Accounting Project

AppleNetflix.xlsx

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Financial1

gehen
		Apple				Netlfix
		ROE (Milions)				ROE (Thousands)
		Net Income	Equtiy	ROE		Net Income	Equtiy	ROE
	2019	55,256	90,488	61.06%		1,866,916	7,582,157	24.62%
	2018	59,531	107,147	55.56%		1,211,242	5,238,765	23.12%
	2017	48,351	134,047	36.07%		558,929	3,581,956	15.60%
	2016	45,687	128,249	35.62%		186,678	2,679,800	6.97%
	2015	53,394	119,355	44.74%		122,641	2,223,426	5.52%
		Apple				Netlfix			Apple			Netlfix
		AROE (Milions)				AROE (Thousands)			Year 1	Year 2	Avg	Year 1	Year 2	Avg
		Net Income	Equtiy	AROE		Net Income	Equtiy	AROE	90,488	107,147	98,818	7,582,157	5,238,765	6,410,461
	2019	55,256	98,818	55.92%		1,866,916	6,410,461	29.12%	107,147	134,047	120,597	5,238,765	3,581,956	4,410,361
	2018	59,531	120,597	49.36%		1,211,242	4,410,361	27.46%	134,047	128,249	131,148	3,581,956	2,679,800	3,130,878
	2017	48,351	131,148	36.87%		558,929	3,130,878	17.85%	128,249	119,355	123,802	2,679,800	2,223,426	2,451,613
	2016	45,687	123,802	36.90%		186,678	2,451,613	7.61%	119,355	111,547	115,451	2,223,426	1,857,708	2,040,567
	2015	53,394	115,451	46.25%		122,641	2,040,567	6.01%
		OROE				OROE (Thousands)
		Operating Income (Milions)	Equtiy	OROE		Operating Income	Equtiy	OROE
	2019	63,930	90,488	70.65%		2,604,254	7,582,157	34.35%
	2018	70,898	107,147	66.17%		1,605,226	5,238,765	30.64%
	2017	61,344	134,047	45.76%		838,679	3,581,956	23.41%
	2016	60,024	128,249	46.80%		379,793	2,679,800	14.17%
	2015	71,230	119,355	59.68%		305,826	2,223,426	13.75%
		AOROE				OROE (Thousands)			Apple			Netlfix
		Operating Income (Milions)	Equtiy	AOROE		Operating Income	Equtiy	AOROE	Year 1	Year 2	Avg	Year 1	Year 2	Avg
	2019	63,930	98,818	64.70%		2,604,254	6,410,461	40.63%	90,488	107,147	98,818	7,582,157	5,238,765	6,410,461
	2018	70,898	120,597	58.79%		1,605,226	4,410,361	36.40%	107,147	134,047	120,597	5,238,765	3,581,956	4,410,361
	2017	61,344	131,148	46.77%		838,679	3,130,878	26.79%	134,047	128,249	131,148	3,581,956	2,679,800	3,130,878
	2016	60,024	123,802	48.48%		379,793	2,451,613	15.49%	128,249	119,355	123,802	2,679,800	2,223,426	2,451,613
	2015	71,230	115,451	61.70%		305,826	2,040,567	14.99%	119,355	111,547	115,451	2,223,426	1,857,708	2,040,567
		ROA				ROA (Thousands)
		Net Income (Milions)	Total Assests	ROA		Net Income	Total Assests	ROA
	2019	55,256	338,516	16.32%		1,866,916	33,975,712	5.49%
	2018	59,531	365,725	16.28%		1,211,242	25,974,400	4.66%
	2017	48,351	375,319	12.88%		558,929	19,012,742	2.94%
	2016	45,687	321,686	14.20%		186,678	13,586,610	1.37%
	2015	53,394	290,345	18.39%		122,641	10,202,871	1.20%
		OROA				OROA (Thousands)
		Net Income (Milions)	Total Assests	OROA		Net Income	Total Assests	OROA
	2019	63,930	338,516	18.89%		2,604,254	33,975,712	7.67%
	2018	70,898	365,725	19.39%		1,605,226	25,974,400	6.18%
	2017	61,344	375,319	16.34%		838,679	19,012,742	4.41%
	2016	60,024	321,686	18.66%		379,793	13,586,610	2.80%
	2015	71,230	290,345	24.53%		305,826	10,202,871	3.00%
		Earnings Per Share				Earnings Per Share
	2019	$11.97			2019	$4.26
	2018	$12.01			2018	$2.78
	2017	$9.27			2017	$1.29
	2016	$8.35			2016	$0.44
	2015	$9.28			2015	$0.29
		Price to Earnings Ratio for Current Year (For 2019 = Stock price = Dec 2018 Closing price)
		Price (Prior Year Closing Stock Price)	EPS	PE Ratio		Price (Prior Year Closing Stock Price)	EPS	PE Ratio
	2019	$157.74	$11.97	13		$267.66	$4.26	63
	2018	$169.23	$12.01	14		$191.96	$2.78	69
	2017	$115.82	$9.27	12		$123.80	$1.29	96
	2016	$105.26	$8.35	13		$114.38	$0.44	260
	2015	$110.38	$9.28	12		$48.80	$0.29	168
		Price to Earnings Ratio for Previous Year (For 2019 Stock price = Dec 2017 Closing price)
		Price (Prior Year Closing Stock Price)	EPS	PE Ratio		Price (Prior Year Closing Stock Price)	EPS	PE Ratio
	2019	$169.23	$11.97	14		$191.96	$4.26	45
	2018	$115.82	$12.01	10		$123.80	$2.78	45
	2017	$105.26	$9.27	11		$114.38	$1.29	89
	2016	$110.38	$8.35	13		$48.80	$0.44	111
	2015	$80.15	$9.28	9		$52.60	$0.29	181
		Market Capitalization (Thousands) Apple
		Weighted Average Basic Shares Outstanding	In thousands	Price (Prior Year Closing Stock Price)	Total Cap
	2019	4,617,834	4,617,834,000	$157.74	728,417,135,160	seven hundred twenty-eight billion four hundred seventeen million one hundred thirty-five thousand one hundred sixty
	2018	4,955,377	4,955,377,000	$169.23	838,598,449,710
	2017	5,217,242	5,217,242,000	$115.82	604,260,968,440
	2016	5,470,820	5,470,820,000	$105.26	575,858,513,200
	2015	5,753,421	5,753,421,000	$110.38	635,062,609,980
		Market Capitalization (Thousands) Netflix
		Weighted Average Shares Outstanding
		Weighted Average Basic Shares Outstanding	In thousands	Price (Prior Year Closing Stock Price)	Total Cap
	2019	437,799	437,799,000.00	$267.66	117,181,280,340.00	one hundred seventeen billion one hundred eighty-one million two hundred eighty thousand three hundred forty
	2018	435,374	435,374,000.00	$191.96	83,574,393,040.00
	2017	431,885	431,885,000.00	$123.80	53,467,363,000.00
	2016	428,822	428,822,000.00	$114.38	49,048,660,360.00
	2015	425,889	425,889,000.00	$48.80	20,783,383,200.00
		Market to Book Ratio	Apple
		Market Cap	Book value of Equity	In Millions	Market to Book Ratio
	2019	728,417,135,160.00	90,488	90,488,000,000.00	8.05
	2018	838,598,449,710.00	107,147	107,147,000,000.00	7.83
	2017	604,260,968,440.00	134,047	134,047,000,000.00	4.51
	2016	575,858,513,200.00	128,249	128,249,000,000.00	4.49
	2015	635,062,609,980.00	119,355	119,355,000,000.00	5.32
		Market to Book Ratio	Netflix
		Market Cap	Book value of Equity	In Thousands	Market to Book Ratio
	2019	117,181,280,340.00	7,582,157	7,582,157,000.00	15.45
	2018	83,574,393,040.00	5,238,765	5,238,765,000.00	15.95
	2017	53,467,363,000.00	3,581,956	3,581,956,000.00	14.93
	2016	49,048,660,360.00	2,679,800	2,679,800,000.00	18.3
	2015	20,783,383,200.00	2,223,426	2,223,426,000.00	9.35
		October Stock Price			October Stock Price
	2019	227.01		2019	272.79
	2017	155.3		2017	198.02
	Gain $	$71.71		Gain $	$74.77
	Gain %	46.18%		Gain %	37.76%

