Question: What does Discover’s Provision Coverage Ratio for 2023 indicate about its approach to managing bad debts?

The PCR  for Discover for 2023 of approximately 401.21% indicates that Discover has set aside provisions that are more than four times the amount of its NPAs. A higher PCR suggests strong risk management as it shows that the company is well-prepared to cover potential losses from its bad loans. This level of coverage provides confidence that the company can absorb credit losses, reflecting financial stability and conservative provisioning practices.

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 65: The following tables provide changes in our allowance for credit losses (dollars in millions):

	For the Year Ended December 31, 2023

 	Credit Card Loans		Private StudentLoans		Personal Loans		Other Loans		Total Loans

Balance at December 31, 2022	$	5,883 			$	839 			$	595 			$	57 			$	7,374

Cumulative effect of ASU No. 2022-02 adoption(1)	(66)			- 			(2)			- 			(68)

Balance at January 1, 2023	5,817 			839 			593 			57 			7,306

Additions

Provision for credit losses(2)	5,476 			152 			363 			28 			6,019

Deductions

Charge-offs	(4,481)			(155)			(290)			(1)			(4,927)

Recoveries	807 			22 			56 			- 			885

Net charge-offs	(3,674)			(133)			(234)			(1)			(4,042)

Balance at December 31, 2023	$	7,619 			$	858 			$	722 			$	84 			$	9,283

	For the Year Ended December 31, 2022

 	Credit Card Loans		Private StudentLoans		Personal Loans		Other Loans		Total Loans

Balance at December 31, 2021	$	5,273 			$	843 			$	662 			$	44 			$	6,822

Additions

Provision for credit losses(2)	2,233 			99 			24 			13 			2,369

Deductions

Charge-offs	(2,417)			(126)			(159)			- 			(2,702)

Recoveries	794 			23 			68 			- 			885

Net charge-offs	(1,623)			(103)			(91)			- 			(1,817)

Balance at December 31, 2022	$	5,883 			$	839 			$	595 			$	57 			$	7,374

	For the Year Ended December 31, 2021

 	Credit Card Loans		Private StudentLoans		Personal Loans		Other Loans		Total Loans

Balance at December 31, 2020	$	6,491 			$	840 			$	857 			$	38 			$	8,226

Additions

Provision for credit losses(2)	229 			67 			(75)			6 			227

Deductions

Charge-offs	(2,255)			(89)			(190)			- 			(2,534)

Recoveries	808 			25 			70 			- 			903

Net charge-offs	(1,447)			(64)			(120)			- 			(1,631)

Balance at December 31, 2021	$	5,273 			$	843 			$	662 			$	44 			$	6,822

(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.

(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
-65-

, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 67:
Delinquencies

Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):

	December 31,

 	2023		2022

 	$		%		$		%

Loans 30 or more days delinquent

Credit card loans	$	3,955 			3.87 	%		$	2,278 			2.53 	%

Private student loans	$	271 			2.62 	%		$	212 			2.05 	%

Personal loans	$	143 			1.45 	%		$	63 			0.80 	%

Total loan receivables	$	4,427 			3.45 	%		$	2,578 			2.30 	%

Loans 90 or more days delinquent

Credit card loans	$	1,917 			1.87 	%		$	1,028 			1.14 	%

Private student loans	$	70 			0.67 	%		$	45 			0.43 	%

Personal loans	$	39 			0.40 	%		$	16 			0.21 	%

Total loan receivables	$	2,045 			1.59 	%		$	1,101 			0.98 	%

Loans not accruing interest	$	269 			0.21 	%		$	214 			0.19 	%

The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.

Modified and Restructured Loans

For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.

Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates

Our loan portfolio had the following maturity distribution(1) (dollars in millions):

At December 31, 2023	Due OneYear orLess		Due AfterOne YearThroughFive Years		Due AfterFive Years Through Fifteen Years		Due After Fifteen Years		Total

Credit card loans	$	32,250 			$	54,628 			$	15,032 			$	349 			$	102,259

Private student loans	364 			2,083 			6,296 			1,609 			10,352

Personal loans	2,653 			6,653 			546 			- 			9,852

Other loans	161 			724 			2,102 			2,959 			5,946

Total loan portfolio	$	35,428 			$	64,088 			$	23,976 			$	4,917 			$	128,409

(1)    Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
-67-

The following tables provide changes in our allowance for credit losses (dollars in millions):

	For the Year Ended December 31, 2023

 	Credit Card Loans		Private StudentLoans		Personal Loans		Other Loans		Total Loans

Balance at December 31, 2022	$	5,883 			$	839 			$	595 			$	57 			$	7,374

Cumulative effect of ASU No. 2022-02 adoption(1)	(66)			- 			(2)			- 			(68)

Balance at January 1, 2023	5,817 			839 			593 			57 			7,306

Additions

Provision for credit losses(2)	5,476 			152 			363 			28 			6,019

Deductions

Charge-offs	(4,481)			(155)			(290)			(1)			(4,927)

Recoveries	807 			22 			56 			- 			885

Net charge-offs	(3,674)			(133)			(234)			(1)			(4,042)

Balance at December 31, 2023	$	7,619 			$	858 			$	722 			$	84 			$	9,283

	For the Year Ended December 31, 2022

 	Credit Card Loans		Private StudentLoans		Personal Loans		Other Loans		Total Loans

Balance at December 31, 2021	$	5,273 			$	843 			$	662 			$	44 			$	6,822

Additions

Provision for credit losses(2)	2,233 			99 			24 			13 			2,369

Deductions

Charge-offs	(2,417)			(126)			(159)			- 			(2,702)

Recoveries	794 			23 			68 			- 			885

Net charge-offs	(1,623)			(103)			(91)			- 			(1,817)

Balance at December 31, 2022	$	5,883 			$	839 			$	595 			$	57 			$	7,374

	For the Year Ended December 31, 2021

 	Credit Card Loans		Private StudentLoans		Personal Loans		Other Loans		Total Loans

Balance at December 31, 2020	$	6,491 			$	840 			$	857 			$	38 			$	8,226

Additions

Provision for credit losses(2)	229 			67 			(75)			6 			227

Deductions

Charge-offs	(2,255)			(89)			(190)			- 			(2,534)

Recoveries	808 			25 			70 			- 			903

Net charge-offs	(1,447)			(64)			(120)			- 			(1,631)

Balance at December 31, 2021	$	5,273 			$	843 			$	662 			$	44 			$	6,822

(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.

