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Apple 2015 Financial Analysis (Full year ended 30 September)

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VCE Accounting Unit 3/4

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Apple 2015 Financial Analysis (Full year ended 30 September)

  1. 1. Apple 2015 Financial Analysis Full year results released in October 2015 (all numbers in $US) Oct 2014 Nov 2014 Dec 2014 Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Reporting Period Oct 2014 Nov 2014 Dec 2014 Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015
  2. 2. The Key Numbers
  3. 3. The Key Numbers In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7% In $millions This Period Last Period Variance Sales 233715 182795 +28% Cost of Goods Sold 140089 112258 +25% Gross Profit 93626 70537 +33% Net Profit 53394 39510 +35% Current Assets 89378 68531 +30% Non-Current Assets 201101 163308 +23% Current Liabilities 80610 63448 +27% Non-Current Liabilities 90514 56844 +59% Owner's Equity 119355 111547 +7%
  4. 4. The Key Numbers Operating Investing Financing Operating Investing Financing +81266 m ─56274 m ─17716 m Cash Balance This Period Operating Investing Financing Operating Investing Financing +59713 m ─22579 m Cash Balance Last Period ─37549 m +7276m Change in Cash Balance ─415m Change in Cash Balance
  5. 5. Analysis of the Financial Reports
  6. 6. Analysis of the Financial Reports Profitability Gross Profit Margin This Period Last Period Comparison 40.1% 38.6% Better Sales $1.00 Gross Profit 40.1c COGS 59.9c Income Statement What does this mean? For every $1 the firm generates in sales: • A Gross Profit of 40.1 cents is earned • Once the Cost of Goods Sold is deducted.
  7. 7. Analysis of the Financial Reports Profitability Net Profit Margin This Period Last Period Comparison 22.8% 21.6% Better Income Statement $1.00 of Sales Gross Profit 40.1c COGS 59.9c Net Profit 22.8c Other Expenses 17.3c What does this mean? For every $1 the firm generates in sales an overall Net Profit of 22.8 cents is earned.
  8. 8. Analysis of the Financial Reports This Period Sales $1.00 Gross Profit 40.1c COGS 59.9c Net Profit 22.8c Other Exp 17.3c ─ = ─ = Last Period Sales $1.00 Gross Profit 38.6c COGS 61.4c Net Profit 21.6c Other Exp 17.0c ─ = ─ = Lower COGS… possible causes? • Suppliers ↓ prices • Mark-ups ↑ And a better Net Profit Margin… possible causes? • But ↑ in Oth. Exp.??? • ↑ GP > ↑ in Oth. Exp .
  9. 9. Analysis of the Financial Reports Profitability Return on Assets This Period Last Period Comparison 18.4% 13.6% Better What does this mean? For every $1 of Assets the firm has, the business is earning a Net Profit of 18.4 cents. Business Net Profit 18.4c Balance Sheet Assets Liabilities Owner’s Equity Balance Sheet Assets Liabilities $1 Owner’s Equity
  10. 10. Analysis of the Financial Reports Return on Investment This Period Last Period Comparison 46.2% 35.4% Better What does this mean? For every $1 of Capital invested in the firm, the business is earning a Net Profit of 46.2 cents. Net Profit 46.2c Balance Sheet Assets Liabilities Owner’s Eq. $1 Business Balance Sheet Assets Liabilities Owner’s Eq. $1 Profitability
  11. 11. Analysis of the Financial Reports Efficiency Asset Turnover Ratio This Period Last Period Comparison 0.80 times 0.63 times Better Business $0.80 of Sales Balance Sheet Assets Liabilities Owner’s Equity Balance Sheet Assets Liabilities $1 Owner’s Equity What does this mean? For every $1 of Assets the firm has, the business generates $0.80 of sales
  12. 12. Analysis of the Financial Reports Efficiency This Period Last Period Profitability and DuPont Formula 0.80 times 0.63 times 22.8% 21.6% 18.4% 13.6% = X = X Asset Turnover Net Profit Margin Return on Assets = X Better ROA More efficient at making sales And each sale made at a higher Net Profit
  13. 13. Analysis of the Financial Reports Efficiency Stock Turnover Ratio This Period Last Period Comparison 6 days 7 days Better What does this mean? The firm takes, on average, 6 days to sell all of its inventory 0 6 days Stock bought Stock sold
  14. 14. Analysis of the Financial Reports Liquidity Working Capital Ratio This Period Last Period Comparison 1.11 1.08 Better What does this mean? For every $1 of Current Liabilities the firm has, there are $1.11 in Current Assets to pay them Balance Sheet Current Assets Current Liabilities $1.53 $1.00 Balance Sheet Current Assets Current Liabilities $1.53 $1.00 Balance Sheet Current Assets Current Liabilities $1.11 $1.00
  15. 15. Analysis of the Financial Reports Liquidity Quick Asset Ratio This Period Last Period Comparison 1.08 1.05 Better What does this mean? For every $1 of Urgent Liabilities the firm has, there are $1.08 in Quick Assets to pay them $1.08 Quick Assets $1.00 Urgent Liabilities
  16. 16. Analysis of the Financial Reports Liquidity Cash Flow Ratio This Period Last Period Comparison 1.13 0.94 Better What does this mean? For every $1 of Current Liabilities the firm has, the firm’s Operating Activities are generating $1.13 to pay them Operating Investing Financing $1.13 Cash Balance $1.00 Current Liabilities Nothing needed from here
  17. 17. Analysis of the Financial Reports Stability Debt Ratio (Gearing) This Period Last Period Comparison 59% 52% Worse What does this mean? 59% of the firm’s Total Assets have been financed with debt (Liabilities) Balance Sheet Assets Liabilities $1.00 $0.60 Owner’s Equity $0.40 Balance Sheet Assets Liabilities $1.00 $0.60 Owner’s Equity $0.40 Balance Sheet Assets Liabilities $1.00 $0.59 Owner’s Equity $0.40 Balance Sheet Assets Liabilities $1.00 $0.59 Owner’s Equity $0.41
  18. 18. Summary of Results
  19. 19. Summary of Results This Period Last PeriodProfitability Gross Profit Margin 40.1% 38.6% Net Profit Margin 22.8% 21.6% Return on Assets 18.4% 13.6% Return on Investment 46.2% 35.4% Efficiency Asset Turnover Ratio 0.80 times 0.63 times Stock Turnover Ratio 6 days 7 days This Period Last PeriodLiquidity Working Capital Ratio 1.11 1.08 Quick Asset Ratio 1.08 1.05 Cash Flow Ratio 1.13 0.94 Debt Ratio (Gearing) 59% 52% Stability

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