The following summarized data (amounts in millions) are taken from the September

Question

The following summarized data (amounts in millions) are taken from the September 27, 2014, and September 28, 2013, comparative financial statements of Apple Inc., a manufacturer of mobile communication and media devices, personal computers, portable digital music players, and seller of a variety of related sottware, services, accessories, networking solutions, and third-party digital content and applications (Amounts Expressed in Millions) For the Fiscal Years Ended September 27 and September 28, respectively Not salas Costs of sales Operating income Net income At Year End: Assets Current assets 2014 2013 S 182,795 $170,910 106,606 48,999 $ 39.510 37,037 112.258 52,503 S 13,844 $14,259 26,287 13,102 1,764 3,453 7,539 6,882 Cash and cash equivalents Short-term marketable securities Accounls receivable, less allowarce of $84 and $99, respeclively 11.233 17,460 Delerred lax asses Vendor nontrade receivables Other curent assets 9759 800 Total current assots 130,162 20,624 106,215 16,597 1,577 4,179 Propcrty. plant, and cquipment, net Acquired intangible asscts, nct Other assots 4.142 3,784 Tolal assels 5 251539 5 201000 Liabilities and Shareholders' Equity Current liablitios Accourils payable Accrued cxpensos Delerred revenue Commercial papar S 30,196 22,367 13,856 7,435 18453 Total current liabilities 63,448 3,031 28,987 43,658 2,625 16,980 20,208 Long-term debt Other noncurrent liabilities Total liabilitios Sharcholders' Equity: Common stock and aclditional paid-in capital, $0.00001 par value, 12,600,000 shares authorized 23.313 87,152 1,082 11.547 19,764 104,256 (471) 123,549 929,277 and 915,970 shares issued and outstanding, respectively Relained earnings Accumulated other comprohensive incomo (loss) Total shareholders equity Total liabilities and shareholders' equity S 231,839 207,000 At September 29, 2012, total assets were $176,064 and total shareholders' equity was $118,210.

Explanation / Answer

Return on equity (also called return on shareholders equity) is the ratio of net income of a business during a year to its average shareholders' equity during that year. It is a measure of profitability of shareholders' investments.

The formula to calculate return on equity is:

ROE = Annual net income / Average Share holders equity

Therefore

2013 2014 A Shareholders equity at beginning 118210 207000 B Shareholders equity at ending 207000 231839 C Average share holders equity ( A + B ) / 2 162605 219419.5 D Net Income 37307 39510 E ROE ( D / C ) 22.90% 18%

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