Using the Annual Report of Apple answer the following questions in the Discussio
ID: 2578834 • Letter: U
Question
Using the Annual Report of Apple answer the following questions in the Discussion. Post the link to the statement with your discussion post. You may use a service such as Yahoo Finance to help research industry averages. The notes to the financial statements will also be of use in answering the discussion questions. For many of the ratios in the discussion, you will need 2-3 years' worth of financial data. Here is a possible website to use for the annual report...http://investor.apple.com/secfiling.cfm?filingid=1628280-16-20309&cik=320193
What are adjusting entries and why are they necessary?
In your chosen company, which accounts might require adjusting entries?
Why is it unethical not to record adjusting entries when required? What difference does it make?
What is the purpose of an adjusted trial balance?
Explanation / Answer
2016
2015
2014
COMMENTS
RETURN ON SALES =
NET INCOME/SALES
45689/215,639
21.18%
53394/233,715
22.8%
39510/182,795
21.6%
IS A HEALTHY RATIO WITH INDUSTRY COMPARISONS
GP MARGIN =
GP/SALES X 1000
84,263/215639
39%
93,626/ 233715
40%
70,537 /182795
38.5%
IS A HEALTHY RATIO WITH INDUSTRY COMPARISONS
CURRENT RATIO=
CURRENT ASSETS/ CRRENT LIABILITIES
106,869
/79,006
1.35
290,345/
80,610=
3.6
NO FIGURES FOR 2014
IN 2015 WAS EXCELLENT
BENCHMARK IS 2
-DECREASE/ INCREASE IN CASH
CASH @ END OF YEAR
-636
20484
7276
21120
-415
13844
GOOD RATIOS WHICH ARE POSITIVE
TOTAL DEBT/
EQUITY
36,074/
128,249
28%
33,427/
119,355
28%
24,826/
111,547
22%
GEARING HAS BEEN CONTROLLED
<50%
COLLECTION PERIOD
ACC REC/ SALES X 365 DAYS
15,754/215639
26.6 DAYS
16,849/
233,715
26.3 DAYS
NO FIGURES FOR 2014
PAYMENT PERIOD
CREDITORS/COS X 365 DAYS
37,294/
131,376.
103 DAYS
35,490/
140,089
92 DAYS
NO FIGURES FOR 2014
2016
2015
2014
2013
2012
Net sales
$
215,639
$
233,715
$
182,795
$
170,910
$
156,508
Net income
$
45,687
$
53,394
$
39,510
$
37,037
$
41,733
Earnings per share:
Basic
$
8.35
$
9.28
$
6.49
$
5.72
$
6.38
Diluted
$
8.31
$
9.22
$
6.45
$
5.68
$
6.31
Cash dividends declared per share
$
2.18
$
1.98
$
1.82
$
1.64
$
0.38
Shares used in computing earnings per share:
Basic
5,470,820
5,753,421
6,085,572
6,477,320
6,543,726
Diluted
5,500,281
5,793,069
6,122,663
6,521,634
6,617,483
Total cash, cash equivalents and marketable securities
$
237,585
$
205,666
$
155,239
$
146,761
$
121,251
Total assets
$
321,686
$
290,345
$
231,839
$
207,000
$
176,064
Commercial paper
$
8,105
$
8,499
$
6,308
$
—
$
—
Total term debt (1)
$
78,927
$
55,829
$
28,987
$
16,960
$
—
Other long-term obligations (2)
$
36,074
$
33,427
$
24,826
$
20,208
$
16,664
Total liabilities
$
193,437
$
170,990
$
120,292
$
83,451
$
57,854
Total shareholders’ equity
$
128,249
$
119,355
$
111,547
$
123,549
$
118,210
ADJUSTING ENTRIES:
are necessary to de done as the Original trial balance after the books are closed there will be changes, due to updates received after the books closed. Also after the audit is completed.
If the adjusting entries are not done, the gap between original T/B and the subsequent final balances will have unanswered queries and make the reconciliations very difficult and also suspicious. Thus adjusting entries with counter signatures of senior accountant are a must to keep queries low and also as a reminder of what took place, which will not be remembered after a while.
An adjusted TB will connect exactly to the final balances in Income statement and Balance Sheet so that it is not only safe and easy to reconcile it will help the audit queries to be easily solved and
2016
2015
2014
COMMENTS
- PROFITABILITY
RETURN ON SALES =
NET INCOME/SALES
45689/215,639
21.18%
53394/233,715
22.8%
39510/182,795
21.6%
IS A HEALTHY RATIO WITH INDUSTRY COMPARISONS
GP MARGIN =
GP/SALES X 1000
84,263/215639
39%
93,626/ 233715
40%
70,537 /182795
38.5%
IS A HEALTHY RATIO WITH INDUSTRY COMPARISONS
- SOLVENCY
CURRENT RATIO=
CURRENT ASSETS/ CRRENT LIABILITIES
106,869
/79,006
1.35
290,345/
80,610=
3.6
NO FIGURES FOR 2014
IN 2015 WAS EXCELLENT
BENCHMARK IS 2
-DECREASE/ INCREASE IN CASH
CASH @ END OF YEAR
-636
20484
7276
21120
-415
13844
GOOD RATIOS WHICH ARE POSITIVE
- GEARING
TOTAL DEBT/
EQUITY
36,074/
128,249
28%
33,427/
119,355
28%
24,826/
111,547
22%
GEARING HAS BEEN CONTROLLED
<50%
COLLECTION PERIOD
ACC REC/ SALES X 365 DAYS
15,754/215639
26.6 DAYS
16,849/
233,715
26.3 DAYS
NO FIGURES FOR 2014
PAYMENT PERIOD
CREDITORS/COS X 365 DAYS
37,294/
131,376.
103 DAYS
35,490/
140,089
92 DAYS
NO FIGURES FOR 2014
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