QUESTION 1 (Points: 50)Consider the annual reports of Apple for a period of 2 years. Using the different financial ratios, we covered in this course you are required to1.1. Critically evaluate the financial statements individually across the 2-year period and cross-sectionally and identify their main strengths andweaknesses,and1.2. Make recommendations for future improvement.Note: Students are expected to comment on the change of company financial performance (income statement) and position (balance sheet)during the 2-year period of examination by looking at the main accounts and how they have changed (information may be taken from the notesto the accounts). The aim of this assignment is to familiarize students with the information content of annual reports.QUESTION 2 (Points: 50)From the balance sheet, income statement, statement of cash flows, and notes to the financial statements, answer the following questions.2.1. What are the largest assets included in the companys balance sheet? Why would a company of this type (size and industry) have a largeinvestment in this particular type of asset?In a review of the companys statement of cash flows:2.2. What are the primary sources and uses of cash from investing activities?2.3. Did investing activities cause the companys cash to increase or decrease?2.4. What are the primary sources and uses of cash from financing activities?2.5. Did financing activities cause the companys cash to increase or decrease?2.6. In a review of the companys income statement, did the company have a net income or a net loss for the most recent year? Whatpercentage of total revenues was that net income or net loss?2.7. Select three items in the notes accompanying the financial statements and explain briefly the importance of these items to people makingdecisions about investing in, or extending credit to, this company.2.8. Assume that you are a lender and this company has asked to borrow an amount of cash equal to 10 percent of its total assets, to be repaidin 90 days. Would you consider this company to be a good credit risk? Explain
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