Analysis of Apple 's Financial Statements

ANALYSIS OF APPLE’S FINANCIAL STATEMENTS

1. Balance Sheet

1. Asset growth

• Total Assets: From 2003 ($207,000 million), the amount of total assets rose to $231,839 million in 2007 – 12.5% increase for the period.
• Total Current Assets: The amount of total current assets slowed a little from $73,286 million to $68,531 million in 2014 due to a drop in cash and cash equivalents and short-term marketable securities growth.

1. Asset structure

First, the relative importance of Property, Plant and Equipment to Apple is not large.  This reflects the fact that manufacturing hardware such as the Apple iPhone is outsourced.  The relative importance of Financial Assets is immediately clear.  The big spike is “Long term marketable securities.”  In general the asset composition is a much greater emphasis upon financial as opposed to real assets for Apple. 

Furthermore, this is an increasing trend over time. This is especially the case for investment related financial assets however Apple’s working capital assets, such as inventory and accounts receivable, are also growing.  This reflects the current growth and the expectations for immediate future growth.

1. Liabilities and Equity Growth

• Total Liabilities: As shown at the chart above, the amount of Total Liabilities successively increased within the last two years due to the overall growth.
• Retained Earnings: For the analyzed period, Apple’s Retained Earnings fell from $104,256 million in 2013 to $87,152 million in 2014 (16.4% decrease). For the last fiscal year of 22014, Apple’s Retained Earnings were 37.6% of the Company’s Total Liabilities and Equity.
• The composition liabilities for Apple also reflect strength. Long term liabilities are approximately 13% of Total liabilities.   Compared to Total Assets, Apple’s Total liabilities are low.

1. Income Statement

• Revenues: During the analyzed period the amount of Total Revenues increased successively. That shows a strong positive trend. In 2014 alone, Net Sales grew by 7%. This incredible growth in 2014 was due to the release of the new iPhone in the middle of last year.
• Cost of Goods Sold: The amount of Cost of Goods Sold also successively increased through the years, which is directly related to the increase in total sales.
• Gross Income: The Gross Income also increased simultaneously to the Net Sales and represents a positive trend.
• Selling, General and Administrative Expenses: According to the overall growth these expenses also increased during the analyzed period - from $10,830 million in 2013 to $11,993 million in 2014, which is a total increase of 10.7%.
• EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization increased tremendously during the last two years - from $50,155 million in 2013 to $53,483 million in 2014. This huge growth supports Apple’s overall prosperity through the years.
• Income Taxes: The growth in the amount of income taxes reflects the growth in Apple’s operating income.
• Net Income: For the last two years Apple’s Net Income increased almost 7% - from a low of $37,037 million in 2013 to a high of $39,510 million in 2014. In summary, Apple’s revenues and costs were successively increasing through the analyzed period, which leads to an increasing EBITDA and Net Income respectively.

1. Cash Flow Statement

• Net Cash Flow from Operating Activities: The net cash flow from operating activities has been on the rise since 2013. The total increase for the last two years is 11.27% (from $53,666 million in 2003 to $59,713 million in 2014).
• Net Cash Flow from Investing Activities: Trend analysis shows that the overall growth.
• Net Cash Flow from Financing Activities: This figure continuously rose from 2013 to 2014.