(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
-65-

,
Delinquencies

Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):

	December 31,

 	2023		2022

 	$		%		$		%

Loans 30 or more days delinquent

Credit card loans	$	3,955 			3.87 	%		$	2,278 			2.53 	%

Private student loans	$	271 			2.62 	%		$	212 			2.05 	%

Personal loans	$	143 			1.45 	%		$	63 			0.80 	%

Total loan receivables	$	4,427 			3.45 	%		$	2,578 			2.30 	%

Loans 90 or more days delinquent

Credit card loans	$	1,917 			1.87 	%		$	1,028 			1.14 	%

Private student loans	$	70 			0.67 	%		$	45 			0.43 	%

Personal loans	$	39 			0.40 	%		$	16 			0.21 	%

Total loan receivables	$	2,045 			1.59 	%		$	1,101 			0.98 	%

Loans not accruing interest	$	269 			0.21 	%		$	214 			0.19 	%

The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.

Modified and Restructured Loans

For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.

Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates

Our loan portfolio had the following maturity distribution(1) (dollars in millions):

At December 31, 2023	Due OneYear orLess		Due AfterOne YearThroughFive Years		Due AfterFive Years Through Fifteen Years		Due After Fifteen Years		Total

Credit card loans	$	32,250 			$	54,628 			$	15,032 			$	349 			$	102,259

Private student loans	364 			2,083 			6,296 			1,609 			10,352

Personal loans	2,653 			6,653 			546 			- 			9,852

Other loans	161 			724 			2,102 			2,959 			5,946

Total loan portfolio	$	35,428 			$	64,088 			$	23,976 			$	4,917 			$	128,409

(1)    Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
-67-


Question: How does Discover Financial Services' Debt-to-Equity Ratio for 2023 reflect on its financial stability?

Increase in Leverage: The ratio increased from 8.2 in 2022 to 9.2 in 2023, indicating higher reliance on debt relative to equity.
Financial Risk: The higher ratio suggests greater financial risk due to increased debt obligations.
Impact on Stability: Greater leverage could affect financial stability, especially in adverse economic conditions or with rising interest rates.

Item 8.    Financial Statements and Supplementary Data

Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES

Consolidated Statements of Financial Condition

(dollars in millions, except for share amounts)

	December 31,

	2023		2022

Assets

Cash and cash equivalents	$	11,685 			$	8,856

Restricted cash	43 			41

Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)	13,655 			12,208

Loan receivables

Loan receivables	128,409 			112,120

Allowance for credit losses	(9,283)			(7,374)

Net loan receivables	119,126 			104,746

Premises and equipment, net	1,091 			1,003

Goodwill	255 			255

Other assets	5,667 			4,597

Total assets	$	151,522 			$	131,706

Liabilities and Stockholders' Equity

Liabilities

Deposits

Interest-bearing deposit accounts	$	107,493 			$	90,151

Non-interest-bearing deposit accounts	1,438 			1,485

Total deposits	108,931 			91,636

Short-term borrowings	750 			-

Long-term borrowings	20,581 			20,108

Accrued expenses and other liabilities	6,432 			5,618

Total liabilities	136,694 			117,362

Commitments, contingencies and guarantees (Notes 15, 18 and 19)

Stockholders' Equity

Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively	6 			6

Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively	1,056 			1,056

Additional paid-in capital	4,553 			4,468

Retained earnings	30,448 			28,207

Accumulated other comprehensive loss	(225)			(339)

Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively	(21,010)			(19,054)

Total stockholders' equity	14,828 			14,344

Total liabilities and stockholders' equity	$	151,522 			$	131,706

The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.

	December 31,

	2023		2022

Assets

Restricted cash	$	43 			$	41

Loan receivables	$	30,590 			$	25,937

Allowance for credit losses allocated to securitized loan receivables	$	(1,347)			$	(1,152)

Other assets	$	3 			$	3

Liabilities

Short- and long-term borrowings	$	11,743 			$	10,259

Accrued expenses and other liabilities	$	19 			$	14

See Notes to the Consolidated Financial Statements.

-85-


Question: What does the change in Discover’s ROE for 2023 compared to 2022 reflect about the company?

ROE Calculation:
2023: ROE (2023)=$2,940 million/$14,586 million = 19.6%
2022: ROE (2022)=$4,374 million/$14,344 million = 29.9%

The decline from 29.9% in 2022 to 19.6% in 2023 reflects a reduction in profitability relative to shareholders' equity. This drop could be attributed to decreased net income despite a relatively stable equity base.

Item 8.    Financial Statements and Supplementary Data

Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES

Consolidated Statements of Financial Condition

(dollars in millions, except for share amounts)

	December 31,

	2023		2022

Assets

Cash and cash equivalents	$	11,685 			$	8,856

Restricted cash	43 			41

Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)	13,655 			12,208

Loan receivables

Loan receivables	128,409 			112,120

Allowance for credit losses	(9,283)			(7,374)

Net loan receivables	119,126 			104,746

Premises and equipment, net	1,091 			1,003

Goodwill	255 			255

Other assets	5,667 			4,597

Total assets	$	151,522 			$	131,706

Liabilities and Stockholders' Equity

Liabilities

Deposits

Interest-bearing deposit accounts	$	107,493 			$	90,151

Non-interest-bearing deposit accounts	1,438 			1,485

Total deposits	108,931 			91,636

Short-term borrowings	750 			-

Long-term borrowings	20,581 			20,108

Accrued expenses and other liabilities	6,432 			5,618

Total liabilities	136,694 			117,362

Commitments, contingencies and guarantees (Notes 15, 18 and 19)

Stockholders' Equity

Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively	6 			6

Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively	1,056 			1,056

Additional paid-in capital	4,553 			4,468

Retained earnings	30,448 			28,207

Accumulated other comprehensive loss	(225)			(339)

Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively	(21,010)			(19,054)

Total stockholders' equity	14,828 			14,344

Total liabilities and stockholders' equity	$	151,522 			$	131,706

The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.

	December 31,

	2023		2022

Assets

Restricted cash	$	43 			$	41

Loan receivables	$	30,590 			$	25,937

Allowance for credit losses allocated to securitized loan receivables	$	(1,347)			$	(1,152)

Other assets	$	3 			$	3

Liabilities

Short- and long-term borrowings	$	11,743 			$	10,259

Accrued expenses and other liabilities	$	19 			$	14

See Notes to the Consolidated Financial Statements.

-85-

, 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-

DISCOVER FINANCIAL SERVICES

Consolidated Statements of Financial Condition

(dollars in millions, except for share amounts)

	December 31,

	2023		2022

Assets

Cash and cash equivalents	$	11,685 			$	8,856

Restricted cash	43 			41

Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)	13,655 			12,208

Loan receivables

Loan receivables	128,409 			112,120

Allowance for credit losses	(9,283)			(7,374)

Net loan receivables	119,126 			104,746

Premises and equipment, net	1,091 			1,003

Goodwill	255 			255

Other assets	5,667 			4,597

Total assets	$	151,522 			$	131,706

Liabilities and Stockholders' Equity

Liabilities

Deposits

Interest-bearing deposit accounts	$	107,493 			$	90,151

Non-interest-bearing deposit accounts	1,438 			1,485

Total deposits	108,931 			91,636

Short-term borrowings	750 			-

Long-term borrowings	20,581 			20,108

Accrued expenses and other liabilities	6,432 			5,618

Total liabilities	136,694 			117,362

Commitments, contingencies and guarantees (Notes 15, 18 and 19)

Stockholders' Equity

Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively	6 			6

Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively	1,056 			1,056

Additional paid-in capital	4,553 			4,468

Retained earnings	30,448 			28,207

Accumulated other comprehensive loss	(225)			(339)

Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively	(21,010)			(19,054)

Total stockholders' equity	14,828 			14,344

Total liabilities and stockholders' equity	$	151,522 			$	131,706

The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.

