The contrast appears in the bottom line: net income fell to $93.74B (-3.36%) despite margin expansion at the gross and operating levels. That divergence indicates non-operating items, tax effects, or timing differences affected reported profit. Looking at the reported components, income before tax was $123.48B, very close to operating income, which suggests the gap between operating and net income is driven by tax and other non-operating adjustments rather than an operational deterioration. All FY figures referenced are from Apple’s FY2024 statements (filed 2024-11-01).

A second tension: profitability ratios improved in operating metrics even as net margin contracted to 23.97% from 25.31% in FY2023. This pattern — rising gross and operating margins with falling net margin — typically signals increased non-operating charges, higher effective taxes, or one-time items that suppressed the final line. Absent granular line items in the dataset for those non-operating components, the numbers compel a cautious read: Apple’s core product economics strengthened, but reported earnings were partially offset by items outside core operations.

Income-statement trend table#

Year	Revenue (B)	Gross Profit (B)	Gross Margin	Operating Income (B)	Operating Margin	Net Income (B)	Net Margin
2024	391.04	180.68	46.21%	123.22	31.51%	93.74	23.97%
2023	383.29	169.15	44.13%	114.30	29.82%	97.00	25.31%
2022	394.33	170.78	43.31%	119.44	30.29%	99.80	25.31%
2021	365.82	152.84	41.78%	108.95	29.78%	94.68	25.88%

Table notes: margins are calculated as line item / revenue. Figures drawn from Apple FY2024 financial statements (filed 2024-11-01).

Examining multi-year dynamics, Apple has steadily expanded gross margin from 41.78% (2021) to 46.21% (2024) — a meaningful structural improvement in product economics. Operating margin trended upward as well, indicating operating leverage has been captured even with only modest revenue growth over the period. The net-margin decline between 2023 and 2024, however, interrupts a multi-year pattern of net-margin stability around the mid-20% range and warrants closer inspection of non-operating items, taxes, and share-count effects.

Cash flow quality: conversion, capital allocation and shareholder returns#

Cash generation remains a core strength. Apple reported net cash provided by operating activities of $118.25B and free cash flow of $108.81B in FY2024. Two measures quantify cash quality directly: the operating cash conversion ratio (operating cash flow / net income) and the free-money conversion (free cash flow / net income). For FY2024, operating cash conversion = 118.25 / 93.74 = 1.2617 (126.17%) and free cash flow conversion = 108.81 / 93.74 = 1.1607 (116.07%).

High conversion ratios (>100%) indicate that reported net income is conservative relative to cash generation — Apple is producing more cash than accounting profit in FY2024. That tends to reflect favorable working-capital movements, non-cash depreciation charges, and strong product cash receipts. Over the most recent years, free-cash-flow rose to $108.81B from $99.58B in FY2023 (++9.26% per the dataset), showing resilient FCF growth even with only modest revenue expansion.

Capital allocation shows a heavy tilt to buybacks: common stock repurchases were $94.95B in FY2024 versus $77.55B in FY2023. Dividends paid were $15.23B in FY2024 (vs $15.03B in FY2023). Aggregate shareholder returns from buybacks plus dividends totaled $110.18B in FY2024. With free cash flow of $108.81B, Apple financed nearly all shareholder returns from FCF but also drew on financing sources (net cash used in financing activities was $121.98B). The company remains a major capital-return engine; the pace of repurchases accelerated year-over-year, accounting for roughly 87% of total shareholder distributions in FY2024.

Cash flow table#

Year	Net Cash from Ops (B)	Free Cash Flow (B)	CapEx (B)	Repurchases (B)	Dividends (B)	Cash at End (B)
2024	118.25	108.81	-9.45	-94.95	-15.23	29.94
2023	110.54	99.58	-10.96	-77.55	-15.03	30.74
2022	122.15	111.44	-10.71	-89.40	-14.84	24.98
2021	104.04	92.95	-11.09	-85.97	-14.47	35.93

Table notes: capex is shown as negative in source data; displayed here with sign for clarity. All figures from Apple FY statements (filed 2024-11-01).

