Reformulate the statements for the given year fiscal quarter

Assignment Help Finance Basics

Reference no: EM131490995

Question: A Bite of the Apple: Apple Inc. (Medium) Apple Inc., under the leadership of Steve Jobs, has been a huge success over the past few years, with new products such as iPhone and iPad received enthusiastically by consumers. The firm's stock price increased from $91 at the beginning of 2009 to $350 by midyear 2011. The income statement and balance sheet for the first quaiter of 201 1 are shown below.

The firm has a statutory tax rate of37 percent.

a. Reformulate the statements for the 2011 fiscal quarter in a way that shows how Apple adds value through its business. The long-term marketable securities are debt securities. "Other income and expenses" on the income statement is largely income on financial assets.

b. You will observe that Apple holds a large amount of "cash" on its balance sheet, invested largely in government and corporate bonds and commercial paper. It earned an average of only 0. 75 percent (on an annual basis, before tax) on this cash during the quarter. With the free cash flow for the full 1 fiscal year ending September 2011 projected to be $14.6 billion, the figure could become much higher. Apple pays no dividends. What could be Apple's thinking in holding so much cash?

c. Why does Apple have no financing debt?

d. You will notice in your reformulation that Apple has negative net operating assets. What do you infer from this? Calculate residual income from operations for the quarter (using a rough guess of the required return) to provide some insights.

2107_Apple 1.png

Reference no: EM131490995

Questions Cloud

Why the north won the civil war : This is a three paragraph essay. List and discuss three primary reasons why the North won the Civil War. Each answer must be distinct from the others.

Calculate the effective tax rate on operating income : Analysis of an Income Statement: Pepsico. Inc. (Easy) Pepsico, Inc. reported the following income state ment for 1999 (in millions of dollars).

What was the average monthly return to a portfolio : What was the average monthly return to a portfolio of 50% TSLA and 50% SBUX?

Impact of the automobile on american life : 1. What was the impact of the automobile on American life?

Reformulate the statements for the given year fiscal quarter : A Bite of the Apple: Apple Inc. (Medium) Apple Inc., under the leadership of Steve Jobs, has been a huge success over the past few years, with new products.

Analyze the merger between zappos and amazon : Analyze the merger between Zappos and Amazon and assess potential issues for Zappos customers. Define SCM and how it can benefit Zappos.

Identify need to be reflective of the project : PPMP20008 - identify need to be reflective of the project described in the selected tender and align to the requirements of the PMBoK and Prince2.

States percentage returns economic recession : State of the economy Probability of the states Percentage returns Economic recession 15% 7.4% Steady economic growth 36% 4.0%

Difficulty thriving in traditional high school environment : MOOC High was developed by Walter Salazar, a high school dropout who had difficulty thriving in a traditional high school environment.

User Account

All Pages