	December 31,

	2023		2022

Assets

Restricted cash	$	43 			$	41

Loan receivables	$	30,590 			$	25,937

Allowance for credit losses allocated to securitized loan receivables	$	(1,347)			$	(1,152)

Other assets	$	3 			$	3

Liabilities

Short- and long-term borrowings	$	11,743 			$	10,259

Accrued expenses and other liabilities	$	19 			$	14

See Notes to the Consolidated Financial Statements.

-85-

,
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-


Question: How did the earnings per share (EPS) attributable to Nextera Energy Inc., assuming dilution, change from 2021 to 2023?

The earnings per share (EPS) attributable to NEE, assuming dilution, changed as follows from 2021 to 2023:
- 2021: $1.81
- 2022: $2.10
- 2023: $3.60
The EPS increased from $1.81 in 2021 to $3.60 in 2023, reflecting a significant improvement in the company's profitability on a per-share basis.

Item 8.  Financial Statements and Supplementary Data

NEXTERA ENERGY INC 10-K form for the fiscal year ended 2023-12-31, page 60:
Table of Contents

NEXTERA ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(millions, except per share amounts)

 		Years Ended December 31,

	2023		2022		2021

OPERATING REVENUES		$	28,114 			$	20,956 			$	17,069

OPERATING EXPENSES

Fuel, purchased power and interchange		5,457 			6,389 			4,527

Other operations and maintenance		4,681 			4,428 			3,981

Depreciation and amortization		5,879 			4,503 			3,924

Taxes other than income taxes and other – net		2,265 			2,077 			1,801

Total operating expenses – net		18,282 			17,397 			14,233

GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET		405 			522 			77

OPERATING INCOME		10,237 			4,081 			2,913

OTHER INCOME (DEDUCTIONS)

Interest expense		(3,324)			(585)			(1,270)

Equity in earnings (losses) of equity method investees		(648)			203 			666

Allowance for equity funds used during construction		161 			112 			142

Gains on disposal of investments and other property – net		125 			80 			70

Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net		159 			(461)			267

Other net periodic benefit income		245 			202 			257

Other – net		333 			200 			130

Total other income (deductions) – net		(2,949)			(249)			262

INCOME BEFORE INCOME TAXES		7,288 			3,832 			3,175

INCOME TAXES		1,006 			586 			348

NET INCOME		6,282 			3,246 			2,827

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		1,028 			901 			746

NET INCOME ATTRIBUTABLE TO NEE		$	7,310 			$	4,147 			$	3,573

Earnings per share attributable to NEE:

Basic		$	3.61 			$	2.10 			$	1.82

Assuming dilution		$	3.60 			$	2.10 			$	1.81

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

60


Question: What are the liquidity metrics for Apple Inc. for the year 2023, and what do they indicate?

The liquidity metrics for Apple Inc. for the year 2023 are as follows:
- Current Assets: $143,566 million
- Current Liabilities: $145,308 million
- Cash and Cash Equivalents: $29,965 million
- Marketable Securities (Current): $31,590 million
The current ratio is calculated as Current Assets / Current Liabilities. For 2023, the current ratio is $143,566 million / $145,308 million = 0.99. A current ratio of less than 1 indicates that the company may not have enough current assets to cover its current liabilities. However, the company has significant cash and cash equivalents and marketable securities, which provide liquidity to meet short-term obligations. The quick ratio, which excludes inventories from current assets, is calculated as (Current Assets - Inventories) / Current Liabilities. For 2023, the quick ratio is ($143,566 million - $6,331 million) / $145,308 million = 0.95. This also indicates a slightly lower ability to cover current liabilities with liquid assets. Overall, while the current and quick ratios are slightly below 1, the company's substantial cash and marketable securities provide a strong liquidity position.

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

, 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.

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

,
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


Question: What does the Fixed Asset Turnover Ratio for Apple Inc. for the year 2023 indicate?

The Fixed Asset Turnover Ratio of Apple for 2023 is 8.93. This ratio indicates that Apple Inc. is generating $8.93 in sales for every dollar invested in fixed assets, reflecting highly efficient utilization of its fixed assets to generate revenue.

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

, 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.

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

,
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


Question: What does the change in dividend payout ratio between 2022 and 2023 indicate about Discover's dividend policy?

The increase in dividend payout ratio from 14.9% in FY 2022 to 23.9% in FY 2023 indicates that Discover has been returning a larger portion of its earnings to shareholders. The rise in the payout ratio suggests a shift towards a more generous dividend policy, which may reflect a strategic decision to enhance shareholder value or confidence in the company’s financial stability. This change highlights Discover’s growing commitment to rewarding investors through dividends.

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-


Question: How Discover’s Return on Assets for 2023 reflect the company’s efficiency in utilizing its assets to generate profit?

Discover’s ROA for 2023 was approximately 2.08%, which indicates how efficiently the company used its assets to generate profits. A higher ROA suggests that Discover was effective in converting its asset base into earnings.

Item 8.    Financial Statements and Supplementary Data

Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES

Consolidated Statements of Financial Condition

(dollars in millions, except for share amounts)

	December 31,

	2023		2022

Assets

Cash and cash equivalents	$	11,685 			$	8,856

Restricted cash	43 			41

Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)	13,655 			12,208

Loan receivables

Loan receivables	128,409 			112,120

Allowance for credit losses	(9,283)			(7,374)

Net loan receivables	119,126 			104,746

Premises and equipment, net	1,091 			1,003

Goodwill	255 			255

Other assets	5,667 			4,597

Total assets	$	151,522 			$	131,706

Liabilities and Stockholders' Equity

Liabilities

Deposits

Interest-bearing deposit accounts	$	107,493 			$	90,151

Non-interest-bearing deposit accounts	1,438 			1,485

Total deposits	108,931 			91,636

Short-term borrowings	750 			-

Long-term borrowings	20,581 			20,108

Accrued expenses and other liabilities	6,432 			5,618

Total liabilities	136,694 			117,362

Commitments, contingencies and guarantees (Notes 15, 18 and 19)

Stockholders' Equity

Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively	6 			6

Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively	1,056 			1,056

Additional paid-in capital	4,553 			4,468

Retained earnings	30,448 			28,207

Accumulated other comprehensive loss	(225)			(339)

Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively	(21,010)			(19,054)

Total stockholders' equity	14,828 			14,344

Total liabilities and stockholders' equity	$	151,522 			$	131,706

The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.