Financial2

gehen
		Apple					Netlfix
		Gross Profit Margin (In Millions)					Gross Profit Margin (In Thousands)
		Net Sales	Cost of Sales	Gross Profit	GPM		Sales	Cost of Sales	Gross Profit	GPM
	2019	260,174	161,782	98,392	37.82%		5,467,434		2,001,411	36.60%
	2018	265,595	163,756	101,839	38.34%		4,186,841		1,453,441	34.70%
	2017	229,234	141,048	88,186	38.47%		3,285,755		1,178,401	35.90%
	2016	215,639	131,376	84,263	39.08%		2,477,541		823,122	33.20%
	2015	233,715	140,089	93,626	40.06%		1,823,333		573,968	31.50%
		Operating Profit Margin					Operating Profit Margin
		Net Sales	Gross Profit	Operating Expense	Operating Income	OPM	Sales	Operating Income	OPM
	2019	260,174	98,392	34,462	63,930	24.57%	5,467,434	2,604,254	47.63%
	2018	265,595	101,839	30,941	70,898	26.69%	4,186,841	838,679	20.03%
	2017	229,234	88,186	26,842	61,344	26.76%	3,285,755	838,679	25.52%
	2016	215,639	84,263	24,239	60,024	27.84%	2,477,541	379,793	15.33%
	2015	233,715	93,626	22,396	71,230	30.48%	1,823,333	305,826	16.77%
		Net Profit Margin					Net Profit Margin
		Net Income	Net Sales	NPM			Net Income	Net Sales	NPM
	2019	55,256	260,174	21.24%			1,866,916	5,467,434	34.15%
	2018	59,531	265,595	22.41%			1,211,242	4,186,841	28.93%
	2017	48,351	229,234	21.09%			558,929	3,285,755	17.01%
	2016	45,687	215,639	21.19%			186,678	2,477,541	7.53%
	2015	53,394	233,715	22.85%			122,641	1,823,333	6.73%
		Income before provision for income taxes					Income before income taxes
		EBIT	Depreciation and Amortization	EBITDA			EBIT	Depreciation and Amortization	EBITDA
	2019	65,737	12,547	$78,284			2,062,231	103,579	$2,165,810
	2018	72,903	10,903	$83,806			1,226,458	83,157	$1,309,615
	2017	64,089	10,157	$74,246			485,321	71,911	$557,232
	2016	61,372	10,505	$71,877			260,507	57,528	$318,035
	2015	72,515	11,257	$83,772			141,885	62,283	$204,168
		EBITDA Margin					EBITDA Margin
		EBITDA	Net Sales	EBITDA Margin			EBITDA	Net Sales	EBITDA Margin
	2019	78,284	260,174	30.09%			2,165,810	5,467,434	39.61%
	2018	83,806	265,595	31.55%			1,309,615	4,186,841	31.28%
	2017	74,246	229,234	32.39%			557,232	3,285,755	16.96%
	2016	71,877	215,639	33.33%			318,035	2,477,541	12.84%
	2015	83,772	233,715	35.84%			204,168	1,823,333	11.20%
		Working Capital					Working Capital
		Current Assests	Current Liabilities	WC			Current Assests	Current Liabilities	WC
	2019	162,819	105,718	$57,101			6,178,504	6,855,696	-$677,192
	2018	131,339	115,929	$15,410			9,694,135	6,487,320	$3,206,815
	2017	128,645	100,814	$27,831			7,669,974	5,466,312	$2,203,662
	2016	106,869	79,006	$27,863			5,720,291	4,586,657	$1,133,634
	2015	89,378	80,610	$8,768			5,431,840	3,529,624	$1,902,216
		Current Ratio					Current Ratio
		Current Assests	Current Liabilities	CR			Current Assests	Current Liabilities	CR
	2019	162,819	105,718	1.5			6,178,504	6,855,696	0.9
	2018	131,339	115,929	1.1			9,694,135	6,487,320	1.5
	2017	128,645	100,814	1.3			7,669,974	5,466,312	1.4
	2016	106,869	79,006	1.4			5,720,291	4,586,657	1.2
	2015	89,378	80,610	1.1			5,431,840	3,529,624	1.5
		Quick Ratio					Quick Ratio
		Current Assests	Inventory	Current Liabilities	QR		Current Assests	Inventory	Current Liabilities	QR
	2019	162,819	496	105,718	1.5		6,178,504	0	6,855,696	0.9
	2018	131,339	-1,114	115,929	1.1		9,694,135	0	6,487,320	1.5
	2017	128,645	-2,723	100,814	1.3		7,669,974	0	5,466,312	1.4
	2016	106,869	217	79,006	1.3		5,720,291	0	4,586,657	1.2
	2015	89,378	-238	80,610	1.1		5,431,840	0	3,529,624	1.5
		Cash generated by operating activities					Net cash (used in) provided by operating activities
		Operating Cash Flow Ratio					Operating Cash Flow Ratio
