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INSTRUCTIONS SEC 10-K Project The SEC 10-K Project is a culmination of the learning, research, and analysis completed on your chosen SEC corporation throughout the course in weekly discussion posts and course projects. Use the research and analysis, along with an explanation of accounting concepts, to tell a story about your corporation's financial performance and position. TWO PART PROJECT DESCRIPTION Part 1: Written Report: SEC 10-K Analysis Using the Internet, access the SEC 10-K annual report for a publicly-traded company of your choice. You must select a company that is publicly traded and has inventory and accounts receivable. Most students find the SEC 10-K annual report at their company's web site in sections such as About Us and / or Investor Relations. Look for SEC and Annual Filings (you will often find drop-down menus to click). You must research and secure the SEC 10-K Annual Report for the most recent year. Save the file to your computer for access. Do not print as the report is usually 100 pages or more. Post the name of your company, the SEC 10-K web link, and how you found the SEC 10-K in the SEC 10-K discussion for approval by your professor. Review the company's MD&A as well as financial statements and the accompanying footnotes. Use this information to prepare your "analytic" results. The SEC 10-K report and the materials from our class are the only resources you should use. Avoid a copy and paste approach except for the presentation of financial statements. The content of your paper should focus on accounting issues and include words used in our accounting class, including financial accounting as well as managerial accounting. Include details you learned this semester. Use terms from our class along with the research and financial analysis completed for your SEC 10-K company. The use of headings will label the sections in your paper. You should present inventory turnover, days sales in inventory, days sales in accounts receivable, and other financial ratio analysis from our course, both for the current year and as they relate to changes in accounts from one year to the next. Your goal is to explain the financial statements and the information of the SEC 10-K with the knowledge you learn from our class. While not explaining every item in the SEC 10-K, your paper should tell a story and illustrate your mastery of accounting terms and concepts. No more than one page should be devoted to your company's history and non-financial information. Part 2: PowerPoint Presentation A PowerPoint presentation (no more than 10 slides) will also need to be prepared to summarize and cover the highlights of your paper. Please post the presentation in the designated SEC 10-K discussion near the end of the semester to share with other students. Read your classmate's presentation and provide comments to at least one other posting. After the discussion week, you should review your PowerPoint presentation and submit the final version in the assignment folder. This is the PowerPoint file to be graded. The PowerPoint Presentation discussion is part of participation and designed to assist you in creating your final project. However, if you fail to participate in that discussion it may affect the ‘grade’ for your PowerPoint Presentation. Don’t miss the easy points! Need this report/power point on Apples SEC 10k report done by Friday, the link for the report is listed below, thank you. https://investor.apple.com/sec-filings/sec-filings-details/default.aspx?FilingId=13709514 LIQUIDITY RATIO Measures ability to pay current liabilities A liquid company has a value exceeding one The category entails current and quick ratio The company is managing its working capital well. Current ratio 2019 2018 Current assets 162,819 131,339 Current liability 105,718 115,929 Ratio 1.54 1.13 Quick ratio     Current assets 158,713 127,383 Current liability 105,718 115,929 Ratio 1.50 1.10 TURNOVER RATIOS Turnover ratio gauges the utilization of assets They include the inventory, the receivable and total assets turnover There is a decrease in inventory turnover There is an increase in the days of inventory Inventory Turnover 2019 2018 COGS 161,782 163,756 Inventory 4,106 3,956 Inventory Turnover 39.40 41.39 Days of inventory     Days 360 360 Inventory turnover 39.40136 41.39434 Days of inventory 9 9 ACCOUNT RECEIVABLE TURNOVER Account receivable is the quotient of the sales and debtors The turnover ratio has decreased in the period There is an increase in the days of account receivables Offering better rates and terms Accounts receivable Turnover 2019 2018 Sales 260,174 265,595 Account receivable 22,926 23,186 Turnover 11.35 11.45 Days of account receivable     Days 360 360 Account receivable turnover 11.35 11.45 Days of receivable 32 31 LEVERAGE RATIO Evaluates the level of borrowings in a business They include the debt to equity, the interest cover, the debt to assets etc. There is an increase in the solvency ratios It is important to reduce the borrowed funds through repayments. Debt to equity  2019 2018  Debt 102,067 102,519 Equity 90,488 107,147 Debt to equity ratio 1.13 0.96 Debt to total assets     Debt 102067 102519 Total assets 338,516 365,725 Ratio 0.30 0.28 PROFITABILITY RATIO Evaluates the returns generated by a business It includes the net margin and the return on equity (ROE). The firm has minimal net income There is an increases in the returns generated by the firm Return on equity 2019 2018 Net income 55,256 59,531 Equity 90,488 107,147 ROE 0.61 0.56 Net profit margin     Net profit 55256 59531 Sales 260,174 265,595 Ratio 