Common-Size Income Statement
Apple Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2025-09-27), 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).
The financial data reveals several notable trends in the company’s performance and cost structure over the observed periods.
- Revenue Composition
- The proportion of net sales attributed to products has been decreasing steadily from 80.41% to 73.77%, while services have correspondingly increased from 19.59% to 26.23%. This indicates a strategic shift towards a greater emphasis on services in the revenue mix.
- Cost of Sales
- The cost of sales as a percentage of net sales has shown a continuous decline, falling from -61.77% to -53.09%. Both products and services costs as a percentage of net sales have decreased, with product costs dropping from -55.11% to -46.64% and service costs remaining relatively stable around -6.5%. This improvement suggests better cost efficiency or favorable pricing adjustments over time.
- Gross Margin
- Gross margin has steadily improved, increasing from 38.23% to 46.91%. This trend aligns with the reduction in cost of sales and reflects enhanced profitability at the gross level.
- Operating Expenses
- Research and development expenses as a percentage of net sales have generally increased, moving from -6.83% to -8.3%, indicating increased investment in innovation. Selling, general, and administrative expenses have remained relatively stable, fluctuating slightly around -6.5%. Overall operating expenses have increased modestly from -14.09% to -14.93%, suggesting controlled spending despite growth in R&D.
- Operating Income
- Operating income as a percentage of net sales has improved from 24.15% to 31.97%, reflecting the combined effects of improved gross margin and controlled operating expenses.
- Interest and Other Income/Expense
- Interest and dividend income showed a decline initially and was not reported for the last two periods. Interest expense remained relatively low and stable but also unreported in the most recent periods. Other income (expense), net, fluctuated modestly around zero with no clear trend.
- Income Before Taxes and Provision
- Income before provision for income taxes tracked closely with operating income, increasing from 24.44% to 31.89%. However, the provision for income taxes exhibited volatility, with a notable increase to -7.61% in the second-to-last period before decreasing to -4.98% in the most recent period.
- Net Income
- Net income as a percentage of net sales improved from 20.91% to 26.92% over the timeframe. Despite some variation, particularly a dip in one period to 23.97%, the overall trend indicates enhanced profitability after taxes.