Apple Inc. Apple Inc. is an American technology company headquar...

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Apple Inc.

Apple Inc. is an American technology company headquartered in Cupertino, CA that designs, develops, and sells consumer electronics, computer software, and online services. The company's hardware products include smartphones, tablet computers, personal computers, portable media players, smartwatchs, digital media players, and smart speakers. Apple's consumer software includes operating systems, a web browser, and other systems that are designed to give a seamless experience across their various products.

Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976 to develop and sell Wozniak's Apple I personal computer. Today Apple is the world's largest information technology company by revenue and profit and the world's 3rd largest mobile phone manufacturer after Samsung and Huawei. In January 2018, Apple became the first company to be valued at over $900 billion. The company employs 123,000 full-time employees as of September 2017 and maintains 499 retail stores in 22 countries as of December 2017. It operates the iTunes Store, which is the world's largest music retailer. As of January 2016, more than one billion Apple products are actively in use worldwide. Apple's worldwide annual revenue totaled $229 billion for the 2017 fiscal year. The company enjoys a high level of brand loyalty and has been repeatedly ranked as the world's most valuable brand.

a. Using the accompanying consolidated cash flow statement for Apple Inc., prepare a summary analysis for the most recent three years (FY 2017, 2016, and 2015). As demonstrated by the example in our text, this is a summary of cash flows, so you can group together cash flows of like items.

b. Using your summary analysis, write an analysis and interpretation of the cash flows for Apple for the three-year period, i.e., one analysis that includes all three years. Be sure to analyze both the cash flows from operating activities as well as the cash inflows and outflows from the summary analysis for the firm.

c. Evaluate the creditworthiness of Apple based on only the cash flow statements and the summary analysis.

d. What information from the balance sheet would be useful to a creditor in determining whether to make a loan to Apple? What other information would be useful in making this determination?

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Part A

Apple is the world’s largest information technology company and world’s 3rd largest mobile phone manufacturer. It operates iTunes store, which is world’s largest music retailer.

Statement of cash flows indicates that the company has been able to generate positive cash flows from operating activities. In the year 2015, the cash inflow from operating activities was 81,266 million, which has come down to 65,824 million in 2016 and 63,824 million in 2017. The reason for this decrease needs to be investigated, as the net income has come down with small amounts, but cash flow has decreased sharply....

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