		Operating Cash Flow	Current Liabilities	OCFR			Operating Cash Flow	Current Liabilities	OCFR
	2019	69,391	162,819	0.43			-2,887,322	6,855,696	-0.42
	2018	77,434	131,339	0.59			-2,680,479	6,487,320	-0.41
	2017	63,598	128,645	0.49			-1,785,948	5,466,312	-0.33
	2016	65,824	106,869	0.62			-1,473,984	4,586,657	-0.32
	2015	81,266	89,378	0.91			-749,439	3,529,624	-0.21
		Accounts Receivable Turnover					Accounts Receivable Turnover
		Sales	Accounts Receivable	ART	Per Day		Sales	Accounts Receivable	ART	Per Day
	2019	260,174	245	1061.93	0.34		5,467,434	454,399	12.03	30.34
	2018	265,595	-5,322	-49.91	-7.31		4,186,841	362,712	11.54	31.62
	2017	229,234	-2,093	-109.52	-3.33		3,285,755	0	0
	2016	215,639	527	409.18	0.89		2,477,541	0	0
	2015	233,715	417	560.47	0.65		1,823,333	0	0
		Inventory Turnover		365			Inventory Turnover
		COGS	Inventory	IT	Per Day		COGS	Inventory	IT	Per Day
	2019	161,782	496	326.17	1.12		12,440,000	0
	2018	163,756	-1,114	-147	-2.48		9,968,000	0
	2017	141,048	-2,723	-51.8	-7.05		8,033,000	0
	2016	131,376	217	605.42	0.6		6,257,000	0
	2015	140,089	-238	-588.61	-0.62		4,591,000	0
		Accounts Payable Turnover					Accounts Payable Turnover
		Accounts Payable	COGS	APT	Per Day		Accounts Payable	COGS	APT	Per Day
	2019	46,236	161,782	3.5	104.31		674,347	12,440,000	18.45	19.79
	2018	55,888	163,756	2.93	124.57		562,985	9,968,000	17.71	20.61
	2017	9,618	141,048	14.67	24.89		359,555	8,033,000	22.34	16.34
	2016	1,837	131,376	71.52	5.1		312,842	6,257,000	20	18.25
	2015	5,001	140,089	28.01	13.03		253,491	4,591,000	18.11	20.15
		Liablities-to-equity-ratio					Liablities-to-equity-ratio
		Total Liabilities	Shareholders' equity	L/E Ratio			Total Liabilities	Shareholders' equity	L/E Ratio
	2019	248,028	90,488	2.74			26,393,555	7,582,157	3.48
	2018	258,578	107,147	2.41			20,735,635	5,238,765	3.96
	2017	241,272	134,047	1.8			15,430,786	3,581,956	4.31
	2016	193,437	128,249	1.51			10,906,810	2,679,800	4.07
	2015	170,990	119,355	1.43			7,979,445	2,223,426	3.59
		Debt-to-equity-ratio (In Millions)					Debt-to-equity-ratio (In Thousands)
		Short-term Debt	Long-term Debt	Shareholders' equity	Short + Long Debt	D/E Ratio	Short-term Debt	Long-term Debt	Short + Long Debt	Shareholders' equity	D/E Ratio
	2019	5,980	9,181	90,488	15,161	0.17	190,620,000	16,180,000	206,800,000	7,582,157	27.27
	2018	1,196	9,374	107,147	10,570	0.1	-	10,390,000	10,390,000	5,238,765	1.98
	2017	1,198	9,721	134,047	10,919	0.08	-	6,530,000	6,530,000	3,581,956	1.82
	2016	8,110	7,543	128,249	15,653	0.12	-	3,390,000	3,390,000	2,679,800	1.27
	2015	8,500	5,346	119,355	13,846	0.12	-	2,400,000	2,400,000	2,223,426	1.08
		Total cash, cash equivalents and marketable securities
		Net-debt-to-equity ratio (In Millions)
		Short-term Debt	Long-term Debt	Cash and Marketable Securities	Shareholders' equity	Net-debt/E Ratio	Short-term Debt	Long-term Debt	Unrealized Gain/Loss Marketable Securities	Cash	C + M	Shareholders' equity	Net-debt/E Ratio
	2019	5,980	9,181	205,898	90,488	-2.11	190,620,000	16,180,000	-	5,020,000	5,020,000	7,582,157	26.61
	2018	1,196	9,374	237,100	107,147	-2.11	-	10,390,000	-	3,790,000	3,790,000	5,238,765	1.26
	2017	1,198	9,721	268,895	134,047	-1.92	-	6,530,000	-	2,820,000	2,820,000	3,581,956	1.04
	2016	8,110	7,543	237,585	128,249	-1.73	-	3,390,000	-599,000	1,470,000	871,000	2,679,800	0.94
	2015	8,500	5,346	205,666	119,355	-1.61	-	2,400,000	-806,000	1,810,000	1,004,000	2,223,426	0.63
		OBSD \| Operating Leases (In Millions)					OBSD For Netflix Missing
	2019	$1,300
	2018	$1,200
	2017	$1,100
	2016	$662
	2015	$676
		Free Cash Flow is not mentioned in the slides to calculate for presentation packet.

