Analysis of Investments
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Apple Inc., adjustment to net income
US$ in millions
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
The financial data indicates variations in both reported and adjusted net income over the six-year period under review.
- Reported Net Income
- The reported net income shows a generally increasing trend from 2019 through 2022, rising from 55,256 million US dollars in 2019 to a peak of 99,803 million US dollars in 2022. In the subsequent years, 2023 and 2024, reported net income declines to 96,995 million and 93,736 million US dollars respectively, indicating a downward adjustment after the peak year.
- Adjusted Net Income
- Adjusted net income follows a broadly similar trajectory but with some differences. It starts at 59,083 million US dollars in 2019 and remains relatively stable through 2020 at 58,550 million. A substantial increase occurs in 2021 to 93,713 million US dollars, followed by a decline to 87,904 million in 2022. However, in 2023 and 2024, adjusted net income rebounds to 98,811 million and 99,790 million US dollars respectively, surpassing the reported net income figures for those years.
- Comparative Insights
- Throughout the period, adjusted net income generally exceeds reported net income, suggesting that adjustments made for investments or other factors positively impact the net income figures. The divergence between the two metrics is most notable in 2023 and 2024 when adjusted net income not only increases but also is significantly higher than the reported net income, pointing to possible re-evaluation or reclassification of income components in the adjusted figures for those years.
- Overall Trends
- The period from 2019 to 2024 is characterized by growth in net income metrics, peaking around 2021-2022, followed by a decline in reported net income but a recovery and surpassing in adjusted net income by 2023 and 2024. This pattern may reflect changes in operational performance, accounting adjustments, or investment outcomes impacting profitability.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Apple Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
The financial ratios exhibit notable trends over the observed periods. Both reported and adjusted net profit margins show fluctuations with a general tendency to remain around the mid-20% range. The reported net profit margin peaked at 25.88% in the year ending September 2021, then slightly declined and stabilized close to 25% through 2023 before dipping to 23.97% in 2024. The adjusted net profit margin follows a somewhat similar pattern but demonstrates a slightly higher peak at 25.78% in 2023 and settles at 25.52% in 2024, indicating slightly more stable profitability when factoring adjustments.
Return on equity (ROE) shows a pronounced upward trend with significant growth from 61.06% in 2019 to a peak above 196% in 2022 (reported), followed by a decline yet remaining very high at 164.59% in 2024. The adjusted ROE also mirrors this trend, rising consistently to 173.48% in 2022 and then maintaining an elevated level near 175.22% by 2024. These values suggest very strong equity returns, albeit with increased volatility and a notable spike in 2021-2022.
Return on assets (ROA) indicates an increasing trend with reported ROA rising from 16.32% in 2019 to a peak of 28.29% in 2022, followed by a slight decline to 25.68% in 2024. The adjusted ROA similarly climbs from 17.45% in 2019 to 28.02% in 2023 and slightly decreases to 27.34% in 2024. This trend suggests a steady improvement in asset utilization efficiency over the period, with the adjusted figures showing a less volatile progression.
- Net Profit Margin
- Moderate fluctuation with an overall stable trend around 25% for both reported and adjusted metrics.
- Return on Equity (ROE)
- Significant increase reaching extraordinary levels in 2021-2022, followed by a decline but remaining substantially elevated through 2024.
- Return on Assets (ROA)
- Consistent upward trend indicating improved asset efficiency, peaking around 2022-2023, with minor decrease thereafter.
The analysis highlights strong profitability and efficiency metrics with some volatility in returns on equity. Adjusted measures tend to smooth some of the fluctuations, portraying stable operational performance. The exceptional ROE peaks suggest leverage or extraordinary item effects during the 2021-2022 period. Overall, the company has maintained strong financial performance with slight moderation in the latest reported period.
Apple Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2024 Calculations
1 Net profit margin = 100 × Net income ÷ Net sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × ÷ =
The data reflects the financial performance trends over a six-year period, focusing on both reported and investment-adjusted net income figures alongside their respective profit margins.
- Net Income Trends
- Reported net income shows an overall increase from 55,256 million USD in 2019 to a peak of 99,803 million USD in 2022, followed by a slight decline in the subsequent years, ending at 93,736 million USD in 2024. A similar pattern is observed in adjusted net income, which rose from 59,083 million USD in 2019 to 93,713 million USD in 2021, experienced a dip in 2022 to 87,904 million USD, then increased again reaching 99,790 million USD by 2024.
- Net Profit Margin Trends
- Reported net profit margin displayed a gradual increase from 21.24% in 2019 to a high of 25.88% in 2021, stabilizing around 25.31% in 2022 and 2023, before slightly decreasing to 23.97% in 2024. Adjusted net profit margin followed a somewhat more volatile trajectory: it rose from 22.71% in 2019 to 25.62% in 2021, declined to 22.29% in 2022, then improved sharply to approximately 25.78% in 2023, marginally declining to 25.52% in 2024.
