substantial explanation and relevant supporting details. Discussion of the information that must be collected to perform the analysis on the proposed change is extremely thorough and includes substantial explanation and relevant supporting details. Discussion of the scope of the analysis and what parameters will be used to determine whether proposed change should be made is extremely thorough and includes substantial explanation and relevant supporting details. Thesis is comprehensive and contains the essence of the paper. Thesis statement makes the purpose of the paper clear. Clear and convincing argument that presents a persuasive claim in a distinctive and compelling manner. All sources are authoritative. Writer is clearly in command of standard, written, academic English. Comments All format elements are correct. Sources are completely and correctly documented, as appropriate to assignment and style, and format is free of error. Points Earned Debt USD (in millions) Return on equity = Net Income/Shareholder's Equity Net Income Shareholder's Equity ROE 55,256 90,488 61% Debt to Equity Ratio = Total Shareholders’ Equity/Total Liabilities ​ Total Liability 248,028 Debt to Equity 2.741 Capital Structure Leverage Ratio = Total Debt/Capital (debt+equity) Capital 338,516 Thus, capital structure leverage is 0.733 Times interest earned ratio = Income before interest and tax/interest expenses Income before interest and tax 4,961 Interest expense -3,576 The ratio is thus -1.387 Statement Analysis Amber Scott Grand Canyon University- ACC 502 2019 (Values in millions of Dollars) 2018 (Values in millions of Dollars) Gross profit ratio = (Gross profit/sales)*100 Gross profit Sales Gross Profit Ratio 98392 260174 101839 265595 37,82% 38,34% 55256 65737 59531 72903 84,06% 81,66% 55256 338516 59531 365725 16,32% 16,28% Net Profit ratio = (Net Profit after tax/Net sales)*100 Net Profit after tax Net sales Net Profit Ratio Return on assets = Net Income/Average total Assets Net Income Average Total Assets Return on Asset Ratio 2017 (Values in millions of Dollars) 88186 229234 38,47% 48351 64089 75,44% 48351 375319 12,88%
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