Apple 2006 Annual Report Download - page 68

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first quarter of fiscal 2009. Although the Company will continue to evaluate the application of SFAS No. 157, management does not currently
believe adoption will have a material impact on the Company’s results of operations or financial position.
In June 2006, the FASB issued FASB Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes-an Interpretation of FASB
Statement No. 109 . FIN No. 48 clarifies the accounting for uncertainty in income taxes by creating a framework for how companies should
recognize, measure, present, and disclose in their financial statements uncertain tax positions that they have taken or expect to take in a tax
return. FIN No. 48 is effective for fiscal years beginning after December 15, 2006 and is required to be adopted by the Company beginning in
the first quarter of fiscal 2008. Although the Company will continue to evaluate the application of FIN No. 48, management does not currently
believe adoption will have a material impact on the Company’s results of operations or financial position.
In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, which replaces APB Opinion No. 20, Accounting
Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements—An Amendment of APB Opinion No. 28.
SFAS No. 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principal unless it is
not practicable. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15,
2005 and is required to be adopted by the Company in the first quarter of fiscal 2007. Although the Company will continue to evaluate the
application of SFAS No. 154, management does not currently believe adoption will have a material impact on the Company’s results of
operations or financial position.
Liquidity and Capital Resources
The following table presents selected financial information and statistics for each of the last three fiscal years (dollars in millions):
(1)
See the “Explanatory Note” immediately preceding Part I, Item 1 and Note 2, “Restatement of Consolidated Financial Statements,”
in Notes to Consolidated Financial Statements of this Form 10-K.
(a)
DSO is based on ending net trade receivables and most recent quarterly net sales for each period.
(b)
Days supply of inventory is based on ending inventory and most recent quarterly cost of sales for each period.
(c)
DPO is based on ending accounts payable and most recent quarterly cost of sales adjusted for the change in inventory.
As of September 30, 2006, the Company had $10.11 billion in cash, cash equivalents, and short-term investments, an increase of $1.85 billion
over the same balances at the end of 2005. The principal
67
September 30,
September 24,
September 25,
2006
2005
2004
As Restated (1)
As Restated (1)
Cash, cash equivalents, and short
-
term investments
$
10,110
$
8,261
$
5,464
Accounts receivable, net
$
1,252
$
895
$
774
Inventory
$
270
$
165
$
101
Working capital
$
8,038
$
6,813
$
4,403
Days sales in accounts receivable (DSO) (a)
24
22
30
Days of supply in inventory (b)
7
6
5
Days payables outstanding (DPO) (c)
89
62
76
Annual operating cash flow
$
2,220
$
2,535
$
934