Apple Inc. Consolidated Income Statements In millions Year ended Sept. 30, 2018 $ 265,595 Year ended Year ended Sept. 30, 2019 $ 260,174 Sept. 30, 2020 Net sales $274,515 Cost of goods sold 169,559 161,782 163,756 Gross margin 104,956 98,392 101,839 Operating expenses: Research and development 18,752 16,217 14,236 Depreciation and amortization 11,056 12,547 10,903 Other operating expenses 8,860 5,698 5,802 Operating income 66,288 63,930 70,898 Interest and dividend income 3,763 4,961 5,686 Interest expense 2,873 3,576 3,240 Other expense/(income), net 87 (422) 441 Income before income taxes 67,091 65,737 72,903 Income tax expense 9,680 10,481 13,372 Net income $57,411 $ 55,256 $ 59,531 Basic earnings per share $3.31 $ 2.99 $ 3.00 Apple Inc. Consolidated Statements of Retained Earnings In millions Year ended Year ended Year ended Sept. 30, 2018 $ 258,873 Sept. 30, 2020 Sept. 30, 2019 $ 303,999 Beginning Retained Earnings $346,598 Net income 57,411 55,256 59,531 Dividends declared (14,087) (14,129) (13,735) (1,740) $ 388,182 Other, net 1,472 (670) Ending Retained Earnings $ 346,598 $303,999
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
Use Apple’s financial statements to calculate the following ratios and summary measures for fiscal 2020 and 2019 (round to the nearest tenth). Indicate whether the ratio was more favorable in 2020 or 2019. Apple’s stock price was $115 per share on Sept. 30, 2020, and $55 on Sept. 30, 2019.
|
Fiscal 2020 |
Fiscal 2019 |
Is the Ratio more favorable in 2020 or 2019? |
DAYS RECEIVABLE |
21.43 |
32.16 |
2020 |
DAYS INVENTORY |
8.79 |
9.09 |
2019 |
RETURN ON ASSETS |
|
|
|
PROFIT MARGIN % |
|
|
|
GROSS MARGIN % |
|
|
|
RETURN ON EQUITY |
|
|
|
|
1.36 |
1.54 |
2019 |
QUICK RATIO |
|
|
|
EBITDA |
|
|
|
DEBT-TO-EQUITY RATIO |
|
|
n/a |
DIVIDEND PAYOUT RATIO |
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|
n/a |
PE RATIO |
|
|
n/a |
Financial ratios refers to the ratios that represent the financial data of the company. This ratios are used to determine the performance of the company and helpful in comparing the performance from last year
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