Financial Analysis of Apple and Alphabet

School: Valparaiso University - Course: ACC 503 - Subject: Accounting

ACCT 503 Signature Assignment Financial Statement Analysis of Apple and Alphabet Professor Joel Frazier

Complete one paragraph, profiling each company's business, including information such as brief histories, where each company is located, number of employees, the products each company sells, and so forth. Please reference any websites that you used for the profiles on the Bibliography tab. Apple Inc. Apple is the world's largest technology company by revenue that specializes in consumer electronics, computer software, and online services. Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976 to develop and sell Wozniak's Apple I personal computer. It was incorporated by Jobs and Wozniak as Apple Computer, Inc. in 1977. Now it is one of the Big Five American information technology companies, along with Amazon, Google, Microsoft, and Facebook. Alphabet Inc. is an American multi-industry company headquartered in Mountain View, California. On August 10, 2015, Google Inc. announced plans to create a new public holding company, Alphabet Inc. Google CEO Larry Page made this announcement in a blog post on Google's official blog. Alphabet would be created to restructure Google by moving subsidiaries from Google to Alphabet, narrowing Google's scope. The two co-founders of Google remained as controlling shareholders, board members, and employees at Alphabet. Alphabet is the world's fourth-largest technology company by revenue and one of the world's most valuable companies.

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Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab, and also include your commentary. The 2017 and 2018 financial statements used to calculate these ratios are available in the Investor Relations sections of the Apple and Alphabet websites. AppleAlphabet11/3/20176/2/2018 What does this mean? Earnings per Share of Common Stock (basic - common)As given in the income statement$ 9.27 $18.27 Current RatioCurrent assets$128,645=1.28$124,308=5.14What does this mean? Current liabilities$100,814$24,183 Gross Profit RateGross profit$88,186=38.5%$65,272=58.9%What does this mean? Net sales$229,234$110,855 Profit MarginNet income$48,351=21.1%$12,662=11.4%What does this mean? Net sales$229,234$110,855 Inventory TurnoverCost of goods sold$141,048=40.4$45,58389.6What does this mean? Average inventory$3,494$509 *Note Apple (4855+2132)/2 = 3494 --- Alphabet (749+268)/2 = 509 Days in Inventory365 days365=9365=4What does this mean? Inventory turnover40.4days89.6days Accounts Receivable TurnoverNet credit sales$229,234=13.6 $110,855=6.8 What does this mean? Average net accounts receivable$16,814$16,237 *Note Apple (17874+15754)/2 = 16814 --- Alphabet (18336+14137)/2 = 16237 Average Collection Period365 days365=27365=53What does this mean? Accounts receivable turnover13.6days6.8days Asset turnover Net sales$229,234=0.66$110,855=0.61What does this mean? Average total assets$348,503$182,396 *Note Apple (375319+321686)/2 = 348503 --- Alphabet (197295+167497)/2 = 182396 Return on Assets (ROA)Net income$48,351=13.9%$12,662=6.9% What does this mean? Average total assets$348,503$182,396 Debt to assets ratioTotal Liabilities$241,272=64.3%$44,793=22.7%What does this mean? Total Assets$375,319$197,295 Times-Interest Earned RatioNet income + interest expense + income tax expense$66,412=28.627,302=250.5What does this mean? interest expense$2,323$109 *Note Apple 48351+15738+2323=66412 Alphabet 12662+14531+109=27302 Dividend YieldDividend per share of common stock (Yahoo Finance 6/7/2021)$0.22=0.2%$0.00=0.0% What does this mean? (Please follow the Course Project instructions to calculate the current dividend yield.)Market price per share of common stock (Yahoo Finance 6/7/2021)$125.96$2,466.11 Return on Common Stockholders' Equity (ROE)Net income - preferred dividends48,351=36.9%$12,662=8.7%What does this mean? Average common stockholders' equity131,148.00145,769.00 *Note Apple (134047+128249)/2 = 131148 --- Alphabet (152502+139036)/2 = 145769 Free cash flowNet cash provided by operating activities minus capital expenditures minus cash dividends =$38,378= $23,907 What does this mean? in millionsin millions Price-Earnings Ratio Market price per share of common stock as of 9/28/2017 for Apple and of 12/29/2017 for Alphabet$153.28=17$1,046.40=57What does this mean?