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Profit against cash: Apple's fiscal 2026 cash conversion, accruals ratio in two forms, working-capital days and F-score

Tool	Earnings Quality Trend
Source	Apple Inc., annual report figures for fiscal 2025 and 2026 as tagged in the U.S. Securities and Exchange Commission's EDGAR Company Facts data held on this site. Measures: Sloan, R. G. (1996), The Accounting Review 71(3); Hribar, P., and Collins, D. W. (2002), Journal of Accounting Research 40(1); Piotroski, J. D. (2000), Journal of Accounting Research 38 (Supplement).
Level	Undergraduate

Problem

From two years of statement lines, measure how closely reported profit follows cash. For Apple's fiscal year ended 26 September 2026 (B) and the year before (A), in millions of dollars: net income 132,175; cash from operating activities 145,097; total assets 359,241 (A) and 404,548 (B); revenue 416,161 and 478,834; receivables 39,777 and 43,817; cost of revenue 220,960 and 245,232; inventory 5,718 and 14,541; current assets 147,957 and 173,857; cash and short-term investments 54,697 and 56,722; current liabilities 165,631 and 169,915; short-term debt 20,329 and 11,903; depreciation and amortization 13,423; capital spending 9,041; share-based compensation 13,789.

Inputs to Enter

Company AAPL (the default); press Load; read the worked steps under each table

Open the Earnings Quality Trend tool (loaded with this example)

Answers

Cash conversion = 145,097 / 132,175 = 1.10
Average total assets = (359,241 + 404,548) / 2 = 381,894.5; accruals ratio, cash-flow form = (132,175 − 145,097) / 381,894.5 = −3.38 %
Balance-sheet accruals = (173,857 − 147,957) − (56,722 − 54,697) − (169,915 − 165,631) + (11,903 − 20,329) − 13,423 = −2,258; ratio −2,258 / 381,894.5 = −0.59 %
Revenue growth 15.1 %, receivables growth 10.2 %; days sales outstanding = 365 · 43,817 / 478,834 = 33.4
Cost of revenue growth 11.0 %, inventory growth 154.3 %; days inventory = 365 · 14,541 / 245,232 = 21.6
Free cash flow 145,097 − 9,041 = 136,056; after share-based compensation 136,056 − 13,789 = 122,267; capital spending / depreciation 9,041 / 13,423 = 0.67
Piotroski F-score of fiscal 2026 against 2025: 9 of 9 on the figures as held

Notes

The tool's default company is Apple; press Load. The page shows the ten latest fiscal years on file and writes out the steps of the newest year, so these numbers are replaced when a later year is loaded into the data. Figures are as filed and standardised by reporting tag; the filing is the authority. The page describes each measure and what a change in it means mechanically; it gives no opinion on the company. Checked by hand, against Financial Quality Scores for the F-score, and against an independent numpy implementation (test_earnings_quality_trend.php). A calculator for education and analysis, not investment advice.