0.21 0.22 IS Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 28, September 29, September 30, 2019 2018 2017 Net sales:    Products 213,883 225,847 196,534    Services 46,291 39,748 32,700 Total net sales 260,174 265,595 229,234 Cost of sales:    Products 144,996 148,164 126,337    Services 16,786 15,592 14,711 Total cost of sales 161,782 163,756 141,048 Gross margin 98,392 101,839 88,186 Operating expenses: Research and development 16,217 14,236 11,581 Selling, general and administrative 18,245 16,705 15,261 Total operating expenses 34,462 30,941 26,842 Operating income 63,930 70,898 61,344 Other income/(expense), net 1,807 2,005 2,745 Income before provision for income taxes 65,737 72,903 64,089 Provision for income taxes 10,481 13,372 15,738 Net income 55,256 59,531 48,351 Earnings per share: Basic 11.97 12.01 9.27 Diluted 11.89 11.91 9.21 Shares used in computing earnings per share: Basic 4,617,834 4,955,377 5,217,242 Diluted 4,648,913 5,000,109 5,251,692 BS Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 28, September 29, 2019 2018 ASSETS: Current assets: Cash and cash equivalents 48,844 25,913 Marketable securities 51,713 40,388 Accounts receivable, net 22,926 23,186 Inventories 4,106 3,956 Vendor non-trade receivables 22,878 25,809 Other current assets 12,352 12,087 Total current assets 162,819 131,339 Non-current assets: Marketable securities 105,341 170,799 Property, plant and equipment, net 37,378 41,304 Other non-current assets 32,978 22,283 Total non-current assets 175,697 234,386 Total assets 338,516 365,725 LIABILITIES AND SHAREHOLDERS’ EQUITY: Current liabilities: Accounts payable 46,236 55,888 Other current liabilities 37,720 33,327 Deferred revenue 5,522 5,966 Commercial paper 5,980 11,964 Term debt 10,260 8,784 Total current liabilities 105,718 115,929 Non-current liabilities: Term debt 91,807 93,735 Other non-current liabilities 50,503 48,914 Total non-current liabilities 142,310 142,649 Total liabilities 248,028 258,578 Commitments and contingencies Shareholders’ equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,986 shares issued and outstanding, respectively 45,174 40,201 Retained earnings 45,898 70,400 Accumulated other comprehensive income/(loss) -584 -3,454 Total shareholders’ equity 90,488 107,147 Total liabilities and shareholders’ equity 338,516 365,725 Ratio Inventory Turnover 2019 2018 COGS 161,782 163,756 Inventory 4,106 3,956 Inventory Turnover 39.40 41.39 Days of inventory Days 360 360 Inventory turnover 39.4013638578 41.3943377149 Days of inventory 9 9 Accounts receivable Turnover 2019 2018 Sales 260,174 265,595 Account receivable 22,926 23,186 Turnover 11.35 11.45 Days of inventory Days 360 360 Inventory turnover 11.35 11.45 Days of inventory 32 31 Debt to equity Debt 102,067 102,519 Equity 90,488 107,147 Debt to equity ratio 1.13 0.96 Debt to total assets Debt 102067 102519 Total assets 338,516 365,725 Ratio 0.30 0.28 Return on equity 2019 2018 Net income 55,256 59,531 Equity 90,488 107,147 Debt to equity ratio 0.61 0.56 Net profit margin Net profit 55256 59531 Sales 260,174 265,595 Ratio 0.21 0.22 Current ratio 2019 2018 Current assets 162,819 131,339 Current liability 105,718 115,929 Ratio 1.54 1.13 Quick ratio Current assets 158,713 127,383 Current liability 105,718 115,929 Ratio 1.50 1.10 Running head: APPLE INC. 1 APPLE INC. 5 Apple Inc. Name Institutional Affiliation Date Apple Inc. Introduction Apple is an established, global brand. It is found in the technology sector and the consumer electronics industry. It is estimated to have about 137000 employees on its payroll. The annual report contains information that sheds light on the performance of any business. The analytical review gives information that benefits any investor in the long run. One may evaluate the liquidity, profitability, solvency, and leverage ratio. There is a need to assess the non- financial data due to its influence on performance. The annual report contains both financial and non-financial data that have to be analyzed. Turnover ratios Turnover ratios gauge the manner a business uses its assets in the generation of revenues. The inventory and the accounts receivable turnover fall in this category (Financial Ratio Analysis, 2018). One notes that Apple Inc. had an inventory turnover of 41.39 in 2018 and 39.40 in 2019. A reduction of this rate indicates that the business is doing a great job of selling off its inventory. Besides, the company has days of inventory of nine days in both years. A reduction in the number of days implies a decrease in storage and holding costs. Inventory Turnover 2019 2018 COGS 161,782 163,756 Inventory 4,106 3,956 Inventory Turnover 39.40 41.39 Days of inventory     Days 360 360 Inventory turnover 39.40136 41.39434 Days of inventory 9 9 The accounts receivable is the quotient of the sales and the average debtors. Apple Inc. had a turnover of 11.45 in 2018 and 11.35 in 2019. A reduction in the rate shows that the business is taking longer to collect its receivables. It had days of receivable of 31 and 32 in the same period. Increasing the number of days shows that the business needs to offer better rates to its debtors. They may consider offering better quantity and price discounts. Accounts receivable Turnover 2019 2018 Sales 260,174 265,595 Account receivable 22,926 23,186 Turnover 11.35 11.45 Days of inventory     Days 360 360 Inventory turnover 11.35 11.45 Days of inventory 32 31 Leverage ratios Leverage ratios evaluate the level of borrowings by a business. An investor may determine the debt to equity and the debt to assets ratio (Financial Ratio Analysis, 2018). It is noted that Apple Inc. had a