Fin Apple

Eirin	be aware that I have a norwegian computer and we use "," as "."
Apple		2019	2018	2017	2016	2015
	Net Income	$ 55 256,00	$ 59 531,00	$ 48 351,00	$ 45 687,00	$ 53 394,00	in millions
	Shareholders' equity Beg	$ 107 147,00	$ 134 047,00	$ 128 249,00	$ 119 355,00	$ 111 547,00	in millions
	Shareholders' equity End	$ 90 488,00	$ 107 147,00	$ 134 047,00	$ 128 249,00	$ 119 355,00	in millions
	Operating Income	$ 63 930,00	$ 70 898,00	$ 61 344,00	$ 60 024,00	$ 71 230,00	in millions
	Assets Beg	$ 365 725,00	$ 375 319,00	$ 321 686,00	$ 290 345,00	$ 231 839,00	in millions
	Assets End	$ 338 516,00	$ 365 725,00	$ 375 319,00	$ 321 686,00	$ 290 345,00	in millions
	Price of stock per share	$ 218,82	$ 225,74	$ 154,12	$ 112,71	$ 114,71	Where i found it:	https://investor.apple.com/stock-price/default.aspx	Used closing price Friday (the balancedate is Saturday)
	Shares outstanding	$ 45 174,00	$ 40 201,00	$ 35 867,00	$ 31 251,00	$ 27 416,00	in millions
	Total Liabilities	$ 248 028,00	$ 258 578,00	$ 241 272,00	$ 193 437,00	$ 17 099,00	in millions
	Gross Margin	$ 98 392,00	$ 101 839,00	$ 88 186,00	$ 84 263,00	$ 93 626,00	in millions
	Sales	$ 260 174,00	$ 265 595,00	$ 229 234,00	$ 215 639,00	$ 233 715,00	in millions
	Depreciation and amorization	$ 12 547,00	$ 10 903,00	$ 10 157,00	$ 10 505,00	$ 11 257,00	in millions
	Current Assets	$ 162 819,00	$ 131 339,00	$ 128 645,00	$ 106 869,00	$ 89 378,00	in millions
	Current Liabilities	$ 105 718,00	$ 115 929,00	$ 100 814,00	$ 79 006,00	$ 8 061,00	in millions	Confused bc there are two different numbers for current labiliteis on the 10-k for 2019 and the 10-k for 2018
			$ 116 866,00	(10-k 2018)			in millions
	Inventory	$ 4 106,00	$ 3 956,00	$ 4 855,00	$ 2 132,00	$ 2 349,00	in millions
	Cash	$ 25 913,00	$ 20 289,00	$ 20 484,00	$ 21 120,00	$ 13 844,00	in millions
	Short-term investmets (marketable securities, current assets?)	$ 51 713,00	$ 40 388,00	$ 53 892,00	$ 46 671,00	$ 20 481,00	in millions
	Operating Cash Flows	$ 69 391,00	$ 77 434,00	$ 64 225,00	$ 66 231,00	$ 81 266,00	in millions	Confused bc there are two different numbers for operation cash flows on the 10-k for 2018 and the 10-k for 2017
				$ 63 598,00	$ 65 824,00		in millions
	AR	$ 22 926,00	$ 23 186,00	$ 17 874,00	$ 15 754,00	$ 16 849,00	in millions
	COGS
		2019	2018	2017	2016	2015
							Average ROE:
ROE:	(Net income/average total shareholders' equity)	56 %	49 %	37 %	37 %	46 %	45 %
							Average OROE:
OROE:	(Operationg income/average total shareholders' equity)	65 %	59 %	47 %	48 %	62 %	56 %
							Average ROA:
ROA:	(Net Income/average total assets)	16 %	16 %	14 %	15 %	20 %	16 %
							Average OROA:
OROA:	(Operating income/average total assets)	18 %	19 %	18 %	20 %	27 %	20 %
							Average EPS:
EPS:	(Net income/average # of common stock outstanding)	USD 11,97	USD 12,01	USD 9,27	USD 8,35	USD 9,28	USD 10,18
							Average PE Ratio:
PE Ratio:	(Price of the stock per share/earning per share)	18,28	18,80	16,63	13,50	12,36	15,91
Market Cap:	(Price of the stock per share * # of shares outstanding)	$ 9 884 974,68	$ 9 074 973,74	$ 5 527 822,04	$ 3 522 300,21	$ 3 144 889,36	$ 6 230 992,01
Market-to-book Ratio:	(Market Cap / book value of equity)	$ 109,24	$ 84,70	$ 41,24	$ 27,46	$ 11,51	$ 54,83
Stock price as of October 1st and % gain (or loss) when compared to exactly two years ago today:				(Maybe show a graf)
Gross Profit Margin:	((sales-cost of sales)/sales)	38 %	38 %	38 %	39 %	40 %
Operating Profit Margin:	(operating income/sales)	25 %	27 %	27 %	28 %	30 %
Net Profit Margin:	(Net income/Sales)	21 %	22 %	21 %	21 %	23 %
EBITDA:	(Operating income + Depriciation and Amorization)	$ 76 477,00	$ 81 801,00	$ 71 501,00	$ 70 529,00	$ 82 487,00
EBITDA Margin:	(Earnings before interest, taxes, depreciation, amorization/sales)	29 %	31 %	31 %	33 %	35 %
Working Capital:	(Current assets - Current liabilities)	$ 57 101,00	$ 15 410,00	$ 27 831,00	$ 27 863,00	$ 81 317,00
Current Ratio:	(Current assets / Current liablities)	1,54	1,13	1,28	1,35	11,09
Qick Ratio:	(Current assets - Inventory) / Current Liabilities	1,50	1,10	1,23	1,33	10,80
Cash Ratio:	(Cash + Short term investments) / Current Liabilities	0,73	0,52	0,74	0,86	4,26
Operating Cash Flow Ratio:	(Operating Cash Flow / Current liabilities)	0,66	0,67	0,64	0,84	10,08
AR turnover:	(Sales/ AR)	11,35	11,45	12,82	13,69	13,87
Day's Receivables:	(AR/ average sales PER DAY)
Inventory turnover:	(COGS / Inventory)
Day's Inventory:	(Inventory / AVG Cost of Goods Sold PER DAY)
AP turnover:	(COGS /AP)
Day's payables:	(AP / COGS PER DAY)
Liabilities-to-equity ratio:	(Total Liabilities / shareholders' equity)							YOU SHOULD CALCULATE THESE PER THE BALANCE SHEET….AND THEN ADJUST THEM PER THE FOOTNOTES (OFF-BALANCE SHEET DEBT ADDED TO THE BALANCE SHEET DEBT)…SHOW THEM SIDE BY SIDE..HINT!!!!!!!!!!!!
Debt-to-equity ratio:	(Short term debt + Long time debt - Cash and marketable securities)/Shareholders equity
Net-debt-to-equity ratio:	(Short term debt + long term debt) / shareholders' equity
Free Cash Flow (FCF)	(Cash flow opearations - capital expenditures)

