How much debt is the company carrying

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Reference no: EM132265132

Financial Analysis Information

Given the information contained in the balance sheets and income statements for years 2015, 2016, and 2017 calculate and explain the meaning of the following:

Percent change in sales from year to year

Gross profit as a percent of sales (You cannot calculate this figure for a service business.)

Net income as a percent of sales

ROA

ROE

Debt to Assets

Debt to Equity

Formulas for ROA, ROE, Debt to Assets and Debt to Equity can be found in your textbook starting on page C-11. To calculate percent change in sales you subtract one year's sales from another and divide that figure by the older year's sales. (Example: 2014 sales minus 2013 sales = X.

Divide X by 2035 sales. To calculate gross profit and net income as a percent of sales, you divide, for example, gross profit by the sales for that year.

Preparing the Financial Analysis

The first step is to find the consolidated financial statements contained in the 2016 annual report. The information you need is found on the balance sheet and income statement. You'll need the 2015 report to find the sales figure for 2013 so that you can calculate the change in sales for 2013 to 2014. You should carry your findings out two decimals instead of rounding to whole numbers. Percentage points can mean a lot when you're dealing with millions of dollars.

Once you have calculated the ratios you must explain their meaning. For instance, are sales increasing, but at a lesser rate? How much debt is the company carrying? A good resource for this exercise is Investopedia on the Internet.

Ratios can tell a lot more about a company's performance than dollar figures.

Instructions :

Calculate the percent change in sales, gross profit as a percent of sales, Net income as a percent of sales, ROA, ROE, Debt to Assets, and Debt to Equity for years 2015, 2016, and 2017. After you have your calculations, explain your findings and what they mean for Apple's management team.

Include all your calculations in your submission.

An Excel spreadsheet works well for the calculations. It may be easier to put your explanations in a Word document, put that is up to you.

Reference no: EM132265132

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