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Is the dividend covered? Apple's fiscal 2021 to 2023 payout ratios from the figures printed in its Form 10-K
| Tool | Dividend Sustainability |
| Source | Apple Inc. (2023). Form 10-K: Annual Report for the Fiscal Year Ended September 30, 2023. U.S. Securities and Exchange Commission, EDGAR accession 0000320193-23-000106, filed 3 November 2023. Consolidated statements of operations, of shareholders' equity and of cash flows. |
| Level | Undergraduate |
Problem
Set a company's dividend against the profit and the free cash flow of the same year. Apple's Form 10-K for the fiscal year ended 30 September 2023 prints, for fiscal 2023 / 2022 / 2021 and in millions of dollars except per share: dividends declared per share 0.94 / 0.90 / 0.85; net income 96,995 / 99,803 / 94,680; payments for dividends 15,025 / 14,841 / 14,467; repurchases of common stock 77,550 / 89,402 / 85,971; operating income 114,301 / 119,437 / 108,949; interest expense 3,933 / 2,931 / 2,645; and for fiscal 2023 cash generated by operating activities 110,543 and payments for property, plant and equipment 10,959. Find the change of the dividend per share, the payout ratio, the free-cash-flow payout, dividends plus repurchases against free cash flow, and the interest cover.
Inputs to Enter
- Company AAPL (type it in place of the default KO and press Load); read the 2021 to 2023 columns of Tables 1 and 2; no share price typed
Answers
- Change of the dividend per share: fiscal 2023 0.94 / 0.90 − 1 = 4.4 %; fiscal 2022 0.90 / 0.85 − 1 = 5.9 %
- Payout ratio (dividends paid / net income): 15,025 / 96,995 = 15.5 % (2023), 14,841 / 99,803 = 14.9 % (2022), 14,467 / 94,680 = 15.3 % (2021)
- Free cash flow of fiscal 2023 = 110,543 − 10,959 = 99,584; free-cash-flow payout 15,025 / 99,584 = 15.1 %
- Dividends plus repurchases against free cash flow, fiscal 2023: (15,025 + 77,550) / 99,584 = 93.0 %
- Interest cover (operating income / interest expense): 114,301 / 3,933 = 29.06 (2023), 119,437 / 2,931 = 40.75 (2022)
Notes
The page shows the ten latest fiscal years on file, so these columns move left as new years are added and the written-out steps are those of the newest year. The figures the tool holds for these three years are compared with the filed text in test_dividend_sustainability.php. The page states what each ratio is and the range it has been in; it gives no verdict on the dividend. A calculator for education and analysis, not investment advice.