Question: How did Apple Inc.'s Interest Coverage Ratio evolve between 2021 and 2023?

Interest Coverage Ratio is calculated using the formula: Interest Coverage Ratio = EBIT / Interest Expenses.

For 2021:
EBIT (Operating Income) = $108,949 million
Interest Expenses = $2,687 million
Interest Coverage Ratio = $108,949 million / $2,687 million = 40.6

For 2022:
EBIT (Operating Income) = $119,437 million
Interest Expenses = $2,931 million
Interest Coverage Ratio = $119,437 million / $2,931 million = 40.7

For 2023:
EBIT (Operating Income) = $114,301 million
Interest Expenses = $3,933 million
Interest Coverage Ratio = $114,301 million / $3,933 million = 29.1

Item 8.    Financial Statements and Supplementary Data

Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 29:
Apple Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Net income	$	96,995 			$	99,803 			$	94,680

Other comprehensive income/(loss):

Change in foreign currency translation, net of tax	(765)			(1,511)			501

Change in unrealized gains/losses on derivative instruments, net of tax:

Change in fair value of derivative instruments	323 			3,212 			32

Adjustment for net (gains)/losses realized and included in net income	(1,717)			(1,074)			1,003

Total change in unrealized gains/losses on derivative instruments	(1,394)			2,138 			1,035

Change in unrealized gains/losses on marketable debt securities, net of tax:

Change in fair value of marketable debt securities	1,563 			(12,104)			(694)

Adjustment for net (gains)/losses realized and included in net income	253 			205 			(273)

Total change in unrealized gains/losses on marketable debt securities	1,816 			(11,899)			(967)

Total other comprehensive income/(loss)	(343)			(11,272)			569

Total comprehensive income	$	96,652 			$	88,531 			$	95,249

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 29

, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 30:
Apple Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares, which are reflected in thousands, and par value)

	September 30,2023		September 24,2022

ASSETS:

Current assets:

Cash and cash equivalents	$	29,965 			$	23,646

Marketable securities	31,590 			24,658

Accounts receivable, net	29,508 			28,184

Vendor non-trade receivables	31,477 			32,748

Inventories	6,331 			4,946

Other current assets	14,695 			21,223

Total current assets	143,566 			135,405

Non-current assets:

Marketable securities	100,544 			120,805

Property, plant and equipment, net	43,715 			42,117

Other non-current assets	64,758 			54,428

Total non-current assets	209,017 			217,350

Total assets	$	352,583 			$	352,755

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:

Accounts payable	$	62,611 			$	64,115

Other current liabilities	58,829 			60,845

Deferred revenue	8,061 			7,912

Commercial paper	5,985 			9,982

Term debt	9,822 			11,128

Total current liabilities	145,308 			153,982

Non-current liabilities:

Term debt	95,281 			98,959

Other non-current liabilities	49,848 			49,142

Total non-current liabilities	145,129 			148,101

Total liabilities	290,437 			302,083

Commitments and contingencies

Shareholders' equity:

Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively	73,812 			64,849

Accumulated deficit	(214)			(3,068)

Accumulated other comprehensive loss	(11,452)			(11,109)

Total shareholders' equity	62,146 			50,672

Total liabilities and shareholders' equity	$	352,583 			$	352,755

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 30

, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 31:
Apple Inc.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions, except per-share amounts)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Total shareholders' equity, beginning balances	$	50,672 			$	63,090 			$	65,339

Common stock and additional paid-in capital:

Beginning balances	64,849 			57,365 			50,779

Common stock issued	1,346 			1,175 			1,105

Common stock withheld related to net share settlement of equity awards	(3,521)			(2,971)			(2,627)

Share-based compensation	11,138 			9,280 			8,108

Ending balances	73,812 			64,849 			57,365

Retained earnings/(Accumulated deficit):

Beginning balances	(3,068)			5,562 			14,966

Net income	96,995 			99,803 			94,680

Dividends and dividend equivalents declared	(14,996)			(14,793)			(14,431)

Common stock withheld related to net share settlement of equity awards	(2,099)			(3,454)			(4,151)

Common stock repurchased	(77,046)			(90,186)			(85,502)

Ending balances	(214)			(3,068)			5,562

Accumulated other comprehensive income/(loss):

Beginning balances	(11,109)			163 			(406)

Other comprehensive income/(loss)	(343)			(11,272)			569

Ending balances	(11,452)			(11,109)			163

Total shareholders' equity, ending balances	$	62,146 			$	50,672 			$	63,090

Dividends and dividend equivalents declared per share or RSU	$	0.94 			$	0.90 			$	0.85

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 31

, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 32:
Apple Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Cash, cash equivalents and restricted cash, beginning balances	$	24,977 			$	35,929 			$	39,789

Operating activities:

Net income	96,995 			99,803 			94,680

Adjustments to reconcile net income to cash generated by operating activities:

Depreciation and amortization	11,519 			11,104 			11,284

Share-based compensation expense	10,833 			9,038 			7,906

Other	(2,227)			1,006 			(4,921)

Changes in operating assets and liabilities:

Accounts receivable, net	(1,688)			(1,823)			(10,125)

Vendor non-trade receivables	1,271 			(7,520)			(3,903)

Inventories	(1,618)			1,484 			(2,642)

Other current and non-current assets	(5,684)			(6,499)			(8,042)

Accounts payable	(1,889)			9,448 			12,326

Other current and non-current liabilities	3,031 			6,110 			7,475

Cash generated by operating activities	110,543 			122,151 			104,038

Investing activities:

Purchases of marketable securities	(29,513)			(76,923)			(109,558)

Proceeds from maturities of marketable securities	39,686 			29,917 			59,023

Proceeds from sales of marketable securities	5,828 			37,446 			47,460

Payments for acquisition of property, plant and equipment	(10,959)			(10,708)			(11,085)

Other	(1,337)			(2,086)			(385)

Cash generated by/(used in) investing activities	3,705 			(22,354)			(14,545)

Financing activities:

Payments for taxes related to net share settlement of equity awards	(5,431)			(6,223)			(6,556)

Payments for dividends and dividend equivalents	(15,025)			(14,841)			(14,467)

Repurchases of common stock	(77,550)			(89,402)			(85,971)

Proceeds from issuance of term debt, net	5,228 			5,465 			20,393

Repayments of term debt	(11,151)			(9,543)			(8,750)

Proceeds from/(Repayments of) commercial paper, net	(3,978)			3,955 			1,022

Other	(581)			(160)			976

Cash used in financing activities	(108,488)			(110,749)			(93,353)

Increase/(Decrease) in cash, cash equivalents and restricted cash	5,760 			(10,952)			(3,860)

Cash, cash equivalents and restricted cash, ending balances	$	30,737 			$	24,977 			$	35,929

Supplemental cash flow disclosure:

Cash paid for income taxes, net	$	18,679 			$	19,573 			$	25,385

Cash paid for interest	$	3,803 			$	2,865 			$	2,687

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 32

, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 39:
Note 5 – Property, Plant and Equipment

The following table shows the Company's gross property, plant and equipment by major asset class and accumulated depreciation as of September 30, 2023 and September 24, 2022 (in millions):

	2023		2022

Land and buildings	$	23,446 			$	22,126

Machinery, equipment and internal-use software	78,314 			81,060

Leasehold improvements	12,839 			11,271

Gross property, plant and equipment	114,599 			114,457

Accumulated depreciation	(70,884)			(72,340)

Total property, plant and equipment, net	$	43,715 			$	42,117

Depreciation expense on property, plant and equipment was $8.5 billion, $8.7 billion and $9.5 billion during 2023, 2022 and 2021, respectively.

Note 6 – Consolidated Financial Statement Details

The following tables show the Company's consolidated financial statement details as of September 30, 2023 and September 24, 2022 (in millions):

Other Non-Current Assets

	2023		2022

Deferred tax assets	$	17,852 			$	15,375

Other non-current assets	46,906 			39,053

Total other non-current assets	$	64,758 			$	54,428

Other Current Liabilities

	2023		2022

Income taxes payable	$	8,819 			$	6,552

Other current liabilities	50,010 			54,293

Total other current liabilities	$	58,829 			$	60,845

Other Non-Current Liabilities

	2023		2022

Long-term taxes payable	$	15,457 			$	16,657

Other non-current liabilities	34,391 			32,485

Total other non-current liabilities	$	49,848 			$	49,142

Other Income/(Expense), Net

The following table shows the detail of other income/(expense), net for 2023, 2022 and 2021 (in millions):

	2023		2022		2021

Interest and dividend income	$	3,750 			$	2,825 			$	2,843

Interest expense	(3,933)			(2,931)			(2,645)

Other income/(expense), net	(382)			(228)			60

Total other income/(expense), net	$	(565)			$	(334)			$	258

Apple Inc. | 2023 Form 10-K | 39

Apple Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Net income	$	96,995 			$	99,803 			$	94,680

Other comprehensive income/(loss):

Change in foreign currency translation, net of tax	(765)			(1,511)			501

Change in unrealized gains/losses on derivative instruments, net of tax:

Change in fair value of derivative instruments	323 			3,212 			32

Adjustment for net (gains)/losses realized and included in net income	(1,717)			(1,074)			1,003

Total change in unrealized gains/losses on derivative instruments	(1,394)			2,138 			1,035

Change in unrealized gains/losses on marketable debt securities, net of tax:

Change in fair value of marketable debt securities	1,563 			(12,104)			(694)

Adjustment for net (gains)/losses realized and included in net income	253 			205 			(273)

Total change in unrealized gains/losses on marketable debt securities	1,816 			(11,899)			(967)

Total other comprehensive income/(loss)	(343)			(11,272)			569

Total comprehensive income	$	96,652 			$	88,531 			$	95,249

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 29

,
Apple Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares, which are reflected in thousands, and par value)

	September 30,2023		September 24,2022

ASSETS:

Current assets:

Cash and cash equivalents	$	29,965 			$	23,646

Marketable securities	31,590 			24,658

Accounts receivable, net	29,508 			28,184

Vendor non-trade receivables	31,477 			32,748

Inventories	6,331 			4,946

Other current assets	14,695 			21,223

Total current assets	143,566 			135,405

Non-current assets:

Marketable securities	100,544 			120,805

Property, plant and equipment, net	43,715 			42,117

Other non-current assets	64,758 			54,428

Total non-current assets	209,017 			217,350

Total assets	$	352,583 			$	352,755

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:

Accounts payable	$	62,611 			$	64,115

Other current liabilities	58,829 			60,845

Deferred revenue	8,061 			7,912

Commercial paper	5,985 			9,982

Term debt	9,822 			11,128

Total current liabilities	145,308 			153,982

Non-current liabilities:

Term debt	95,281 			98,959

Other non-current liabilities	49,848 			49,142

Total non-current liabilities	145,129 			148,101

Total liabilities	290,437 			302,083

Commitments and contingencies

Shareholders' equity:

Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively	73,812 			64,849

Accumulated deficit	(214)			(3,068)

Accumulated other comprehensive loss	(11,452)			(11,109)

Total shareholders' equity	62,146 			50,672

Total liabilities and shareholders' equity	$	352,583 			$	352,755

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 30

,
Apple Inc.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions, except per-share amounts)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Total shareholders' equity, beginning balances	$	50,672 			$	63,090 			$	65,339

Common stock and additional paid-in capital:

Beginning balances	64,849 			57,365 			50,779

Common stock issued	1,346 			1,175 			1,105

Common stock withheld related to net share settlement of equity awards	(3,521)			(2,971)			(2,627)

Share-based compensation	11,138 			9,280 			8,108

Ending balances	73,812 			64,849 			57,365

Retained earnings/(Accumulated deficit):

Beginning balances	(3,068)			5,562 			14,966

Net income	96,995 			99,803 			94,680

Dividends and dividend equivalents declared	(14,996)			(14,793)			(14,431)

Common stock withheld related to net share settlement of equity awards	(2,099)			(3,454)			(4,151)

