Share-Based Compensation The Company generally measures share-based compensation based on the closing price of the Company’s common stock on
the date of grant, and recognizes expense on a straight-line basis for its estimate of equity awards that will ultimately vest.
Further information regarding share-based compensation can be found in Note 9, “Benefit Plans.”
Earnings Per Share The following table shows the computation of basic and diluted earnings per share for 2022, 2021 and 2020 (net income in
millions and shares in thousands):
2022 2021 2020 Numerator:
Net income
$
99,803 $
94,680 $
57,411
Denominator:
Weighted-average basic shares outstanding
16,215,963
16,701,272
17,352,119
Effect of dilutive securities
109,856
163,647
176,095
Weighted-average diluted shares
16,325,819
16,864,919
17,528,214
Basic earnings per share
$
6.15 $
5.67 $
3.31
Diluted earnings per share
$
6.11 $
5.61 $
3.28
The Company applies the treasury stock method to determine the dilutive effect of potentially dilutive securities.
Cash Equivalents and Marketable Securities All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents.
The Company’s investments in marketable debt securities have been classified and accounted for as available-for-sale. The
Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying
contractual maturity date.
The Company’s investments in marketable equity securities are classified based on the nature of the securities and their
availability for use in current operations.
The cost of securities sold is determined using the specific identification method.
Inventories Inventories are measured using the first-in, first-out method.
Apple Inc. | 2022 Form 10-K | 35