	December 31,

	2023		2022

Assets

Restricted cash	$	43 			$	41

Loan receivables	$	30,590 			$	25,937

Allowance for credit losses allocated to securitized loan receivables	$	(1,347)			$	(1,152)

Other assets	$	3 			$	3

Liabilities

Short- and long-term borrowings	$	11,743 			$	10,259

Accrued expenses and other liabilities	$	19 			$	14

See Notes to the Consolidated Financial Statements.

-85-

, 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-

DISCOVER FINANCIAL SERVICES

Consolidated Statements of Financial Condition

(dollars in millions, except for share amounts)

	December 31,

	2023		2022

Assets

Cash and cash equivalents	$	11,685 			$	8,856

Restricted cash	43 			41

Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)	13,655 			12,208

Loan receivables

Loan receivables	128,409 			112,120

Allowance for credit losses	(9,283)			(7,374)

Net loan receivables	119,126 			104,746

Premises and equipment, net	1,091 			1,003

Goodwill	255 			255

Other assets	5,667 			4,597

Total assets	$	151,522 			$	131,706

Liabilities and Stockholders' Equity

Liabilities

Deposits

Interest-bearing deposit accounts	$	107,493 			$	90,151

Non-interest-bearing deposit accounts	1,438 			1,485

Total deposits	108,931 			91,636

Short-term borrowings	750 			-

Long-term borrowings	20,581 			20,108

Accrued expenses and other liabilities	6,432 			5,618

Total liabilities	136,694 			117,362

Commitments, contingencies and guarantees (Notes 15, 18 and 19)

Stockholders' Equity

Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively	6 			6

Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively	1,056 			1,056

Additional paid-in capital	4,553 			4,468

Retained earnings	30,448 			28,207

Accumulated other comprehensive loss	(225)			(339)

Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively	(21,010)			(19,054)

Total stockholders' equity	14,828 			14,344

Total liabilities and stockholders' equity	$	151,522 			$	131,706

The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.

	December 31,

	2023		2022

Assets

Restricted cash	$	43 			$	41

Loan receivables	$	30,590 			$	25,937

Allowance for credit losses allocated to securitized loan receivables	$	(1,347)			$	(1,152)

Other assets	$	3 			$	3

Liabilities

Short- and long-term borrowings	$	11,743 			$	10,259

Accrued expenses and other liabilities	$	19 			$	14

See Notes to the Consolidated Financial Statements.

-85-

,
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-


Question: How does NVIDIA's improvement in its Quick Ratio from 2023 to 2024 reflect the company's enhanced liquidity management and financial health?

There are 2 ways to calculate Quick ratio:

Method 1: Calculating quick assets as Current assets - Inventories:

For 2024: Quick Ratio = ($44,345 - $5,282) / $10,631 = 3.67

For 2023: Quick Ratio = ($23,073 - $5,159) / $6,563 = 2.73

Method 2: Calculating quick assets as sum of Cash and cash equivalent, Short term investments and accounts receivables:

Quick Ratio Calculation
For January 29, 2023

Cash and Cash Equivalents: $3,389 million
Marketable Securities: $9,907 million
Accounts Receivable: $3,827 million
Current Liabilities: $6,563 million
Quick Ratio (2023)=3,389+9,907+3,827/6,563 =17,123/6,563  ≈2.61

For 2024
Cash and Cash Equivalents: $7,280 million
Marketable Securities: $18,704 million
Accounts Receivable: $9,999 million
Current Liabilities: $10,631 million
Quick Ratio (2024)=
7,280+18,704+9,999/10,631 =
35,983/10,631 ≈3.38

Analysis:
NVIDIA's Quick Ratio increased from 2023 to 2024 (2.73 to 3.67 by method 1, 2.61 to 3.38 by method 2). This improvement indicates that the company has enhanced its ability to meet its short-term obligations without relying on the sale of inventory. The higher ratio suggests a stronger liquidity position, reflecting positively on the company's financial health and liquidity management.

Item 15. Exhibit and Financial Statement Schedules

NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries

Consolidated Balance Sheets

(In millions, except par value)

 	Jan 28, 2024		Jan 29, 2023

Assets

Current assets:

Cash and cash equivalents	$	7,280 			$	3,389

Marketable securities	18,704 			9,907

Accounts receivable, net	9,999 			3,827

Inventories	5,282 			5,159

Prepaid expenses and other current assets	3,080 			791

Total current assets	44,345 			23,073

Property and equipment, net	3,914 			3,807

Operating lease assets	1,346 			1,038

Goodwill	4,430 			4,372

Intangible assets, net	1,112 			1,676

Deferred income tax assets	6,081 			3,396

Other assets	4,500 			3,820

Total assets	$	65,728 			$	41,182

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	2,699 			$	1,193

Accrued and other current liabilities	6,682 			4,120

Short-term debt	1,250 			1,250

Total current liabilities	10,631 			6,563

Long-term debt	8,459 			9,703

Long-term operating lease liabilities 	1,119 			902

Other long-term liabilities	2,541 			1,913

Total liabilities	22,750 			19,081

Commitments and contingencies - see Note 13

Shareholders' equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued	- 			-

Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023	2 			2

Additional paid-in capital	13,132 			11,971

 Accumulated other comprehensive income (loss)	27 			(43)

Retained earnings	29,817 			10,171

Total shareholders' equity	42,978 			22,101

Total liabilities and shareholders' equity	$	65,728 			$	41,182

See accompanying notes to the consolidated financial statements.
52


Question: How does the increase in NVIDIA's Cash Ratio from 2023 to 2024 highlight improvements in its ability to cover liabilities with liquid assets?

Cash Ratio is calculated using the formula: Cash Ratio = Cash & Cash Equivalents / Current Liabilities.

For 2024: Cash Ratio = $7,280 / $10,631 = 0.68

For 2023: Cash Ratio = $3,389 / $6,563 = 0.52

Analysis:
NVIDIA's Cash Ratio increased from 0.52 in 2023 to 0.68 in 2024. This improvement indicates that the company has enhanced its ability to cover its current liabilities with its most liquid assets, i.e., cash and cash equivalents. The higher ratio suggests a stronger liquidity position, reflecting positively on the company's financial health and liquidity management.