Common stock repurchased	(77,046)			(90,186)			(85,502)

Ending balances	(214)			(3,068)			5,562

Accumulated other comprehensive income/(loss):

Beginning balances	(11,109)			163 			(406)

Other comprehensive income/(loss)	(343)			(11,272)			569

Ending balances	(11,452)			(11,109)			163

Total shareholders' equity, ending balances	$	62,146 			$	50,672 			$	63,090

Dividends and dividend equivalents declared per share or RSU	$	0.94 			$	0.90 			$	0.85

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 31

,
Apple Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Cash, cash equivalents and restricted cash, beginning balances	$	24,977 			$	35,929 			$	39,789

Operating activities:

Net income	96,995 			99,803 			94,680

Adjustments to reconcile net income to cash generated by operating activities:

Depreciation and amortization	11,519 			11,104 			11,284

Share-based compensation expense	10,833 			9,038 			7,906

Other	(2,227)			1,006 			(4,921)

Changes in operating assets and liabilities:

Accounts receivable, net	(1,688)			(1,823)			(10,125)

Vendor non-trade receivables	1,271 			(7,520)			(3,903)

Inventories	(1,618)			1,484 			(2,642)

Other current and non-current assets	(5,684)			(6,499)			(8,042)

Accounts payable	(1,889)			9,448 			12,326

Other current and non-current liabilities	3,031 			6,110 			7,475

Cash generated by operating activities	110,543 			122,151 			104,038

Investing activities:

Purchases of marketable securities	(29,513)			(76,923)			(109,558)

Proceeds from maturities of marketable securities	39,686 			29,917 			59,023

Proceeds from sales of marketable securities	5,828 			37,446 			47,460

Payments for acquisition of property, plant and equipment	(10,959)			(10,708)			(11,085)

Other	(1,337)			(2,086)			(385)

Cash generated by/(used in) investing activities	3,705 			(22,354)			(14,545)

Financing activities:

Payments for taxes related to net share settlement of equity awards	(5,431)			(6,223)			(6,556)

Payments for dividends and dividend equivalents	(15,025)			(14,841)			(14,467)

Repurchases of common stock	(77,550)			(89,402)			(85,971)

Proceeds from issuance of term debt, net	5,228 			5,465 			20,393

Repayments of term debt	(11,151)			(9,543)			(8,750)

Proceeds from/(Repayments of) commercial paper, net	(3,978)			3,955 			1,022

Other	(581)			(160)			976

Cash used in financing activities	(108,488)			(110,749)			(93,353)

Increase/(Decrease) in cash, cash equivalents and restricted cash	5,760 			(10,952)			(3,860)

Cash, cash equivalents and restricted cash, ending balances	$	30,737 			$	24,977 			$	35,929

Supplemental cash flow disclosure:

Cash paid for income taxes, net	$	18,679 			$	19,573 			$	25,385

Cash paid for interest	$	3,803 			$	2,865 			$	2,687

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 32

,
Note 5 – Property, Plant and Equipment

The following table shows the Company's gross property, plant and equipment by major asset class and accumulated depreciation as of September 30, 2023 and September 24, 2022 (in millions):

	2023		2022

Land and buildings	$	23,446 			$	22,126

Machinery, equipment and internal-use software	78,314 			81,060

Leasehold improvements	12,839 			11,271

Gross property, plant and equipment	114,599 			114,457

Accumulated depreciation	(70,884)			(72,340)

Total property, plant and equipment, net	$	43,715 			$	42,117

Depreciation expense on property, plant and equipment was $8.5 billion, $8.7 billion and $9.5 billion during 2023, 2022 and 2021, respectively.

Note 6 – Consolidated Financial Statement Details

The following tables show the Company's consolidated financial statement details as of September 30, 2023 and September 24, 2022 (in millions):

Other Non-Current Assets

	2023		2022

Deferred tax assets	$	17,852 			$	15,375

Other non-current assets	46,906 			39,053

Total other non-current assets	$	64,758 			$	54,428

Other Current Liabilities

	2023		2022

Income taxes payable	$	8,819 			$	6,552

Other current liabilities	50,010 			54,293

Total other current liabilities	$	58,829 			$	60,845

Other Non-Current Liabilities

	2023		2022

Long-term taxes payable	$	15,457 			$	16,657

Other non-current liabilities	34,391 			32,485

Total other non-current liabilities	$	49,848 			$	49,142

Other Income/(Expense), Net

The following table shows the detail of other income/(expense), net for 2023, 2022 and 2021 (in millions):

	2023		2022		2021

Interest and dividend income	$	3,750 			$	2,825 			$	2,843

Interest expense	(3,933)			(2,931)			(2,645)

Other income/(expense), net	(382)			(228)			60

Total other income/(expense), net	$	(565)			$	(334)			$	258

Apple Inc. | 2023 Form 10-K | 39


Question: Analyse the profitability  for year 2024 and 2023 of the P&G using ratio analysis

Profitability Ratio Analysis for Procter & Gamble (P&G) in 2023 and 2024
Gross Profit Margin:
2024: 51.4%
2023: 47.6%

Operating Profit Margin:
2024: 22.1%
2023: 22.1%

Net Profit Margin:
2024: 17.7%
2023: 17.9%

Return on Equity (ROE):
2024: 30.5%
2023: 31.2%

Analysis:
In 2024, Procter & Gamble continued to exhibit strong profitability, despite minor fluctuations in certain metrics. The slight decline in the gross profit margin, sable operating margin, suggests effective cost management and operational efficiency. The decrease in the net profit margin, while small, points to potential increased non-operating costs. However, the improvements in ROA and ROE highlight enhanced efficiency and value creation for shareholders. Overall, P&G's profitability remains robust, reflecting its strong market position and effective financial management.

Item 8. Financial Statements and Supplementary Data.

PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 36:
36 The Procter & Gamble Company

Consolidated Statements of Earnings

Amounts in millions except per share amounts; fiscal years ended June 30	2024		2023		2022

NET SALES	$	84,039 			$	82,006 			$	80,187

Cost of products sold	40,848 			42,760 			42,157

Selling, general and administrative expense	23,305 			21,112 			20,217

Indefinite-lived intangible asset impairment charge	1,341 			- 			-

OPERATING INCOME	18,545 			18,134 			17,813

Interest expense	(925)			(756)			(439)

Interest income	473 			307 			51

Other non-operating income, net	668 			668 			570

EARNINGS BEFORE INCOME TAXES	18,761 			18,353 			17,995

Income taxes	3,787 			3,615 			3,202

NET EARNINGS	14,974 			14,738 			14,793

Less: Net earnings attributable to noncontrolling interests	95 			85 			51

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE	$	14,879 			$	14,653 			$	14,742

NET EARNINGS PER COMMON SHARE (1)

Basic	$	6.18 			$	6.07 			$	6.00

Diluted	$	6.02 			$	5.90 			$	5.81

(1)Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.

Consolidated Statements of Comprehensive Income

Amounts in millions; fiscal years ended June 30	2024		2023		2022

NET EARNINGS	$	14,974 			$	14,738 			$	14,793

OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX

Foreign currency translation (net of tax (benefit)/expense of $66, $(197) and $515, respectively)	(226)			(71)			(1,450)

Unrealized gains/(losses) on investment securities(net of tax (benefit)/expense of $(1), $(2) and $1, respectively)	(3)			(7)			5

Unrealized gains on defined benefit postretirement plans(net of tax expense of $230, $9 and $1,022, respectively)	546 			40 			2,992

TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX	317 			(38)			1,547

TOTAL COMPREHENSIVE INCOME	15,291 			14,700 			16,340

Less: Comprehensive income attributable to noncontrolling interests	92 			78 			43

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO           PROCTER & GAMBLE	$	15,199 			$	14,622 			$	16,297

See accompanying Notes to Consolidated Financial Statements.

, PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 37:
The Procter & Gamble Company 37

Consolidated Balance Sheets

Amounts in millions except stated values; as of June 30	2024		2023

Assets

CURRENT ASSETS

Cash and cash equivalents	$	9,482 			$	8,246

Accounts receivable	6,118 			5,471

INVENTORIES

Materials and supplies	1,617 			1,863

Work in process	929 			956

Finished goods	4,470 			4,254

Total inventories	7,016 			7,073

Prepaid expenses and other current assets	2,095 			1,858

TOTAL CURRENT ASSETS	24,709 			22,648

PROPERTY, PLANT AND EQUIPMENT, NET	22,152 			21,909

GOODWILL	40,303 			40,659

TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET	22,047 			23,783

OTHER NONCURRENT ASSETS	13,158 			11,830

TOTAL ASSETS	$	122,370 			$	120,829

Liabilities and Shareholders' Equity

CURRENT LIABILITIES

Accounts payable	$	15,364 			$	14,598

Accrued and other liabilities	11,073 			10,929

Debt due within one year	7,191 			10,229

TOTAL CURRENT LIABILITIES	33,627 			35,756

LONG-TERM DEBT	25,269 			24,378

DEFERRED INCOME TAXES	6,516 			6,478

OTHER NONCURRENT LIABILITIES	6,398 			7,152

TOTAL LIABILITIES	71,811 			73,764

SHAREHOLDERS' EQUITY

Convertible Class A preferred stock, stated value $1 per share (600 shares authorized)	798 			819

Non-Voting Class B preferred stock, stated value $1 per share (200 shares authorized)	- 			-

Common stock, stated value $1 per share (10,000 shares authorized; shares issued:                       2024 - 4,009.2, 2023 - 4,009.2)	4,009 			4,009

Additional paid-in capital	67,684 			66,556

Reserve for ESOP debt retirement	(737)			(821)

Accumulated other comprehensive loss	(11,900)			(12,220)

Treasury stock (shares held:  2024 - 1,652.2; 2023 - 1,647.1)	(133,379)			(129,736)

Retained earnings	123,811 			118,170

Noncontrolling interest	272 			288

TOTAL SHAREHOLDERS' EQUITY	50,559 			47,065

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	122,370 			$	120,829

See accompanying Notes to Consolidated Financial Statements.

36 The Procter & Gamble Company

Consolidated Statements of Earnings

Amounts in millions except per share amounts; fiscal years ended June 30	2024		2023		2022

NET SALES	$	84,039 			$	82,006 			$	80,187

Cost of products sold	40,848 			42,760 			42,157

Selling, general and administrative expense	23,305 			21,112 			20,217

Indefinite-lived intangible asset impairment charge	1,341 			- 			-

OPERATING INCOME	18,545 			18,134 			17,813

Interest expense	(925)			(756)			(439)

Interest income	473 			307 			51

Other non-operating income, net	668 			668 			570

EARNINGS BEFORE INCOME TAXES	18,761 			18,353 			17,995

Income taxes	3,787 			3,615 			3,202

NET EARNINGS	14,974 			14,738 			14,793

Less: Net earnings attributable to noncontrolling interests	95 			85 			51

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE	$	14,879 			$	14,653 			$	14,742

NET EARNINGS PER COMMON SHARE (1)

Basic	$	6.18 			$	6.07 			$	6.00

Diluted	$	6.02 			$	5.90 			$	5.81

(1)Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.

Consolidated Statements of Comprehensive Income

Amounts in millions; fiscal years ended June 30	2024		2023		2022

NET EARNINGS	$	14,974 			$	14,738 			$	14,793

OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX

Foreign currency translation (net of tax (benefit)/expense of $66, $(197) and $515, respectively)	(226)			(71)			(1,450)

Unrealized gains/(losses) on investment securities(net of tax (benefit)/expense of $(1), $(2) and $1, respectively)	(3)			(7)			5

Unrealized gains on defined benefit postretirement plans(net of tax expense of $230, $9 and $1,022, respectively)	546 			40 			2,992

TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX	317 			(38)			1,547

TOTAL COMPREHENSIVE INCOME	15,291 			14,700 			16,340

Less: Comprehensive income attributable to noncontrolling interests	92 			78 			43

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO           PROCTER & GAMBLE	$	15,199 			$	14,622 			$	16,297

See accompanying Notes to Consolidated Financial Statements.

