Last I checked, Apple doesn't compare to the rest of the industry. It owns the MP3 player market and it makes the best hardware and software out there. Can't we just be happy they pulled off another great quarter?
And my ass smells of cherry blossoms. The rest of us would like to know how the company is performing relative to the industry. It obviously compares to the industry, or everyone would be using a Mac.
Over 9 Billion in Cash on hand!!! Where will they use this or who will they buy? Abobe's Market Cap as of today is 16,454.48. Buy them already.
Damn, that would be interesting. As much as I hate to see consolidation and lack of competition, that is already happening with Adobe owning most of the creative design market. Apple would control a huge aspect of their destiny, freak out microsoft and probably spawn renewed competition in the multimedia and design tools area.
I don't think he meant 9 billion exactly. But before jobs returned and Apple was losing a lot of money, I think they had around 4 billion in the bank.
Wanna take a guess what else Apple had in the days prior to Jobs return?!?!
BILLIONS in short term & long term liabilities (loans)... I still call it a huge difference when you try and compare: 1997ish $3ish B in the bank and gobs of debt is NOT the same as 9B in the bank and much more manageable debts.
Sunil, Apple doesn't sell laptops. Glad to see audiopollution didn't follow through with his applestoreisdown threat.
Yes, they are not laptops because you burn your lap if you put it there. They are "portables"
I tend to get away with way too much on these forums at times. Anyway the threat was mainly during the run up to macworld 2006 or something like that. People were all over the store is down! now it's up! oh now its down! now it's up! OMFG!
Yeah, the rule is no Store is Down! threads, only Store is Up With Real Updates! thread. AppleInsider would be crushed greatly and be in mourning, deep deep sadness should I be permanently banned.
Found out that Apple still has no debt. 8 Billion is cash and the rest is short term investments such as memory they purchased for future iPods and other things totaling 9.4 Billion dollars.
Another point to be made. I found out that Apple did not not cash in the bank when Steve came back. They also has hordes of debt.
Apple is actually debt-free and has been for a while now.
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
Let's say $8,000,000,000 @ 5% interest - That's $100,000,000 a quarter. A hundred million per quarter without having to do anything. Nice
Anyway I think it's in their official SEC GAAP reporting or something, how they manage their 9 billion, and what is defined as "cash".
8 Billion is cash and the rest is short term investments such as memory they purchased for future iPods and other things totaling 9.4 Billion dollars.
Yeah, having a several billion spare is nice to secure big deals such as memory contracts and stuff. Still curious as to what is defined as "cash" for that 8 billion and how it is invested. They probably get 5% interest on it easy.
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
Some of that cash is to be spent on a swanky new office complex up the road from 1 Infinite Loop. That's not going to be cheap.
Apple is actually debt-free and has been for a while now.
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
Let's say $8,000,000,000 @ 5% interest - That's $100,000,000 a quarter. A hundred million per quarter without having to do anything. Nice
Anyway I think it's in their official SEC GAAP reporting or something, how they manage their 9 billion, and what is defined as "cash".
In several years, I think around 98-02, they made profits each quarter, but 90% of their profits were from the intrest on the 4-5 billion they had in the bank.
I'm sure my specifics are off, but I think the general gist is correct.
Some of that cash is to be spent on a swanky new office complex up the road from 1 Infinite Loop. That's not going to be cheap.
While the initial amounts paid for contracts and so on to get the complex underway may dip into the 8 billion+ warchest, It will/ should be all covered quarter-by-quarter by profits. Since you take the revenue for the quarter, minus operating expenses and costs (including building contracts for new offices, etc.) ... if you end up with a profit then the 8 billion+ is "safe" since you take your revenues and put it back into the warchest.
And yeah as SpamSandwich says, you aren't gonna give the builders, hey, here's $1 billion transferred to your bank account. No go build!! The contracts will specify payments at specific junctures, like initial deposit, stage 1, stage 2, stage 3, etc. So in terms of cash flow, IMHO, Apple will be covered by their quarterly revenue to take into account expense of building offices.
I think that will be the same with other contracts like the $500million Apple is putting with Intel-Micron into some memory deal:
- I don't think it will be a lump sum payment, the contract will specify stages of cash injections so again should be covered on a quarterly basis by Apple revenue.
Although to play devil's advocate on what I just said, there are some cases where yes, having that warchest of 8billion+ is useful in that you can dip into it to prepay your "deposits" on these big contracts. Even if you don't have to pay the whole amount at once, I think the deposits for the contract are fairly chunky, so you take it out of the warchest as a long-term-investment. I don't know how they figure that into operating expenses though.
Since normally, for cash flow, if you are making big chunky payments, what a company does is get loans. So you pay your deposits on chunky contracts via the loan. Then you figure in your *interest payments* into the quarterly expenses. If Apple is not taking loans and just "borrowing" from it's own warchest then I wonder how the accountants figure these costs into the quarterly expenses.
In several years, I think around 98-02, they made profits each quarter, but 90% of their profits were from the intrest on the 4-5 billion they had in the bank...I'm sure my specifics are off, but I think the general gist is correct.
