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Decoding Apple's Balance Sheet

Categories: Apple IncBusiness

In March of 2009, Apple had its best March quarter revenue and earnings in Apple history (Apple). In order to see how this occurred, it is important to look over the financial statements of Apple. There is a lot of information available to investors who are interested in investing in a company. By looking specifically at the balance sheet of Apple I am going to determine if investing in Apple is a good idea or a bad idea. Some things I am going to consider are Apple’s assets, liabilities, and shareholder’s equity.

These areas should give me insight to how the best quarter in Apple history ame to be.

Looking at the current assets of Apple, cash and cash equivalents went down from 1 1. 8 billion dollars to 4. 4 billion dollars. This may look bad at first, but all of the other assets must be added to this in order to get an overall picture of the assets. Short – term marketable securities went up from 10.

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2 billion dollars to 20. 5 billion dollars. This helped Apple’s assets grow tremendously. Accounts receivable fell to 1. 9 billion dollars from 2. 4 billion dollars. With the rest of the current assets fgured in, inventories, deferred tax assets, and other current assets, the total current assets ose to 33. billion dollars from 32. 3 billion dollars. That was a rise of 1. 5 billion dollars (Apple). It is important to take into account the rest of the assets. For example, long-term marketable securities rose 1. 5 billion dollars, property, plant and equipment rose 0. 91 billion dollars, goodwill stayed the same, acquired intangible assets fell 0.

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017 billion dollars, and other assets rose 0. 56 billion dollars. Now that we know how each asset was affected during this quarter, we come to the final numbers, which are total assets rose 3. 6 billion dollars. Apple grew its assets substantially during this quarter.

I would think Apple would be a good company to invest in. Before I made any decisions I would investigate the balance sheet further in order to compare liabilities and shareholder’s equity with the previous quarter. This will give me a better understanding of the financial situation of the company (Apple). Current liabilities are in the first section of liabilities and shareholder’s equity. The following accounts are current liabilities and how they fared. Accounts payable went down from 5. 5 billion dollars to 3. 9 billion dollars. Accrued expenses went down 1 billion dollars.

Deferred revenue went up from 4. 8 billion dollars to 7 billion dollars. The total change in current liabilities was a decrease of 0. 4 billion dollars. The other two liabilities categories, deferred revenue (non-current) and other non-current liabilities, rose collectively 0. 7 billion dollars. This gives the total liabilities a rise of 0. 3 billion dollars. This amount compared to current assets is not as significant. So far Apple is still looking like a good investment because the assets of Apple rose 1. 5 billion dollars whereas their liabilities only rose 0. billion dollars.

It is now time to take a look at the final category of the balance sheet, the shareholder’s equity (Apple). The value of shareholders equity, common stock, rose from 7. 1 billion dollars to billion dollars. Accumulated other comprehensive income rose . 07 billion dollars. Total shareholder’s equity rose 3. 3 billion dollars. So adding together the rise of 0. 4 billion dollars in liabilities with the 3. 3 billion dollar rise of the shareholder’s equity, we get the same amount, 3. 7 billion dollars, as we got for the rise in total assets. The balance sheet balances (Apple).

With the rise in assets, which led to the rise in retained earnings, I think Apple would be a good company to invest in because they are growing their business. I would want to look at past financial statements, specifically the balance sheets, in order to compare assets, liabilities, and shareholder’s equity from past quarters, but from the information presented on the balance sheet from this quarter I would be willing to invest in Apple.

References:

Apple reports second quarter results. (2009, April 22). Retrieved August 29, 2010, from http://www.apple.com/pr/library/2009/04/22results.html

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Decoding Apple's Balance Sheet. (2018, Sep 27). Retrieved from https://studymoose.com/decoding-apples-balance-sheet-essay

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