Apples Financial Statements

Financial Statement Analysis (Balance Sheet & Income Statement)Working CapitalCurrent assets= 68,531,000: Current liabilities = 63,448,000Working capital = Current assets – current liabilitiesApple= 68,531,000 - 63,448,000 = 5,083,000As we can see the working capital of Apple is positive and just the right amount.As we can see the company current assets are more than that of current liabilities so the company is following the conservative strategy.Current RatioThe current ratio (or liquidity ratio) is a measure of financial strength. The number of times current assets exceed current liabilities is a valuable expression of a business’ solvency. Here is the formula to compute the current ratio: Current ratio = Total Current Assets/Total Current LiabilitiesCurrent assets= 68,531,000: Current liabilities = 63,448,000 (as given in balance sheet)In the case of Apple Company the Current ratio in 2014 is 1.08 and in 2013 is 1.67. The current ratio shows does business has enough current assets to make the payment of the current liabilities.Cash conversion CycleAll numbers in thousandsItemYear 2014Year 2013AverageRevenue182,795,000No NeedNo NeedCOGS112,258,000No NeedNo NeedInventory2,111,0001,764,0001,937,500AP48,649,00036,223,00042,436,000AR31,537,00024,094,00027,815,500Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding - Days Payable OutstandingDays