Analysis of Apple's Financial Statement and Risk Factors

Apple - Time to Think Different
about cash

TABLE OF CONTENTS
1. Analysis of the financial statement..............................................................................................4
a. Providing brief analysis of the Apple's current final reports and key evolutions over a period
of 1995-2012................................................................................................................................4
b. Stating the reason of issuing new common stock every year by Apple, despite the abundant
cash position and the shortage of requirement in raising an additional capital...........................8
c. With respect to Apple's peculiarities, stating the traditional ratio that might be hugely
distorted.......................................................................................................................................8
d. Assessing return on Equity of Apple on the basis of the book and market value...................8
e. reason for decreasing operating cash flow of Apple than Exon..............................................9
2.......................................................................................................................................................9
Detecting the major risk factors that adversely affects future business of an enterprise.............9
3.....................................................................................................................................................10
(a)...............................................................................................................................................10
(b)...............................................................................................................................................11
©................................................................................................................................................11
(4)...............................................................................................................................................14
4.....................................................................................................................................................15
a. representing that Apple's cash pile comes at an expense of the shareholders.......................15
5.....................................................................................................................................................15
a. Analysing past and the new dividend policy of Apple..........................................................15
b. Explaining the foremost objective of the share repurchase program and the way in which it
is financed..................................................................................................................................15
c. Describing and evaluating the capital structure of Apple......................................................15
REFERENCES..............................................................................................................................17
Table 1EV/EBIT calculation.........................................................................................................10
Table 2EV/sales ratio.....................................................................................................................11
Table 3Cash flow...........................................................................................................................11
Table 4Discounted cash flow.........................................................................................................12

Table 5CAPM model.....................................................................................................................12
Table 6Enterprise value.................................................................................................................12
Table 7SDebt equity weight and WACC calculation....................................................................13
Table 8Terminal value...................................................................................................................13
Table 9Equity value.......................................................................................................................14
Table 10Intrinsic value of equity...................................................................................................14

1. Analysis of the financial statement
a. Providing brief analysis of the Apple's current final reports and key evolutions over a period of
1995-2012
Particulars Formula 2011 2012
Liquidity ratio
Current assets 44988 57653
Current liabilities 27970 38542
Current ratio
Current
assets/Current
liabilities 1.61 1.50
Current assets 44988 57653
Inventory 776 791
Quick assets 44212 56862
Current liabilities 27970 38542
Quick ratio
Quick assets/Current
liabilities 1.58 1.48
Profitability ratio
Net profit 25922 41733
Net sales 108249 156508
Net profit margin
Net profit/Net
sales*100 23.95% 26.67%
Gross Profit 43818 68662
Net sales 108249 156508
Gross profit ratio
Gross profit/Net
sales*100 40.48% 43.87%