US$ in millions

12 months ended: 2024 2023 Difference %

Change
Net sales 391,035 383,285 7,750 2.02

Cost of sales 210,352 214,137 -3,785 -1.77

Gross profit 180,683 169,148 11,535 6.82

Research and development 31,370 29,915 1,455 4.87

Operating, selling, general and administrative 26,097 24,932 1,165 4.68

expenses
Total operating expenses 57,467 54,847 2,620 4.78

Operating income 123,216 114,301 8,915 7.80

Other (expenses)/income 269 (565) 834 -147.44

Income Before provision for income tax 123,485 113,736 9,749 8.58

Provision of income tax 29,749 16,741 13,008 77.58

Net income 93,736 96,995 -3,259 -3.36

FINANCIAL REPORTING
Student no : CT0350846

1.Horizontal Analysis of Apple Inc Consolidation Income .

US$ in millions

2024 2023 Difference %

Cash and cash equivalents 29,943 29,965 -22 -0.07

Receivables, net 33,410 29,508 3,902 13.2

Inventories 7,286 6,331 955 15.1

Vendor non trade receivables 32,833 31,477 1,356 . 4.3

Market securities 35,228 31,590 3,638 11.5

Other current asset 14,287 14,695 -408 -2.8

Total current asset 152,987 143,566 9,421 6.6

Non current asset

Property and equipment, net 45,680 43,715 1,965 4.5

Marketable securities 91,479 100,544 -9,065 -9.0

Other long-term assets 74,834 64,758 10,076 15.6

Total Long-term assets 211,993 209,017 2,976 1.4

Total assets 364,980 352,583 12,397 3.5

1.2 Horizontal Analysis of Apple Inc company consolidated Balance sheet

US$ in millions

2024 2023 \

Cash and cash equivalents 29,943 29,965 -22 -0.07

Receivables, net 33,410 29,508 3,902 13.2

 Inventories 7,286 6,331 955 15.1

Vendor non trade receivables 32,833 31,477 1,356 . 4.3

Market securities 35,228 31,590 3,638 11.5

Other current asset 14,287 14,695 -408 -2.8

Total current asset 152,987 143,566 9,421 6.6

Non current asset

Property and equipment, net 45,680 43,715 1,965 4.5

Marketable securities 91,479 100,544 -9,065 -9.0

Other long-term assets 74,834 64,758 10,076 15.6

Total Long-term assets 211,993 209,017 2,976 1.4

Total assets 364,980 352,583 12,397 3.5

 Current liabilities 2024 2023 Difference %

Account payables 68,960 62,611 6,349 10.1

Other current liabilities 78,304 58,829 19,475 33.1

Deferred revenue 8,249 8,061 188 2.3

Commercial paper 9,967 5,985 3,982 66.6

Term debt 10,912 9,822 1,090 11.1

Total current liabilities 176,392 145,308 31,084 21.4

Non current liabilities

Term debt 85,750 95,281 -9,531 -10.0

Other non current liabilities 45,888 49,848 -3,960 -7.9

Total non current liabilities 131,638 145,129 -13,491 -9.3

Total liabilities 308,030 290,437 17,593 6.1

Finance lease obligations due within one year 725 567 158 27.9

CommitmentS and contingencies

Shareholders equity :

Common stock of share issued and 83,276 73,812 9,464 12.8

outstanding

Accumulated deficit (19,154) (214) -18,940 -88

Comprehensive loss (7,172) (11,452) 4,280 37.4

Total l share holder Equity 56,950 62,146 -5196 -8.4

Total liabilities and 364,980 352,583 12,397 3.5

Shareholders equity
 US$ in millions
12 months ended: 2024 2022 % %

Net sales 391,035 383,285 100 100

Cost of sales 210,352 214,137 53.81 55.86

Gross profit 180,683 169,148 46.19 44.14

Research and development 31,370 29,915 8.02 7.80

Operating, selling, general and administrative 26,097 24,932 6.68 6.50

expenses
Total operating expenses 57,467 54,847 14.70 14.30

Operating income 123,216 114,301 31.51 29.84

Other (expenses)/income 269 (565) 0.07 -0.15

Income Before provision for income tax 123,485 113,736 31.58 29.69

Provision of income tax 29,749 16,741 7.61 4.37

Net income 93,736 96,995 23.97 25.31

2.Vertical Analysis of Apple Inc Consolidated Income Statement .

