Please complete the following questions to the best of your ability. Use the attached financial statements as needed.
- Using Apple Inc.’s 9/26/2015 (filing date 10/28/2015) annual report balance sheet and income statement, compute the following (using formulas provided in class):
- DuPont ROE analysis
- Equity Multiplier
- Asset Turnover
- Profit Margin
- Quick Ratio
- Inventory Turnover
- Dividend Yield
- P/E Ratio (use price = $114.22, closing price on 9/25/2015)
- Why are initiations or increases in dividends seen as “good news” for a company?
- What are the pitfalls in P/E analysis?
- Use the financial statements of Apple to answer the following questions.
- Compute the book value and market value of Apple (price = $114.22). Compute both aggregate and per share.
- Using the dividend discount model, back out the capitalization rate of Apple. This entails computing “g” and then manipulating the Gordon Growth Model. Does this rate seem reasonable?
NOTE: You can obtain the Apple financial statements from finance.yahoo.com or from www.sec.gov/edgar