CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) 12 Months Ended shares in Thousands, $ in Millions Sep. 28, 2019 Sep. 29, 2018 Sep. 30, 2017 Net sales $ 260,174 $ 265,595 $ 229,234 Cost of sales 161,782 163,756 141,048 Gross margin 98,392 101,839 88,186 Operating expenses: Research and development 16,217 14,236 11,581 Selling, general and administrative 18,245 16,705 15,261 Total operating expenses 34,462 30,941 26,842 Operating income 63,930 70,898 61,344 Other income/(expense), net 1,807 2,005 2,745 Income before provision for income taxes 65,737 72,903 64,089 Provision for income taxes 10,481 13,372 15,738 Net income $ 55,256 S 59,531 $ 48,351 Earnings per share: Basic (in dollars per share) $ 11.97 $ 12.01 S 9.27 Diluted (in dollars per share) $ 11.89 S 11.91 $ 9.21 Shares used in computing earnings per share: Basic (in shares) 4,617,834 4,955,377 5,217,242 Diluted (in shares) 4,648,913 5,000,109 5,251,692 Products Net sales $ 213,883 $ 225,847 $ 196,534 Cost of sales 144,996 148,164 126,337 Services Net sales 46,291 39,748 32,700 Cost of sales $ 16,786 $ 15,592 S 14,711 ment Sep. 28, 2019 Sep. 29, 2018 $ 48,844 51,713 22,926 4,106 22,878 12,352 162,819 $ 25,913 40,388 23,186 3,956 25,809 12,087 131,339 105,341 37,378 32,978 175,697 338,516 170,799 41,304 22,283 234,386 365,725 CONSOLIDATED BALANCE SHEETS - USD (5) $ in Millions Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets Current liabilities: Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities Non-current liabilities: Term debt Other non-current liabilities Total non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity: Common stock and additional paid in capital, 50.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,906 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/(loss) Total shareholders' equity Total liabilities and shareholders' equity 46,236 37.720 5,522 5,980 10,260 105.718 55,888 33,327 5.966 11,964 8,784 115,929 CONSOLIDATED BALANCE SHEETS - USD ($) Sep. 30, 2017 Sep. 24, 2016 $ in Millions Current assets: Cash and cash equivalents $ 20,289 $ 20,484 Short-term marketable securities 53,892 46,671 Accounts receivable, less allowances of 17,874 15,754 $58 and $53, respectively Inventories 4,855 2,132 Vendor non-trade receivables 17,799 13,545 Other current assets 13,936 8,283 Total current assets 128,645 106,869 Long-term marketable securities 194,714 170,430 Property, plant and equipment, net 33,783 27,010 Goodwill 5,717 5,414 Acquired intangible assets, net 2,298 3,206 Other non-current assets 10.162 8,757 Total assets 375,319 321,686 Current liabilities: Accounts payable 49,049 37.294 Accrued expenses 25.744 22,027 Deferred revenue 7,548 8,080 Commercial paper 11,977 8,105 Current portion of long-term debt 6.496 3.500 Total current liabilities 100.814 79,006 Deferred revenue, non-current 2,836 2,930 Long-term debt 97.207 76,427 Other non-current liabilities 40.415 36,074 Total liabilities 241 272 193,437 Commitments and contingencies Shareholders' equity: Common stock and additional paid in capital $0.00001 par value: 12.600.000 shares authorized: 5,126,201 and 35,867 31,251 5.336,166 shares issued and outstanding, respectively Retained earnings 98.330 96,384 Accumulated other comprehensive income/loss (150) 634 Total shareholders equity 134,047 128,249 Total liabilities and shareholders equity S 375,219 $ 321.886 91,807 50,503 142,310 248.028 93,735 48,914 142,649 258,578 45,174 40,201 45,898 70.400 (3,454) (584) 90,488 $ 338,516 107.147 $365,725 ire (2,817) (2,527) (1,874) 14,119 13,712 2.931 CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) 12 Months Ended $ in Millions Sep. 25, 2013 Sep. 29, 2018 Sep. 30, 2017 Statement of Cash Flows [Abstract Cash, cash equivalents and restricted cash, beginning balances $ 25,913 $20 289 $ 20,434 Operating activities: Net Income 55 256 59,531 48,351 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 12,547 10,903 10.157 Share-based compensation expense 6,068 5,340 4,840 Deferred income tax expensel benefit) (340) (32,590) 5,966 Other (652) (166) Changes in operating assets and liabilities: Accounts receivable, net 245 (5.322) (2,093) Inventories (289) 828 (2.723) Vendor non-trade receivables (8,010) (4,254) Other current and non-current assets 873 (423) (5.318) Accounts payable (1923) 9.175 8,988 Deferred revenue (625) (3) (593) Other current and non-current abilities (4,700) 38.449 1.092 Cash generated by operating activities 69,391 77.434 64.225 Investing activities: Purchases of marketable securities (39.630) (71,356) (159,486) Proceeds from matures of marketable 40,102 55,881 31775 securities Proceeds from sales of marketable 56,988 47,838 securities 94.564 Payments for acquistion of property (10,495) (13,313) (12.451) plant and equipment Payments made in connection with (721) business acquisitions.net Purchases of non-marketable securbes (1.001) (1 671) Proceeds from non-marketable securities 1,834 393 Other (1.078 Cash generated by used in investing 45.396 16.066 46,446) activities Financing activities: Proceeds from issuance of common 781 555 stock Payments for taxes realed to net share (1.874 net 12,769 (32,900) 28,662 (3,500) (66,897) 6,963 (8,805) (5,977) (72,738) 6,969 (6,500) (37) 3,852 (105) (90.976) 24,311 0 (87.876) 0 (17,974) 5,624 (195) 50,224 25,913 20.289 fe: (824) 15.263 $ 3,423 10,417 $ 3,022 11.591 $ 2,092 639 . 3. Extend the analysis by computing the following ratios for the current and prior years for the company(ies). (As- sume a marginal tax rate of 22%.) Return on equity (ROE) Return on assets (ROA) Return on net operating assets (RNOA) Times interest earned . . . . . Operating cash flow to debt Free cash flow to debt Current ratio Quick ratio Liabilities-to-equity ratio Total debt-to-equity ratio