Then the 472million in profits this past quarter, of it maybe 100million is via the 8-9billion in the bank ... So actually 22% of the profit for the past quarter could be from interest. So excluding interest their profit could be "only" 372million. Hmm.......
In several years, I think around 98-02, they made profits each quarter, but 90% of their profits were from the intrest on the 4-5 billion they had in the bank...I'm sure my specifics are off, but I think the general gist is correct.
Then the 472million in profits this past quarter, of it maybe 100million is via the 8-9billion in the bank ... So actually 22% of the profit for the past quarter could be from interest. So excluding interest their profit could be "only" 372million. Hmm.......
Actually, Apple's cash has never contributed to its profit; it can't. Profit is calculated as "Revenues - Cost of Revenues", and their cash doesn't figure in that. For example, their profit this quarter was $472 million, but their cash increased by $950 million (see here under the heading "the financial side of Q3", near the bottom). Profits can contribute to the increase in cash, but increase in cash from interest doesn't count as profit.
Actually, Apple's cash has never contributed to its profit; it can't. Profit is calculated as "Revenues - Cost of Revenues", and their cash doesn't figure in that. For example, their profit this quarter was $472 million, but their cash increased by $940 million (see here under the heading "the financial side of Q3", near the bottom). Profits can contribute to the increase in cash, but increase in cash from interest doesn't count as profit.
Oh okay, Cool. Was wondering about that. So where did the cool $468 million come from?
Oh okay, Cool. Was wondering about that. So where did the cool $468 million come from?
Assuming that all their profits went into the cash pile, that means they made $478 million* in "investment gains" on their cash. They started the quarter with $9.2 - 0.95 = $8.25 billion. .478/8.25 = 5.79% increase in one quarter, which is the equivalent of 23% per year.
Why do you think Apple set up Braeburn Capital? It's because they're bloody good at generating impressive gains on their capital. Apple have been good at it for a long time now.
*the total cash increase was $950 million, I made a mistake in my previous post, now corrected.
Yeah I did some sums and when the return on investment came out to over 20% I was floored. That is f*king a massive return. Who's managing this cash? Who are these fund managers at Braeburn Capital or whatever that's delivering 20%? Fund managers at major institutions push what, anywhere from 5% to 15%? But over 20%? Either it was a great investment choice for the quarter, or there's something we're not seeing. Sounds too good to be true.
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
[/B]
Didn't they start the Braeburn company to manage that money?
It looks like the money is reported as "cash and short term investments".
Comments
Originally posted by aegisdesign
Or 'Doomed' as the less savvy pundits described having billions in the bank.
Are Apple more Doomed now ?
Well, geez, Aegis, they're always doomed.
Originally posted by zeus423
Last I checked, Apple doesn't compare to the rest of the industry. It owns the MP3 player market and it makes the best hardware and software out there. Can't we just be happy they pulled off another great quarter?
And my ass smells of cherry blossoms. The rest of us would like to know how the company is performing relative to the industry. It obviously compares to the industry, or everyone would be using a Mac.
Originally posted by muchicuchi
Over 9 Billion in Cash on hand!!! Where will they use this or who will they buy? Abobe's Market Cap as of today is 16,454.48. Buy them already.
Damn, that would be interesting. As much as I hate to see consolidation and lack of competition, that is already happening with Adobe owning most of the creative design market. Apple would control a huge aspect of their destiny, freak out microsoft and probably spawn renewed competition in the multimedia and design tools area.
Originally posted by sunilraman
Hi Gene, Apple's market share for laptops in the USA has gone up from 6% to 12%. First time I've seen any market share figure exceed 10% !!
Sunil, Apple doesn't sell laptops.
Glad to see audiopollution didn't follow through with his applestoreisdown threat.
--B
Originally posted by nmcphers
I don't think he meant 9 billion exactly. But before jobs returned and Apple was losing a lot of money, I think they had around 4 billion in the bank.
Wanna take a guess what else Apple had in the days prior to Jobs return?!?!
BILLIONS in short term & long term liabilities (loans)... I still call it a huge difference when you try and compare: 1997ish $3ish B in the bank and gobs of debt is NOT the same as 9B in the bank and much more manageable debts.
Dave
Sunil, Apple doesn't sell laptops.
Yes, they are not laptops because you burn your lap if you put it there. They are "portables"
I tend to get away with way too much on these forums at times.
Yeah, the rule is no Store is Down! threads, only Store is Up With Real Updates! thread.
Another point to be made. I found out that Apple did not not cash in the bank when Steve came back. They also has hordes of debt.
Apple is actually debt-free and has been for a while now.
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
Let's say $8,000,000,000 @ 5% interest - That's $100,000,000 a quarter. A hundred million per quarter without having to do anything. Nice
Anyway I think it's in their official SEC GAAP reporting or something, how they manage their 9 billion, and what is defined as "cash".
8 Billion is cash and the rest is short term investments such as memory they purchased for future iPods and other things totaling 9.4 Billion dollars.
