Climbing the Apple Tree: Fool by Numbers

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On Jan.17, consumer electronics and services master Apple (Nasdaq: AAPL) released first-quarter 2007 earnings for the period ending Dec. 30, 2006.

• Steve Jobs' merry band has pushed margins skyward over the year, and many hardware shops would plunder and pillage for a 14% net margin.
• A very successful holiday season saw demand for the iPod/iTunes symbiosis skyrocket, and the new-style Macs powered by the latest and greatest out of Intel (Nasdaq: INTC) are proving way more popular than the old Freescale-based systems.
• The debt-free stash of $11.9 billion of bullion in Apple's proverbial vaults looks mighty tasty. What's the plan, Steve -- acquisitions or dividends?

(Figures in millions, except per-share data)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$7,115	$5,749	23.8%
Net Profit	$1,004	$565	77.7%
EPS	$1.14	$0.65	75.4%
Diluted Shares	883.3	874.2	1.0%

Get back to basics with a look at the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Gross Margin	31.2%	27.2%	4.0
Operating Margin	18.6%	13.1%	5.5
Net Margin	14.1%	9.8%	4.3

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Management Effectiveness

	Q1 2007	Q1 2006	Change*
Return On Average Assets	21.9%	17.6%	4.3
Return On Average Equity	37.9%	28.6%	9.3

*Expressed in percentage points.

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$11,869	$8,707	36.3%
Accounts Rec.	$1,621	$1,331	21.8%
Inventory	$303	$244	24.2%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$3,885	$2,896	34.2%
Long-Term Debt	$0	$0	N/A

Learn the ways of the balance sheet.

Cash Flow Highlights

I know Apple just restated a whole bunch of earnings, but that's no excuse for depriving us of a cash flow statement, now is it?

Find out why Fools always follow the money.

Cash Conversion Checkup

	Q1 2007	Q1 2006	Change
Days in Inventory	5.3	4.4	0.9
Days in Receivables	18.2	17.4	0.7
Days Payables Outstanding	66.9	50.3	16.6
Cash Conversion Cycle	(43.4)	(28.4)	(15.0)

Read up on cash conversion metrics.

Related Companies:

• Microsoft (Nasdaq: MSFT)
• Dell (Nasdaq: DELL)
• Palm (Nasdaq: PALM)
• SanDisk (Nasdaq: SNDK)

Related Foolishness:

• Bobbing for Apple
• Foolish Forecast: Apple Ripens

Intel, Dell, and Microsoft are all Inside Value recommendations. Dell and Palm are Motley Fool Stock Advisor picks. Grab a free 30-day trial or two and head over to our premium newsletters to check out the quality of Apple's competition.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.