Lesson 1 of 6
Ten years in one table
Eight figures, ten filed fiscal years, one company, and what to do with the table before explaining a single row of it.
By Javier Sanz
Founder of ValueScreener. Built Ninety Nine, a securities services provider, and sold it to a tier-one global bank; ran operations and internationalization at Alpaca, the brokerage API.
Who writes thisEditorial processLinkedIn (opens in a new tab)X (opens in a new tab)
In one minute
- Look at the whole table before explaining any row of it: a question you write from the table is yours, not management's.
- These eight rows are the figures this product rebuilds on its live formula back to fiscal 2016.
- A drift usually has many small causes and a step one large one; the gross margin row here is a step.
Eight figures, ten filed fiscal years, one company. The company is Apple Inc., chosen because a decade of its filings is on file and citable, not for any view on its shares. Every sentence below is past-tense arithmetic on figures filed with the SEC.
Three margins, ten filed fiscal years
- Gross margin
- Operating margin
- Net margin
Show the numbers
| Gross margin | Operating margin | Net margin | |
|---|---|---|---|
| FY16 | 39.08% | 27.84% | 21.19% |
| FY17 | 38.47% | 26.76% | 21.09% |
| FY18 | 38.34% | 26.69% | 22.41% |
| FY19 | 37.82% | 24.57% | 21.24% |
| FY20 | 38.23% | 24.15% | 20.91% |
| FY21 | 41.78% | 29.78% | 25.88% |
| FY22 | 43.31% | 30.29% | 25.31% |
| FY23 | 44.13% | 29.82% | 25.31% |
| FY24 | 46.21% | 31.51% | 23.97% |
| FY25 | 46.91% | 31.97% | 26.92% |
Why these eight rows
They are not a pick of the most interesting figures. They are every figure this product can rebuild backwards over filed history on the same formula it uses for the live value: current ratio, debt to equity, free cash flow, the three margins, one-year revenue growth and return on equity. Return on invested capital is not among them, and neither is any composite score or anything with a share price in it, because none of those can be reconstructed for fiscal 2018 on the same basis as fiscal 2025.
The full table
| Figure | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.35 | 1.28 | 1.13 | 1.54 | 1.36 | 1.07 | 0.88 | 0.99 | 0.87 | 0.89 |
| Debt to equity | 0.68 | 0.86 | 1.07 | 1.19 | 1.87 | 2.16 | 2.61 | 1.99 | 2.09 | 1.52 |
| Gross margin % | 39.08 | 38.47 | 38.34 | 37.82 | 38.23 | 41.78 | 43.31 | 44.13 | 46.21 | 46.91 |
| Operating margin % | 27.84 | 26.76 | 26.69 | 24.57 | 24.15 | 29.78 | 30.29 | 29.82 | 31.51 | 31.97 |
| Net margin % | 21.19 | 21.09 | 22.41 | 21.24 | 20.91 | 25.88 | 25.31 | 25.31 | 23.97 | 26.92 |
| Return on equity % | 35.62 | 36.07 | 55.56 | 61.06 | 87.87 | 150.07 | 196.96 | 156.08 | 164.59 | 151.91 |
| Revenue growth % | n/a | 6.3 | 15.86 | -2.04 | 5.51 | 33.26 | 7.79 | -2.8 | 2.02 | 6.43 |
| Free cash flow $bn | 53.5 | 51.8 | 64.1 | 58.9 | 73.4 | 93.0 | 111.4 | 99.6 | 108.8 | 98.8 |
Fiscal 2016 has no prior year on file, so revenue growth is n/a rather than zero. Apple's fiscal year ends in late September, so a row here sits about a quarter off a company with a December year end, and the mismatch is worst in exactly the years something happened in between. From fiscal 2020, lease obligations sit inside the debt-to-equity figure under ASC 842, so the two halves of this decade are not on the same basis.
