financial analysis
Activity Instructions: Financial Statement Analysis
For this Activity, you will create an Excel file (workbook). The ?Apple Solutions? workbook will consist of two (2) worksheets, each of which further examines the financial data of Apple Computer, Inc. Please retain these worksheets because they will serve as the basis for Activities 2 through 6 and the Stand-Alone Project.
To begin this Activity, you will need to download Supplement I from this Activity. Once downloaded, create an Excel file (workbook) titled ?Apple Solutions.? Within this workbook, create two (2) worksheets – Income Statements and Balance Sheets. Copy Apple Computer?s Income Statements from Supplement I into your newly create ?Income Statements? worksheet. Then copy Apple Computer?s Balance Sheets from Supplement I and paste into your newly created ?Balance Sheets? worksheet.
Your Activity responses should be both grammatically and mechanically correct and formatted in the same fashion as the Activity itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your response and document them in a bibliography using APA style. (100 points) (An Excel file with two (2) worksheets and a 2-page written response are required.)
Part A
Go to both Apple Computer?s (https://www.apple.com) and the U.S. Securities and Exchange Commision?s Web sites (https://sec.gov/) to locate Apple?s 2002 Form 10-K (Annual Report). Examine the financial statements. Compare and contrast Apple?s standardized financial statements provided in Supplement I with those in the Form 10-K. Write a brief 1- to 2-paragraph summary stating whether the same substantive information is conveyed in the two sets of financial statements and whether there are any differences in the format of the disclosures. (16 points)
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Part B
Vertically common size Apple?s income statements and balance sheets from 1998 to 2002.? Refer to Chapter 4 of your text to see how vertical analysis is accomplished.? You may also refer to the vertical common sizing of Apple from 1993 to 1998 in Appendix A of the text (p. 347 and pp. 349-350).? For this task, place the percentage-based statements beneath the monetary ones in both worksheets as illustrated below.? (20 points)
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Part C
Horizontally common size Apple?s income statements and balance sheets, using the rolling-forward approach, from 1998 to 2002.? Like Part B, place the revised statements below the vertical common sized statements in their respective worksheets.? Refer to Chapter 4 to see how horizontal analysis is accomplished.? You may also refer to the horizontal common sizing of Apple from 1993 to 1998 in Appendix A of the text (pp. 347-348 and pp. 350-351).? (20 points)
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Part D
Compute the compound annual growth rate for these statements in the ?Income Statements? and ?Balance Sheets? worksheets, respectively.? Like Parts B and C, place the compound annual growth rate statements below the rolling-forward percentage-based statements in each worksheet, respectively.? Refer to Chapter 4 to see how compound annual growth rates are computed.? You may also refer to the compound annual growth common sizing of Apple from 1993 to 1998 in Appendix A of the text (pp. 348 and pp. 352).?? (20 points)
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Part E
Write a one-paragraph trend analysis for each of the four (4) items below based upon the common sizing and growth rate financial statements of Apple for 1998 through 2002.? (24 points)? (A 1- to 2-page narrative response is required.)
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1.
Revenues
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2.
Net income as a percentage of sales
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3.
Current assets as a percentage of total assets
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4.
Liabilities as a percentage of total assets
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