,
The Procter & Gamble Company 37

Consolidated Balance Sheets

Amounts in millions except stated values; as of June 30	2024		2023

Assets

CURRENT ASSETS

Cash and cash equivalents	$	9,482 			$	8,246

Accounts receivable	6,118 			5,471

INVENTORIES

Materials and supplies	1,617 			1,863

Work in process	929 			956

Finished goods	4,470 			4,254

Total inventories	7,016 			7,073

Prepaid expenses and other current assets	2,095 			1,858

TOTAL CURRENT ASSETS	24,709 			22,648

PROPERTY, PLANT AND EQUIPMENT, NET	22,152 			21,909

GOODWILL	40,303 			40,659

TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET	22,047 			23,783

OTHER NONCURRENT ASSETS	13,158 			11,830

TOTAL ASSETS	$	122,370 			$	120,829

Liabilities and Shareholders' Equity

CURRENT LIABILITIES

Accounts payable	$	15,364 			$	14,598

Accrued and other liabilities	11,073 			10,929

Debt due within one year	7,191 			10,229

TOTAL CURRENT LIABILITIES	33,627 			35,756

LONG-TERM DEBT	25,269 			24,378

DEFERRED INCOME TAXES	6,516 			6,478

OTHER NONCURRENT LIABILITIES	6,398 			7,152

TOTAL LIABILITIES	71,811 			73,764

SHAREHOLDERS' EQUITY

Convertible Class A preferred stock, stated value $1 per share (600 shares authorized)	798 			819

Non-Voting Class B preferred stock, stated value $1 per share (200 shares authorized)	- 			-

Common stock, stated value $1 per share (10,000 shares authorized; shares issued:                       2024 - 4,009.2, 2023 - 4,009.2)	4,009 			4,009

Additional paid-in capital	67,684 			66,556

Reserve for ESOP debt retirement	(737)			(821)

Accumulated other comprehensive loss	(11,900)			(12,220)

Treasury stock (shares held:  2024 - 1,652.2; 2023 - 1,647.1)	(133,379)			(129,736)

Retained earnings	123,811 			118,170

Noncontrolling interest	272 			288

TOTAL SHAREHOLDERS' EQUITY	50,559 			47,065

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	122,370 			$	120,829

See accompanying Notes to Consolidated Financial Statements.


Question: What are the key findings from the profitability analysis of Apple Inc. for the year 2023?

The key findings from the profitability analysis of Apple Inc. for the year 2023 are as follows:
- Gross Margin: The gross margin for 2023 is $169,148 million, which indicates the company's ability to generate profit from its core business activities after accounting for the cost of goods sold.
- Operating Income: The operating income for 2023 is $114,301 million, reflecting the company's efficiency in managing its operating expenses, including research and development and selling, general, and administrative expenses.
- Net Income: The net income for 2023 is $96,995 million, showcasing the company's overall profitability after accounting for all expenses, including taxes and other income/expenses.
- Earnings Per Share (EPS): The basic EPS for 2023 is $6.16, and the diluted EPS is $6.13, indicating the earnings attributable to each share of the company's stock.
Overall, Apple Inc. has demonstrated strong profitability in 2023, with significant gross margin, operating income, and net income, reflecting its ability to generate substantial profits from its operations.

Item 8.    Financial Statements and Supplementary Data

Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28:
Apple Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares, which are reflected in thousands, and per-share amounts)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Net sales:

   Products	$	298,085 			$	316,199 			$	297,392

   Services	85,200 			78,129 			68,425

Total net sales	383,285 			394,328 			365,817

Cost of sales:

   Products	189,282 			201,471 			192,266

   Services	24,855 			22,075 			20,715

Total cost of sales	214,137 			223,546 			212,981

Gross margin	169,148 			170,782 			152,836

Operating expenses:

Research and development	29,915 			26,251 			21,914

Selling, general and administrative	24,932 			25,094 			21,973

Total operating expenses	54,847 			51,345 			43,887

Operating income	114,301 			119,437 			108,949

Other income/(expense), net	(565)			(334)			258

Income before provision for income taxes	113,736 			119,103 			109,207

Provision for income taxes	16,741 			19,300 			14,527

Net income	$	96,995 			$	99,803 			$	94,680

Earnings per share:

Basic	$	6.16 			$	6.15 			$	5.67

Diluted	$	6.13 			$	6.11 			$	5.61

Shares used in computing earnings per share:

Basic	15,744,231 			16,215,963 			16,701,272

Diluted	15,812,547 			16,325,819 			16,864,919

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 28


Question: How does the solvency position of Apple Inc. look based on the balance sheet data for 2023?

The solvency position of Apple Inc. for 2023 can be assessed using the balance sheet data:
- Total Assets: $352,583 million
- Total Liabilities: $290,437 million
- Total Shareholders' Equity: $62,146 million
The company's total liabilities are significantly higher than its total shareholders' equity, indicating a higher reliance on debt financing. However, the company has substantial total assets, which can cover its total liabilities. The term debt for 2023 is $105,103 million (current and non-current), and the company's cash and cash equivalents are $29,965 million, with additional marketable securities of $31,590 million (current) and $100,544 million (non-current). This indicates that Apple Inc. has sufficient liquidity to meet its debt obligations. Overall, while the company has a high level of debt, its strong asset base and liquidity position suggest a stable solvency position.

Item 8.    Financial Statements and Supplementary Data

Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 29:
Apple Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Net income	$	96,995 			$	99,803 			$	94,680

Other comprehensive income/(loss):

Change in foreign currency translation, net of tax	(765)			(1,511)			501

Change in unrealized gains/losses on derivative instruments, net of tax:

Change in fair value of derivative instruments	323 			3,212 			32

Adjustment for net (gains)/losses realized and included in net income	(1,717)			(1,074)			1,003

Total change in unrealized gains/losses on derivative instruments	(1,394)			2,138 			1,035

Change in unrealized gains/losses on marketable debt securities, net of tax:

Change in fair value of marketable debt securities	1,563 			(12,104)			(694)

Adjustment for net (gains)/losses realized and included in net income	253 			205 			(273)

Total change in unrealized gains/losses on marketable debt securities	1,816 			(11,899)			(967)

Total other comprehensive income/(loss)	(343)			(11,272)			569

Total comprehensive income	$	96,652 			$	88,531 			$	95,249

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 29

, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 30:
Apple Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares, which are reflected in thousands, and par value)

	September 30,2023		September 24,2022

ASSETS:

Current assets:

Cash and cash equivalents	$	29,965 			$	23,646

Marketable securities	31,590 			24,658

Accounts receivable, net	29,508 			28,184

Vendor non-trade receivables	31,477 			32,748

Inventories	6,331 			4,946

Other current assets	14,695 			21,223

Total current assets	143,566 			135,405

Non-current assets:

Marketable securities	100,544 			120,805

Property, plant and equipment, net	43,715 			42,117

Other non-current assets	64,758 			54,428

Total non-current assets	209,017 			217,350

Total assets	$	352,583 			$	352,755

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:

Accounts payable	$	62,611 			$	64,115

Other current liabilities	58,829 			60,845

Deferred revenue	8,061 			7,912

Commercial paper	5,985 			9,982

Term debt	9,822 			11,128

Total current liabilities	145,308 			153,982

Non-current liabilities:

Term debt	95,281 			98,959

Other non-current liabilities	49,848 			49,142

Total non-current liabilities	145,129 			148,101

Total liabilities	290,437 			302,083

Commitments and contingencies

Shareholders' equity:

Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively	73,812 			64,849

Accumulated deficit	(214)			(3,068)

Accumulated other comprehensive loss	(11,452)			(11,109)

Total shareholders' equity	62,146 			50,672

Total liabilities and shareholders' equity	$	352,583 			$	352,755

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 30

, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 31:
Apple Inc.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions, except per-share amounts)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Total shareholders' equity, beginning balances	$	50,672 			$	63,090 			$	65,339

Common stock and additional paid-in capital:

Beginning balances	64,849 			57,365 			50,779

Common stock issued	1,346 			1,175 			1,105

Common stock withheld related to net share settlement of equity awards	(3,521)			(2,971)			(2,627)

Share-based compensation	11,138 			9,280 			8,108

Ending balances	73,812 			64,849 			57,365

Retained earnings/(Accumulated deficit):

Beginning balances	(3,068)			5,562 			14,966

Net income	96,995 			99,803 			94,680

Dividends and dividend equivalents declared	(14,996)			(14,793)			(14,431)

Common stock withheld related to net share settlement of equity awards	(2,099)			(3,454)			(4,151)

Common stock repurchased	(77,046)			(90,186)			(85,502)

Ending balances	(214)			(3,068)			5,562

Accumulated other comprehensive income/(loss):

Beginning balances	(11,109)			163 			(406)

Other comprehensive income/(loss)	(343)			(11,272)			569

Ending balances	(11,452)			(11,109)			163

Total shareholders' equity, ending balances	$	62,146 			$	50,672 			$	63,090

Dividends and dividend equivalents declared per share or RSU	$	0.94 			$	0.90 			$	0.85

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 31

, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 32:
Apple Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Cash, cash equivalents and restricted cash, beginning balances	$	24,977 			$	35,929 			$	39,789

Operating activities:

Net income	96,995 			99,803 			94,680

Adjustments to reconcile net income to cash generated by operating activities:

Depreciation and amortization	11,519 			11,104 			11,284

Share-based compensation expense	10,833 			9,038 			7,906

Other	(2,227)			1,006 			(4,921)

Changes in operating assets and liabilities:

Accounts receivable, net	(1,688)			(1,823)			(10,125)

Vendor non-trade receivables	1,271 			(7,520)			(3,903)

Inventories	(1,618)			1,484 			(2,642)

Other current and non-current assets	(5,684)			(6,499)			(8,042)

Accounts payable	(1,889)			9,448 			12,326

Other current and non-current liabilities	3,031 			6,110 			7,475

Cash generated by operating activities	110,543 			122,151 			104,038

Investing activities:

Purchases of marketable securities	(29,513)			(76,923)			(109,558)

Proceeds from maturities of marketable securities	39,686 			29,917 			59,023

Proceeds from sales of marketable securities	5,828 			37,446 			47,460

Payments for acquisition of property, plant and equipment	(10,959)			(10,708)			(11,085)

Other	(1,337)			(2,086)			(385)

Cash generated by/(used in) investing activities	3,705 			(22,354)			(14,545)

Financing activities:

Payments for taxes related to net share settlement of equity awards	(5,431)			(6,223)			(6,556)

Payments for dividends and dividend equivalents	(15,025)			(14,841)			(14,467)

Repurchases of common stock	(77,550)			(89,402)			(85,971)

Proceeds from issuance of term debt, net	5,228 			5,465 			20,393

Repayments of term debt	(11,151)			(9,543)			(8,750)

Proceeds from/(Repayments of) commercial paper, net	(3,978)			3,955 			1,022

Other	(581)			(160)			976

Cash used in financing activities	(108,488)			(110,749)			(93,353)

Increase/(Decrease) in cash, cash equivalents and restricted cash	5,760 			(10,952)			(3,860)

Cash, cash equivalents and restricted cash, ending balances	$	30,737 			$	24,977 			$	35,929

Supplemental cash flow disclosure:

Cash paid for income taxes, net	$	18,679 			$	19,573 			$	25,385

Cash paid for interest	$	3,803 			$	2,865 			$	2,687

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 32

Apple Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Net income	$	96,995 			$	99,803 			$	94,680

Other comprehensive income/(loss):

Change in foreign currency translation, net of tax	(765)			(1,511)			501

Change in unrealized gains/losses on derivative instruments, net of tax:

Change in fair value of derivative instruments	323 			3,212 			32

Adjustment for net (gains)/losses realized and included in net income	(1,717)			(1,074)			1,003

Total change in unrealized gains/losses on derivative instruments	(1,394)			2,138 			1,035

