Apple Inc. Financial Statements and Financial Ratios Analyzed

Apple Inc.: Brief Summary

Apple Inc. is currently located at One Apple Park Way in Cupertino, CA. the organization competes in the consumer electronics industry.  Currently, the firm employs over 150,000 individuals.  Their CEO is Tim Cook.  As for CFO, this would be Luca Maestri. Finally, their chief operating officer is Jeffrey Williams.

Apple Inc. designs, manufactures and sells iPhones, Macs, iPods, watches, and complementary accessories the world over.  Apple Inc. also sells various related services like Apple TV and iPads, AppleCare support services, and cloud services store services. 

Currently, our Apple financial analysis has found that the company has a market capitalization of approximately $2.6T.  The company’s beta is 1.20.  This indicates that the firm is slightly riskier as compared to the overall market.  As for earnings, the firm has current earnings per share of 5.61 (1/22).

Apple Financial Report Sources

“A Beginner's Guide to Analyzing Apple's Financial Statements and Financial Ratios” and "Apple Inc. Financial Report" were written by Paul Borosky, MBA., and owner of Quality Business Plan.  In this report, I used Apple’s 2022 10k, Apple’s 2021 10k annual report, Apple’s 2020 10k annual report, Apple’s 2019 10k annual report, and Apple’s 2018 10k annual report as the basis for information gathering. 

 

Snipits From Apple Inc. Financial Report by Paul Borosky, MBA.

Section 1: Apple Inc. Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc., in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Apple’s important income statement line item trends.

Apple 2022 Summary Income Statement
Column1	2022	2021	2020	2019	2018
Revenues	394,328	365,817	274,515	260,174	265,595
COGS	223,546	212,981	169,559	161,782	163,756
Gross Profit	170,782	152,836	104,956	98,392	101,839
SG&A	25,094	21,973	19,916	18,245	16,705
Depreciation	11,104	11,284	11,056	12,547	10,903
R & D	26,251	21,914	18,273	16,217	14,236
Other	-	-	-	-	-
Total Operating Expenses	51,345	43,887	38,668	34,462	41,844
EBIT	119,437	108,949	66,288	63,930	59,995
Other Income	(334)	258	803	1,807	2,005
Interest Expense	9,543	8,750	12,629	8,805	6,500
EBT	119,103	109,207	67,091	65,737	55,500
Taxes	19,300	14,527	9,680	10,481	13,372
Net Income	99,803	94,680	57,411	55,256	59,531

Revenue Growth for Apple:

Apple’s revenues increased at an impressive 15.9% growth rate from 2017 to 2018.  Also, the organization’s revenue growth rate decreased in 2019 by approximately 2%.  Finally, in the last five years, Apple’s annual average growth rate for revenues was approximately 13.1%, which is an impressive annual revenue growth rate for a mature company.

Analyst Grade: A

Section 2: Apple Inc. Balance Sheet Analyzed

For Apple Inc. balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define Apple’s balance sheet line item, such as cash, property, plant and equipment, and liabilities.  Next, I then offer a summary analysis of Apple’s important balance sheet line items.

Cash.

Apple’s cash position grew substantially between 2017 and 2019.  The substantial cash position increase, well above previous years’ trends, may indicate that the firm mismanaged this balance sheet line item.  A better strategy would have been to allocate excessive cash funds to short-term investments.

Analyst Grade: A

 

Apple 2022 Summary Balance Sheet
Column1	2022	2021	2020	2019	2018
Cash	23,646	34,940	38,016	48,844	25,913
Short Term Investment	24,658	27,699	52,927	51,713	40,388
Account Receivable	28,184	26,278	16,120	22,926	23,186
Inventory	4,946	6,580	4,061	4,106	3,956
Other	-	-	-	-	-
Current Assets	135,405	134,836	143,713	162,819	93,443
Net PPE	42,117	39,440	36,766	37,378	41,304
Goodwill	-	-	-	-	-
Other	-	-
Total Assets	352,755	351,002	323,888	338,516	365,725
Accounts Payable	64,115	54,763	42,296	46,236	55,888
Accrued Expense	-	-	-	-	32,687
Accrued Taxes	-	-	-	-	-
Notes Payable	9,982	6,000	4,996	5,980	11,964
LT Debt - Current	11,128	9,613	8,773	10,260	8,784
Other				-	-
Total Current Liabilities	153,982	125,481	105,392	105,718	116,866
LT Debt	98,959	109,106	98,667	91,807	93,735
Other
Total Liabilities	302,083	287,912	258,549	248,028	258,578
Common Stock	64,849	57,365	50,779	45,174	40,201
Treasury	-	-	-	-	-
Retained Earnings	(3,068)	5,562	14,966	45,898	70,400
Other
Total Equity	50,672	63,090	65,339	90,488	110,601
Total Equity & Liability	352,755	351,002	323,888	338,516	365,725

 

Section 3: Apple Inc. Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for Apple Inc.  In reviewing each of Apple’s financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of Apple’s Important Financial ratios.

Apple's Current Ratio:

Apple’s current ratio was 1.07 as of 2021.  This indicates that the organization has sufficient short-term assets to cover short-term liabilities—an excellent position for the organization.

Analyst Grade: A

Apple's Return on Assets:

Apple’s return on assets ended 2017 at 12.88%.  Over the next five years, the organization would substantially improve its return on assets ending 2021 at 26.97%.  This shows that the firm is doing an excellent job not only with growing sales with fewer assets but also in controlling asset growth as well.

Analyst Grade: A