debt to equity ratio of 0.96 in 2018 and 1.13 in 2019. Besides, it had a debt to assets ratio of 0.28 in 2018 and .30 in 2019. Such rates show that the business is quite leveraged. It also indicates that the company has taken up more debt. There is a need for the management to make sure the borrowings are kept within a sustainable level. Debt to equity  2019 2018  Debt 102,067 102,519 Equity 90,488 107,147 Debt to equity ratio 1.13 0.96 Debt to total assets     Debt 102067 102519 Total assets 338,516 365,725 Ratio 0.30 0.28 Profitability ratios Profitability ratios evaluate the returns generated by a business. This category entails both the net profit margin and the return on equity (ROE). Besides, Apple Inc. had a net profit margin of 0.22 in 2018 and 0.21 in 2019. It also had an ROE of 0.56 in 2018 and 0.61 in 2019. One notes that the business has been consistently profitable. However, there is a need for management to undertake cost control and to maximize profits. Return on equity 2019 2018 Net income 55,256 59,531 Equity 90,488 107,147 ROE 0.61 0.56 Net profit margin     Net profit 55256 59531 Sales 260,174 265,595 Ratio 0.21 0.22 Liquidity ratio Liquidity ratio gauges the ability of a business to meet its short term obligations. They include both current and quick rates (Financial Ratio Analysis, 2018). One notes that Apple Inc. had a current ratio of 1.13 in 2018 and 1.54 in 2019. It also had a quick ratio of 1.10 in 2018 and 1.50 in 2019. Such results exceed the value of one, showing that the business is quite liquid. Current ratio 2019 2018 Current assets 162,819 131,339 Current liability 105,718 115,929 Ratio 1.54 1.13 Quick ratio     Current assets 158,713 127,383 Current liability 105,718 115,929 Ratio 1.50 1.10 History and non-financial information Competition Apple Inc. was incorporated in the year 1977 and had its headquarters in Cupertino, California. It faces stiff competition from other established brands such as Samsung Electronics and Hewlett Packard, amongst others. The industry players engage in aggressive marketing and competition for market share. One note that the businesses are keen on undertaking aggressive pricing and putting in place low-cost structures. The customers evaluate multiple issues before settling on the product to purchase. These features include the product features, its price, innovativeness of the manufacturer, the company reputation, its supply chain, quality, and performance of the product, and the software of the products. Rival companies pose a threat due to their vast resources. Apple has been a market leader in creativity and innovativeness. However, some of its competitors have imitated its products and offered low priced electronics. They also have a large customer base that may make it hard for firms such as Apple Inc. to establish itself in countries such as China. The company has made itself a market leader; hence the other players are keen on offering profits at minimal margins. They aim at reducing Apple Inc.'s market share. The business is also keen on expanding into new markets in regions across the globe. Intellectual property Apple Inc. holds intellectual property rights in software and services, accessories, and hardware devices. They include the service marks, copyrights, patents, trade dress, amongst others. It holds property rights both in the US and foreign countries. However, it depends on technical competence, innovative skills, and marketing to spur its growth. The company protects its innovations, research, design, and development using this legal means. It also holds copyrights that relate to certain aspects of the services and products offered by the firm. Apple Inc. files the patent applications regularly. This move makes sure that no one interferes with business services, processes, and products. Supply of components The company generates revenues from various sources and obtains its components from many suppliers. However, the industry may source similar components from the manufacturers (SEC Filings Details, 2019). This situation creates competition for products. It may also lead to a shortage of products hence affecting their prices. However, Apple Inc. customizes its components, making them different from the ones demanded by its rivals. As a result, the business has to pay a relatively higher price to make the manufacturers concentrate on the production of the company components. Apple Inc. has also created contractual terms with the manufacturers to make them focus on supplying the components. The majority of the company suppliers are found on the Asian continent. Conclusion Financial ratios show a positive performance. The business is quite liquid and has very minimal leverage. However, there is a need to manage the assets of a business in the right manner. One notes that the company takes longer to collect credit sales. It also holds inventory for long periods. Correcting this pattern reduces both storage and bad debt expenses. Besides, non-financial factors have a direct impact on the success of the business. The paper has considered the supply chain, the level of competition, and intellectual property. Proper management of both the financial and non-financial matters affects the success of any business. References Apple - SEC Filings - SEC Filings Details. (2019). Retrieved from Apple.com website: https://investor.apple.com/sec-filings/sec-filings-details/default.aspx?FilingId=13709514 Financial Ratio Analysis - List of Financial Ratios. (2018). Retrieved from accountingverse.com website: https://www.accountingverse.com/managerial-accounting/fs-analysis/financial-ratios.html ‌