ACCOUNTING-ACC 101 – Financial Accounting Case 2 – Financial Statement Analysis

QUESTION

ACC 101 –
Financial Accounting
Case 2 – Financial
Statement Analysis
Part 2 – 120
Points

Name ______________________________________________ Date ______________________

Use the information
contained in these financial statements and notes to complete this case. All answers should be for the most current
year (September 26, 2015) unless
asked otherwise. Many companies show amounts in the thousands or millions –
please state amounts as shown on the financial statements. Do not add zeros. You do not need to include
dollar signs.
Selected financial statements ofApple,
Inc. follow.
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I.
Financial Statement
Analysis Ratios – Must show your work for all ratios. Calculate each
ratio to three decimal places. (Page numbers are for referencing the formulas
in your textbook.) (100 Points Total)

1.

Chapters 3
& 13(pages 128, 127, 597) (24Points)

Calculate
the Current ratio. (4) Does this
ratio appear favorable or unfavorable?
(4) Why? (4)

b. Calculate the Profit Margin
ratio. (4)Does this ratio appear favorable or unfavorable? (4) Why? (4)

2.

Chapters 6, 7 & 13(pages
327, 285, 597) (18 Points)

a. Calculate the Accounts
Receivable Turnover ratio. (8)

Calculate
the Days’ Sales Uncollected ratio. (6) Does this ratio appear favorable
or unfavorable? Why? (4)

3.

Chapters 8
& 13 (pages 367, 597) (6 Points)

a. Calculate the Total Asset Turnover
ratio. (6)

4.

Chapters 2
& 13(pages 77, 597) (12 Points)

a. Calculate the Debt ratio. (4) Does
this ratio appear favorable or unfavorable?
(4) Why? (4)

5.

Chapters 10
& 13 (pages 451, 452, 597) (12 Points)

a. Calculate the Debt-to-Equity Ratio. (4) Does this ratio appear favorable or
unfavorable? (4) Why? (4)

6.

Chapters 11
& 13 (pages 501, 597) (16 Points)

a. What
is the current market price of the stock? This is not in the financial
statements provided. It is noted on
Apple’s website or go to .yahoofinance.com/”>www.yahoofinance.com
to get the quote. The ticker symbol for Apple is AAPL.

Price __________ (4)

Date found:
­____________

Calculate
the Dividend Yield. (4)

c. Calculate
the Price-Earnings Ratio. (4)

Does this
ratio appear favorable or unfavorable? (4) Why? (4)

7.

Chapters 5
& 13 (page 227, 597) (12
Points)

Calculate
the Inventory turnover ratio. (6)

Calculate
the Days’ Sales in Inventory ratio. (6)

II. Summary (20 Points)
Your superior asks you to analyze this
company’s financial condition (liquidity, efficiency, solvency,
profitability). Would you recommend it
as a worthy investment (yes or no)? Support
your opinion using answers from part I above.
You must give at least five reasons to support your answer to receive full
credit.

ANSWER:

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