ACCT504CourseProjectW8

School: DeVry University, Chicago - Course: ACCT 504 - Subject: Accounting

Signature Assignmment: Course Project - Markus Davis February 22, 2023 ACCT504 DeVry University

Apple Inc. is a multinational technology company headquartered in Cupertino, California. The company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976 and was incorporated in 1977. Apple started out as a personal computer company, but it has since expanded its product line to include a variety of electronics such as smartphones, tablets, wearables, and accessories. Some of Apple's most popular products include the iPhone, iPad, Apple Watch, and MacBook. The company is known for its innovative design and user-friendly interface, which has helped establish its brand as a leader in the technology industry. As of 2021, Apple has approximately 147,000 employees worldwide and reported a revenue of $274.5 billion in fiscal year 2020. Microsoft Corporation is a multinational technology company based in Redmond, Washington. It was founded by Bill Gates and Paul Allen in 1975 and is now one of the world's largest software makers. Microsoft has over 181,000 employees in 120 countries, and its products are used by millions of people worldwide. Some of its most popular products include Windows, Office, and the Xbox gaming console. The company has also diversified into cloud computing with its Azure platform, and recently acquired GitHub, a popular code-sharing platform for software developers. Microsoft has a long history of innovation and has been at the forefront of the technology industry for decades. With a market capitalization of over $2 trillion, Microsoft is one of the most valuable companies in the world.

Use this Excel spreadsheet to compute ratios;show your computations for all ratios on this tab, and also include your commentary. AppleMicrosoft 9/25/202112/12/2021 Earnings per Share of Common Stock (basic - common)As given in the income statement$9.27$0.98 Current RatioCurrent assets$134,836=1.07$184,406=0.55 Current liabilities$125,481$333,779 Gross Profit RateGross profit$12,446=44.8%$115,856=69.0% Net sales$27,799$168,000 Profit MarginNet income$2,693=9.7%$208,042=6.7% Net sales$27,799$3,084,370 Inventory TurnoverCost of goods sold$15,353=4.1$1,572,1643.1 Average inventory$3,716$502,860 Days in Inventory365 days365=88365=117 Inventory turnover4.1days3.1days Accounts Receivable TurnoverNet credit sales$27,799=8.5$3,084,370=12.6 Average net accounts receivable$3,276$244,894 Average Collection Period365 days365=43365=29 Accounts receivable turnover8.5days12.6days Asset turnoverNet sales$27,799=1.54$3,084,370=1.68 Average total assets$18,070$1,836,412 Return on Assets (ROA)Net income$94,680=27.0%$208,042=11.3% Average total assets$351,002$1,836,412 Debt to assets ratioTotal Liabilities$287,912=82.0%$744,783=35.5% Total Assets$351,002$2,095,083 Times-Interest Earned RatioNet income + interest expense + income tax expense$94,680=367.0347,545=65.1 interest expense$2585,335 Dividend YieldDividend per share of common stock (Yahoo Finance 12/24/2015)$1.28=2.0%$0.00=0.0% (Please follow the Course Project instructions to calculate the current dividend yield.)Market price per share of common stock (Yahoo Finance 12/24/2015)$63.18$81.20 Return on Common Stockholders' Equity (ROE)Net income - preferred dividends2,693=24.6%208,042=17.3% Average common stockholders' equity10,952.501,201,827.00 Free cash flowNet cash provided by operating activities minus capital expenditures minus cash dividends =$1,324= $78,505 in millionsin thousands Price-Earnings RatioMarket price per share of common stock as of 5/30/2014 for Nike and 12/31/2014 for Under Armour$76.91=25$67.90=69 (Please see the Course Project instructions for the dates to use for this ratio.)Earnings per share$3.05$0.98Interpretation and comparison between the two companies' ratios (reading Chapter 13 will help you prepare the commentary) The comparison of the ratios is an important part of the project. A good approach is to briefly explain what the ratio tells us. Indicate whether a higher or lower ratio is better. Then compare the two companies on this basis. Remember that each ratio below requires a comparison.

You all get the chance to play the role of financial analyst below. The summary should be a comparison of each company's performance for each major category of ratios listed below. Focus on major differences as you compare each company's performance. A nice way to conclude is to state which company you feel is the better investment and why. Based on the financial summary data and income statement information from 2017, it is clear that Apple is in a better financial position than Microsoft. Apple's total revenue for the year was $229.2 billion, while Microsoft's was $110.4 billion. Additionally, Apple's net income was $48.4 billion, which is more than double Microsoft's net income of $21.2 billion. Apple's gross profit margin was also significantly higher than Microsoft's, at 38.6% compared to Microsoft's 64.7%. This indicates that Apple was able to generate more profit from its revenue than Microsoft. Furthermore, Apple's return on equity was 36.1%, while Microsoft's was 29.2%. This indicates that Apple was more efficient in generating profits from its shareholder investments. Overall, these financial metrics demonstrate that Apple was able to outperform Microsoft in terms of revenue, net income, gross profit margin, and return on equity in 2017, making it the better performing company in that year. Based on the above ratios and metrics, Apple has shown strong growth in 2021. The gross profit margin and operating margin have increased, indicating increased efficiency and profitability, respectively. The ROE has also increased, indicating that Apple is generating more profit per dollar of shareholder equity. Lastly, the EPS has also increased, which indicates that Apple's profitability is growing over time. In conclusion, Apple is a better investment as it has shown strong financial performance in 2021, which is a good indicator of future success. The company's growing profitability and efficiency make it an attractive investment for investors looking for long-term growth opportunities in the technology sector. However, as with any investment, it is important to conduct a thorough analysis of the company's financials and future growth prospects before making any investment decisions.