Apple Inc.

The scores point in different directions, so readers may want to look at each one separately. The Beneish M-Score is -2.247, below -1.78, and its label places it outside the elevated manipulation-risk zone. That is a screening result for fiscal 2025, not proof either way. The Altman Z-Score of 12.53 is in the safe zone, which describes low modeled distress risk for a non-financial company like Apple. The Piotroski F-Score is 8 of 9 computable signals, a checklist of profitability, leverage and efficiency tests that Apple passes on most measures. The Fog Index of 20.77 is in the very hard to read band, so the MD&A takes more effort than typical filings. The balance sheet shows equity rising to $73.73 billion from $56.95 billion and long-term debt falling to $78.33 billion from $85.75 billion. Yet operating cash flow of $111.48 billion trailed net income of $112.01 billion, a ratio of 1.00, and it fell from $118.25 billion. The risk factors add concentration: sales outside the U.S. are a majority of total net sales, and manufacturing is located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, with single or limited sources for many critical components. The third-quarter Products gross margin of 40.1% compares with 34.5% a year earlier, but management says component cost pressure will intensify. Readers may want to compare future margin figures with the operating cash flow line.

Catalyst.Growth is coming mainly from iPhone and Services. In the first nine months of fiscal 2026, net sales rose 16% to $364.4 billion from $313.7 billion, with iPhone up 22% to $196.5 billion and Services up 14% to $91.7 billion. Greater China net sales rose 30% to $64.8 billion, which management attributes primarily to higher iPhone sales. Products gross margin percentage was 39.9% for the nine months, up from 36.9%. For fiscal 2025, revenue was $416.16 billion, up 6.4% from $391.04 billion, and net income was $112.01 billion, up from $93.74 billion. Management also points to the iOS 27 software launch and the introduction of Siri AI as part of the current product cycle.

Hidden risk.The MD&A states that supply constraints and rising costs for advanced semiconductors, NAND storage and DRAM memory are expected to intensify and may materially hurt revenue, costs and gross margin. It also says price increases used to offset those costs may reduce demand. Tariff exposure remains open, since further Section 232 semiconductor actions are still possible. The Supreme Court tariff refund is recognized as a reduction of cost of sales, which supports current margins but is not a recurring operating source of profit. Fiscal 2025 operating cash flow fell to $111.48 billion from $118.25 billion even as net income rose, and the MD&A has a Fog Index of 20.77, which is very hard to read.