accounting problem

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Business Finance

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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.

Unformatted Attachment Preview

Name Section Date Chapter 12 Financial Reporting Problem Apple Inc. 2014 (a) Net cash provided by operating activities (in millions) (b) (c) (d) (e) (f) 713 2013 CT12-1 The financial statements of Apple Inc. are presented in Appendix A. E Answer the following questions. Instructions (a) What was the amount of net cash provided by operating activities for the year ended September 27, 2014? For the year ended September 28, 2013? (b) What was the amount of increase or decrease in cash and cash equivalents for the year ended September 27, 2014? (c) Which method of computing net cash provided by operating activities does Apple use? (d) From your analysis of the September 27, 2014, statement of cash flows, was the change in accounts receivable a decrease or an increase? Was the change in inventories a decrease or an increase? Was the change in accounts payable a decrease or an increase? (e) What was the net cash used by investing activities for the year ended September 27, 2014? (f) What was the amount of interest paid in the year ended September 27, 2014? What was the amount of income taxes paid for the same period? CONSOLIDATED STATEMENTS OF OPERATIONS ( In millions, except number of shares which are reflected in thousands and per share amounts) Net sales Years onded September 27, September 28, September 29, 2014 2013 2012 $ 182,796 $ 170,910 $ 156,508 112,258 106,606 87,846 70,537 64,304 68,662 6,041 4,475 3,381 Cost of sales Gross margin Operating expenses: : Research and development Selling, general and administrative Total operating expenses Operating income Other income/(exponse), net Income before provision for income taxes Provision for income taxes Net income 11,993 18,034 10,830 15.305 48.999 10,040 13,421 55,241 522 52,503 980 1,156 50,155 55,763 53,483 13,973 39,510 13.118 14,030 $ $ 37,037 $ 41.733 Earnings per share: Basic $ 6.49 $ 5.72 $ 6.38 Diluted $ 6.45 $ 5.68 $ 6.31 Shares used in computing earnings per share: Basic Diluted 6,085,572 6,122,663 6,477,320 6,521,634 6,543,726 6,617,483 Cash dividends declared per common share $ 1.82 $ 1.64 $ 0.38 See accompanying Notes to Consolidated Financial Statements. . CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME In millions) ) Years ended September 27, September 28, September 29, 2014 2013 2012 $ 39,510 $ 37,037 $ 41,733 (137) (112) (15) 1,390 522 (131) 149 (458) (399) Net Income Other comprehensive income/loss): Change in foreign currency translation, net of tax effects of $50, $35 and $13, respectively $ Change in unrecognized gains/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(297). $(351) and $73, respectively Adjustment for net losses/gains) realized and included in net income, net of tax expense/benefit) of $(36), $255 and $220, respectively Total change in unrecognized gains/losses on derivative instruments, net of tax Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit/ (expense) of $(153), $458 and $(421), respectively Adjustment for net losses/gains) realized and included in net income, net of tax expense/benefit) of $71, $82 and $68, respectively Total change in unrealized gains/losses on marketable securities, net of tax Total other comprehensive income/(loss) Total comprehensive income 1,539 64 (530) 285 (791) 715 (134) (131) (114) 601 151 1.553 (922) (970) 56 $ 41,063 $ 36,067 $ 41,789 See accompanying Notes to Consolidated Financial Statements. NSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 27 2014 September 28. 2013 $ 13,844 11,233 17,460 2,111 4,318 14,259 26,287 13,102 1,764 3,453 7,539 6.882 9,759 9,806 68,531 130,162 20,624 4,616 4,142 3,764 $ 231.839 73,286 106,215 16,597 1,577 4,179 5,146 $ 207.000 ASSETS: Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $86 and $09, respectively Inventories Deferred tax assets Vendor non-trade receivables Other current assets Total current assets Long-term marketable securities Property, plant and equipment, net Goodwill Acquired intangible assets, net Other assets Total assets LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable Accrued expenses Deferred revenue Commercial paper Total current liabilities Deferred revenue-non-current Long-term debt Other non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value; 12,600,000 shares authorized: 5,866,161 and 6,294,494 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/loss) Total shareholders' equity Total liabilities and shareholders' equity $ 30,196 $ 22,367 18,453 13,856 7,435 0 8,491 6,308 63,448 3,031 28,987 43,658 2,625 16,960 20,208 24,826 120,292 83,451 19,764 23,313 87,152 1,082 104,256 (471) 123,549 $ 207,000 111,547 $ 231,839 See accompanying Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 27, September 28, September 29, 2014 2013 2012 Cash and cash equivalents, beginning of the year $ 14,259 $ 10,746 $ 9,815 Operating activities: Net income 39,510 37,037 41,733 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 7,946 6,757 3,277 Share-based compensation expense 2,863 2,253 1,740 Deferred income tax expense 2,347 1,141 4,405 Changes in operating assets and liabilities: Accounts receivable, net (4,232) (2,172) (5,551) Inventories (76) (973) (15) Vendor non-trade receivables 2,220) 223 (1,414) Other current and non-current assets 167 1,080 (3,162) Accounts payable 5,938 2,340 4,467 Deferred revenue 1,460 1,459 2,824 Other current and non-current liabilities 6,010 4,521 2,552 Cash generated by operating activities 59,713 53,666 50,856 Investing activities: Purchases of marketable securities (217,128) (148,489) (151,232) Proceeds from maturities of marketable securities 18,810 20,317 13,035 Proceeds from sales of marketable securities 189,301 104,130 99,770 Payments made in connection with business acquisitions, net (3,765) (496) (350) Payments for acquisition of property, plant and equipment (9,571) (8.165) (8,295) Payments for acquisition of intangible assets (242) (911) (1,107) Other 16 (160) (48) Cash used in investing activities (22,579) (33,774) (48,227) Financing activities: Proceeds from issuance of common stock 730 530 665 Excess tax benefits from equity awards 739 701 1,351 Taxes paid related to net share settlement of equity awards (1,158) (1,082) (1,226) Dividends and dividend equivalents paid (11,126) (10,564) (2.488) Repurchase of common stock (45,000) (22,860) 0 Proceeds from issuance of long-term debt, net 11,960 16,896 Proceeds from issuance of commercial paper, net 6,306 Cash used in financing activities (37,549) (16,379) (1,698) Increase/(decrease) in cash and cash equivalents (415) 3,513 931 Cash and cash equivalents, end of the year $ 13,844 $ 14,259 $ 10,746 Supplemental cash flow disclosure: Cash paid for income taxes, net $ 10,026 $ 9,128 $ 7,682 Cash paid for interest 339 $ 0 $ 0 See accompanying Notes to Consolidated Financial Statements. 0 0 0 69 69 6969
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Explanation & Answer