Item 15. Exhibit and Financial Statement Schedules

NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries

Consolidated Balance Sheets

(In millions, except par value)

 	Jan 28, 2024		Jan 29, 2023

Assets

Current assets:

Cash and cash equivalents	$	7,280 			$	3,389

Marketable securities	18,704 			9,907

Accounts receivable, net	9,999 			3,827

Inventories	5,282 			5,159

Prepaid expenses and other current assets	3,080 			791

Total current assets	44,345 			23,073

Property and equipment, net	3,914 			3,807

Operating lease assets	1,346 			1,038

Goodwill	4,430 			4,372

Intangible assets, net	1,112 			1,676

Deferred income tax assets	6,081 			3,396

Other assets	4,500 			3,820

Total assets	$	65,728 			$	41,182

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	2,699 			$	1,193

Accrued and other current liabilities	6,682 			4,120

Short-term debt	1,250 			1,250

Total current liabilities	10,631 			6,563

Long-term debt	8,459 			9,703

Long-term operating lease liabilities 	1,119 			902

Other long-term liabilities	2,541 			1,913

Total liabilities	22,750 			19,081

Commitments and contingencies - see Note 13

Shareholders' equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued	- 			-

Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023	2 			2

Additional paid-in capital	13,132 			11,971

 Accumulated other comprehensive income (loss)	27 			(43)

Retained earnings	29,817 			10,171

Total shareholders' equity	42,978 			22,101

Total liabilities and shareholders' equity	$	65,728 			$	41,182

See accompanying notes to the consolidated financial statements.
52


Question: What does the significant increase in NVIDIA's Working Capital from 2023 to 2024 reveal about its ability to manage short-term obligations and overall financial health?

NVIDIA's Working Capital increased from $16,510 million in 2023 to $33,714 million in 2024. This significant improvement indicates that the company has enhanced its ability to cover its short-term obligations with its current assets. The higher working capital suggests a stronger liquidity position, reflecting positively on the company's financial health and liquidity management.

Item 15. Exhibit and Financial Statement Schedules

NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries

Consolidated Balance Sheets

(In millions, except par value)

 	Jan 28, 2024		Jan 29, 2023

Assets

Current assets:

Cash and cash equivalents	$	7,280 			$	3,389

Marketable securities	18,704 			9,907

Accounts receivable, net	9,999 			3,827

Inventories	5,282 			5,159

Prepaid expenses and other current assets	3,080 			791

Total current assets	44,345 			23,073

Property and equipment, net	3,914 			3,807

Operating lease assets	1,346 			1,038

Goodwill	4,430 			4,372

Intangible assets, net	1,112 			1,676

Deferred income tax assets	6,081 			3,396

Other assets	4,500 			3,820

Total assets	$	65,728 			$	41,182

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	2,699 			$	1,193

Accrued and other current liabilities	6,682 			4,120

Short-term debt	1,250 			1,250

Total current liabilities	10,631 			6,563

Long-term debt	8,459 			9,703

Long-term operating lease liabilities 	1,119 			902

Other long-term liabilities	2,541 			1,913

Total liabilities	22,750 			19,081

Commitments and contingencies - see Note 13

Shareholders' equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued	- 			-

Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023	2 			2

Additional paid-in capital	13,132 			11,971

 Accumulated other comprehensive income (loss)	27 			(43)

Retained earnings	29,817 			10,171

Total shareholders' equity	42,978 			22,101

Total liabilities and shareholders' equity	$	65,728 			$	41,182

See accompanying notes to the consolidated financial statements.
52


Question: What does the increase in NVIDIA's Days Sales Outstanding (DSO) from 2023 to 2024 indicate about its accounts receivable management and its potential impact on cash flow?

NVIDIA's Days Sales Outstanding (DSO) increased from 51.8 days in 2023 to 59.9 days in 2024. This increase indicates that the company is taking longer to collect payments from its customers. The higher DSO suggests a potential issue with accounts receivable management, which could impact the company's cash flow and liquidity.

Item 15. Exhibit and Financial Statement Schedules

NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries

Consolidated Statements of Income

(In millions, except per share data)

	Year Ended

	Jan 28, 2024		Jan 29, 2023		Jan 30, 2022

Revenue	$	60,922 			$	26,974 			$	26,914

Cost of revenue	16,621 			11,618 			9,439

Gross profit	44,301 			15,356 			17,475

Operating expenses

Research and development	8,675 			7,339 			5,268

Sales, general and administrative	2,654 			2,440 			2,166

Acquisition termination cost	- 			1,353 			-

Total operating expenses	11,329 			11,132 			7,434

Operating income	32,972 			4,224 			10,041

Interest income	866 			267 			29

Interest expense	(257)			(262)			(236)

Other, net	237 			(48)			107

Other income (expense), net	846 			(43)			(100)

Income before income tax	33,818 			4,181 			9,941

Income tax expense (benefit)	4,058 			(187)			189

Net income	$	29,760 			$	4,368 			$	9,752

Net income per share:

Basic	$	12.05 			$	1.76 			$	3.91

Diluted	$	11.93 			$	1.74 			$	3.85

Weighted average shares used in per share computation:

Basic	2,469 			2,487 			2,496

Diluted	2,494 			2,507 			2,535

See accompanying notes to the consolidated financial statements.
50

, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries

Consolidated Balance Sheets

(In millions, except par value)

 	Jan 28, 2024		Jan 29, 2023

Assets

Current assets:

Cash and cash equivalents	$	7,280 			$	3,389

Marketable securities	18,704 			9,907

Accounts receivable, net	9,999 			3,827

Inventories	5,282 			5,159

Prepaid expenses and other current assets	3,080 			791

Total current assets	44,345 			23,073

Property and equipment, net	3,914 			3,807

Operating lease assets	1,346 			1,038

Goodwill	4,430 			4,372

Intangible assets, net	1,112 			1,676

Deferred income tax assets	6,081 			3,396

Other assets	4,500 			3,820

Total assets	$	65,728 			$	41,182

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	2,699 			$	1,193

Accrued and other current liabilities	6,682 			4,120

Short-term debt	1,250 			1,250

Total current liabilities	10,631 			6,563

Long-term debt	8,459 			9,703

Long-term operating lease liabilities 	1,119 			902

Other long-term liabilities	2,541 			1,913

Total liabilities	22,750 			19,081

Commitments and contingencies - see Note 13

Shareholders' equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued	- 			-

Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023	2 			2

Additional paid-in capital	13,132 			11,971

 Accumulated other comprehensive income (loss)	27 			(43)

Retained earnings	29,817 			10,171

Total shareholders' equity	42,978 			22,101

Total liabilities and shareholders' equity	$	65,728 			$	41,182

See accompanying notes to the consolidated financial statements.
52

NVIDIA Corporation and Subsidiaries

Consolidated Statements of Income

(In millions, except per share data)

	Year Ended

	Jan 28, 2024		Jan 29, 2023		Jan 30, 2022

Revenue	$	60,922 			$	26,974 			$	26,914

Cost of revenue	16,621 			11,618 			9,439

Gross profit	44,301 			15,356 			17,475

Operating expenses

Research and development	8,675 			7,339 			5,268

Sales, general and administrative	2,654 			2,440 			2,166

Acquisition termination cost	- 			1,353 			-

Total operating expenses	11,329 			11,132 			7,434

Operating income	32,972 			4,224 			10,041

Interest income	866 			267 			29

Interest expense	(257)			(262)			(236)