US$ in millions

2024 2023 2024 % 2023%

Cash and cash equivalents 29,943 29,965 8.41 8.50

Receivables, net 33,410 29,508 9.15 8.37

Inventories 7,286 6,331 2.00 1.79

 Vendor non trade receivables 32,833 31,477 8.99 8.93

Market securities 35,228 31,590 9.64 8.96

Other current asset 14,287 14,695 3.92 4.17

Total current asset 152,987 143,566 41.92 40.74

Non current asset

Property and equipment, net 45,680 43,715 12.50 12.42

Marketable securities 91,479 100,544 25.00 28.59

Other long-term assets 74,834 64,758 20.47 18.39

Total Long-term assets 211,993 209,017 58.00 59.25

Total assets 364,980 352,583 100 100

2.1 Vertical Analysis of Apple Inc Consolidated Income Statement

 Current liabilities 2024 2023 2024 % 2023 %

Account payables 68,960 62,611 18.89 17.78

Other current liabilities 78,304 58,829 21.46 16.75

Deferred revenue 8,249 8,061 2.26 2.29

Commercial paper 9,967 5,985 2.73 1.69

Term debt 10,912 9,822 2.99 2.79

Total current liabilities 176,392 145,308 48.28 41.22

Non current liabilities

Term debt 85,750 95,281 23.51 27.03

Other non current liabilities 45,888 49,848 12.50 14.18

Total non current liabilities 131,638 145,129 36.06 41.20

Total liabilities 308,030 290,437 84.32 82.31

Finance lease obligations due within one 725 567 0.20 0.16
year
CommitmentS and contingencies

Shareholders equity :

Common stock of share issued and 83,276 73,812 22.83 20.92

outstanding

Accumulated deficit (19,154) (214) -5.24 -0.06

Comprehensive loss (7,172) (11,452)

Total l share holder Equity 56,950 62,146 1.96 17.62

Total liabilities and 364,980 352,583 100 100

Shareholders equity
Ratio analysis :
1.Gross Profit Margin = (Net Sales / Gross Profit)×100
 2024:

180,683 / 391,035 × 100 = 46.2%

 2023:

169,148 / 383,285 × 100 = 44.1%

Interpretation: The Gross Profit Margin increased from 44.1% in 2023 to 46.2% in 2024,
indicating better control over production costs.

2. Operating Profit Margin

Formula: Operating Profit Margin = (Operating Income / Net Sales)×100

 2024

123,216 / 391,035 × 100 = 31.5%

 2023:

114,301 / 383,285 × 100 = 29.8%

Interpretation: The Operating Profit Margin improved from 29.8% in 2023 to 31.5% in
2024, meaning the company was more efficient at turning sales into operating profits.

3. Net Profit Margin

Formula:

Net Profit Margin=(Net Income / Net Sales) × 100

 2024:

93,736 / 391,035 × 100 = 23.97%

 2023:

96,995 / 383,285 × 100 = 25.3%

Interpretation: The Net Profit Margin decreased from 25.3% in 2023 to 23.97% in 2024,
primarily due to a higher tax rate in 2024.
4 .Return on Assets (ROA),

you use the following formula:

ROA= Net Income / Total Assets ×100

You have provided net income and total assets for two years. Let's calculate ROA for both
years.

For 2024:

 Net Income = 93,736

 Total Assets = 364,980

ROA 2024 = 93,736 / 364,980 × 100 = 25.67%

For 2023:

 Net Income = 96,995

 Total Assets = 352,583

ROA 2023 = 96,995 / 352,583 × 100 = 27.52%

In 2024, the Return on Assets (ROA) decreased slightly to 25.67% from 27.52% in 2023,
indicating a minor decline in asset efficiency.

