Question

In: Finance

Apple Inc. just reported an EPS of $3.30 on revenues of $260,174 million. The company has...

Apple Inc. just reported an EPS of $3.30 on revenues of $260,174 million. The company has 17,100 million shares outstanding. Total assets are $338,516 million, current liabilities equal $105,718 million, and long-term debt is $142,310 million. Net fixed assets are worth $175,697 million. Given this information, which one of the following statements is correct?

		Apple’s net working capital is $67,101 million.
		Apple’s total asset turnover is 1.77.
		Apple’s debt-equity ratio is 2.74.
		Apple’s current ratio is 3.54.

Expert Solution

Given

Total Assets = $ 338516 Million.

Current liabilities = $ 105718 Million

Long term Debt = $ 142310 Million

Net Fixed Assets = $ 175697 Million

We know that Current Assets + Fixed Assets = Total Assets

Current Assets + $ 175697 Million = $ 338516 Million

Current Assetsb = $ 338516 Million-$ 175697 Million

Current Assets = $ 162819 Milion

Computation of Net working Capital

NetWorking Capital = Current Assets - Current liabilities

= $ 162819 Million - $ 105718 Million

= $57101 Million

Computation of Total Asset Turnover

Total Asset turnover = Net sales / Total Assets

= $ 260174 million / $ 338516 million

= 0.768572

Computation Of Debt Equity ratio

We know that Total Assets = Total liabilities & Equity

Total Assets = Current liabilities+ Long term Debt + Equity

$ 338516 = $ 105718+$ 142310+ Equity

$ 338516 = $ 248028 + Equity

Equity = $ 338516-$ 248028

Equity = $ 90488 Millions

Debt Equity Ratio = Debt / Equity

= $ 248028/$ 90488

= 2.74

* Debt = Current liabilities+ Long term debt

= $ 105718+$ 142310

= $ 248028 Million

Computation of Current ratio

We know that Current ratio = Current Assets / Current liabilities

= $ 162819/$ 105718

= 1.540126

From all the given statements Option 3) Apples Debt Equity ratio is 2.74 is correct.

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jeff jeffy answered 2 years ago

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