Why Apple has a lot of debt?
Apple isn't just borrowing to benefit from inflation. They're strategically deploying this capital in areas that yield higher returns. One such area is stock buybacks. Over the past decade, Apple has reduced its outstanding shares from 26 billion to 16 billion, effectively boosting its stock price.
Leverage. Due to the zero interest rate policy (ZIRP) environment, Apple began issuing its first bonds and notes in 2013, underwriting a total of $64.46 billion worth of debt. Apple made this move not because it needed the capital but because it was essentially receiving free money.
Apple has a low net debt to EBITDA ratio of only 0.38. And its EBIT covers its interest expense a whopping 470 times over. So we're pretty relaxed about its super-conservative use of debt.
The WACC of Apple Inc (AAPL) is 8.8%. The Cost of Equity of Apple Inc (AAPL) is 9%. The Cost of Debt of Apple Inc (AAPL) is 4.3%.
Debt Level: AAPL's net debt to equity ratio (47.2%) is considered high. Debt Coverage: AAPL's debt is well covered by operating cash flow (107.8%). Interest Coverage: AAPL's interest payments on its debt are well covered by EBIT (648.4x coverage).
That's because Apple is reluctant to pay the corporate taxes, as much as 35%, required to move it back to the US. And so instead of using that money to pay off investors, Apple will borrow in the US in order to pay its $30 billion in planned dividends and stock-buy backs.
The borrowing is profitable for the company's shareholders by at least one measure: the company's earnings yield, a measure of how much the company earns relative to its share price, is around 5.6%, while it can borrow for 30 years for less than 3%. Apple's not the only one seizing this golden opportunity.
CUPERTINO, CALIFORNIA Apple today announced financial results for its fiscal 2024 first quarter ended December 30, 2023. The Company posted quarterly revenue of $119.6 billion, up 2 percent year over year, and quarterly earnings per diluted share of $2.18, up 16 percent year over year.
Bloomberg Daybreak Europe: Apple's Value Drop (Podcast)
Shares of the company slid 4.1% Thursday, erasing about $113 billion in market value and taking their year-to-date loss back to 11%. Once the world's most valuable firm at more than $3 trillion, Apple has underperformed both the Nasdaq 100 and the S&P 500 in 2024.
Apple's debt ratio of 31% (comparing its debt to assets) has actually come down in recent years. And it demonstrates that there are ample assets backing the company. The business generated an incredible $114 billion in operating income in fiscal 2023.
Is Apple a debt free company?
Apple has a low net debt to EBITDA ratio of only 0.27. And its EBIT covers its interest expense a whopping 648 times over. So we're pretty relaxed about its super-conservative use of debt.
Long term debt can be defined as the sum of all long term debt fields. Apple long term debt for the quarter ending December 31, 2023 was $95.088B, a 4.56% decline year-over-year. Apple long term debt for 2023 was $95.281B, a 3.72% decline from 2022. Apple long term debt for 2022 was $98.959B, a 9.3% decline from 2021.
Apple net long-term debt for the twelve months ending December 31, 2023 was $-15.497B, a 3.02% decline year-over-year. Apple annual net long-term debt for 2023 was $-5.923B, a 45.24% increase from 2022. Apple annual net long-term debt for 2022 was $-4.078B, a 135.03% decline from 2021.
Cash on Hand as of December 2023 : $73.10 B
According to Apple's latest financial reports the company has $73.10 B in cash and cash equivalents. A company's cash on hand also refered as cash/cash equivalents (CCE) and Short-term investments, is the amount of accessible money a business has.
Total liabilities on the balance sheet as of December 2023 : $279.41 B. According to Apple's latest financial reports the company's total liabilities are $279.41 B. A company's total liabilities is the sum of all current and non-current debts and obligations.
As of February 2023, the Japanese car manufacturer Toyota was the company with the highest debt worldwide, amounting to 217 billion U.S. dollars. The Chinese property developer Evergrande followed in second with a debt of roughly 170 billion U.S. dollars, with Volkswagen following in third.
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Corporate debt is usually categorized into long-term and short-term types, and can be analyzed through various financial ratios to assess a company's financial health. Only a small handful of public companies today have zero or near-zero debt.
If you had invested $1,000 in Apple stock on Jan. 24, 1984, today, you would have $1,593,809. Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $55,090.
July 3 (Reuters) - Apple Inc (AAPL. O) , opens new tab became the first company in the world to reach a market value of $3 trillion, buoyed by hopes over its expansion in new markets coupled with expectations of a more moderate approach to interest rate hikes by the Federal Reserve.
What did Apple do with all its cash?
According to Apple's most recent 10-Q, nearly 90% of the company's cash equivalents are invested in interest-earning marketable securities. More than half of the total sits in corporate and asset-backed securities with maturities longer than one year that should yield more than treasuries.
Apple's iPhone sales accounted for over 58 percent of the company's overall revenue in the first quarter of fiscal year 2024, the largest share of all Apple products. Over the years, services as well as wearables, home and accessories have made a growing contribution to Apple's net sales.
TSLA Stock Forecast FAQ
Based on analyst ratings, Tesla's 12-month average price target is $182.58. Tesla has 24.16% upside potential, based on the analysts' average price target. Tesla has a conensus rating of Hold which is based on 7 buy ratings, 20 hold ratings and 7 sell ratings.
As the U.S. government struggles to reach an agreement on the debt-ceiling, the U.S. Treasury's balance has fallen behind Apple Inc. The balance fell to $74 billion behind Apple's $76 billion. Apple is the second largest company in the world by market value, at nearly $362 billion.
Apple (AAPL) Ownership Overview
The ownership structure of Apple (AAPL) stock is a mix of institutional, retail and individual investors. Approximately 33.65% of the company's stock is owned by Institutional Investors, 0.11% is owned by Insiders and 66.24% is owned by Public Companies and Individual Investors.