Change in unrealized gains/losses on marketable debt securities, net of tax:

Change in fair value of marketable debt securities	1,563 			(12,104)			(694)

Adjustment for net (gains)/losses realized and included in net income	253 			205 			(273)

Total change in unrealized gains/losses on marketable debt securities	1,816 			(11,899)			(967)

Total other comprehensive income/(loss)	(343)			(11,272)			569

Total comprehensive income	$	96,652 			$	88,531 			$	95,249

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 29

,
Apple Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares, which are reflected in thousands, and par value)

	September 30,2023		September 24,2022

ASSETS:

Current assets:

Cash and cash equivalents	$	29,965 			$	23,646

Marketable securities	31,590 			24,658

Accounts receivable, net	29,508 			28,184

Vendor non-trade receivables	31,477 			32,748

Inventories	6,331 			4,946

Other current assets	14,695 			21,223

Total current assets	143,566 			135,405

Non-current assets:

Marketable securities	100,544 			120,805

Property, plant and equipment, net	43,715 			42,117

Other non-current assets	64,758 			54,428

Total non-current assets	209,017 			217,350

Total assets	$	352,583 			$	352,755

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:

Accounts payable	$	62,611 			$	64,115

Other current liabilities	58,829 			60,845

Deferred revenue	8,061 			7,912

Commercial paper	5,985 			9,982

Term debt	9,822 			11,128

Total current liabilities	145,308 			153,982

Non-current liabilities:

Term debt	95,281 			98,959

Other non-current liabilities	49,848 			49,142

Total non-current liabilities	145,129 			148,101

Total liabilities	290,437 			302,083

Commitments and contingencies

Shareholders' equity:

Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively	73,812 			64,849

Accumulated deficit	(214)			(3,068)

Accumulated other comprehensive loss	(11,452)			(11,109)

Total shareholders' equity	62,146 			50,672

Total liabilities and shareholders' equity	$	352,583 			$	352,755

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 30

,
Apple Inc.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions, except per-share amounts)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Total shareholders' equity, beginning balances	$	50,672 			$	63,090 			$	65,339

Common stock and additional paid-in capital:

Beginning balances	64,849 			57,365 			50,779

Common stock issued	1,346 			1,175 			1,105

Common stock withheld related to net share settlement of equity awards	(3,521)			(2,971)			(2,627)

Share-based compensation	11,138 			9,280 			8,108

Ending balances	73,812 			64,849 			57,365

Retained earnings/(Accumulated deficit):

Beginning balances	(3,068)			5,562 			14,966

Net income	96,995 			99,803 			94,680

Dividends and dividend equivalents declared	(14,996)			(14,793)			(14,431)

Common stock withheld related to net share settlement of equity awards	(2,099)			(3,454)			(4,151)

Common stock repurchased	(77,046)			(90,186)			(85,502)

Ending balances	(214)			(3,068)			5,562

Accumulated other comprehensive income/(loss):

Beginning balances	(11,109)			163 			(406)

Other comprehensive income/(loss)	(343)			(11,272)			569

Ending balances	(11,452)			(11,109)			163

Total shareholders' equity, ending balances	$	62,146 			$	50,672 			$	63,090

Dividends and dividend equivalents declared per share or RSU	$	0.94 			$	0.90 			$	0.85

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 31

,
Apple Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Years ended

	September 30,2023		September 24,2022		September 25,2021

Cash, cash equivalents and restricted cash, beginning balances	$	24,977 			$	35,929 			$	39,789

Operating activities:

Net income	96,995 			99,803 			94,680

Adjustments to reconcile net income to cash generated by operating activities:

Depreciation and amortization	11,519 			11,104 			11,284

Share-based compensation expense	10,833 			9,038 			7,906

Other	(2,227)			1,006 			(4,921)

Changes in operating assets and liabilities:

Accounts receivable, net	(1,688)			(1,823)			(10,125)

Vendor non-trade receivables	1,271 			(7,520)			(3,903)

Inventories	(1,618)			1,484 			(2,642)

Other current and non-current assets	(5,684)			(6,499)			(8,042)

Accounts payable	(1,889)			9,448 			12,326

Other current and non-current liabilities	3,031 			6,110 			7,475

Cash generated by operating activities	110,543 			122,151 			104,038

Investing activities:

Purchases of marketable securities	(29,513)			(76,923)			(109,558)

Proceeds from maturities of marketable securities	39,686 			29,917 			59,023

Proceeds from sales of marketable securities	5,828 			37,446 			47,460

Payments for acquisition of property, plant and equipment	(10,959)			(10,708)			(11,085)

Other	(1,337)			(2,086)			(385)

Cash generated by/(used in) investing activities	3,705 			(22,354)			(14,545)

Financing activities:

Payments for taxes related to net share settlement of equity awards	(5,431)			(6,223)			(6,556)

Payments for dividends and dividend equivalents	(15,025)			(14,841)			(14,467)

Repurchases of common stock	(77,550)			(89,402)			(85,971)

Proceeds from issuance of term debt, net	5,228 			5,465 			20,393

Repayments of term debt	(11,151)			(9,543)			(8,750)

Proceeds from/(Repayments of) commercial paper, net	(3,978)			3,955 			1,022

Other	(581)			(160)			976

Cash used in financing activities	(108,488)			(110,749)			(93,353)

Increase/(Decrease) in cash, cash equivalents and restricted cash	5,760 			(10,952)			(3,860)

Cash, cash equivalents and restricted cash, ending balances	$	30,737 			$	24,977 			$	35,929

Supplemental cash flow disclosure:

Cash paid for income taxes, net	$	18,679 			$	19,573 			$	25,385

Cash paid for interest	$	3,803 			$	2,865 			$	2,687

See accompanying Notes to Consolidated Financial Statements.

Apple Inc. | 2023 Form 10-K | 32


Question: What were the key outcomes of the solvency analysis for JPMorgan Chase as of March 31, 2024?

The key findings from the solvency analysis of JPMorgan Chase as of March 31, 2024, include:
- Debt Equity Ratio: 11.15
- Interest Coverage Ratio: 0.71
- Financial Leverage Ratio: 12.15
- Long-term Debt to Capitalization Ratio: 0.54
These ratios suggest that JPMorgan Chase has a high level of debt relative to equity, a low interest coverage ratio, and significant financial leverage, indicating potential solvency risks.

JPMORGAN CHASE & CO 10-Q form for quarterly period ended 2024-03-31, page 83: JPMorgan Chase & Co.
Consolidated statements of income (unaudited)

	Three months ended March 31,

(in millions, except per share data)	2024		2023

Revenue

Investment banking fees	$	1,954 			$	1,649

Principal transactions	6,790 			7,615

Lending- and deposit-related fees	1,902 			1,620

Asset management fees	4,146 			3,465

Commissions and other fees	1,805 			1,695

Investment securities losses	(366)			(868)

Mortgage fees and related income	275 			221

Card income	1,218 			1,234

Other income	1,128 			1,007

Noninterest revenue	18,852 			17,638

Interest income	47,438 			37,004

Interest expense	24,356 			16,293

Net interest income	23,082 			20,711

Total net revenue	41,934 			38,349

Provision for credit losses	1,884 			2,275

Noninterest expense

Compensation expense	13,118 			11,676

Occupancy expense	1,211 			1,115

Technology, communications and equipment expense	2,421 			2,184

Professional and outside services	2,548 			2,448

Marketing	1,160 			1,045

Other expense	2,299 			1,639

Total noninterest expense	22,757 			20,107

Income before income tax expense	17,293 			15,967

Income tax expense	3,874 			3,345

Net income	$	13,419 			$	12,622

Net income applicable to common stockholders	$	12,942 			$	12,193

Net income per common share data

Basic earnings per share	$	4.45 			$	4.11

Diluted earnings per share	4.44 			4.10

Weighted-average basic shares	2,908.3 			2,968.5

Weighted-average diluted shares	2,912.8 			2,972.7

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

83

, JPMORGAN CHASE & CO 10-Q form for quarterly period ended 2024-03-31, page 85: JPMorgan Chase & Co.
Consolidated balance sheets (unaudited)

(in millions, except share data)	March 31, 2024		December 31, 2023

Assets

Cash and due from banks	$	22,750 			$	29,066

Deposits with banks	539,366 			595,085

Federal funds sold and securities purchased under resale agreements (included $324,418 and $259,813 at fair value)	330,559 			276,152

Securities borrowed (included $84,258 and $70,086 at fair value)	198,336 			200,436

Trading assets (included assets pledged of $180,196 and $128,994)	754,409 			540,607

Available-for-sale securities (amortized cost of $239,813 and $205,456; included assets pledged of $10,806 and $9,219)	236,152 			201,704

Held-to-maturity securities 	334,527 			369,848

Investment securities, net of allowance for credit losses	570,679 			571,552

Loans (included $39,046 and $38,851 at fair value)	1,309,616 			1,323,706

Allowance for loan losses	(22,351)			(22,420)

Loans, net of allowance for loan losses	1,287,265 			1,301,286

Accrued interest and accounts receivable	129,823 			107,363

Premises and equipment	30,279 			30,157

Goodwill, MSRs and other intangible assets	64,374 			64,381

Other assets (included $15,645 and $12,306 at fair value and assets pledged of $9,811 and $6,764)	162,887 			159,308

Total assets(a)	$	4,090,727 			$	3,875,393

Liabilities

Deposits (included $80,578 and $78,384 at fair value)	$	2,428,409 			$	2,400,688

Federal funds purchased and securities loaned or sold under repurchase agreements (included $264,554 and $169,003 at fair value)	325,670 			216,535

Short-term borrowings (included $22,856 and $20,042 at fair value)	46,268 			44,712

Trading liabilities	228,327 			180,428

Accounts payable and other liabilities (included $8,917 and $5,637 at fair value)	301,469 			290,307

Beneficial interests issued by consolidated VIEs (included $1 and $1 at fair value)	28,075 			23,020

Long-term debt (included $92,730 and $87,924 at fair value)	395,872 			391,825

Total liabilities(a)	3,754,090 			3,547,515

Commitments and contingencies (refer to Notes 22, 23 and 24)

Stockholders' equity

Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,990,375 and 2,740,375 shares) 	29,900 			27,404

Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares)	4,105 			4,105

Additional paid-in capital	89,903 			90,128

Retained earnings	342,414 			332,901

Accumulated other comprehensive losses	(11,639)			(10,443)

Treasury stock, at cost (1,233,266,016 and 1,228,275,301 shares)	(118,046)			(116,217)

Total stockholders' equity	336,637 			327,878

Total liabilities and stockholders' equity	$	4,090,727 			$	3,875,393

(a)The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at March 31, 2024 and December 31, 2023. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. Refer to Note 13 for a further discussion.