5.Operating Expense Ratio

Formula:

Operating Expense Ratio=(Total Operating Expenses / Net Sales) ×100

 2024:

57,467 / 391,035 × 100 = 14.7%

 2023:

54,847 / 383,285 × 100 = 14.3%

Interpretation: The Operating Expense Ratio slightly increased from 14.3% in

2023 to 14.7% in 2024, meaning operating expenses are a bit higher relative to sales.
6.Inventory Turnover Formula:

 COGS is the Cost of Goods Sold (which you provided as 210,352 for 2023).
 Average Inventory is calculated as the average of Inventory at the
beginning and Inventory at the end of the period.

Step 1: Calculate Average Inventory

From the data provided, Inventory in 2023 is 7,286, and Inventory in 2022 is 6,331.

Average Inventory = 7,286 + 6,3312 = 6,808.5

Step 2: Calculate Inventory Turnover

Now, using the formula for Inventory Turnover:

Inventory Turnover = 210,352 / 6,808.5 = 30.9

Inventory Turnover Period Formula:

Inventory Turnover Period= 365 / Inventory TurnoverInventory

For 2023: Inventory Turnover Period = 365 / 30.9 =11.8 days

This means it takes the company approximately 11.8 days to sell its entire inventory.

7. Receivables Collection Period (DSO) Formula:

DSO = Receivables / Net Sales × 365

Where:

 Receivables for 2022 = 29,508 (as provided)

 Net Sales for 2022 = 383,285 (from the earlier data provided)

Step 1: Calculate DSO for 2022

DSO (2022)=29,508 / 383,285 × 365 = 28.1 days

Interpretation:

The Receivables Collection Period (DSO) for 2022 is 28.1 days. This means that, on
average, it took the company 28.1 days to collect its receivables from customers in 2022.

 Receivables (2023) = 33,410

 Net Sales (2023) = 391,035

Now, calculate DSO for 2023: DSO = 33,410 / 391,035 × 365 = 31.1 days
8.Payables Payment Period (DPO) Formula:

DPO.= Accounts Payable / Cost of Goods Sold (COGS) ×365

Where:

 Accounts Payable for 2022 = 62,611 (from the provided data)

 COGS for 2022 = 214,137 (from the earlier data provided)

Step 1: Calculate DPO for 2022

DPO (2022) = 62,611 / 214,137 × 365 =106.3 days

Interpretation:

The Payables Payment Period (DPO) for 2022 is 106.3 days. This means, on average, the
company took 106.3 days to pay its suppliers after receiving goods or services.

 Accounts Payable (2023) = 68,960COGS (2023) = 210,352Now

, calculate DPO for 2023 DPO = 68,960 / 210,352 × 365 = 119.0 days

9.Current Ratio

Formula:

Current Ratio = Current Assets / Current Liabilities

 Current Assets (2023) = 152,987

 Current Liabilities (2023) = 176,392

Now, calculate the Current Ratio for 2023:

Current Ratio = 152,987 / 176,392 = 0.87

 Current Assets for 2022 = 143,566 (from the provided data)

 Current Liabilities for 2022 = 145,308 (from the provided data)

Step 1: Calculate the Current Ratio for 2022

Current Ratio (2022) = 143,566 / 145,308 = 0.99

In 2023, the Current Ratio of 0.87 and 0.99 in 2022 indicate the company struggled to meet
short-term liabilities.
10.Quick Ratio (Acid-Test Ratio)

The Quick Ratio is a more stringent measure of liquidity as it excludes inventory, which is
less liquid.

Formula: Quick Ratio = Current Assets−Inventories / Current Liabilities

 Inventories (2023) = 7,286

 Current Assets (2023) = 152,987
 Current Liabilities (2023) = 176,392

Now, calculate the Quick Ratio for 2023:

Quick Ratio = 152,987−7,286 / 176,392 =145,701 / 176,392 = 0.83

 Current Assets for 2022 = 143,566 (from the provided data)

 Inventories for 2022 = 6,331 (from the provided data)
 Current Liabilities for 2022 = 145,308 (from the provided data)

Calculation of Quick Ratio for 2022

 Quick Ratio = 143,566−6,331 / 145,308= 137,235 / 145,308 = 0.94