Financial Analysis Report

Financial Analysis Project: Part 4

Overview of the Annual Report

Overview of Annual Report 2014,September 27. :

Source of Annual Report: http://investor.apple.com/secfiling.cfm?filingid=1193125-14-383437

Given all research I’ve done on Apple Inc. as part of this project, In the annual report, Apple net sales has raised about 7% or 11.9 billion in 2014 compared to 2013.So, there were increases in net sales due to he software and services. By April 2014, Apple increases its share repurchase authorization to $90 billion and quarterly diviends increase to $0.47 per common share. So, the overall increase in its capital return program from $100 billion to over $130 billion. During 2014, the Company utilized $45 billion to repurchase its common stock and paid dividends and dividend equivalents of $11.1 billion. The Company also issued $12.0 billion of long-term debt during 2014 with maturities through 2044 and a launched a commercial paper program, with $6.3 billion outstanding as of September 27, 2014.As for the other income and expense, the decrease in other income and expense during 2014 compared to 2013 was due primarily to higher interest expense on debt and higher expenses associated with foreign exchange rate movements, partially offset by lower premium expenses on foreign exchange contracts and higher interest income. The year-over-year increase in other income and expense during 2013 was due primarily to higher interest and dividend income resulting from the Company’s higher cash, cash equivalents and marketable securities balances and lower premium expenses on foreign exchange contracts, partially offset by interest expense on debt issued in the third quarter of 2013 and higher expenses associated with foreign exchange rate movements. The weighted-average interest rate earned by the Company on its cash, cash equivalents and marketable securities was 1.11%, 1.03% and 1.03% during 2014, 2013 and 2012, respectively. The Company had no debt outstanding during 2012 and accordingly did not incur any related interest expense. For operating leases, major facility leases are typically for terms not exceeding 10 years and generally contain multi-year renewal options. Leases for retail space are for terms ranging from five to 20 years, the majority of which are for 10 years, and often contain multi-year renewal options. As of September 27, 2014, the Company’s total future minimum lease payments under non-cancelable operating leases were $5.0 billion, of which $3.6 billion related to leases for retail space. This report was created by an public independent accounting firm Ernst & Young LLP and signed in San Jose, California October 27,2014.

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