Description
Purpose of Assignment
The purpose of this assignment is to expose you to the basic process involved in the analysis of the cash flow statement.
Assignment Steps
Resources: Appendix A of Financial Accounting: Tools for Business Decision Making
Note: This is a two part assignment.
Part 1
Answer questions A-F in problem CT12-1 in Financial Accounting (p. 640).
Provide an 875-word analysis of your findings.
Include conclusions concerning the management of the company's cash.
Part 2
Complete a 1,050-word summary of findings and recommendations from the following questions:
What is the par or stated value per share of Apple's common stock?
What percentage of Apple's authorized common stock was issued at September 27, 2014?
How many shares of common stock were outstanding at September 28, 2013, and at September 27, 2014?
Calculate the payout ratio, earnings per share, and return on common stockholders' equity for 2014.
Use the Week 5 Excel® spreadsheet and submit with your analysis and summary.
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Explanation & Answer
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Running head: CASH FLOW ANALAYSIS APPLE .INC
A-F in problem CT12-1 Cash flow Analysis Apple Inc
Name of Student
Name of Professor
Course Title
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CASH FLOW ANALAYSIS APPLE .INC
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Executive Summary
Cash flow comprises of amounts of money or funds moving in and out of an organization.
A positive cash flow of company indicates that the liquid possession of the organization is
increasing. Generally, cash flows help business companies in paying out all their existing debts
among other expenses. Moreover, companies use these cash flows in determining how and when
to invest their funds in business operations. Contrary to the information shared above, negative
cash flows represent a decreasing liquid possession of an organization. Organizational cash flow
comprises of three components as indicated below: Cash transactions achieved from operating
operations, cash transactions attained from investing events and cash transactions accumulating
from organizational financing processes (O'Grady, 2009).
In our case, we will be analyzing the cashflow statement of Apple. Inc. The financial
statement to be considered here is for the fiscal year of September,27th, 2014 and for Sep, 27th
2013. Moreover, based on cash flow analysis, I will be able to comment on reason as to why Apple
Inc noticed an increase or decrease in the cash flow and cash equivalents during financial years
2013 and 2014.
During financial year of September 27, 2014, Apple Inc recorded net cash on operatingevents of Apple Inc. of $59,713 million. This value was higher as compared to the $53,666 million
recorded in September 27, 2013. Furthermore, Apple recorded an increase in cash flow of $6,047
million representing a rise of 11.27%. an increase in cash flows indicated an increase in the
liquidness of the company in the financial year 2014. Apple Inc recorded an increase in cash flow
CASH FLOW ANALAYSIS APPLE .INC
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due to increase in number of accounts billed. According to its financial statement, accounts billed
increased by $3,598 million indicating an increase of 153.76% for the fiscal year 2014.
According to Apple’s financial statement, both current and non-current liabilities rose to
$1,489 million indicating an increase of 32.94%. These liabilities increased from $4,521 million
during financial year 2013 to $6,010 million in the year 2014. The factors which facilitated this
discharge in cash included an increase in total accounts attained by $2060 million (O'Grady, 2009).
Generally, cash or cash equivalents constitute of: Money, petty cash, market accounts,
currency as well as highly-liquid investments. During the financial year 2013, Apple Inc recorded
cash equivalents as $14,259 million. Cash equivalents decreased during the financial year 2014 to
$13,844 million. This indicated a tot...