(in millions)	March 31, 2024		December 31, 2023

Assets

Trading assets	$	2,229 			$	2,170

Loans	40,059 			37,611

All other assets	648 			591

Total assets	$	42,936 			$	40,372

Liabilities

Beneficial interests issued by consolidated VIEs	$	28,075 			$	23,020

All other liabilities	282 			263

Total liabilities	$	28,357 			$	23,283

 The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

85

JPMorgan Chase & Co.
Consolidated statements of income (unaudited)

	Three months ended March 31,

(in millions, except per share data)	2024		2023

Revenue

Investment banking fees	$	1,954 			$	1,649

Principal transactions	6,790 			7,615

Lending- and deposit-related fees	1,902 			1,620

Asset management fees	4,146 			3,465

Commissions and other fees	1,805 			1,695

Investment securities losses	(366)			(868)

Mortgage fees and related income	275 			221

Card income	1,218 			1,234

Other income	1,128 			1,007

Noninterest revenue	18,852 			17,638

Interest income	47,438 			37,004

Interest expense	24,356 			16,293

Net interest income	23,082 			20,711

Total net revenue	41,934 			38,349

Provision for credit losses	1,884 			2,275

Noninterest expense

Compensation expense	13,118 			11,676

Occupancy expense	1,211 			1,115

Technology, communications and equipment expense	2,421 			2,184

Professional and outside services	2,548 			2,448

Marketing	1,160 			1,045

Other expense	2,299 			1,639

Total noninterest expense	22,757 			20,107

Income before income tax expense	17,293 			15,967

Income tax expense	3,874 			3,345

Net income	$	13,419 			$	12,622

Net income applicable to common stockholders	$	12,942 			$	12,193

Net income per common share data

Basic earnings per share	$	4.45 			$	4.11

Diluted earnings per share	4.44 			4.10

Weighted-average basic shares	2,908.3 			2,968.5

Weighted-average diluted shares	2,912.8 			2,972.7

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

83

, JPMorgan Chase & Co.
Consolidated balance sheets (unaudited)

(in millions, except share data)	March 31, 2024		December 31, 2023

Assets

Cash and due from banks	$	22,750 			$	29,066

Deposits with banks	539,366 			595,085

Federal funds sold and securities purchased under resale agreements (included $324,418 and $259,813 at fair value)	330,559 			276,152

Securities borrowed (included $84,258 and $70,086 at fair value)	198,336 			200,436

Trading assets (included assets pledged of $180,196 and $128,994)	754,409 			540,607

Available-for-sale securities (amortized cost of $239,813 and $205,456; included assets pledged of $10,806 and $9,219)	236,152 			201,704

Held-to-maturity securities 	334,527 			369,848

Investment securities, net of allowance for credit losses	570,679 			571,552

Loans (included $39,046 and $38,851 at fair value)	1,309,616 			1,323,706

Allowance for loan losses	(22,351)			(22,420)

Loans, net of allowance for loan losses	1,287,265 			1,301,286

Accrued interest and accounts receivable	129,823 			107,363

Premises and equipment	30,279 			30,157

Goodwill, MSRs and other intangible assets	64,374 			64,381

Other assets (included $15,645 and $12,306 at fair value and assets pledged of $9,811 and $6,764)	162,887 			159,308

Total assets(a)	$	4,090,727 			$	3,875,393

Liabilities

Deposits (included $80,578 and $78,384 at fair value)	$	2,428,409 			$	2,400,688

Federal funds purchased and securities loaned or sold under repurchase agreements (included $264,554 and $169,003 at fair value)	325,670 			216,535

Short-term borrowings (included $22,856 and $20,042 at fair value)	46,268 			44,712

Trading liabilities	228,327 			180,428

Accounts payable and other liabilities (included $8,917 and $5,637 at fair value)	301,469 			290,307

Beneficial interests issued by consolidated VIEs (included $1 and $1 at fair value)	28,075 			23,020

Long-term debt (included $92,730 and $87,924 at fair value)	395,872 			391,825

Total liabilities(a)	3,754,090 			3,547,515

Commitments and contingencies (refer to Notes 22, 23 and 24)

Stockholders' equity

Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,990,375 and 2,740,375 shares) 	29,900 			27,404

Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares)	4,105 			4,105

Additional paid-in capital	89,903 			90,128

Retained earnings	342,414 			332,901

Accumulated other comprehensive losses	(11,639)			(10,443)

Treasury stock, at cost (1,233,266,016 and 1,228,275,301 shares)	(118,046)			(116,217)

Total stockholders' equity	336,637 			327,878

Total liabilities and stockholders' equity	$	4,090,727 			$	3,875,393

(a)The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at March 31, 2024 and December 31, 2023. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. Refer to Note 13 for a further discussion.

(in millions)	March 31, 2024		December 31, 2023

Assets

Trading assets	$	2,229 			$	2,170

Loans	40,059 			37,611

All other assets	648 			591

Total assets	$	42,936 			$	40,372

Liabilities

Beneficial interests issued by consolidated VIEs	$	28,075 			$	23,020

All other liabilities	282 			263

Total liabilities	$	28,357 			$	23,283

 The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

85


Question: What percentage of Nike's total revenue in 2018 was contributed by each region, and how does this reflect the company's global revenue distribution?

To calculate the percentage of revenue contributed by each region to Nike's total revenue in 2018:

Formula:
Percentage of Revenue = (Revenue from Region / Total Revenue) × 100

Data:

North America Revenue = $14,855 million
EMEA Revenue = $9,242 million
Greater China Revenue = $5,134 million
APLA Revenue = $5,166 million
Global Brand Divisions Revenue = $88 million
Total Revenue = $14,855 + $9,242 + $5,134 + $5,166 + $88 = $34,485 million
Calculations:

North America: (14,855 / 34,485) × 100 ≈ 43.08%
EMEA: (9,242 / 34,485) × 100 ≈ 26.80%
Greater China: (5,134 / 34,485) × 100 ≈ 14.89%
APLA: (5,166 / 34,485) × 100 ≈ 14.98%
Global Brand Divisions: (88 / 34,485) × 100 ≈ 0.26%

ITEM 8. Financial Statements and Supplementary Data

NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 71:

 	 	Year Ended May 31,

(In millions)	 	2018	 	2017	 	2016

REVENUES

North America	 	$	14,855		 	$	15,216		 	$	14,764

Europe, Middle East & Africa	 	9,242		 	7,970		 	7,568

Greater China	 	5,134		 	4,237		 	3,785

Asia Pacific & Latin America	 	5,166		 	4,737		 	4,317

Global Brand Divisions	 	88		 	73		 	73

Total NIKE Brand	 	34,485		 	32,233		 	30,507

Converse	 	1,886		 	2,042		 	1,955

Corporate	 	26		 	75		 	(86	)

TOTAL NIKE, INC. REVENUES	 	$	36,397		 	$	34,350		 	$	32,376

EARNINGS BEFORE INTEREST AND TAXES

North America	 	$	3,600		 	$	3,875		 	$	3,763

Europe, Middle East & Africa	 	1,587		 	1,507		 	1,787

Greater China	 	1,807		 	1,507		 	1,372

Asia Pacific & Latin America	 	1,189		 	980		 	1,002

Global Brand Divisions	 	(2,658	)	 	(2,677	)	 	(2,596	)

Total NIKE Brand	 	5,525		 	5,192		 	5,328

Converse	 	310		 	477		 	487

Corporate	 	(1,456	)	 	(724	)	 	(1,173	)

Total NIKE, Inc. Earnings Before Interest and Taxes	 	4,379		 	4,945		 	4,642

Interest expense (income), net	 	54		 	59		 	19

TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	 	$	4,325		 	$	4,886		 	$	4,623

ADDITIONS TO LONG-LIVED ASSETS

North America	 	$	196		 	$	223		 	$	242

Europe, Middle East & Africa	 	240		 	173		 	234

Greater China	 	76		 	51		 	44

Asia Pacific & Latin America	 	49		 	59		 	62

Global Brand Divisions	 	286		 	278		 	258

Total NIKE Brand	 	847		 	784		 	840

Converse	 	22		 	30		 	39

Corporate	 	325		 	387		 	312

TOTAL ADDITIONS TO LONG-LIVED ASSETS	 	$	1,194		 	$	1,201		 	$	1,191

DEPRECIATION

North America	 	$	160		 	$	140		 	$	133

Europe, Middle East & Africa	 	116		 	106		 	85

Greater China	 	56		 	54		 	48

Asia Pacific & Latin America	 	55		 	54		 	42

Global Brand Divisions	 	217		 	233		 	230

Total NIKE Brand	 	604		 	587		 	538

Converse	 	33		 	28		 	27

Corporate	 	110		 	91		 	84

TOTAL DEPRECIATION	 	$	747		 	$	706		 	$	649

71


Question: How does Nike's EBIT compare year-on-year?

EBIT 2018: $4,379 million
EBIT 2017: $4,945 million
Formula:
Percentage Change in EBIT = ((EBIT 2018 - EBIT 2017) / EBIT 2017) × 100

Calculation:
Percentage Change = ((4,379 - 4,945) / 4,945) × 100
Percentage Change = (-566 / 4,945) × 100 ≈ -11.45%

Nike's EBIT decreased by approximately 11.45% from fiscal 2017 to 2018. The decline was driven by increased selling and administrative expenses and gross margin pressures, despite higher revenues.

ITEM 8. Financial Statements and Supplementary Data

NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 71:

 	 	Year Ended May 31,

(In millions)	 	2018	 	2017	 	2016

REVENUES

North America	 	$	14,855		 	$	15,216		 	$	14,764

Europe, Middle East & Africa	 	9,242		 	7,970		 	7,568

Greater China	 	5,134		 	4,237		 	3,785

Asia Pacific & Latin America	 	5,166		 	4,737		 	4,317

Global Brand Divisions	 	88		 	73		 	73

Total NIKE Brand	 	34,485		 	32,233		 	30,507

Converse	 	1,886		 	2,042		 	1,955

Corporate	 	26		 	75		 	(86	)

TOTAL NIKE, INC. REVENUES	 	$	36,397		 	$	34,350		 	$	32,376

EARNINGS BEFORE INTEREST AND TAXES

North America	 	$	3,600		 	$	3,875		 	$	3,763

Europe, Middle East & Africa	 	1,587		 	1,507		 	1,787

Greater China	 	1,807		 	1,507		 	1,372

Asia Pacific & Latin America	 	1,189		 	980		 	1,002

Global Brand Divisions	 	(2,658	)	 	(2,677	)	 	(2,596	)

Total NIKE Brand	 	5,525		 	5,192		 	5,328

Converse	 	310		 	477		 	487

Corporate	 	(1,456	)	 	(724	)	 	(1,173	)

Total NIKE, Inc. Earnings Before Interest and Taxes	 	4,379		 	4,945		 	4,642

Interest expense (income), net	 	54		 	59		 	19

TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	 	$	4,325		 	$	4,886		 	$	4,623

ADDITIONS TO LONG-LIVED ASSETS

North America	 	$	196		 	$	223		 	$	242

Europe, Middle East & Africa	 	240		 	173		 	234

Greater China	 	76		 	51		 	44

Asia Pacific & Latin America	 	49		 	59		 	62

Global Brand Divisions	 	286		 	278		 	258

Total NIKE Brand	 	847		 	784		 	840

Converse	 	22		 	30		 	39

Corporate	 	325		 	387		 	312

TOTAL ADDITIONS TO LONG-LIVED ASSETS	 	$	1,194		 	$	1,201		 	$	1,191

DEPRECIATION

North America	 	$	160		 	$	140		 	$	133

Europe, Middle East & Africa	 	116		 	106		 	85

Greater China	 	56		 	54		 	48

Asia Pacific & Latin America	 	55		 	54		 	42

Global Brand Divisions	 	217		 	233		 	230

Total NIKE Brand	 	604		 	587		 	538

Converse	 	33		 	28		 	27

Corporate	 	110		 	91		 	84

TOTAL DEPRECIATION	 	$	747		 	$	706		 	$	649

71


Question: How did the growth rates of revenues from Footwear, Apparel, and Equipment compare from Fiscal 2017 to Fiscal 2018, and which category experienced the highest and lowest percentage change?

