Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Apple Inc. (NASDAQ:AAPL)

Analysis of Income Taxes

Advanced level

Income Tax Expense (Benefit)

Apple Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
Federal 6,306  6,384  41,425  7,842  7,652  11,730 
State 455  475  551  259  990  1,265 
Foreign 3,134  3,962  3,986  1,671  2,105  4,744 
Current 9,895  10,821  45,962  9,772  10,747  17,739 
Federal (3,619) (2,939) (33,819) 5,980  5,043  3,408 
State 21  (67) 48  (138) (220)
Foreign 3,383  2,666  1,181  (16) 33  (1,806)
Deferred (215) (340) (32,590) 5,966  4,938  1,382 
Provision for income taxes 9,680  10,481  13,372  15,738  15,685  19,121 

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Apple Inc.’s current decreased from 2018 to 2019 and from 2019 to 2020.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Apple Inc.’s deferred increased from 2018 to 2019 and from 2019 to 2020.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Apple Inc.’s provision for income taxes decreased from 2018 to 2019 and from 2019 to 2020.

Effective Income Tax Rate (EITR)

Apple Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
Statutory federal income tax rate 21.00% 21.00% 24.50% 35.00% 35.00% 35.00%
Effective tax rate 14.40% 15.90% 18.30% 24.60% 25.60% 26.40%

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Apple Inc.’s effective tax rate decreased from 2018 to 2019 and from 2019 to 2020.

Components of Deferred Tax Assets and Liabilities

Apple Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
Amortization and depreciation 8,317  11,645  137  1,230  2,107  2,238 
Accrued liabilities and other reserves 4,934  5,196  3,151  4,019  4,135  4,205 
Lease liabilities 2,038  —  —  —  —  — 
Deferred revenue 1,638  1,372  1,141  1,521  1,717  1,941 
Deferred cost sharing —  —  —  667  667  667 
Unrealized losses —  —  871  —  —  564 
Other 2,409  2,174  1,310  1,537  1,389  1,296 
Deferred tax assets 19,336  20,387  6,610  8,974  10,015  10,911 
Valuation allowance (1,041) (747) —  —  —  — 
Deferred tax assets, net 18,295  19,640  6,610  8,974  10,015  10,911 
Minimum tax on foreign earnings (7,045) (10,809) —  —  —  — 
Right-of-use assets (1,862) —  —  —  —  — 
Unrealized gains (526) (186) —  —  —  — 
Other (705) (600) (776) (36,562) (31,921) (27,171)
Deferred tax liabilities (10,138) (11,595) (776) (36,562) (31,921) (27,171)
Net deferred tax assets (liabilities) 8,157  8,045  5,834  (27,588) (21,906) (16,260)

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Apple Inc.’s deferred tax assets increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.
Deferred tax assets, net Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Apple Inc.’s deferred tax assets, net increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Apple Inc.’s net deferred tax assets (liabilities) increased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

Apple Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
Adjustment to Total Assets
Total assets (as reported) 323,888  338,516  365,725  375,319  321,686  290,479 
Less: Noncurrent deferred tax assets, net 8,157  8,045  5,834  —  —  — 
Total assets (adjusted) 315,731  330,471  359,891  375,319  321,686  290,479 
Adjustment to Total Liabilities
Total liabilities (as reported) 258,549  248,028  258,578  241,272  193,437  171,124 
Less: Noncurrent deferred tax liabilities, net —  —  —  27,588  21,906  16,260 
Total liabilities (adjusted) 258,549  248,028  258,578  213,684  171,531  154,864 
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 65,339  90,488  107,147  134,047  128,249  119,355 
Less: Net deferred tax assets (liabilities) 8,157  8,045  5,834  (27,588) (21,906) (16,260)
Shareholders’ equity (adjusted) 57,182  82,443  101,313  161,635  150,155  135,615 
Adjustment to Net Income
Net income (as reported) 57,411  55,256  59,531  48,351  45,687  53,394 
Add: Deferred income tax expense (benefit) (215) (340) (32,590) 5,966  4,938  1,382 
Net income (adjusted) 57,196  54,916  26,941  54,317  50,625  54,776 

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).