https://investor.apple.com/stock-price/default.aspx

Vertical - Apple

Vertical Analysis - Apple
Income Statement
Period Ending		Forecast, 2020	September 28,2019	September 29, 2018	September 30, 2017	September 24, 2016	September 26, 2015
Total Revenue	(is the same as Total Net Sales, right?)		$ 260 174,00	$ 265 595,00	$ 229 234,00	$ 215 639,00	$ 233 715,00
Cost of Revenue	(is the same as Cost of Sales, right?)		$ 161 782,00	$ 163 756,00	$ 141 048,00	$ 131 376,00	$ 140 089,00
Gross Profit			$ 98 392,00	$ 101 839,00	$ 88 186,00	$ 84 263,00	$ 93 626,00
	Operating Expenses
	Research and development		$ 16 217,00	$ 14 236,00	$ 11 581,00	$ 10 045,00	$ 8 067,00
	Selling, general and administrative		$ 18 245,00	$ 16 705,00	$ 15 261,00	$ 14 194,00	$ 14 329,00
	Total Operating Expenses		$ 34 462,00	$ 30 941,00	$ 26 842,00	$ 24 239,00	$ 22 396,00
Operating Income or Loss
	Income from Continuing Operations
	Other income/(expense), net		$ 1 807,00	$ 2 005,00	$ 2 745,00	$ 1 348,00	$ 1 285,00
	Income before provision for income taxes		$ 65 737,00	$ 72 903,00	$ 64 089,00	$ 61 372,00	$ 72 515,00
	Provision for income taxes

Vertical - Netflix

Vertical Analysis - Netflix

Income Statement

Period Ending

Forecast, 2020

2019

2018

2017

2016

2015

Total Revenue

(is the same as Total Net Sales, right?)

Cost of Revenue

(is the same as Cost of Sales, right?)

Gross Profit

Operating Expenses

Research and development

Selling, general and administrative

Total Operating Expenses

Operating Income or Loss

Income from Continuing Operations

Other income/(expense), net

Income before provision for income taxes

Provision for income taxes

Compilation of arguments

General guidelines and rules set by the professor

DO'S:

DON'T:

- Cover's each of Porter's 5 forces

- No financial statements can be used

- Explain why we have assigned each the risk level that we have

- Video presentation can be NO LONGER than 8 minutes

- Include the strategies that apple uses to address each risk

- Don't talk about profitability/rev or using number statistics in general

- Include competitive strategy analysis (cost leadership/product differ)

- Don't just read off the slide

- Suggested to give a brief history of Apple and where they are now

Porter's Five Forces - Apple

Competitive Strategy Analysis: Product Differentiation

Gehen

Rivalry Among Existing Firms:

Risk Level - High

Bargaining Power of Buyers:

Risk Level -

Joel

Competitors: Dell, HP, Microsoft, Samsung

- Can stand alone with mobile prodcuts and other handheld devices, excluding latops

- Can be comprosmised if it's competitors is able to develop thier own operating

system that is unquie and similar to Apple, EX, iMessage, facetime,

no sim calling (iPod with a email address

Kennedi-

Threat of New Entrants

Risk Level - low

Bargaining Power of Suppliers:

Risk Level -

Eirin

Cole

Threat of Substitute Products

Risk Level - Low

- Summary: Not likey due to the number of substitutes it would take to meet feature parody with one of their products. See 'Sub. Products' TAB for expanded information.

Company Background Info - INTRO

	Yu
	Company industry and background information about the executive management (CEO, CFO, level of experience and professional background, hierarchy in the company)
	Most resent Apple 10-k, 8-k and 10-q will most likely include some of this informaton (if not all)
	Compnay Background: When the company was first established, the purpose was to change the way people viewed computers. Steve Jobs and Steve Wozniak was trying to make computer small enough for people to have them in their homes or offices.
	Founded on April 1, 1976 by Steve Jobs and Steve Wozniak.
	CEO: Tim Cook	After Graduating from Aubum University, he worked for IBM's personal computer business for 12 years.
		Ultimately serving as director of North American fulfillment. Meanwhile,he got an MBA degree from Duke University and was honored as Fuqua Scholar in 1998.
		In 1997, he became the Vice Prisident of Corporate Materials at Compaq until he left to Apple.
		His first position in Apple was Senior Vice President for worldwide operations.
		Promoted to lead operations in 2007 and served as chief executive in 2009, while Jobs was away on a leave of absence for health related issues. Became CEO from 2011- present.
	CFO: Luca Maestri, firstly worked at General Motors, worked at Nokia Networks and Xerox as CFO in 2009. He was appointed CFO of Apple Inc in 2014.