Footwear Revenues (Fiscal 2018): $3,575 million

Footwear Revenues (Fiscal 2017): $3,285 million

Percentage Change (Footwear): 9%

Apparel Revenues (Fiscal 2018): $1,347 million

Apparel Revenues (Fiscal 2017): $1,185 million

Percentage Change (Apparel): 14%

Equipment Revenues (Fiscal 2018): $244 million

Equipment Revenues (Fiscal 2017): $267 million

Percentage Change (Equipment): -9%
Footware= ((3,575 - 3,285)/(3285))*100=8.83%
Apparel=(1,347-1,185)/(1,185)*100=13.67%
Equipment=(244-267)/(267)*100=-8.61%
From Fiscal 2017 to Fiscal 2018:

Apparel experienced the highest growth rate at approximately 14%, driven by increased demand and product innovation.
Footwear revenues grew by approximately 9%, showing steady growth in the region.
Equipment revenues declined by approximately -9%, indicating challenges in this category, possibly due to decreased demand or competitive pressures.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 30:
Asia Pacific & Latin America

(Dollars in millions)	 	Fiscal 2018	 	Fiscal 2017	 	% Change	 	% Change Excluding Currency Changes	 	Fiscal 2016	 	% Change	 	% Change Excluding Currency Changes

Revenues by:

Footwear	 	$	3,575		 	$	3,285		 	9	 %	 	9	 %	 	$	2,930		 	12	 %	 	16	 %

Apparel	 	1,347		 	1,185		 	14	 %	 	15	 %	 	1,117		 	6	 %	 	9	 %

Equipment	 	244		 	267		 	-9	 %	 	-8	 %	 	270		 	-1	 %	 	-1	 %

TOTAL REVENUES	 	$	5,166		 	$	4,737		 	9	 %	 	10	 %	 	$	4,317		 	10	 %	 	13	 %

Revenues by:

Sales to Wholesale Customers	 	$	3,829		 	$	3,631		 	5	 %	 	6	 %	 	$	3,411		 	6	 %	 	10	 %

Sales through NIKE Direct	 	1,337		 	1,106		 	21	 %	 	21	 %	 	906		 	22	 %	 	21	 %

TOTAL REVENUES	 	$	5,166		 	$	4,737		 	9	 %	 	10	 %	 	$	4,317		 	10	 %	 	13	 %

EARNINGS BEFORE INTERESTAND TAXES	 	$	1,189		 	$	980		 	21	 %	 	 	 	$	1,002		 	-2	 %

Fiscal 2018 Compared to Fiscal 2017

On a currency-neutral basis, APLA revenues increased 10%, driven by higher revenues in every territory. Territory revenue growth was broad-based, led by SOCO (which comprises Argentina, Uruguay and Chile), which grew 19%. Revenues increased in all key categories, led by Sportswear and Running. NIKE Direct revenues increased 21%, fueled by comparable store sales growth of 11%, strong digital commerce sales growth and the addition of new stores.
The 9% increase in currency-neutral footwear revenues for fiscal 2018 was attributable to growth in every key category, led by Sportswear and Running. Unit sales of footwear increased 5% and higher ASP per pair contributed approximately 4 percentage points of footwear revenue growth, driven by higher full-price, off-price and NIKE Direct ASPs.
Currency-neutral apparel revenues grew 15% for fiscal 2018, driven by higher revenues in every key category, most notably Sportswear and, to a lesser extent, Football (Soccer), Training and NIKE Basketball. Unit sales of apparel increased 11% and higher ASP per unit contributed approximately 4 percentage points of apparel revenue growth. The increase in ASP per unit was primarily driven by higher full-price ASP and, to a lesser extent, favorable off-price mix and higher off-price ASP.
Reported EBIT increased 21% due to revenue growth, strong selling and administrative expense leverage and gross margin expansion. Gross margin increased 90 basis points as higher full-price ASP and favorable standard foreign currency exchange rates more than offset higher product costs. Selling and administrative expense increased as higher operating overhead costs resulting from continued investments in our growing NIKE Direct business more than offset lower demand creation expense. The decrease in demand creation expense was primarily attributable to lower marketing costs as a result of prior year investments to support the Rio Olympics.

Fiscal 2017 Compared to Fiscal 2016

On a currency-neutral basis, APLA revenues for fiscal 2017 increased 13%. Revenue growth was broad-based across all territories, led by SOCO, Korea and Mexico, which grew 34%, 14% and 18%, respectively. Additionally, revenues increased in all key categories, led by Running and Sportswear. NIKE Direct revenues increased 21%, fueled by the addition of new stores, comparable store sales growth of 11% and higher digital commerce sales.
The increase in currency-neutral footwear revenue for fiscal 2017 was attributable to growth in all key categories, most notably Running and Sportswear. Unit sales of footwear increased 9%. Higher ASP per pair contributed approximately 7 percentage points of footwear revenue growth, primarily attributable to higher full-price ASP, in part reflecting inflationary conditions in certain territories.
Currency-neutral growth in apparel revenue was fueled by increases in all key categories, led by Sportswear and Running. For fiscal 2017, unit sales of apparel increased 3% and higher ASP per unit contributed approximately 6 percentage points of apparel revenue growth. The increase in ASP per unit was primarily driven by higher full-price ASP, in part reflecting inflationary conditions in certain territories.
Reported EBIT decreased 2%, in part reflecting the negative impact of changes in foreign currency exchange rates, primarily the Argentine Peso and Mexican Peso. Reported revenue growth and selling and administrative expense leverage were more than offset by lower gross margin. Gross margin decreased 370 basis points as higher full-price ASP was more than offset by unfavorable standard foreign currency exchange rates and higher product costs. Selling and administrative expense increased due to higher operating overhead costs primarily resulting from ongoing investments in our growing NIKE Direct business, partially offset by administrative cost efficiencies. Demand creation expense also increased as lower advertising costs were more than offset by increased marketing support for the Rio Olympics in the first quarter, as well as higher sports marketing costs.
30


Question: How did Nike's stock price perform in 2018 compared to key financial metrics?

From Nike's 2018 financial statements, the following details about its stock performance and key financial metrics are observed:

Stock Price Performance:
Year-end stock price (2018): $71.80
Year-end stock price (2017): $52.99
High stock price (2018): $73.49
Low stock price (2018): $50.35
Key Financial Metrics (2018 vs. 2017):
Revenues: Increased from $34,350 million in 2017 to $36,397 million in 2018 (6% growth).
Net Income: Decreased from $4,240 million in 2017 to $1,933 million in 2018, reflecting a decline.
Earnings per Share (EPS):
Basic EPS: $1.19 in 2018, down from $2.56 in 2017.
Diluted EPS: $1.17 in 2018, down from $2.51 in 2017

NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 18:
ITEM 6. Selected Financial Data

All share and per share amounts are reflective of the two-for-one stock split that began trading at the split-adjusted price on December 24, 2015.

(In millions, except per share data and financial ratios)	Financial History

2018	 	2017	 	2016	 	2015	 	2014

Year Ended May 31,

Revenues	$	36,397		 	$	34,350		 	$	32,376		 	$	30,601		 	$	27,799

Gross profit	15,956		 	15,312		 	14,971		 	14,067		 	12,446

Gross margin	43.8	%	 	44.6	%	 	46.2	%	 	46.0	%	 	44.8	%

Net income	1,933		 	4,240		 	3,760		 	3,273		 	2,693

Earnings per common share:

Basic	1.19		 	2.56		 	2.21		 	1.90		 	1.52

Diluted	1.17		 	2.51		 	2.16		 	1.85		 	1.49

Weighted average common shares outstanding	1,623.8		 	1,657.8		 	1,697.9		 	1,723.5		 	1,766.7

Diluted weighted average common shares outstanding	1,659.1		 	1,692.0		 	1,742.5		 	1,768.8		 	1,811.6

Cash dividends declared per common share	0.78		 	0.70		 	0.62		 	0.54		 	0.47

Cash flow from operations(1)	4,955		 	3,846		 	3,399		 	4,906		 	3,158

Price range of common stock:

High	73.49		 	60.33		 	68.19		 	52.75		 	40.13

Low	50.35		 	49.01		 	47.25		 	36.57		 	29.56

At May 31,

Cash and equivalents	$	4,249		 	$	3,808		 	$	3,138		 	$	3,852		 	$	2,220

Short-term investments	996		 	2,371		 	2,319		 	2,072		 	2,922

Inventories	5,261		 	5,055		 	4,838		 	4,337		 	3,947

Working capital	9,094		 	10,587		 	9,667		 	9,225		 	8,319

Total assets	22,536		 	23,259		 	21,379		 	21,590		 	18,579

Long-term debt	3,468		 	3,471		 	1,993		 	1,072		 	1,191

Capital lease obligations	75		 	27		 	15		 	5		 	74

Redeemable preferred stock	0.3		 	0.3		 	0.3		 	0.3		 	0.3

Shareholders' equity	9,812		 	12,407		 	12,258		 	12,707		 	10,824

Year-end stock price	71.80		 	52.99		 	55.22		 	50.84		 	38.46

Market capitalization	114,983		 	87,084		 	92,867		 	87,044		 	66,921

Financial Ratios:

Return on equity(2)	17.4	%	 	34.4	%	 	30.1	%	 	27.8	%	 	24.6	%

Return on assets(2)	8.4	%	 	19.0	%	 	17.5	%	 	16.3	%	 	14.9	%

Inventory turns	4.0		 	3.8		 	3.8		 	4.0		 	4.1

Current ratio at May 31	2.5		 	2.9		 	2.8		 	2.5		 	2.7

Price/Earnings ratio at May 31(2)	61.4		 	21.1		 	25.6		 	27.5		 	25.9

(1)	Prior year amounts have been updated to reflect the adoption of Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. As a result of adoption, the Company reclassified cash inflows of $177 million, $281 million, $218 million and $132 million for the years ended May 31, 2017, 2016, 2015 and 2014, respectively, related to excess tax benefits from share-based payment awards, from Cash used by financing activities to Cash provided by operations. Additionally, the Company reclassified cash outflows of $29 million, $22 million, $8 million and $13 million for the years ended May 31, 2017, 2016, 2015 and 2014, respectively, related to tax payments for the net settlement of share-based payment awards, from Cash provided by operations to Cash used by financing activities within the Consolidated Statements of Cash Flows. Refer to Note 1 - Summary of Significant Accounting Policies for additional information.

(2)	Certain fiscal 2018 financial ratios reflect the impact of the Tax Cuts and Jobs Act. Refer to Note 9 - Income Taxes for additional information.

18


Question: How did Discover’s Net Interest Margin for 2023 compare to the previous year?

In 2023, Discover’s Net Interest Margin (NIM), representing net interest income as a percentage of average total loan receivables, increased to 11.07% from 11.04% in 2022, despite a disproportionate rise in interest expenses.

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 60:
Earnings Summary

The following table outlines changes in our consolidated statements of income (dollars in millions):

 	For the Years Ended December 31,		2023 vs. 2022Increase (Decrease)		2022 vs. 2021Increase (Decrease)

 	2023		2022		2021		$		%		$		%

Interest income	$	17,845 			$	12,864 			$	10,651 			$	4,981 			39 	%		$	2,213 			21 	%

Interest expense	4,746 			1,865 			1,134 			2,881 			154 	%		731 			64 	%

Net interest income	13,099 			10,999 			9,517 			2,100 			19 	%		1,482 			16 	%

Provision for credit losses	6,018 			2,359 			218 			3,659 			155 	%		2,141 			982 	%

Net interest income after provision for credit losses	7,081 			8,640 			9,299 			(1,559)			(18)	%		(659)			(7)	%

Other income	2,761 			2,294 			2,534 			467 			20 	%		(240)			(9)	%

Other expense	6,016 			5,216 			4,805 			800 			15 	%		411 			9 	%

Income before income taxes	3,826 			5,718 			7,028 			(1,892)			(33)	%		(1,310)			(19)	%

Income tax expense	886 			1,344 			1,606 			(458)			(34)	%		(262)			(16)	%

Net income	$	2,940 			$	4,374 			$	5,422 			$	(1,434)			(33)	%		$	(1,048)			(19)	%

Net income allocated to common stockholders	$	2,859 			$	4,286 			$	5,323 			$	(1,427)			(33)	%		$	(1,037)			(19)	%