Apple Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Apple Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
Net Profit Margin
Reported net profit margin 20.91% 21.24% 22.41% 21.09% 21.19% 22.85%
Adjusted net profit margin 20.84% 21.11% 10.14% 23.70% 23.48% 23.44%
Total Asset Turnover
Reported total asset turnover 0.85 0.77 0.73 0.61 0.67 0.80
Adjusted total asset turnover 0.87 0.79 0.74 0.61 0.67 0.80
Financial Leverage
Reported financial leverage 4.96 3.74 3.41 2.80 2.51 2.43
Adjusted financial leverage 5.52 4.01 3.55 2.32 2.14 2.14
Return on Equity (ROE)
Reported ROE 87.87% 61.06% 55.56% 36.07% 35.62% 44.74%
Adjusted ROE 100.02% 66.61% 26.59% 33.60% 33.72% 40.39%
Return on Assets (ROA)
Reported ROA 17.73% 16.32% 16.28% 12.88% 14.20% 18.38%
Adjusted ROA 18.12% 16.62% 7.49% 14.47% 15.74% 18.86%

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Apple Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Apple Inc.’s adjusted total asset turnover ratio improved from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Apple Inc.’s adjusted financial leverage ratio increased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Apple Inc.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Apple Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.

Apple Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 57,411  55,256  59,531  48,351  45,687  53,394 
Net sales 274,515  260,174  265,595  229,234  215,639  233,715 
Profitability Ratio
Net profit margin1 20.91% 21.24% 22.41% 21.09% 21.19% 22.85%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 57,196  54,916  26,941  54,317  50,625  54,776 
Net sales 274,515  260,174  265,595  229,234  215,639  233,715 
Profitability Ratio
Adjusted net profit margin2 20.84% 21.11% 10.14% 23.70% 23.48% 23.44%

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

2020 Calculations

1 Net profit margin = 100 × Net income ÷ Net sales
= 100 × 57,411 ÷ 274,515 = 20.91%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 57,196 ÷ 274,515 = 20.84%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Apple Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Net sales 274,515  260,174  265,595  229,234  215,639  233,715 
Total assets 323,888  338,516  365,725  375,319  321,686  290,479 
Activity Ratio
Total asset turnover1 0.85 0.77 0.73 0.61 0.67 0.80
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 274,515  260,174  265,595  229,234  215,639  233,715 
Adjusted total assets 315,731  330,471  359,891  375,319  321,686  290,479 
Activity Ratio
Adjusted total asset turnover2 0.87 0.79 0.74 0.61 0.67 0.80

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

2020 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 274,515 ÷ 323,888 = 0.85

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 274,515 ÷ 315,731 = 0.87

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Apple Inc.’s adjusted total asset turnover ratio improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 323,888  338,516  365,725  375,319  321,686  290,479 
Shareholders’ equity 65,339  90,488  107,147  134,047  128,249  119,355 
Solvency Ratio
Financial leverage1 4.96 3.74 3.41 2.80 2.51 2.43
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 315,731  330,471  359,891  375,319  321,686  290,479 
Adjusted shareholders’ equity 57,182  82,443  101,313  161,635  150,155  135,615 
Solvency Ratio
Adjusted financial leverage2 5.52 4.01 3.55 2.32 2.14 2.14

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

2020 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 323,888 ÷ 65,339 = 4.96

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 315,731 ÷ 57,182 = 5.52

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Apple Inc.’s adjusted financial leverage ratio increased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 57,411  55,256  59,531  48,351  45,687  53,394 
Shareholders’ equity 65,339  90,488  107,147  134,047  128,249  119,355 
Profitability Ratio
ROE1 87.87% 61.06% 55.56% 36.07% 35.62% 44.74%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 57,196  54,916  26,941  54,317  50,625  54,776 
Adjusted shareholders’ equity 57,182  82,443  101,313  161,635  150,155  135,615 
Profitability Ratio
Adjusted ROE2 100.02% 66.61% 26.59% 33.60% 33.72% 40.39%

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

2020 Calculations

1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 57,411 ÷ 65,339 = 87.87%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × 57,196 ÷ 57,182 = 100.02%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Apple Inc.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Sep 26, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 57,411  55,256  59,531  48,351  45,687  53,394 
Total assets 323,888  338,516  365,725  375,319  321,686  290,479 
Profitability Ratio
ROA1 17.73% 16.32% 16.28% 12.88% 14.20% 18.38%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 57,196  54,916  26,941  54,317  50,625  54,776 
Adjusted total assets 315,731  330,471  359,891  375,319  321,686  290,479 
Profitability Ratio
Adjusted ROA2 18.12% 16.62% 7.49% 14.47% 15.74% 18.86%

Based on: 10-K (filing date: 2020-10-30), 10-K (filing date: 2019-10-31), 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 57,411 ÷ 323,888 = 17.73%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 57,196 ÷ 315,731 = 18.12%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Apple Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.