- Comparison of Reported vs. Adjusted Data
- Adjusted net income values are consistently higher than the reported figures in the early years, indicating the impact of investment adjustments. Over time, adjusted net income displays greater volatility with noticeable fluctuations especially in 2022. Both net profit margins for reported and adjusted measures generally trend upward, with adjusted margins slightly outperforming reported margins in recent years. This suggests that investment-related adjustments have a meaningful effect on profitability analysis, particularly from 2022 onward.
- Overall Insights
- The financial data reveals strong earnings growth culminating around 2021 and 2022, with some signs of normalization thereafter. The adjusted figures indicate careful consideration of investment impacts, highlighting discrepancies that can inform a more nuanced evaluation of profitability. Profit margins demonstrate a solid capacity to generate returns on revenue, although recent slight declines in reported margins may warrant monitoring for potential operational or market influences.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2024 Calculations
1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Shareholders’ equity
= 100 × ÷ =
The financial data reveals notable trends in both reported and adjusted net income, alongside their respective returns on equity (ROE), over the period from 2019 to 2024. These indicators demonstrate the company's profitability and efficiency in generating returns for shareholders.
- Net Income Trends
- Reported net income shows an overall upward trajectory from 55,256 million US dollars in 2019, peaking at 99,803 million in 2022. After this peak, there is a slight decline observed in the subsequent two years, reaching 93,736 million in 2024.
- Adjusted net income also increases from 59,083 million US dollars in 2019 to a high of 93,713 million in 2021. Unlike the reported figures, adjusted net income dips to 87,904 million in 2022 but rebounds and gradually grows to 99,790 million by 2024.
- The adjustments appear to influence the trajectory differently, smoothing fluctuations and signaling potentially different underlying earnings quality or one-time items affecting reported results.
- Return on Equity Patterns
- Reported ROE rises sharply from 61.06% in 2019, reaching an exceptional peak of 196.96% in 2022, indicating a significant increase in efficiency and profitability relative to shareholder equity. This figure decreases moderately after 2022 but remains elevated at 164.59% in 2024.
- Adjusted ROE follows a similar upward pattern, starting at 65.29% in 2019 and peaking slightly lower than the reported measure at 173.48% in 2022. Thereafter, it experiences a minor decline in 2023 but increases again to 175.22% in 2024, supporting a view of sustained profitability and efficient equity usage when normalized for adjustments.
- Comparative Observations
- Throughout the period, the adjusted net income values are consistently higher than reported net income from 2019 to 2020, then become more aligned or exceed reported figures from 2021 onward. This suggests that adjustments may account for either income smoothing or removal of non-recurring losses/gains, impacting the net income trends.
- ROE metrics, both reported and adjusted, show high levels of profitability relative to equity, which is uncommon and may reflect significant operational efficiency or capital structure leverage. The volatility observed in ROE, especially the sharp increase until 2022 followed by stabilization, indicates dynamic changes in financial leverage or income generation capacity.
In summary, the company demonstrates robust profitability growth from 2019 through 2022, with net income and ROE peaking, followed by a slight retraction in reported figures and a recovery in adjusted income and ROE by 2024. The adjusted measurements suggest underlying strength and resilience after excluding certain items. These trends signify a strong capacity to generate returns on equity despite fluctuations in reported earnings.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2024 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
Over the analyzed periods, net income demonstrates an overall increasing trend until the fiscal year ending in 2021, followed by a slight decline in subsequent years. The reported net income rises from 55,256 million US dollars in 2019 to a peak of 99,803 million in 2022, then slightly decreases to 93,736 million by 2024. Adjusted net income presents a similar upward progression reaching near peak levels in 2023 and 2024, with values of approximately 98,811 million and 99,790 million respectively, indicating stability and slight growth after 2021.
Regarding return on assets (ROA), both reported and adjusted ROA values exhibit a significant enhancement up to the 2022 fiscal year, followed by a moderate downturn thereafter. Reported ROA grows from 16.32% in 2019 to its highest point at 28.29% in 2022, before declining to 25.68% in 2024. Adjusted ROA follows a comparable pattern, increasing from 17.45% in 2019 to 28.02% in 2023, and then slightly decreasing to 27.34% in 2024.
- Net Income Trends
- The company's profitability, as reflected in net income, ascended markedly until 2022, aligning with the peak operating performance. Subsequent modest decreases suggest a slight moderation in earnings.
- Adjusted net income values, factoring in investment adjustments, indicate consistent profitability with marginal increases in the final two years, revealing resilience in earnings quality.
- Return on Assets (ROA) Trends
- The increase in ROA metrics signifies improved efficiency in asset utilization up to 2022, with reported ROA peaking slightly earlier than adjusted ROA.
- Both adjusted and reported ROA exhibit a mild reduction during the final observed years, which may reflect changing asset base management or shifts in operational profitability.
- Comparison of Reported versus Adjusted Values
- While both reported and adjusted net income and ROA trends are generally aligned, adjusted figures are marginally higher, implying that investment adjustments positively influence the evaluation of financial performance.
- The narrower gap between reported and adjusted figures in later years suggests improved reconciliation or less impactful adjustments over time.