Yeah, having a several billion spare is nice to secure big deals such as memory contracts and stuff. Still curious as to what is defined as "cash" for that 8 billion and how it is invested. They probably get 5% interest on it easy.
Originally posted by sunilraman
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
Some of that cash is to be spent on a swanky new office complex up the road from 1 Infinite Loop. That's not going to be cheap.
Quote:
Originally posted by Chucker
Apple is actually debt-free and has been for a while now.
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
Let's say $8,000,000,000 @ 5% interest - That's $100,000,000 a quarter. A hundred million per quarter without having to do anything. Nice
Anyway I think it's in their official SEC GAAP reporting or something, how they manage their 9 billion, and what is defined as "cash".
In several years, I think around 98-02, they made profits each quarter, but 90% of their profits were from the intrest on the 4-5 billion they had in the bank.
I'm sure my specifics are off, but I think the general gist is correct.
Originally posted by aegisdesign
Some of that cash is to be spent on a swanky new office complex up the road from 1 Infinite Loop. That's not going to be cheap.
Those costs are probably amortized across many years...
Some of that cash is to be spent on a swanky new office complex up the road from 1 Infinite Loop. That's not going to be cheap.
While the initial amounts paid for contracts and so on to get the complex underway may dip into the 8 billion+ warchest, It will/ should be all covered quarter-by-quarter by profits. Since you take the revenue for the quarter, minus operating expenses and costs (including building contracts for new offices, etc.) ... if you end up with a profit then the 8 billion+ is "safe" since you take your revenues and put it back into the warchest.
And yeah as SpamSandwich says, you aren't gonna give the builders, hey, here's $1 billion transferred to your bank account. No go build!!
I think that will be the same with other contracts like the $500million Apple is putting with Intel-Micron into some memory deal:
(http://marketwatch-cnet.com.com/Appl...3-5964565.html)
(http://www.embedded.com/showArticle....leID=174400617)
- I don't think it will be a lump sum payment, the contract will specify stages of cash injections so again should be covered on a quarterly basis by Apple revenue.
Although to play devil's advocate on what I just said, there are some cases where yes, having that warchest of 8billion+ is useful in that you can dip into it to prepay your "deposits" on these big contracts. Even if you don't have to pay the whole amount at once, I think the deposits for the contract are fairly chunky, so you take it out of the warchest as a long-term-investment. I don't know how they figure that into operating expenses though.
Since normally, for cash flow, if you are making big chunky payments, what a company does is get loans. So you pay your deposits on chunky contracts via the loan. Then you figure in your *interest payments* into the quarterly expenses. If Apple is not taking loans and just "borrowing" from it's own warchest then I wonder how the accountants figure these costs into the quarterly expenses.
In several years, I think around 98-02, they made profits each quarter, but 90% of their profits were from the intrest on the 4-5 billion they had in the bank...I'm sure my specifics are off, but I think the general gist is correct.
Then the 472million in profits this past quarter, of it maybe 100million is via the 8-9billion in the bank
Quote:
Originally posted by Flounder
In several years, I think around 98-02, they made profits each quarter, but 90% of their profits were from the intrest on the 4-5 billion they had in the bank...I'm sure my specifics are off, but I think the general gist is correct.
Then the 472million in profits this past quarter, of it maybe 100million is via the 8-9billion in the bank
Actually, Apple's cash has never contributed to its profit; it can't. Profit is calculated as "Revenues - Cost of Revenues", and their cash doesn't figure in that. For example, their profit this quarter was $472 million, but their cash increased by $950 million (see here under the heading "the financial side of Q3", near the bottom). Profits can contribute to the increase in cash, but increase in cash from interest doesn't count as profit.
edit: corrected cash increase figure
Actually, Apple's cash has never contributed to its profit; it can't. Profit is calculated as "Revenues - Cost of Revenues", and their cash doesn't figure in that. For example, their profit this quarter was $472 million, but their cash increased by $940 million (see here under the heading "the financial side of Q3", near the bottom). Profits can contribute to the increase in cash, but increase in cash from interest doesn't count as profit.
Oh okay, Cool. Was wondering about that. So where did the cool $468 million come from?
Originally posted by sunilraman
Oh okay, Cool. Was wondering about that. So where did the cool $468 million come from?
Assuming that all their profits went into the cash pile, that means they made $478 million* in "investment gains" on their cash. They started the quarter with $9.2 - 0.95 = $8.25 billion. .478/8.25 = 5.79% increase in one quarter, which is the equivalent of 23% per year.
Why do you think Apple set up Braeburn Capital? It's because they're bloody good at generating impressive gains on their capital. Apple have been good at it for a long time now.
*the total cash increase was $950 million, I made a mistake in my previous post, now corrected.
Originally posted by sunilraman
Since their revenue exceeds their cost (they are making profit), what do they do with the cash really? Don't they report how much interest they earn on it? Just wondering...
[/B]
Didn't they start the Braeburn company to manage that money?
It looks like the money is reported as "cash and short term investments".