-60-

, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 61:
Net Interest Income

The tables that follow this section have been provided to supplement the discussion below and provide further analysis of net interest income, net interest margin and the impact of rate and volume changes on net interest income. Net interest income represents the difference between interest income earned on our interest-earning assets and the interest expense incurred to finance those assets. We analyze net interest income in total by calculating net interest margin (net interest income as a percentage of average total loan receivables) and net yield on interest-earning assets (net interest income as a percentage of average total interest-earning assets). We also separately consider the impact of the level of loan receivables and the related interest yield and the impact of the cost of funds related to each of our funding sources, along with the income generated by our liquidity portfolio, on net interest income.
Our interest-earning assets consist of: (i) cash and cash equivalents primarily related to amounts on deposit with the Federal Reserve Bank of Philadelphia, (ii) restricted cash, (iii) other short-term investments, (iv) investment securities and (v) loan receivables. Our interest-bearing liabilities consist primarily of deposits, both direct-to-consumer and brokered, and long-term borrowings, including amounts owed to securitization investors. The following factors influence net interest income:
•The level and composition of loan receivables, including the proportion of credit card loans to other loans, as well as the proportion of loan receivables bearing interest at promotional rates as compared to standard rates;
•The credit performance of our loans, particularly with regard to charge-offs of finance charges, which reduce interest income;
•The terms of long-term borrowings and certificates of deposit upon initial offering, including maturity and interest rate;
•The interest rates necessary to attract and maintain direct-to-consumer deposits;
•The level and composition of other interest-earning assets, including our liquidity portfolio, and interest-bearing liabilities;
•Changes in the interest rate environment, including the levels of interest rates and the relationships among interest rate indices, such as the prime rate, the federal funds rate, the interest rate on reserve balances, LIBOR and SOFR; and
•The effectiveness of interest rate swaps in our interest rate risk management program.
Net interest income increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily driven by a higher yield on loans and a higher average level of loan receivables, partially offset by higher funding costs. Interest income increased compared to the prior year primarily due to higher market rates and a higher average level of loan receivables. Interest expense increased compared to the prior year primarily due to higher funding costs driven by higher market rates and a larger funding base.
-61-

, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 62:
Average Balance Sheet Analysis

(dollars in millions)

	For the Years Ended December 31,

 	2023		2022		2021

 	Average Balance		Yield/Rate		Interest		Average Balance		Yield/Rate		Interest		Average Balance		Yield/Rate		Interest

Assets

Interest-earning assets

Cash and cash equivalents	$	8,192 			5.17 	%		$	423 			$	9,279 			1.89 	%		$	175 			$	14,236 			0.13 	%		$	18

Restricted cash	250 			7.80 	%		20 			515 			1.48 	%		8 			695 			0.03 	%		NM

Other short-term investments	- 			- 			- 			- 			- 			- 			176 			0.12 	%		NM

Investment securities	12,938 			3.47 	%		449 			6,988 			2.57 	%		179 			8,713 			2.09 	%		182

Loan receivables(1)

Credit card loans(2)(3)	94,205 			15.33 	%		14,438 			79,243 			13.42 	%		10,632 			69,365 			12.57 	%		8,717

Private student loans	10,382 			9.95 	%		1,033 			10,240 			8.11 	%		831 			10,057 			7.38 	%		742

Personal loans	9,011 			12.83 	%		1,156 			7,295 			11.95 	%		872 			6,945 			12.64 	%		878

Other	4,713 			6.92 	%		326 			2,895 			5.77 	%		167 			2,054 			5.57 	%		114

Total loan receivables	118,311 			14.33 	%		16,953 			99,673 			12.54 	%		12,502 			88,421 			11.82 	%		10,451

Total interest-earning assets	139,691 			12.77 	%		17,845 			116,455 			11.05 	%		12,864 			112,241 			9.49 	%		10,651

Allowance for credit losses	(7,936)							(6,820)							(7,351)

Other assets	6,938 							6,070 							6,237

Total assets(4)	$	138,693 							$	115,705 							$	111,127

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

Time deposits	$	38,220 			3.89 	%		$	1,485 			$	23,988 			2.02 	%		$	484 			$	23,928 			1.84 	%		$	440

Money market deposits	8,143 			4.16 	%		339 			8,453 			1.67 	%		141 			8,142 			0.53 	%		43

Other interest-bearing savings deposits	51,366 			4.01 	%		2,062 			44,276 			1.43 	%		632 			40,912 			0.43 	%		178

Total interest-bearing deposits	97,729 			3.98 	%		3,886 			76,717 			1.64 	%		1,257 			72,982 			0.91 	%		661

Borrowings

Short-term borrowings	44 			10.21 	%		5 			225 			0.70 	%		2 			72 			0.18 	%		NM

Securitized borrowings(5)(6)(7)	10,528 			4.30 	%		453 			9,060 			2.41 	%		219 			9,627 			1.06 	%		102

Other long-term borrowings(6)(7)(8)	9,090 			4.43 	%		402 			9,334 			4.15 	%		387 			9,888 			3.75 	%		371

Total borrowings	19,662 			4.37 	%		860 			18,619 			3.26 	%		608 			19,587 			2.42 	%		473

Total interest-bearing liabilities	117,391 			4.04 	%		4,746 			95,336 			1.96 	%		1,865 			92,569 			1.23 	%		1,134

Other liabilities and stockholders' equity(9)	21,302 							20,369 							18,558

Total liabilities and stockholders' equity	$	138,693 							$	115,705 							$	111,127

Net interest income					$	13,099 							$	10,999 							$	9,517

Net interest margin(10)			11.07 	%						11.04 	%						10.76 	%

Net yield on interest-earning assets(11)			9.38 	%						9.45 	%						8.48 	%

Interest rate spread(12)			8.73 	%						9.09 	%						8.26 	%

(1)Average balances of loan receivables and yield calculations include non-accruing loans. If the non-accruing loan balances were excluded, there would not be a material impact on the amounts reported above.
(2)Interest income on credit card loans includes $468 million, $365 million and $295 million of amortization of balance transfer fees for the years ended December 31, 2023, 2022 and 2021, respectively.
(3)Includes the impact of interest rate swap agreements used to change a portion of floating-rate assets to fixed-rate assets for the years ended December 31, 2023, 2022 and 2021.
(4)The return on average assets, based on net income, was 2.12%, 3.80% and 4.90% for the years ended December 31, 2023, 2022 and 2021, respectively.
(5)Includes the impact of one terminated derivative formerly designated as a cash flow hedge for the years ended December 31, 2023, 2022 and 2021.
(6)Includes the impact of interest rate swap agreements used to change a portion of fixed-rate funding to floating-rate funding for the years ended December 31, 2023, 2022 and 2021.
(7)Includes the impact of terminated derivatives formerly designated as fair value hedges for the years ended December 31, 2023, 2022 and 2021.
(8)Includes the impact of interest rate swap agreements used to change a portion of floating-rate funding to fixed-rate funding for the years ended December 31, 2023 and 2022.
(9)The return on average stockholders' equity, based on net income, was 21.00%, 32.00% and 43.12% for the years ended December 31, 2023, 2022 and 2021, respectively.
(10)Net interest margin represents net interest income as a percentage of average total loan receivables.
(11)Net yield on interest-earning assets represents net interest income as a percentage of average total interest-earning assets.
(12)Interest rate spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities.
-62-

Earnings Summary

The following table outlines changes in our consolidated statements of income (dollars in millions):

 	For the Years Ended December 31,		2023 vs. 2022Increase (Decrease)		2022 vs. 2021Increase (Decrease)

 	2023		2022		2021		$		%		$		%

Interest income	$	17,845 			$	12,864 			$	10,651 			$	4,981 			39 	%		$	2,213 			21 	%

Interest expense	4,746 			1,865 			1,134 			2,881 			154 	%		731 			64 	%

Net interest income	13,099 			10,999 			9,517 			2,100 			19 	%		1,482 			16 	%

Provision for credit losses	6,018 			2,359 			218 			3,659 			155 	%		2,141 			982 	%

Net interest income after provision for credit losses	7,081 			8,640 			9,299 			(1,559)			(18)	%		(659)			(7)	%

Other income	2,761 			2,294 			2,534 			467 			20 	%		(240)			(9)	%

Other expense	6,016 			5,216 			4,805 			800 			15 	%		411 			9 	%

Income before income taxes	3,826 			5,718 			7,028 			(1,892)			(33)	%		(1,310)			(19)	%

Income tax expense	886 			1,344 			1,606 			(458)			(34)	%		(262)			(16)	%

Net income	$	2,940 			$	4,374 			$	5,422 			$	(1,434)			(33)	%		$	(1,048)			(19)	%

Net income allocated to common stockholders	$	2,859 			$	4,286 			$	5,323 			$	(1,427)			(33)	%		$	(1,037)			(19)	%

-60-

,
Net Interest Income

The tables that follow this section have been provided to supplement the discussion below and provide further analysis of net interest income, net interest margin and the impact of rate and volume changes on net interest income. Net interest income represents the difference between interest income earned on our interest-earning assets and the interest expense incurred to finance those assets. We analyze net interest income in total by calculating net interest margin (net interest income as a percentage of average total loan receivables) and net yield on interest-earning assets (net interest income as a percentage of average total interest-earning assets). We also separately consider the impact of the level of loan receivables and the related interest yield and the impact of the cost of funds related to each of our funding sources, along with the income generated by our liquidity portfolio, on net interest income.
Our interest-earning assets consist of: (i) cash and cash equivalents primarily related to amounts on deposit with the Federal Reserve Bank of Philadelphia, (ii) restricted cash, (iii) other short-term investments, (iv) investment securities and (v) loan receivables. Our interest-bearing liabilities consist primarily of deposits, both direct-to-consumer and brokered, and long-term borrowings, including amounts owed to securitization investors. The following factors influence net interest income:
•The level and composition of loan receivables, including the proportion of credit card loans to other loans, as well as the proportion of loan receivables bearing interest at promotional rates as compared to standard rates;
•The credit performance of our loans, particularly with regard to charge-offs of finance charges, which reduce interest income;
•The terms of long-term borrowings and certificates of deposit upon initial offering, including maturity and interest rate;
•The interest rates necessary to attract and maintain direct-to-consumer deposits;
•The level and composition of other interest-earning assets, including our liquidity portfolio, and interest-bearing liabilities;
•Changes in the interest rate environment, including the levels of interest rates and the relationships among interest rate indices, such as the prime rate, the federal funds rate, the interest rate on reserve balances, LIBOR and SOFR; and
•The effectiveness of interest rate swaps in our interest rate risk management program.
Net interest income increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily driven by a higher yield on loans and a higher average level of loan receivables, partially offset by higher funding costs. Interest income increased compared to the prior year primarily due to higher market rates and a higher average level of loan receivables. Interest expense increased compared to the prior year primarily due to higher funding costs driven by higher market rates and a larger funding base.
-61-

,
Average Balance Sheet Analysis

(dollars in millions)

	For the Years Ended December 31,

 	2023		2022		2021

 	Average Balance		Yield/Rate		Interest		Average Balance		Yield/Rate		Interest		Average Balance		Yield/Rate		Interest

Assets

Interest-earning assets

Cash and cash equivalents	$	8,192 			5.17 	%		$	423 			$	9,279 			1.89 	%		$	175 			$	14,236 			0.13 	%		$	18

Restricted cash	250 			7.80 	%		20 			515 			1.48 	%		8 			695 			0.03 	%		NM

Other short-term investments	- 			- 			- 			- 			- 			- 			176 			0.12 	%		NM

Investment securities	12,938 			3.47 	%		449 			6,988 			2.57 	%		179 			8,713 			2.09 	%		182

Loan receivables(1)

Credit card loans(2)(3)	94,205 			15.33 	%		14,438 			79,243 			13.42 	%		10,632 			69,365 			12.57 	%		8,717

Private student loans	10,382 			9.95 	%		1,033 			10,240 			8.11 	%		831 			10,057 			7.38 	%		742

Personal loans	9,011 			12.83 	%		1,156 			7,295 			11.95 	%		872 			6,945 			12.64 	%		878

Other	4,713 			6.92 	%		326 			2,895 			5.77 	%		167 			2,054 			5.57 	%		114

Total loan receivables	118,311 			14.33 	%		16,953 			99,673 			12.54 	%		12,502 			88,421 			11.82 	%		10,451