Sub. Products

	VOLUNTEER'S 4 THIS PAGE - COLE
	APPLE:								NETFLIX
	Risk Level: Low								Risk Level: Medium
	POSITION: In Porter's Five Forcers, a substitute threat is considered a replacement product that fills the needs the consumer is looking for - not just a product that directly competes. Apple has a stable advantage here due to the technology of their product and the shear number of features that come with each. For example, an individual would need to carry a digital camera, encyclopedia, telephone, etc. just to have the same functionality as an iPhone.								POSITION: In Porter's Five Forcers, a substitute threat is considered a replacement product that fills the needs the consumer is looking for - not just a product that directly competes. Netflix provides a centralized platform for video content to be consumed that is offered on most electronic devices that are connected to the internet today. While the convenience/accessibility factor is Netflix selling point, there are multiple other avenues to go in order to watch most of the content offered on the platform today. DVD's/BluRays, Cable TV, etc. are all still available and many times offer a larger variety to choose from than the library that Netflix maintains.
	EXAMPLE: - The iPad would now need the same subsitute products as a computer would. - The Apple Watch would require a normal watch, music player, cell phone, step counter and health monitor, etc. - The iPhone (already listed) - AppleTV now acts as a centralized hub for all movies, tv streaming applications, digital media... It would take MANY substitute products to meet a similar feature expectation but even then it would be an inferior replacement.								EXAMPLE: - DVD's/Blu-rays - Cable Television - Other streaming services
	HOW DOES APPLE ADDRESS THIS THREAT: - By continuing to pack each of their products with the base expectation, plus all of the innovations and features that the consumer has come to expect from Apple. If they continue to take this approach, while integrating technologies so that each product crosses over and impacts the other, they will continue to create an eco system that cannot be matched with any one substitute products.								HOW DOES APPLE ADDRESS THIS THREAT: - Netflix has spent a great deal of money in both locking down exclusivity streaming rights to various popular tv shows to ensure that fanbases would neet to subscribe to enjoy the content. In addition to contractual agreements, Netflix has been producing and creating a vast library of original content in-house that you can only find on their platform. Popular series such as Ozarks or Making A Murderer have garnered vast waves of new subscriptions and new customers.

Rivalry among existing firms

	VOLUNTEER'S 4 THIS PAGE - Gehen
	Risk Level : High
	What is thier competitive rivalry like?
	High competition with other techonoligical markets, but mainly differentiates among others with IOS operating
	system where there are arguments that it not easily penetrable like andrioid or windows system. With same amount of sales
	among its competitors it is able to differentiate itself with IOS. Due to this, even at high risk rivalry it is more likely
	Apple gets majority of market share in this industry.
	Is it easy for new competitiors to pop up?
	With the hype around apple prodcuts that usually targets younger adults, it is hard for it's competitiors to have
	them buy other than ios products, even though other devices offer twice as much as what apple phones offer
	with their cameras and storage and others.
	Rivalry amongs exisitng firm. - Med
	What is their competitive rivalry like?
	High competiton within industry, some are hulu, disney, hbo and youtube. There is not enought subscriber at current asking price for Neflix. Long waiting times for tv shows and movies. Their competition beats them by asking more price with thier customers. Although they have individual casting for Netlfix series, there is no revenue growth to reinvest into more tv shows by themselves and produced by others.
	Is it easy for a new competitior to pop up?
	Easily able to pop up. Netlfix is not able to retain customers with thier current offerings. It grew too fast and is now in a limbo, with competitors offering either high quality at low price than netflix and or even greater quality with time excepton from disney and hbo.

Threat of new entrants

Risk Level: Low

Position: The threat of new entrants is the ease with which a new firm can enter an industry and will affect the profitability of other firms within the industry.The risk level of new entrants for Apple and the industry which Apple is in is low. There are factors that affect the barrier of entry for any industry and they are economies of scale, first mover advantage, relationships with customers and suppliers, and legal barriers. If any of these are in place, it is harder for competition to arise. Many of these barriers are present to the industry which Apple is in. The economies of scale barrier is present in the technology industry which means that there are cost advantages that come from being a large company. Apple along with all of their competitors are very large and well funded companies. This means that their costs are usually cut because they are producing so much but, if a smaller company were to try and join, they would experience very high costs for a very low number of goods because the materials for this industry are expensive which results in it being very difficult for new companies to arise. The next barrier is the first mover advantage which is when a company is the first in an industry so they hold the majority of the market share. Apple wasn't the first in the technology industry but they were the first to create the high-end and luxury models of technology which gives Apple some first mover privileges and makes it hard for new companies to compete. The next barrier is relationships with suppliers and customers. In the technology industry this barrier is very high. There are certain components to the devices produced that can only be obtained through very limited sources. The companies in this industry already have to compete for these various components with limited sources. Apple is in agreement with some sources but there is a possibility that they could not be renewed so there are risks for all in the industry of supply shortages or an increase of prices. Relationships with customers is another barrier that other companies would have to overcome when entering the industry. Apple has developed relationships with customers throughout the years. Other industries have also been present and created relationships which makes it very hard for new industries to enter. The final barrier is legal. Legal barriers are things like patents that legally prevent other companies from entering. There are some legal barriers in this industry. There are patents, copyrights, and service marks that are registered so that companies can’t imitate other products. All of these barriers are present in some way in the technology industry so it makes it very difficult for new companies to enter the industry making this a low risk for Apple.

Strategy: Apple addresses the first risk of the economies of scale by continuing to produce large amounts to receive cost advantages when producing. They are able to be the first mover in a luxury technology industry although they were not the first in the industry, they continue to combat this by making high-end products that separate them from the competition. They are able to combat the relationships with suppliers and customers as they have agreements with many sources that provide the components that are limited. They also have created strong relationships with customers by promising a high-quality buying experience. They place their stores in high traffic areas so they can continue to attract customers. Apple employs knowledgeable people who can provide advice, service, and training. With all of the many products and services, Apple has a strong relationship with customers. To address the legal barriers, Apple is able to hold many patents and copyrights and also has registered for more patents, copyrights, trademarks, and service marks. They are able to combat many of these barriers to hold their place in the market.

