Apple’s Financial Analysis Part 2
APPLE’S
FINANCIAL ANALYSIS
FOR THE YEAR ENDED September 27, 2008
Income Statement:
a) Apple Inc uses multi-step income statement format. It organizes its operating section by using functional expense classification.
b)There are no unusual items presented in Apple’s income statement. Also the company did not discontinue any of its operations, neither had any changes in accounting principles. The net income for 2008, 2007, and 200 is $4,834, $3,496, and $1,989 respectively. The net income has increased continually in past three years. Net income increased 38.3% in 2008. Apple’s net income growth for 2007 was 75.7%. The income statement doesn’t need restating. I also believe that Apple is not managing their earnings. The company’s revenue and earnings per share are undervalued and Apple 's financials appear radically weaker than they actually are. It is because in April, 2007 they made a bad decision when announced that Apple will be using what is commonly referred to as the "subscription method of accounting" for sales of the iPhone where the sales revenue from the iPhone is deferred and recognized over a 24-month period instead of at the point of sale. When disregarding the deferred revenue mechanism of subscription accounting, Apple actually earned $7.48 in EPS on $38.041 billion in revenue. That compares to the $5.36 in EPS on $32.479 billion in revenue that Apple reported on a GAAP-basis. During 2008, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Financial Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109. FIN 48 changes the accounting for uncertainty in income taxes by creating a new framework for how companies should recognize, measure, present, and disclose uncertain tax positions in their financial statements.
09/27/08 Restated 09/27/09 Net Sales 32,479 32,479
Cost Of Goods 21,334 21,334
Gross Profit 11,145 11,145
Selling &
FINANCIAL ANALYSIS
FOR THE YEAR ENDED September 27, 2008
Income Statement:
a) Apple Inc uses multi-step income statement format. It organizes its operating section by using functional expense classification.
b)There are no unusual items presented in Apple’s income statement. Also the company did not discontinue any of its operations, neither had any changes in accounting principles. The net income for 2008, 2007, and 200 is $4,834, $3,496, and $1,989 respectively. The net income has increased continually in past three years. Net income increased 38.3% in 2008. Apple’s net income growth for 2007 was 75.7%. The income statement doesn’t need restating. I also believe that Apple is not managing their earnings. The company’s revenue and earnings per share are undervalued and Apple 's financials appear radically weaker than they actually are. It is because in April, 2007 they made a bad decision when announced that Apple will be using what is commonly referred to as the "subscription method of accounting" for sales of the iPhone where the sales revenue from the iPhone is deferred and recognized over a 24-month period instead of at the point of sale. When disregarding the deferred revenue mechanism of subscription accounting, Apple actually earned $7.48 in EPS on $38.041 billion in revenue. That compares to the $5.36 in EPS on $32.479 billion in revenue that Apple reported on a GAAP-basis. During 2008, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Financial Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109. FIN 48 changes the accounting for uncertainty in income taxes by creating a new framework for how companies should recognize, measure, present, and disclose uncertain tax positions in their financial statements.
09/27/08 Restated 09/27/09 Net Sales 32,479 32,479
Cost Of Goods 21,334 21,334
Gross Profit 11,145 11,145
Selling &