Assume that 60% of Apple’s research and development expenses were capitalized, Singapore

Assignment Details:

The following questions relate to Apple’s, 2018 10-K filing.
https://www.sec.gov/Archives/edgar/data/320193/000032019318000145/a10-k20189292018.htm

1. What is the market cap of Apple? What was the book value on Sep 29, 2018? What are the various explanations for the difference between market and book values?
2. Calculate the 2018 ROE for Apple (using year-average numbers). Calculate the DuPont Formula breakdown and comment on each component.
3. Why did the retained earnings of Apple go down?
4. What was Apple’s depreciation and amortization expense for the year?
5. How much does the company report in “other” accounts? What is the largest disclosed “other” component?
6. Ignoring any potential tax effects, assume that 60% of Apple’s research and development expenses were capitalized, that the average product life was two years, and that the company begins amortizing software costs at the beginning of the following year. Estimate the effect of capitalizing software costs on Apple’s 2018 income statements and balance sheets.
7. How much cash did Apple receive from customers in 2018?
8. Calculate the company’s inventory purchases for the year.
9. Calculate the cash to cash cycle in days.
10. Calculate Apple’s cost of equity capital

The following questions relate to iRobot’s 2018 10-K filing.
https://www.sec.gov/Archives/edgar/data/1159167/000115916719000010/irbt12292018x10k.htm#sA26BAB230029861712908413F340F2EF
1. What were iRobot’s Gross Margins from 2016-2018? Have they increased/decreased? What are the primary reasons for any changes?
2. Comment about R&D, Selling and Marketing, and G&A expenses over the period 2016-2018.
3. Assume iRobot bought new furniture for its Bedford, MA office for $1 million in 2018. It estimated that 20% residual value. What is the amount it expensed in 2018?
4. What percentage of total revenue does iRobot generate in the APAC region?
5. What was the final purchase price of Robopolis and what percentage was assigned to goodwill?
6. In 2019, how much of the Robopolis intangible assets acquired will be expensed on the income statements?
7. What is unique about the acquisition of Sales on Demand Corporation? What explains it?
8. Footnote 8 Accrued Expenses lists all the accrued expenses for iRobot. In total, did the company record more expenses for the year or pay more cash for the year related to these accounts?
9. Comment about the relationship between iRobot’s cost of equity and cost of capital.
10. In what form does iRobot distribute value to its shareholders? Explain why.