The implication is straightforward: cash-generation is strong and consistent, and Apple is prioritizing capital returns at a scale that consumes most free cash flow. That reduces the company’s cash cushion over time unless operating cash flow grows or repurchase cadence moderates. The relatively small capex run-rate (capex/revenue = 9.45 / 391.04 = 2.42%) signals limited reinvestment intensity relative to revenue, consistent with a mature hardware-software franchise.

Balance-sheet changes and liquidity positioning#

On the balance sheet, Apple’s total assets increased to $364.98B while total liabilities rose to $308.03B, leaving total stockholders’ equity at $56.95B as of FY2024. The company’s current assets are $152.99B against current liabilities of $176.39B, producing a current ratio of 0.87x (152.99 / 176.39 = 0.86799). That ratio signals a tighter near-term liquidity profile compared with a conventional 1.0x+ benchmark but must be interpreted in context: Apple has strong operating cash flows and substantial access to capital markets.

Apple’s reported total debt (short + long term) was $119.06B. The company reports a line item labeled net debt of $89.12B in the dataset. There is a definitional inconsistency in the data: using the dataset’s cash and short-term investments figure ($65.17B), a standard net-debt calculation yields 119.06 - 65.17 = $53.89B. However, if net debt is computed using only cash and cash equivalents ($29.94B), the result is 119.06 - 29.94 = $89.12B, which matches the dataset’s net-debt figure. Both calculations are valid depending on whether short-term marketable securities are treated as offsets to debt. The difference matters materially for leverage analysis: $53.89B (net-debt using cash+short-term investments) versus $89.12B (net-debt using cash only).

Total stockholders’ equity of $56.95B together with total debt of $119.06B produces a debt-to-equity ratio of 119.06 / 56.95 = 2.09x (209.20%) when using book equity. This is significantly higher than some summary metrics in the dataset (which report different debt/equity figures), underlining the need to reconcile definitions. Apple’s leverage remains manageable given sizable EBITDA and cash-generation, but on a pure balance-sheet basis the company carries substantial debt relative to equity.

Key ratio calculations (explicit, from raw data)#

Below are the principal ratio calculations performed directly from the FY2024 lines in the dataset. Formulas are shown, followed by results rounded to two decimal places where appropriate.

Gross margin = Gross Profit / Revenue = 180.68 / 391.04 = 46.21%.
Operating margin = Operating Income / Revenue = 123.22 / 391.04 = 31.51%.
Net margin = Net Income / Revenue = 93.74 / 391.04 = 23.97%.
Operating cash conversion = Net Cash from Ops / Net Income = 118.25 / 93.74 = 126.17%.
Free cash flow conversion = Free Cash Flow / Net Income = 108.81 / 93.74 = 116.07%.
CapEx / Revenue = 9.45 / 391.04 = 2.42%.
Payout ratio (dividend) = Dividends / Net Income = 15.23 / 93.74 = 16.25%.
EPS-based payout ratio (Dividend per share / EPS) = 1.02 / 7.26 = 14.06%.
Current ratio = Total Current Assets / Total Current Liabilities = 152.99 / 176.39 = 0.87x.
Debt / Equity = Total Debt / Total Stockholders' Equity = 119.06 / 56.95 = 2.09x (209.20%).
Total debt / EBITDA = 119.06 / 134.66 = 0.88x.
Net debt / EBITDA (cash-only net debt = higher, conservative) = 89.12 / 134.66 = 0.66x. If short-term investments are included (alternate), net debt / EBITDA = 53.89 / 134.66 = 0.40x.
Return on assets (ROA) = Net Income / Total Assets = 93.74 / 364.98 = 25.70%.
Return on equity (ROE) = Net Income / Total Equity = 93.74 / 56.95 = 164.60% (FY2024 book basis).

Two observations on these ratios: first, cash-generation metrics (operating and free-cash conversion) are notably strong and exceed 100%, which is a positive quality signal. Second, conventional leverage metrics (debt/equity) appear large on a book-equity basis, producing an outsized ROE driven by relatively low equity, a consequence of sustained buybacks that shrink the equity base.

What the numbers reveal (independent diagnosis)#

Three clear themes emerge from the raw numbers without adopting any external narrative.

