Apple Assessement

hat is your assessment of Apple’s recent financial performance?

Looking to the income statement , apple show a positive net sales growth and increase revenue in both 2007 and 2008 . as well as , a growth in the net income. According to the balance sheet of 2007 and 2008 , the working capital increased from 12657 in 2007 to 20598 in 2008, receivable and inventory amounts was lees than 10% of assets

Also when we look to the cash flow statement , can see the cash from operation activities was appositive and increasing In 2008 compared to 2007 and in both years the CFO was higher the CFI then we can say that apple had the capability to finance its investment activities from internal financing.

2. How does Apple account for Mac computers?

MAC of apple has a 2 components the hardware and the software , Apple generally recognized revenue and cost of sales for its other software-enabled hardware products such as the Macs at the time of sale ( using immediate revenue recognition) as the company did not provide new features or software applications for those products free of charge. However, Software-enabled hardware devices (bundled components”), such as Apple’s iPhone, Macs and iPods, fell under the software revenue recognition rules pursuant to (AICPA) /(SOP) No. 97-2, Software Revenue Recognition. To comply with US.GAAP roles , Apple faced two options: 1) restate its financials to recognize the MacBook revenue under subscription accounting, or 2) charge users for the upgrade. Apple chose the option 2.

3. Explain how Apple accounts for the sale of the iPhone under U.S. GAAP? Why does it do so? What is the impact on the company’s financial statements?

As far for the Apple first introduced the iPhone in 2007, select the use of “subscription method of accounting” under SOP No. 97-2 to record its revenue for as Oppenheimer explained:

“Since we will be periodically providing new software features to iPhone customers free of

charge, we will use...