The filing behind each year
| Fiscal year | Filed | Accession number |
|---|---|---|
| FY2016 | 2016-10-26 | 0001628280-16-020309 |
| FY2017 | 2017-11-03 | 0000320193-17-000070 |
| FY2018 | 2018-11-05 | 0000320193-18-000145 |
| FY2019 | 2019-10-31 | 0000320193-19-000119 |
| FY2020 | 2020-10-30 | 0000320193-20-000096 |
| FY2021 | 2021-10-29 | 0000320193-21-000105 |
| FY2022 | 2022-10-28 | 0000320193-22-000108 |
| FY2023 | 2023-11-03 | 0000320193-23-000106 |
| FY2024 | 2024-11-01 | 0000320193-24-000123 |
| FY2025 | 2025-10-31 | 0000320193-25-000079 |
Write the accession number, the unique ID EDGAR gives every filing, next to a figure and not just the year: a row labelled fiscal 2019 can be two different numbers depending on which filing produced it, and one carrying an accession number cannot.
Three passes, in this order
Read each row alone first. Ask which direction it moved, which year was its worst, and whether it moved as a drift, a run of small changes, or a step, a discontinuity where the earlier years and the later years do not overlap at all. Then read the rows against each other: two moving together are one thing seen twice, or two effects of a shared cause, and the table cannot tell you which. Only then write down three or four questions, each in the form of what would have to be true for a movement to be what it looks like. Writing the questions before opening a filing is the step people skip.
Two more things are visible before any filing is opened. Return on equity went from 35.62 percent in fiscal 2016 to 196.96 percent in fiscal 2022, more than five times over. Net margin over the same years rose by less than a fifth. And the current ratio never once reached Graham's floor of 2.0 in ten years on file, its high point 1.54 in fiscal 2019. Lessons three and four take each of those in turn.
Build the same table for a company you are researching
- Take the margins and revenue growth from the consolidated statements of operations in Item 8, for each of ten annual filings.
- Take the current ratio, debt to equity and the equity denominator from the consolidated balance sheets in the same item.
- Take free cash flow as operating cash flow less capital expenditure, from the consolidated statements of cash flows, and write the accession number beside every column.
Check yourself
Why write the accession number next to a figure instead of just the fiscal year?
- It looks more official
- The same fiscal year can be reported as two different numbers depending on which filing produced it
- EDGAR requires it
Show the answer
Answer: B.
A company can restate a prior year. A figure labelled only by year does not say which version it is; one carrying an accession number does.A row sits between 37.82 and 39.08 percent for five years, then between 41.78 and 46.91 for the next five, with no year in between. What is that?
- A drift
- A step
- A rounding error
Show the answer
Answer: B.
The two ranges do not overlap. A drift is a run of small changes in the same direction; a step is a discontinuity, and it usually has one large cause rather than many small ones.Why is return on invested capital not one of the eight rows?
- It is not a useful figure
- It always agrees with return on equity
- It cannot be rebuilt for fiscal 2018 on the same basis as fiscal 2025 from this data
Show the answer
Answer: C.
The eight rows are exactly the figures reconstructable backwards on a consistent basis over filed history. Anything that fails that test is left out for that reason alone.Sources
- Apple Inc., annual reports on Form 10-K for fiscal years 2016 through 2025, filed with the SEC (accession numbers above).
- ASC 842, Leases: operating leases moved onto the balance sheet for fiscal years beginning after 15 December 2018, so any ratio with assets or liabilities in it is not comparable across that transition.
- Item 6 of Form 10-K: Selected Financial Data was eliminated by the Commission's 2020 amendments, so filings for periods from 2021 carry no five-year summary.
What this leaves out
- Ten fiscal years is the archive this table covers, not the company's whole history.
- The eight rows are the eight that can be rebuilt on a consistent basis; a figure you would rather have, including return on invested capital, is absent for that reason and not because it was judged unimportant.
- Nothing here is a view on Apple or on any security, and none of it describes what any of these figures will do next.