First, Apple’s core margins continued to improve in FY2024. The company increased gross margin to 46.21% and operating margin to 31.51%, reflecting either favorable product mix, pricing power, cost efficiencies, or a combination thereof. The operating engine is performing, and the trend across 2021–2024 is persistently upward for gross and operating margins.

Second, reported net income fell even as operating metrics improved, pointing to material non-operational impacts in FY2024 (tax, financing, one-time items). The dataset shows income before tax at $123.48B, which is nearly identical to operating income, meaning the reconciliation to net income—down to $93.74B—reflects significant tax or post-operating adjustments. That divergence is important: it implies the company’s economic earnings (operating) and reported bottom-line profit have diverged due to items outside core operations.

Third, capital allocation is aggressively skewed to returning capital via buybacks. With $94.95B in repurchases and $15.23B in dividends, Apple distributed $110.18B, which consumed nearly all free cash flow and required substantial financing activity. The cumulative effect of sustained repurchases is a materially reduced equity base, which mechanically inflates ROE and exacerbates balance-sheet leverage metrics on a book basis. The FY2024 ROE of 164.60% is primarily the arithmetic outcome of large buybacks reducing equity denominator rather than a pure signal of proportionally higher underlying profitability.

Fourth, liquidity is tighter on the current-ratio metric. A current ratio of 0.87x is below standard short-term coverage thresholds, but Apple’s high operating cash flow and market access mitigate immediate funding concerns. The practical risk is that continued high cash-return cadence without a commensurate increase in cash balances could reduce optionality for material strategic investments or M&A unless FCF grows.

Fifth, leverage measured against EBITDA looks moderate: total debt / EBITDA = 0.88x and net-debt/EBITDA ranges from 0.40x to 0.66x depending on net-debt definition. These leverage multiples are conservative by corporate standards and indicate ample debt-servicing capacity. The higher debt/equity ratio reflects capital returns (shrinking equity), not unsustainable borrowing relative to earnings.

Forward-looking considerations grounded in the numbers#

The data point to a company that is operationally robust, highly cash generative, and deliberately returning a large share of cash to shareholders. The trade-offs are visible: strong margins and cash flows versus lower reported earnings and compressed short-term liquidity. Management’s capital-allocation choices have reshaped the balance sheet: equity has been materially reduced through repurchases, which boosts ROE but increases book leverage.

Two near-term items to monitor in subsequent filings are the drivers behind the net-income decline (tax rate, special items, reserves) and any change in the pace of repurchases that would restore cushion to cash balances. From a metrics standpoint, a stabilization or reduction in repurchases would raise the current ratio and equity base, lowering headline ROE and debt/equity while preserving FCF for reinvestment or opportunistic M&A.

What this means for investors#

Apple’s FY2024 financials show a company that continues to earn high margins and convert profits into cash at above-100% rates. However, the combination of heavy buybacks and a net-income decline creates subtle risks: the equity base is smaller, making return ratios look stronger but reducing balance-sheet flexibility; a tight current ratio signals less near-term liquidity flexibility if distributions continue to outpace cash accumulation.

Investors should therefore parse operating performance separately from financing and tax impacts. The operational story is positive — gross and operating margins improved — while the bottom-line softness is attributable to non-operational items in the dataset. This is a numbers-first diagnosis anchored to Apple’s FY2024 statements (filed 2024-11-01).

Conclusion#

From the raw financial data, Apple delivered improved product economics in FY2024 with gross margin at 46.21% and operating margin at 31.51%, and it generated $108.81B in free cash flow. Yet net income fell to $93.74B (-3.36%), and balance-sheet changes driven by large buybacks compressed equity and tightened short-term liquidity (current ratio 0.87x). Calculated leverage against EBITDA remains moderate (total debt / EBITDA = 0.88x), but net-debt depends materially on whether short-term investments are treated as debt offsets.

In sum, the raw numbers show a highly cash-generative operating company that is choosing shareholder returns over balance-sheet expansion. That trade-off is explicit in the data: stronger operating performance, softer reported net income, heavy repurchases, and a leaner equity base. All figures cited are calculated from Apple’s FY2024 financial data (filed 2024-11-01) contained in the source dataset.

Sources: Apple FY2024 financial statements and accompanying balance-sheet and cash-flow lines as provided in the dataset (filing date 2024-11-01).