Competitive Advantage: One competitive advantage that Apple holds is with direct contact with customers. Having so many stores allows them to demonstrate their products and show the advantages they have over competitors which helps them attract and retain customers. They continue to have strong relationships with customers as they are dedicated to selling to educational institutions and businesses. Apple creates strong relationships with customers as they retain many customers with all of their many products and services. Apple is very invested in their research and development which gives them more intellectual property. Apple able to patent their new products and if a competing company infringes upon their intellectual property and imitates products it could end up hurting them.

Threat of New Entrants-- Netflix Medium The market for entertainment video is intensely competitive and subject to rapid change ● Economies of Scale: Netflix is able to combat the economies of scale really well. As their company has grown with more consumers, they are able to reduce operating costs on a per subscriber basis. ● First Mover Advantage: Netflix was able to perfect video streaming to become one of the first streaming media services. ● Relationships w/ Customers and Suppliers: This is one of the major risks that Netflix faces. If they struggle to attract and retain members then the business will struggle to grow and the business will be negatively affected. If Netflix fails to maintain a positive relationship with customers through content, then they could lose memberships. They also rely on a number of suppliers and if any of those were to fall through it could hurt Netflix. ● Legal Barriers: The legal barriers do not protect Netflix very well because most of the content can be appropriated. They face the risk of losing the value of their brand and intangible assets. Strategy: Netflix faces some risks because the media streaming business does not have many barriers that slow competition from arising. However, they do hold a large share of the market and have the competitive advantage of more consumers and being one of the first and well known in the business. They need to keep good relationships with their customers by keeping a positive consumer reaction by the content that is streamed. As long as Netflix maintains a customer relationship that is positive and try to keep their proprietary rights protected then Netflix should be able to overcome the threat of new entrants.

Bargaining power of buyers

Apple
Risk Level:	High
Breakdown:
High Buyer Power Factors		Low Buyer Power Factors
-Low switching costs		-Low concentration of buyers
-Well-educated buyers		-Low purchase volume
-Undifferentiated products
Netflix
Risk Level:
Breakdown:
High Buyer Power Factors		Low Buyer Power Factors
-Very low switching costs		-Low concentration of buyers
-Most offerings undifferentiated		-Very low purchase volume
-		-Netflix Original Series

Brown Financial Ratios

Apple	Formulas - Video 1	Calculate		Apple
Does your company deal with foreign currencies?	Return on Equity	- ROE		ROE	2019	2018	2017	2016	2015
- Which ones?	ROE = Net Income / Shareholders' Equity	- Avg ROE		Net Income	$55,256.00	$59,531.00	$48,531.00	$45,687.00	$53,394.00
- Strategy to offset fluctuations?		- OROE		Shareholders' Equity	$90,448.00	$107,147.00	$134,047.00	$128,249.00	$119,335.00
How much revenue comes from international operations?	Operating Return on Equity	- Avg OROE		Return on Equity	61.09%	55.56%	36.20%	35.62%	44.74%
- What are the specific countries?	OROE = Operating Income / Total Equity	- PE for most current year (market price per share / EPS
- What percentages per country?		- PE for previous years		AVG ROE	2019	2018	2017	2016	2015
Segment Info	Return on Assets	- Market to book ratio		Net Income	$55,256.00	$59,531.00	$48,531.00	$45,687.00	$53,394.00
- Build consolidated income statement	ROA = Net Income / Total Assets		- Market Cap / Book value of equity	Beg Shareholders' Equity	$107,147.00	$134,047.00	$128,249.00	$119,335.00	$111,547.00
- Build segmented income statement by product and country			- Market Cap = PPS X # of share outstanding	End Shareholders' Equity	$90,448.00	$107,147.00	$134,047.00	$128,249.00	$119,335.00
- Produce ratios at consolidated level as well as micro level	Operating Return on Assets		- Book Value of Equity = Total Shareholders' Equity	Avg Shareholders' Equity	$98,797.50	$120,597.00	$131,148.00	$123,792.00	$115,441.00
Revenue recognition policy?	OROA = Operating Income / Total Assets	- Stock price as of Oct 1st and % gain or loss when compared to exactly two years ago today		Avg Return on Equity	55.93%	49.36%	37.00%	36.91%	46.25%
How do they value their inventory?
Method of depreciation?	Earnings Per Share			OROE	2019	2018	2017	2016	2015
% of allowance for bad debt?	EPS = Net Income / Avg # Common Stock Outstanding			Operating Income	$63,930.00	$70,898.00	$61,344.00	$60,024.00	$71,230.00
How much off-balance sheet debt?				Shareholders' Equity	$90,448.00	$107,147.00	$134,047.00	$128,249.00	$119,335.00
	Price to Earnings Ratio			Operating Return on Equity	70.68%	66.17%	45.76%	46.80%	59.69%
Netflix	PE = Price of stock per share / EPS
Does your company deal with foreign currencies?				AVG OROE	2019	2018	2017	2016	2015
- Which ones?	Market Capitalization			Operating Income	$63,930.00	$70,898.00	$61,344.00	$60,024.00	$71,230.00
- Strategy to offset fluctuations?	Market Cap = Stock price per share X # of shares outstanding			Beg Shareholders' Equity	$107,147.00	$134,047.00	$128,249.00	$119,335.00	$111,547.00
How much revenue comes from international operations?				End Shareholders' Equity	$90,448.00	$107,147.00	$134,047.00	$128,249.00	$119,335.00
- What are the specific countries?	Formulas - Video 2			Avg Shareholders' Equity	$98,797.50	$120,597.00	$131,148.00	$123,792.00	$115,441.00
- What percentages per country?	Gross Profit Margin			Avg Operating Return on Equity	64.71%	58.79%	46.77%	48.49%	61.70%
Segment Info	GP Margin = (Sales - Cost of Sales) / Sales
- Build consolidated income statement	**Compare to previous years and industry as a whole			EPS	2019	2018	2017	2016	2015
- Build segmented income statement by product and country				Basic	$11.97	$12.01	$9.27	$8.35	$9.28
- Produce ratios at consolidated level as well as micro level	Operating Profit Margin			Diluted	$11.89	$11.91	$9.21	$8.31	$9.22
Revenue recognition policy?	OP Margin = Operating Income / Sales
How do they value their inventory?				PE	2019	2018	2017	2016	2015
Method of depreciation?	Net Profit Margin			Price of Stock per Share	$248.76	$201.59	$172.50	$115.59	$119.27	105.11
% of allowance for bad debt?	NP Margin = Net Income / Sales			Earnings Per Share	$11.97	$12.01	$9.27	$8.35	$9.28
How much off-balance sheet debt?				Price to Earnings Ratio	20.78	16.79	18.61	13.84	12.85
	EBITDA Margin
	EBITDA Margin = EBITDA / Sales			MARKET CAP	2019	2018	2017	2016	2015
				Price of Stock per Share	$248.76	$201.59	$172.50	$115.59	$119.27	105.11
				Shares Outstanding	4443.265	4745.398	5134.132	5332.313	5575.331
				Market Capitalization	$1,105,306.60	$956,624.78	$885,637.77	$616,362.06	$664,969.73
				MARKET CAP/BOOK VALUE	2019	2018	2017	2016	2015
				Market Capitalization	1105306.60	956624.78	885637.77	616362.06	664969.73
				Book Value of Equity	$90,448.00	$107,147.00	$134,047.00	$128,249.00	$119,335.00
					$12.22	$8.93	$6.61	$4.81	$5.57
				Stock Price Comparison	2019	2018	2017	2016	2015
				GROSS PROFIT MARGIN	2019	2018	2017	2016	2015
				Sales	$260,174.00	$265,595.00	$229,234.00	$215,639.00	$233,715.00
				Cost of Sales	$161,782.00	$163,756.00	$141,048.00	$131,376.00	$140,089.00
				Gross Profit Margin	37.82%	38.34%	38.47%	39.08%	40.06%
				OPERATING PROFIT MARGIN	2019	2018	2017	2016	2015
				Operating Income	$63,930.00	$70,898.00	$61,344.00	$60,024.00	$71,230.00
				Sales	$260,174.00	$265,595.00	$229,234.00	$215,639.00	$233,715.00
				Operating Profit Margin	24.57%	26.69%	26.76%	27.84%	30.48%
				NET PROFIT MARGIN	2019	2018	2017	2016	2015
				Net Income	$55,256.00	$59,531.00	$48,531.00	$45,687.00	$53,394.00
				Sales	$260,174.00	$265,595.00	$229,234.00	$215,639.00	$233,715.00
				Net Profit Margin	21.24%	22.41%	21.17%	21.19%	22.85%
				EBITDA MARGIN	2019	2018	2017	2016	2015
				EBITDA
				Sales