Other, net	237 			(48)			107

Other income (expense), net	846 			(43)			(100)

Income before income tax	33,818 			4,181 			9,941

Income tax expense (benefit)	4,058 			(187)			189

Net income	$	29,760 			$	4,368 			$	9,752

Net income per share:

Basic	$	12.05 			$	1.76 			$	3.91

Diluted	$	11.93 			$	1.74 			$	3.85

Weighted average shares used in per share computation:

Basic	2,469 			2,487 			2,496

Diluted	2,494 			2,507 			2,535

See accompanying notes to the consolidated financial statements.
50

,
NVIDIA Corporation and Subsidiaries

Consolidated Balance Sheets

(In millions, except par value)

 	Jan 28, 2024		Jan 29, 2023

Assets

Current assets:

Cash and cash equivalents	$	7,280 			$	3,389

Marketable securities	18,704 			9,907

Accounts receivable, net	9,999 			3,827

Inventories	5,282 			5,159

Prepaid expenses and other current assets	3,080 			791

Total current assets	44,345 			23,073

Property and equipment, net	3,914 			3,807

Operating lease assets	1,346 			1,038

Goodwill	4,430 			4,372

Intangible assets, net	1,112 			1,676

Deferred income tax assets	6,081 			3,396

Other assets	4,500 			3,820

Total assets	$	65,728 			$	41,182

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	2,699 			$	1,193

Accrued and other current liabilities	6,682 			4,120

Short-term debt	1,250 			1,250

Total current liabilities	10,631 			6,563

Long-term debt	8,459 			9,703

Long-term operating lease liabilities 	1,119 			902

Other long-term liabilities	2,541 			1,913

Total liabilities	22,750 			19,081

Commitments and contingencies - see Note 13

Shareholders' equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued	- 			-

Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023	2 			2

Additional paid-in capital	13,132 			11,971

 Accumulated other comprehensive income (loss)	27 			(43)

Retained earnings	29,817 			10,171

Total shareholders' equity	42,978 			22,101

Total liabilities and shareholders' equity	$	65,728 			$	41,182

See accompanying notes to the consolidated financial statements.
52


Question: What are the key findings from the solvency analysis of NVIDIA for 2024 and 2023?

The key findings from the solvency analysis of NVIDIA for 2024 and 2023 are as follows:

1. Total Liabilities: NVIDIA's total liabilities increased from $19,081 million in 2023 to $22,750 million in 2024, indicating a rise in the company's obligations.

2. Long-term Debt: Long-term debt decreased from $9,703 million in 2023 to $8,459 million in 2024, reflecting the company's efforts to reduce its long-term financial obligations.

3. Debt-to-Equity Ratio: The debt-to-equity ratio is calculated using the formula:
Debt-to-Equity Ratio = Total Liabilities / Total Shareholders' Equity
For 2024:
Debt-to-Equity Ratio (2024) = $22,750 million / $42,978 million = 0.53
For 2023:
Debt-to-Equity Ratio (2023) = $19,081 million / $22,101 million = 0.86
The debt-to-equity ratio decreased from 0.86 in 2023 to 0.53 in 2024, indicating an improvement in the company's solvency position and a lower reliance on debt financing.

4. Interest Coverage Ratio: The interest coverage ratio is calculated using the formula:
Interest Coverage Ratio = Operating Income / Interest Expense
For 2024:
Interest Coverage Ratio (2024) = $32,972 million / $257 million = 128.3
For 2023:
Interest Coverage Ratio (2023) = $4,224 million / $262 million = 16.1
The interest coverage ratio increased significantly from 16.1 in 2023 to 128.3 in 2024, indicating that NVIDIA is in a much stronger position to cover its interest expenses with its operating income.

5. Equity Growth: Total shareholders' equity increased from $22,101 million in 2023 to $42,978 million in 2024, reflecting a substantial growth in the company's equity base.

Overall, NVIDIA's solvency position improved significantly in 2024 compared to 2023. The reduction in long-term debt, lower debt-to-equity ratio, and higher interest coverage ratio indicate a stronger financial position and lower financial risk. The substantial growth in shareholders' equity further enhances the company's solvency and financial stability.

Item 15. Exhibit and Financial Statement Schedules

NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries

Consolidated Statements of Income

(In millions, except per share data)

	Year Ended

	Jan 28, 2024		Jan 29, 2023		Jan 30, 2022

Revenue	$	60,922 			$	26,974 			$	26,914

Cost of revenue	16,621 			11,618 			9,439

Gross profit	44,301 			15,356 			17,475

Operating expenses

Research and development	8,675 			7,339 			5,268

Sales, general and administrative	2,654 			2,440 			2,166

Acquisition termination cost	- 			1,353 			-

Total operating expenses	11,329 			11,132 			7,434

Operating income	32,972 			4,224 			10,041

Interest income	866 			267 			29

Interest expense	(257)			(262)			(236)

Other, net	237 			(48)			107

Other income (expense), net	846 			(43)			(100)

Income before income tax	33,818 			4,181 			9,941

Income tax expense (benefit)	4,058 			(187)			189

Net income	$	29,760 			$	4,368 			$	9,752

Net income per share:

Basic	$	12.05 			$	1.76 			$	3.91

Diluted	$	11.93 			$	1.74 			$	3.85

Weighted average shares used in per share computation:

Basic	2,469 			2,487 			2,496

Diluted	2,494 			2,507 			2,535

See accompanying notes to the consolidated financial statements.
50

, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries

Consolidated Balance Sheets

(In millions, except par value)

 	Jan 28, 2024		Jan 29, 2023

Assets

Current assets:

Cash and cash equivalents	$	7,280 			$	3,389

Marketable securities	18,704 			9,907

Accounts receivable, net	9,999 			3,827

Inventories	5,282 			5,159

Prepaid expenses and other current assets	3,080 			791

Total current assets	44,345 			23,073

Property and equipment, net	3,914 			3,807

Operating lease assets	1,346 			1,038

Goodwill	4,430 			4,372

Intangible assets, net	1,112 			1,676

Deferred income tax assets	6,081 			3,396

Other assets	4,500 			3,820

Total assets	$	65,728 			$	41,182

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	2,699 			$	1,193

Accrued and other current liabilities	6,682 			4,120

Short-term debt	1,250 			1,250

Total current liabilities	10,631 			6,563

Long-term debt	8,459 			9,703

Long-term operating lease liabilities 	1,119 			902

Other long-term liabilities	2,541 			1,913

Total liabilities	22,750 			19,081

Commitments and contingencies - see Note 13

Shareholders' equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued	- 			-

Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023	2 			2

Additional paid-in capital	13,132 			11,971

 Accumulated other comprehensive income (loss)	27 			(43)

