Question

Consider the following portions of summarized financial statements (in millions) and ratios for Apple Inc. What is the cash conversion cycle observed in 2013? HOME INSERT DATA fx A B C D E F 1 2012 2013 2 Accounts Receivable, net 10,930 13,102 3 Inventory 791 1,764 4 P,P,&E, net 15,452 16,597 5 Intangibles, net 5,359 5,756 6 Total Assets 176,064 207,000 Days Inventory 4.37 7 Accounts Payable 21,175 22,367 Average Collection Period 25.66 8 Accrued Expenses 11,414 13,856 Days Purchases Outstanding 74.54 9 Other Current Liabilities 5,953 7,435 10 Long Term Debt 0 16,960 Cash Conversion Cycle 11 Other Long Term Liabilities 19,312 22,833 12 Common Stock 16,422 19,764 13 Retained Earnings 101,289 104,256 14 AOCI & Other 499 -471 15 16 Revenue 170,910 17 Cost of Sales 106,606 18 Gross Profit 64,304 19 R&D Expenses 4,475 20 M&S Expenses 7,581 21 G&A Expenses 3,249 22 Total Operating Expenses 15,305 23 Interest Expense 136 24 Other (Income)/Expense -1,292 25 Income Tax Expense 13,118

          Consider the following portions of summarized financial statements (in millions) and ratios for Apple Inc.
What is the cash conversion cycle observed in 2013?
HOME
INSERT
DATA
fx
	A	B	C	D	E	F
1		2012	2013			
2	Accounts Receivable, net	10,930	13,102			
3	Inventory	791	1,764			
4	P,P,&E, net	15,452	16,597			
5	Intangibles, net	5,359	5,756			
6	Total Assets	176,064	207,000		Days Inventory	4.37
7	Accounts Payable	21,175	22,367		Average Collection Period	25.66
8	Accrued Expenses	11,414	13,856		Days Purchases Outstanding	74.54
9	Other Current Liabilities	5,953	7,435			
10	Long Term Debt	0	16,960		Cash Conversion Cycle	
11	Other Long Term Liabilities	19,312	22,833			
12	Common Stock	16,422	19,764			
13	Retained Earnings	101,289	104,256			
14	AOCI & Other	499	-471			
15						
16	Revenue		170,910			
17	Cost of Sales		106,606			
18	Gross Profit		64,304			
19	R&D Expenses		4,475			
20	M&S Expenses		7,581			
21	G&A Expenses		3,249			
22	Total Operating Expenses		15,305			
23	Interest Expense		136			
24	Other (Income)/Expense		-1,292			
25	Income Tax Expense		13,118

Show more…

Consider the following portions of summarized financial statements (in millions) and ratios for Apple Inc.
What is the cash conversion cycle observed in 2013?
HOME
INSERT
DATA
fx
A B C D E F
1 2012 2013
2 Accounts Receivable, net 10,930 13,102
3 Inventory 791 1,764
4 P,P, E, net 15,452 16,597
5 Intangibles, net 5,359 5,756
6 Total Assets 176,064 207,000 Days Inventory 4.37
7 Accounts Payable 21,175 22,367 Average Collection Period 25.66
8 Accrued Expenses 11,414 13,856 Days Purchases Outstanding 74.54
9 Other Current Liabilities 5,953 7,435
10 Long Term Debt 0 16,960 Cash Conversion Cycle
11 Other Long Term Liabilities 19,312 22,833
12 Common Stock 16,422 19,764
13 Retained Earnings 101,289 104,256
14 AOCI Other 499 -471
15
16 Revenue 170,910
17 Cost of Sales 106,606
18 Gross Profit 64,304
19 R D Expenses 4,475
20 M S Expenses 7,581
21 G A Expenses 3,249
22 Total Operating Expenses 15,305
23 Interest Expense 136
24 Other (Income)/Expense -1,292
25 Income Tax Expense 13,118

Added by Edward F.

Fundamentals of Statistics

Michael Sullivan III 5th Edition

Chapter 10

Instant Answer

Solved by Expert Akash M

07/21/2023

Step 1

The formula for days inventory is: Days Inventory = (Inventory / Cost of Sales) * 365 In 2013, the inventory was $1,764 million and the cost of sales was $64,304 million. Plugging these values into the formula, we get: Days Inventory = (1,764 / 64,304) * 365 = Show more…

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Consider the following portions of summarized financial statements (in millions) and ratios for Apple Inc. What is the cash conversion cycle observed in 2013?

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Transcript

00:01 So, here the question is given in four parts and for all the parts we need to find the correct answer.

00:09 So, at for part a or part 1 we can say that we need to compute the net cost of goods purchased.

00:17 So, cost of goods purchased.

00:23 How we can calculate? inventories at the at end of year plus cost of sale minus inventories at beginning of the year.

00:40 So, let's put the values here $3956 plus $163 ,756 minus $2710 million.

00:57 So, here we got the amount all these things in million.

01:01 So, $164 ,002 million.

01:06 This will be our first part of the question.

01:12 Now, in the september 29, 2009.

01:19 Ok.

01:21 So, now here one thing this is for september 29, 2018.

01:30 Now, what we need to calculate? we need to calculate the second part of the question.

01:39 At the second part of question we need to compute the current ratio and asset test ratio for september 29, september 29, 2018 and september 30, 2017.

02:01 So, what we need to do for this? as we know the formula of current ratio will be current asset by current liabilities and asset test ratio will be current asset minus inventories divided by current liabilities.

02:21 So, here using the apple's financial statement in appendix a, we can calculate the current ratio and asset test ratio for the let's put it like this current ratio and asset test ratio for september 29, 2018 and for september 30, 2017.

02:52 So, let's put it from the appendix a, we got it 1 .12, this is 1 .28 and this is 0 .86, 1 .07...

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