Bargaining power of suppliers

VOLUNTEER'S 4 THIS PAGE - Eirin
Bargaining power of suppliers: Risk level – medium
- Suppliers power is weakened by a high number of potential suppliers: Most of the components that are essential to Apple are available from multiple sources. sources.
	However, Apple also use certain components that are currently obtained from single or limited
- Since there is multiple suppliers for most of the essential components Apple needs it is also a low switching cost for Apple (more power less risk)
- Apple is perceived by many a successful and power full company and many suppliers want to be a part that. This creates a competition between suppliers which again put
	the power in Apple’s hands and lower the risk level. It can be considered as a big loss for a supplier to lose Apple, which strengthen Apples position when negotiating deals and contracts.
	- Risk:
	- Competition: Apple competes for different kinds of components with other companies in the markets for smartphones,
		personal computers, tablets and other electronic devices.
	- Industry-wide shortage: Many of the components used by the Apple, including those that are available from multiple sources,
		are at times subject to industry-wide shortage and significant commodity pricing fluctuations.
	- Supplier of Apple specific components change their production: Apple uses some custom components that are not commonly used by its competitors.
		When Apple introduces new components or products, they also uses new technologies. To be able to produce enough fast enough, they usually
		get this component or product from only one source. Limited capacity may exist until the suppliers’ yields have matured or their manufacturing capacities have increased.
		The continued availability of these components at acceptable prices, or at all, may be affected if suppliers decide to concentrate on the production of common
		components instead of components customized to meet the Company’s requirements. --> higher switching cost
- Apple’s strategy to lower the risk: Apple created agreements for the supply of many components. In other words, Apple locks down
		their suppliers by getting the suppliers to sign contracts that contains the number of unites they are going
		to produce which complete the suppliers capacity for the year. This way the
		Apple dominates a supplier and the supplier cannot supply Apples competitor.
	- Risk:
	- There can be no guarantee that Apple will be able to extend or renew these agreements on similar terms, or at all.
		So that is a future risk that one need to take in consideration, but for now they have lowered the
		bargaining power of the supplier
	- Another thing to be aware of is that all Apple’s hardware products are manufactured by outsourcing partners
		that are located primarily in Asia, with some Mac computers manufactured in the U.S. and Ireland.
		Apple also depends on transportation and logistical services provided by outsourcing partners
		outside of the U.S, which can reduce Apple’s direct control over production and distribution
		Such diminished control can effect quality or quantity of products or services
Strategies for creating competitive advantage: Product Differentiation Strategy
- Apple is using a Product Differentiation Strategy. Expensive product, high quality, premium product, all product are connected --> people buy different devices and accessories
- Apple does not use low price campaigns, sale and coupons ($50 dollar off, buy 1 get 1 for free)
- Apple introduced a lower priced iPhone to be competitive on the lower price market, but still offer great quality and technology --> is Apple picking a fight in the cost leadership market?
- Stop selling products instead of selling them cheap (sale)
- The strategy is sustainable --> why?

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