Retained earnings	29,817 			10,171

Total shareholders' equity	42,978 			22,101

Total liabilities and shareholders' equity	$	65,728 			$	41,182

See accompanying notes to the consolidated financial statements.
52

NVIDIA Corporation and Subsidiaries

Consolidated Statements of Income

(In millions, except per share data)

	Year Ended

	Jan 28, 2024		Jan 29, 2023		Jan 30, 2022

Revenue	$	60,922 			$	26,974 			$	26,914

Cost of revenue	16,621 			11,618 			9,439

Gross profit	44,301 			15,356 			17,475

Operating expenses

Research and development	8,675 			7,339 			5,268

Sales, general and administrative	2,654 			2,440 			2,166

Acquisition termination cost	- 			1,353 			-

Total operating expenses	11,329 			11,132 			7,434

Operating income	32,972 			4,224 			10,041

Interest income	866 			267 			29

Interest expense	(257)			(262)			(236)

Other, net	237 			(48)			107

Other income (expense), net	846 			(43)			(100)

Income before income tax	33,818 			4,181 			9,941

Income tax expense (benefit)	4,058 			(187)			189

Net income	$	29,760 			$	4,368 			$	9,752

Net income per share:

Basic	$	12.05 			$	1.76 			$	3.91

Diluted	$	11.93 			$	1.74 			$	3.85

Weighted average shares used in per share computation:

Basic	2,469 			2,487 			2,496

Diluted	2,494 			2,507 			2,535

See accompanying notes to the consolidated financial statements.
50

,
NVIDIA Corporation and Subsidiaries

Consolidated Balance Sheets

(In millions, except par value)

 	Jan 28, 2024		Jan 29, 2023

Assets

Current assets:

Cash and cash equivalents	$	7,280 			$	3,389

Marketable securities	18,704 			9,907

Accounts receivable, net	9,999 			3,827

Inventories	5,282 			5,159

Prepaid expenses and other current assets	3,080 			791

Total current assets	44,345 			23,073

Property and equipment, net	3,914 			3,807

Operating lease assets	1,346 			1,038

Goodwill	4,430 			4,372

Intangible assets, net	1,112 			1,676

Deferred income tax assets	6,081 			3,396

Other assets	4,500 			3,820

Total assets	$	65,728 			$	41,182

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	2,699 			$	1,193

Accrued and other current liabilities	6,682 			4,120

Short-term debt	1,250 			1,250

Total current liabilities	10,631 			6,563

Long-term debt	8,459 			9,703

Long-term operating lease liabilities 	1,119 			902

Other long-term liabilities	2,541 			1,913

Total liabilities	22,750 			19,081

Commitments and contingencies - see Note 13

Shareholders' equity:

Preferred stock, $0.001 par value; 2 shares authorized; none issued	- 			-

Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023	2 			2

Additional paid-in capital	13,132 			11,971

 Accumulated other comprehensive income (loss)	27 			(43)

Retained earnings	29,817 			10,171

Total shareholders' equity	42,978 			22,101

Total liabilities and shareholders' equity	$	65,728 			$	41,182

See accompanying notes to the consolidated financial statements.
52


Question: What does the Operating Profit Margin reveal about Halliburton's financial health in 2023?

The Operating Profit Margin is a vital measure of a company's operational efficiency and profitability, reflecting the percentage of revenue remaining after covering all operating expenses (excluding interest and taxes). For Halliburton, the Operating Profit Margin rose from 13.34% in 2022 to 17.74% in 2023, indicating improved operational efficiency. This increase suggests that Halliburton has effectively managed its operating costs, such as the cost of services, cost of sales, and general and administrative expenses. A higher Operating Profit Margin not only signifies better cost control but also enhances profitability and financial health. This metric is crucial for investors and analysts, as it reveals the company's capacity to generate profit from core operations, essential for long-term sustainability and growth. A consistent or improving margin over time can highlight strong management practices and a competitive advantage in the industry.

Item 8. Financial Statements and Supplementary Data.

HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:

	HALLIBURTON COMPANY Consolidated Statements of Operations

		Year Ended December 31

Millions of dollars and shares except per share data	2023	2022	2021

Revenue:

Services	$	16,483 		$	14,749 		$	10,989

Product sales	6,535 		5,548 		4,306

Total revenue	23,018 		20,297 		15,295

Operating costs and expenses:

Cost of services	13,402 		12,381 		9,745

Cost of sales	5,256 		4,603 		3,534

General and administrative	226 		240 		204

SAP S4 upgrade expense	51 		- 		-

Impairments and other charges	- 		366 		12

Total operating costs and expenses	18,935 		17,590 		13,495

Operating income	4,083 		2,707 		1,800

Interest expense, net of interest income of $81, $29, and $9	(395)		(463)		(520)

Loss on Blue Chip Swap transactions	(110)		- 		-

Argentina currency impact	(131)		(30)		6

Loss on early extinguishment of debt	- 		(42)		-

Other, net	(84)		(62)		(34)

Income before income taxes	3,363 		2,110 		1,252

Income tax benefit (provision)	(701)		(515)		216

Net income	$	2,662 		$	1,595 		$	1,468

Net income attributable to noncontrolling interest 	(24)		(23)		(11)

Net income attributable to company	$	2,638 		$	1,572 		$	1,457

Basic net income per share	$	2.93 		$	1.74 		$	1.63

Diluted net income per share	$	2.92 		$	1.73 		$	1.63

Basic weighted average common shares outstanding	899 		904 		892

Diluted weighted average common shares outstanding	902 		908 		892

	See notes to consolidated financial statements.

HAL 2023 FORM 10-K | 43


Question: What is the significance of the Gross Profit Margin in assessing Halliburton's profitability in 2023?

The Gross Profit Margin is a key indicator of a company's financial health and operational efficiency. It measures the percentage of revenue that exceeds the cost of goods sold (COGS), reflecting the core profitability of the company's primary business activities. For Halliburton, the Gross Profit Margin provides insights into how effectively the company is managing its production costs relative to its revenue. A higher Gross Profit Margin indicates that the company retains more revenue after covering the direct costs associated with producing its goods and services, which can be used to cover other operating expenses, invest in growth, and generate profits. In 2023, Halliburton's Gross Profit Margin was 18.94%, up from 16.32% in 2022. This improvement suggests that Halliburton has become more efficient in managing its production costs, leading to higher profitability. The Gross Profit Margin is crucial for investors and analysts as it helps assess the company's ability to generate profit from its core operations before accounting for other expenses such as administrative costs, interest, and taxes. A consistent or improving Gross Profit Margin over time can indicate a strong competitive position and effective cost management strategies.

Item 8. Financial Statements and Supplementary Data.

HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:

	HALLIBURTON COMPANY Consolidated Statements of Operations

		Year Ended December 31

Millions of dollars and shares except per share data	2023	2022	2021

Revenue:

Services	$	16,483 		$	14,749 		$	10,989

Product sales	6,535 		5,548 		4,306

Total revenue	23,018 		20,297 		15,295

Operating costs and expenses:

Cost of services	13,402 		12,381 		9,745

Cost of sales	5,256 		4,603 		3,534

General and administrative	226 		240 		204

SAP S4 upgrade expense	51 		- 		-

Impairments and other charges	- 		366 		12

Total operating costs and expenses	18,935 		17,590 		13,495

Operating income	4,083 		2,707 		1,800

Interest expense, net of interest income of $81, $29, and $9	(395)		(463)		(520)

Loss on Blue Chip Swap transactions	(110)		- 		-

Argentina currency impact	(131)		(30)		6

Loss on early extinguishment of debt	- 		(42)		-

Other, net	(84)		(62)		(34)

Income before income taxes	3,363 		2,110 		1,252

Income tax benefit (provision)	(701)		(515)		216

Net income	$	2,662 		$	1,595 		$	1,468

Net income attributable to noncontrolling interest 	(24)		(23)		(11)

Net income attributable to company	$	2,638 		$	1,572 		$	1,457

Basic net income per share	$	2.93 		$	1.74 		$	1.63

Diluted net income per share	$	2.92 		$	1.73 		$	1.63

Basic weighted average common shares outstanding	899 		904 		892

Diluted weighted average common shares outstanding	902 		908 		892

	See notes to consolidated financial statements.

HAL 2023 FORM 10-K | 43


Question: How does the Interest Coverage Ratio for Halliburton in 2023 reflect its ability to meet interest obligations?

The Interest Coverage Ratio is calculated by dividing EBIT (Earnings Before Interest and Taxes) by Interest Expenses. For Halliburton in 2023, the EBIT is $4,083 million, and the Interest Expense is $395 million.

Interest Coverage Ratio = EBIT / Interest Expenses = $4,083 million / $395 million ≈ 10.34

An Interest Coverage Ratio of 10.34 indicates that Halliburton earns over ten times its interest obligations. This high ratio suggests that the company is in a strong position to meet its interest payments comfortably. It reflects a low risk of default on interest payments, indicating good financial health and stability. A higher interest coverage ratio is generally favorable as it shows that the company generates sufficient earnings to cover its interest expenses multiple times over, reducing the risk for creditors and investors.

Item 8. Financial Statements and Supplementary Data.

HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:

	HALLIBURTON COMPANY Consolidated Statements of Operations

		Year Ended December 31

Millions of dollars and shares except per share data	2023	2022	2021

Revenue:

Services	$	16,483 		$	14,749 		$	10,989

Product sales	6,535 		5,548 		4,306

Total revenue	23,018 		20,297 		15,295

Operating costs and expenses:

Cost of services	13,402 		12,381 		9,745

Cost of sales	5,256 		4,603 		3,534

General and administrative	226 		240 		204

SAP S4 upgrade expense	51 		- 		-

Impairments and other charges	- 		366 		12

Total operating costs and expenses	18,935 		17,590 		13,495

Operating income	4,083 		2,707 		1,800

Interest expense, net of interest income of $81, $29, and $9	(395)		(463)		(520)

Loss on Blue Chip Swap transactions	(110)		- 		-

Argentina currency impact	(131)		(30)		6

Loss on early extinguishment of debt	- 		(42)		-

Other, net	(84)		(62)		(34)

Income before income taxes	3,363 		2,110 		1,252

Income tax benefit (provision)	(701)		(515)		216

Net income	$	2,662 		$	1,595 		$	1,468

Net income attributable to noncontrolling interest 	(24)		(23)		(11)

Net income attributable to company	$	2,638 		$	1,572 		$	1,457

Basic net income per share	$	2.93 		$	1.74 		$	1.63

Diluted net income per share	$	2.92 		$	1.73 		$	1.63

Basic weighted average common shares outstanding	899 		904 		892

Diluted weighted average common shares outstanding	902 		908 		892

	See notes to consolidated financial statements.

HAL 2023 FORM 10-K | 43


Question: What does the Financial Leverage Ratio for Halliburton in 2023 indicate about its use of debt relative to equity?

The Financial Leverage Ratio is calculated by dividing Total Assets by Shareholders' Equity. For Halliburton in 2023, the Total Assets are $24,683 million, and the Shareholders' Equity is $9,433 million.

Financial Leverage Ratio = Total Assets / Shareholders' Equity = $24,683 million / $9,433 million ≈ 2.62

A Financial Leverage Ratio of 2.62 indicates that Halliburton uses $2.62 in assets for every $1 of equity. This ratio suggests that the company is leveraging its equity to acquire more assets, which can potentially enhance returns on equity. However, it also implies a higher level of debt, which can increase financial risk. A higher financial leverage ratio can be beneficial if the company generates sufficient returns on its assets to cover the cost of debt. Conversely, it can be risky if the returns on assets are insufficient, leading to potential financial distress.

Item 8. Financial Statements and Supplementary Data.

HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:

HALLIBURTON COMPANY Consolidated Balance Sheets

		December 31

Millions of dollars and shares except per share data	2023	2022

Assets

Current assets:

Cash and equivalents	$	2,264 		$	2,346

Receivables (net of allowances for credit losses of $742 and $731)	4,860 		4,627

Inventories	3,226 		2,923

Other current assets	1,193 		1,056

Total current assets	11,543 		10,952

Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)	4,900 		4,348

Goodwill	2,850 		2,829

Deferred income taxes	2,505 		2,636

Operating lease right-of-use assets	1,088 		913

Other assets	1,797 		1,577

Total assets	$	24,683 		$	23,255

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable	$	3,147 		$	3,121

Accrued employee compensation and benefits	689 		634

Income taxes payable	390 		294

Taxes other than income	370 		349

Current portion of operating lease liabilities 	262 		224

Other current liabilities	750 		723

Total current liabilities	5,608 		5,345

Long-term debt	7,636 		7,928

Operating lease liabilities	911 		791

Employee compensation and benefits	408 		408

Other liabilities	687 		806

Total liabilities	15,250 		15,278

Shareholders' equity:

Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)	2,663 		2,664

Paid-in capital in excess of par value	63 		50

Accumulated other comprehensive loss	(331)		(230)

Retained earnings	12,536 		10,572

Treasury stock, at cost (176 and 164 shares)	(5,540)		(5,108)

Company shareholders' equity	9,391 		7,948

Noncontrolling interest in consolidated subsidiaries	42 		29

Total shareholders' equity	9,433 		7,977

Total liabilities and shareholders' equity	$	24,683 		$	23,255

	See notes to consolidated financial statements.

HAL 2023 FORM 10-K | 45