Apple Inc.: Financial Statements Analysis

The auditors gave Apple Inc. an unqualified audit report indicating that the prepared financial statements of the company are in accordance with the general accepted accounting principles (GAAP). Therefore, the statements show a true and fair view that is in accordance with the international financial reporting standards. It can be found under the Auditors Statements on the year-end financial report.

The companys revenue reduced in the year 2016 from 233,715 in the year 2015 to 215,639 in the year 2016 reflecting a reduction of almost 7.7%. The reduction in the sales is attributed to the reduction in the companys main product, the I-Phone. The product sales reduced by 5% in the year 2016 from 48 million in the year 2015 to 45.51 million in Year 2016. In addition, the cost of revenue also decreased from 140,089 in 2015 to 131,376 in 2016, a reduction of 6.2%. This is attributed to the effect of sales reduction of the I-Phone.

The total operating expenses increased in year 2016 by 8.2% from $22,396 million in 2015 to $ 24,239 in year 2016. This effect can be attributed to the increase in research and development expenses as well as reduction in the sale and marketing expenses. Apples sustainability concept is in its continuous research and development which sets its center stage as the best performing company in terms of cutting edge products and services it produces.

The company also paid lesser in tax which is attributed to the reduced revenue base for the year 2016 as compared to year 2016. The tax levied for the year 2015 was $19,121,000 whereas in the year 2016 reduced to $15,685,000.

Short term investments increased as a result of apple converting its free cash (from retained profits) into short term investments to earn the company a better return instead of being un-invested and not bearing any amounts. Receivables increased in year 2016 due to reduced payments from debtors whereas the inventories increased due to low stock turnover affected by sales.

The company also acquired new property, plant and equipment in the year as well as other long term assets. Accrued liabilities and accounts payable increased due to uptake of debt. The stockholders equity increased in year 2016 which is a result of the company issuing more capital and also retaining more profits in the period.

References

Apple Inc. (2017). Apple Inc 10K Report 2016 (pp. 1-46). Sec.Gov. Retrieved from http://files.shareholder.com/downloads/AAPL/4931910044x0x913905/66363059-7FB6-4710-B4A5-7ABFA14CF5E6/10-K_2016_9.24.2016_-_as_filed.pdf

morningstar.com. (2017). Balance Sheet for Apple Inc (AAPL) from Morningstar.com. Financials.morningstar.com. Retrieved 4 August 2017, from http://financials.morningstar.com/balance-sheet/bs.html?t=AAPL&region=usa&culture=en-US

morningstar.com. (2017). Income statement for Apple Inc (AAPL) from Morningstar.com. Financials.morningstar.com. Retrieved 4 August 2017, from http://financials.morningstar.com/income-statement/is.html?t=AAPL&region=usa&culture=en-US