These are the final documents you should turn in.

Running Head: FINANCIAL STATEMENT ANALYSIS

Financial Statement Analysis

Your Name
Institutional Affiliations

1

FINANCIAL STATEMENT ANALYSIS

2
Introduction

The study of the statements gives a solid premise whereupon business choices are made,
for example, the amount to contribute as stock and the amount to disinvest, what advantages for
arrange, purchase, amortize among different choices basic choices made by the clients of
monetary proclamations distributed by organizations. Various devices are utilized for
investigation, however in this paper; we might utilize content examination from the Company's
2014 yearly report from which the advantages on merged money related articulations will be
centered particularly stockholder's value given in the solidified monetary proclamations asset
report for the budgetary year 2014 as given in the Company's 2014 yearly report. From the
yearly report recorded by securities commission as Form 1040, the standard estimation of normal
stock, approved basic stock, basic stock issued and remarkable are examined. Calculations are
examinations in regards to some money related proportions, profit per share and in addition
return on normal stockholders' value. The details used to figure the proportions are gotten from
combined monetary record and articulation of pay. Critical to say is that the Company's
budgetary year closes in September 27 and in the reference section A of Financial Accounting:
Tools for Decision putting forth, Comparative solidified money related expressions are given
whereupon monetary choices are established or rather based.
As indicated by International Financial Reporting Standards, diverse bookkeeping
techniques can be utilized to represent interest in an enterprise's stock. Such strategies
incorporate reasonable esteem technique, value strategy or merged strategy. These techniques
rely on the purpose behind which enterprises hold stock in different organizations and the level
of control and impact the financial specialist has on the investee value. Rate creation of value
that decides the level of control and impact are possession underneath 20%, between 20-half or

FINANCIAL STATEMENT ANALYSIS

3

more half. Standard estimation of a typical stock can be characterized as the expressed sum or
face esteem that a stock can be purchased as given in the share testament. Some normal stocks or
inclination shares may have standard esteem though some may not be named. In the yearly report
of Apple Inc for the year 2014, the Company's standard estimation of every basic stock is given
as $0...


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