Total interest-earning assets	139,691 			12.77 	%		17,845 			116,455 			11.05 	%		12,864 			112,241 			9.49 	%		10,651

Allowance for credit losses	(7,936)							(6,820)							(7,351)

Other assets	6,938 							6,070 							6,237

Total assets(4)	$	138,693 							$	115,705 							$	111,127

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

Time deposits	$	38,220 			3.89 	%		$	1,485 			$	23,988 			2.02 	%		$	484 			$	23,928 			1.84 	%		$	440

Money market deposits	8,143 			4.16 	%		339 			8,453 			1.67 	%		141 			8,142 			0.53 	%		43

Other interest-bearing savings deposits	51,366 			4.01 	%		2,062 			44,276 			1.43 	%		632 			40,912 			0.43 	%		178

Total interest-bearing deposits	97,729 			3.98 	%		3,886 			76,717 			1.64 	%		1,257 			72,982 			0.91 	%		661

Borrowings

Short-term borrowings	44 			10.21 	%		5 			225 			0.70 	%		2 			72 			0.18 	%		NM

Securitized borrowings(5)(6)(7)	10,528 			4.30 	%		453 			9,060 			2.41 	%		219 			9,627 			1.06 	%		102

Other long-term borrowings(6)(7)(8)	9,090 			4.43 	%		402 			9,334 			4.15 	%		387 			9,888 			3.75 	%		371

Total borrowings	19,662 			4.37 	%		860 			18,619 			3.26 	%		608 			19,587 			2.42 	%		473

Total interest-bearing liabilities	117,391 			4.04 	%		4,746 			95,336 			1.96 	%		1,865 			92,569 			1.23 	%		1,134

Other liabilities and stockholders' equity(9)	21,302 							20,369 							18,558

Total liabilities and stockholders' equity	$	138,693 							$	115,705 							$	111,127

Net interest income					$	13,099 							$	10,999 							$	9,517

Net interest margin(10)			11.07 	%						11.04 	%						10.76 	%

Net yield on interest-earning assets(11)			9.38 	%						9.45 	%						8.48 	%

Interest rate spread(12)			8.73 	%						9.09 	%						8.26 	%

(1)Average balances of loan receivables and yield calculations include non-accruing loans. If the non-accruing loan balances were excluded, there would not be a material impact on the amounts reported above.
(2)Interest income on credit card loans includes $468 million, $365 million and $295 million of amortization of balance transfer fees for the years ended December 31, 2023, 2022 and 2021, respectively.
(3)Includes the impact of interest rate swap agreements used to change a portion of floating-rate assets to fixed-rate assets for the years ended December 31, 2023, 2022 and 2021.
(4)The return on average assets, based on net income, was 2.12%, 3.80% and 4.90% for the years ended December 31, 2023, 2022 and 2021, respectively.
(5)Includes the impact of one terminated derivative formerly designated as a cash flow hedge for the years ended December 31, 2023, 2022 and 2021.
(6)Includes the impact of interest rate swap agreements used to change a portion of fixed-rate funding to floating-rate funding for the years ended December 31, 2023, 2022 and 2021.
(7)Includes the impact of terminated derivatives formerly designated as fair value hedges for the years ended December 31, 2023, 2022 and 2021.
(8)Includes the impact of interest rate swap agreements used to change a portion of floating-rate funding to fixed-rate funding for the years ended December 31, 2023 and 2022.
(9)The return on average stockholders' equity, based on net income, was 21.00%, 32.00% and 43.12% for the years ended December 31, 2023, 2022 and 2021, respectively.
(10)Net interest margin represents net interest income as a percentage of average total loan receivables.
(11)Net yield on interest-earning assets represents net interest income as a percentage of average total interest-earning assets.
(12)Interest rate spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities.
-62-


Question: How has Discover’s payout ratio changed between 2023 and 2022?

The payout ratio is calculated using the formula:
Payout Ratio = (Total Dividends per Share/Basci Earnings per Share (EPS))×100

Dividend per Share:
2023: $2.70
2022: $2.30
Basic Earnings per Share (EPS):
2023: $11.27
2022: $15.45
Payout Ratio Calculation:
2023: Payout Ratio = 23.9 %
2022: Payout Ratio = 14.9 %

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations;Item 8.    Financial Statements and Supplementary Data

Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 77: Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:

Declaration Date		Record Date		Payment Date		Dividend per Share

2023

October 16, 2023		November 22, 2023		December 07, 2023		$	0.70

July 17, 2023		August 24, 2023		September 07, 2023		0.70

April 17, 2023		May 25, 2023		June 08, 2023		0.70

January 17, 2023		February 23, 2023		March 09, 2023		0.60

Total common stock dividends		$	2.70

2022

October 18, 2022		November 23, 2022		December 08, 2022		$	0.60

July 20, 2022		August 25, 2022		September 08, 2022		0.60

April 27, 2022		May 26, 2022		June 09, 2022		0.60

January 18, 2022		February 17, 2022		March 03, 2022		0.50

Total common stock dividends		$	2.30

2021

October 19, 2021		November 24, 2021		December 09, 2021		$	0.50

July 20, 2021		August 19, 2021		September 02, 2021		0.50

April 20, 2021		May 20, 2021		June 03, 2021		0.44

January 19, 2021		February 18, 2021		March 04, 2021		0.44

Total common stock dividends		$	1.88

On January 16, 2024, we declared a quarterly cash dividend on our common stock of $0.70 per share, payable on March 7, 2024 to holders of record on February 22, 2024, which is consistent with the quarterly amount paid in 2023.
Our Board of Directors declared the following Series C preferred stock dividends during 2023, 2022 and 2021:

Declaration Date		Record Date		Payment Date		Dividend per Depositary Share

2023

July 17, 2023		October 13, 2023		October 30, 2023		$	27.50

January 17, 2023		April 14, 2023		May 01, 2023		27.50

Total Series C preferred stock dividends		$	55.00

2022

July 20, 2022		October 14, 2022		October 31, 2022		$	27.50

January 18, 2022		April 15, 2022		May 02, 2022		27.50

Total Series C preferred stock dividends		$	55.00

2021

July 20, 2021		October 15, 2021		November 01, 2021		$	27.50

January 19, 2021		April 15, 2021		April 30, 2021		27.50

Total Series C preferred stock dividends		$	55.00

-77-

, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES

Consolidated Statements of Income

(dollars in millions, except for share amounts)

 	For the Years Ended December 31,

 	2023		2022		2021

Interest income

Credit card loans	$	14,438 			$	10,632 			$	8,717

Other loans	2,515 			1,870 			1,734

Investment securities	449 			179 			182

Other interest income	443 			183 			18

Total interest income	17,845 			12,864 			10,651

Interest expense

Deposits	3,886 			1,257 			661

Short-term borrowings	5 			2 			-

Long-term borrowings	855 			606 			473

Total interest expense	4,746 			1,865 			1,134

Net interest income	13,099 			10,999 			9,517

Provision for credit losses	6,018 			2,359 			218

Net interest income after provision for credit losses	7,081 			8,640 			9,299

Other income

Discount and interchange revenue, net	1,447 			1,380 			1,188

Protection products revenue	172 			172 			165

Loan fee income	763 			632 			464

Transaction processing revenue	303 			249 			227

(Losses) gains on equity investments	(9)			(214)			424

Other income	85 			75 			66

Total other income	2,761 			2,294 			2,534

Other expense

Employee compensation and benefits	2,434 			2,139 			1,986

Marketing and business development	1,164 			1,035 			810

Information processing and communications	608 			513 			500

Professional fees	1,041 			871 			797

Premises and equipment	89 			118 			92

Other expense	680 			540 			620

Total other expense	6,016 			5,216 			4,805

Income before income taxes	3,826 			5,718 			7,028

Income tax expense	886 			1,344 			1,606

Net income	$	2,940 			$	4,374 			$	5,422

Net income allocated to common stockholders	$	2,859 			$	4,286 			$	5,323

Basic earnings per common share	$	11.27 			$	15.45 			$	17.75

Diluted earnings per common share	$	11.26 			$	15.44 			$	17.74

See Notes to the Consolidated Financial Statements.

-86-

Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:

Declaration Date		Record Date		Payment Date		Dividend per Share

2023

October 16, 2023		November 22, 2023		December 07, 2023		$	0.70

July 17, 2023		August 24, 2023		September 07, 2023		0.70

April 17, 2023		May 25, 2023		June 08, 2023		0.70

January 17, 2023		February 23, 2023		March 09, 2023		0.60

Total common stock dividends		$	2.70

2022

October 18, 2022		November 23, 2022		December 08, 2022		$	0.60

July 20, 2022		August 25, 2022		September 08, 2022		0.60

April 27, 2022		May 26, 2022		June 09, 2022		0.60

January 18, 2022		February 17, 2022		March 03, 2022		0.50

Total common stock dividends		$	2.30

2021

October 19, 2021		November 24, 2021		December 09, 2021		$	0.50

July 20, 2021		August 19, 2021		September 02, 2021		0.50

April 20, 2021		May 20, 2021		June 03, 2021		0.44

January 19, 2021		February 18, 2021		March 04, 2021		0.44

Total common stock dividends		$	1.88

On January 16, 2024, we declared a quarterly cash dividend on our common stock of $0.70 per share, payable on March 7, 2024 to holders of record on February 22, 2024, which is consistent with the quarterly amount paid in 2023.
Our Board of Directors declared the following Series C preferred stock dividends during 2023, 2022 and 2021:

Declaration Date		Record Date		Payment Date		Dividend per Depositary Share

2023

July 17, 2023		October 13, 2023		October 30, 2023		$	27.50

January 17, 2023		April 14, 2023		May 01, 2023		27.50

Total Series C preferred stock dividends		$	55.00

2022

July 20, 2022		October 14, 2022		October 31, 2022		$	27.50

January 18, 2022		April 15, 2022		May 02, 2022		27.50

Total Series C preferred stock dividends		$	55.00

2021

July 20, 2021		October 15, 2021		November 01, 2021		$	27.50

January 19, 2021		April 15, 2021		April 30, 2021		27.50

Total Series C preferred stock dividends		$	55.00

-77-

,
DISCOVER FINANCIAL SERVICES

Consolidated Statements of Income

(dollars in millions, except for share amounts)

 	For the Years Ended December 31,

 	2023		2022		2021

Interest income

Credit card loans	$	14,438 			$	10,632 			$	8,717

Other loans	2,515 			1,870 			1,734

Investment securities	449 			179 			182

Other interest income	443 			183 			18

Total interest income	17,845 			12,864 			10,651

Interest expense

Deposits	3,886 			1,257 			661

Short-term borrowings	5 			2 			-

Long-term borrowings	855 			606 			473

Total interest expense	4,746 			1,865 			1,134

Net interest income	13,099 			10,999 			9,517

Provision for credit losses	6,018 			2,359 			218

Net interest income after provision for credit losses	7,081 			8,640 			9,299

Other income

Discount and interchange revenue, net	1,447 			1,380 			1,188

Protection products revenue	172 			172 			165

Loan fee income	763 			632 			464

Transaction processing revenue	303 			249 			227

(Losses) gains on equity investments	(9)			(214)			424

Other income	85 			75 			66

Total other income	2,761 			2,294 			2,534

Other expense

Employee compensation and benefits	2,434 			2,139 			1,986

Marketing and business development	1,164 			1,035 			810

Information processing and communications	608 			513 			500

Professional fees	1,041 			871 			797

Premises and equipment	89 			118 			92

Other expense	680 			540 			620

Total other expense	6,016 			5,216 			4,805

Income before income taxes	3,826 			5,718 			7,028

Income tax expense	886 			1,344 			1,606

Net income	$	2,940 			$	4,374 			$	5,422

Net income allocated to common stockholders	$	2,859 			$	4,286 			$	5,323

Basic earnings per common share	$	11.27 			$	15.45 			$	17.75

Diluted earnings per common share	$	11.26 			$	15.44 			$	17.74

See Notes to the Consolidated Financial Statements.

-86-