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
That's right. Usually only investors catch that. Interest on cash, or other investments add to the holdings or value of investments, but are not included in profit statements as well. That would also be considered as double reporting.
The equivalent 23% yearly return is still a massive figure. Where are they investing? If you are an Apple shareholder you'd have a right to know how their cash outside of usual profits went up over $400 million in three months. Aren't you all curious though as to how they generated such a huge figure?
Every once in awhile you hear this or that about where Apple is investing it's money, I've never seen a comprehensive list, though. But then, I've never paid a lot of attention to this individual snippets either, though the Akamai investment and I think it was Samsung they invested in for LCD production, and recently for flash memory though I think they downscaled the investment due to a Samsung product info leak or some such.
Every once in awhile you hear this or that about where Apple is investing it's money, I've never seen a comprehensive list, though. But then, I've never paid a lot of attention to this individual snippets either, though the Akamai investment and I think it was Samsung they invested in for LCD production, and recently for flash memory though I think they downscaled the investment due to a Samsung product info leak or some such.
Yeah, that is interesting. I'm no accountant (though I seem to be getting more interested in it) but let's say they take chunks of cash for Akamai and Samsung and Intel-Micron (http://news.com.com/Apple+lines+up+f...3-5964565.html)
As I thought before, a $200 million deal here and $800 million deal there, some might be paid in smaller chunks, but according to the Cnet article on Intel-Micron Apple is pre-paying $500 million.
Now, these longer term investments seems to not be figured into the usual revenue and profit reporting. Because if they say prepaid $500 million for the past quarter, and it was taken into account into the normal profit reporting, then it would mean overall they would have made a lost 'coz that $500 million would wipe out their $400+ million of profit.
So for one I have no idea where these longer term investments are "reported". Because I don't think they are included in operating costs when working out profit reported.
Now, as to your earlier statement about "Every once in awhile you hear this or that about where Apple is investing it's money" -- I don't think the longer term investments contribute to the 23% in capital gain. Because somehow let's say prepaying for flash or normal memory, it then gets figured into the cost of the computers produced. So then that goes into calculating gross margin (total amount received for macs sold minus cost of producing macs).
What's classified as "cash" I think are fairly liquid investments, I'm not sure if some of that is in stocks and longer-term mutual funds and term deposits and all that it's all classified as "cash"... I could be wrong on this.
Still a mystery to me. Maybe a real analyst (no Mr. Shawn Wu..!!), investor or accountant on these boards can give an insight into this whole "cash" side of Apple things.
The equivalent 23% yearly return is still a massive figure. Where are they investing? If you are an Apple shareholder you'd have a right to know how their cash outside of usual profits went up over $400 million in three months. Aren't you all curious though as to how they generated such a huge figure?
Well, it certainly wasn't from investing in Dell or MS stock.
Some could be currency, some could be derivatives.
Every once in awhile you hear this or that about where Apple is investing it's money, I've never seen a comprehensive list, though. But then, I've never paid a lot of attention to this individual snippets either, though the Akamai investment and I think it was Samsung they invested in for LCD production, and recently for flash memory though I think they downscaled the investment due to a Samsung product info leak or some such.
That's a different kind of investment. Also, they divested most of their shares of akamai long ago.
They gave money to several companies, such as LG, some years ago, to insure product delivery.
Comments
Originally posted by Mr. H
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
That's right. Usually only investors catch that. Interest on cash, or other investments add to the holdings or value of investments, but are not included in profit statements as well. That would also be considered as double reporting.
Every once in awhile you hear this or that about where Apple is investing it's money, I've never seen a comprehensive list, though. But then, I've never paid a lot of attention to this individual snippets either, though the Akamai investment and I think it was Samsung they invested in for LCD production, and recently for flash memory though I think they downscaled the investment due to a Samsung product info leak or some such.
Yeah, that is interesting. I'm no accountant (though I seem to be getting more interested in it) but let's say they take chunks of cash for Akamai and Samsung and Intel-Micron (http://news.com.com/Apple+lines+up+f...3-5964565.html)
As I thought before, a $200 million deal here and $800 million deal there, some might be paid in smaller chunks, but according to the Cnet article on Intel-Micron Apple is pre-paying $500 million.
Now, these longer term investments seems to not be figured into the usual revenue and profit reporting. Because if they say prepaid $500 million for the past quarter, and it was taken into account into the normal profit reporting, then it would mean overall they would have made a lost 'coz that $500 million would wipe out their $400+ million of profit.
So for one I have no idea where these longer term investments are "reported". Because I don't think they are included in operating costs when working out profit reported.
Now, as to your earlier statement about "Every once in awhile you hear this or that about where Apple is investing it's money" -- I don't think the longer term investments contribute to the 23% in capital gain. Because somehow let's say prepaying for flash or normal memory, it then gets figured into the cost of the computers produced. So then that goes into calculating gross margin (total amount received for macs sold minus cost of producing macs).
What's classified as "cash" I think are fairly liquid investments, I'm not sure if some of that is in stocks and longer-term mutual funds and term deposits and all that it's all classified as "cash"... I could be wrong on this.
Still a mystery to me. Maybe a real analyst (no Mr. Shawn Wu..!!), investor or accountant on these boards can give an insight into this whole "cash" side of Apple things.
Originally posted by sunilraman
The equivalent 23% yearly return is still a massive figure. Where are they investing? If you are an Apple shareholder you'd have a right to know how their cash outside of usual profits went up over $400 million in three months. Aren't you all curious though as to how they generated such a huge figure?
Well, it certainly wasn't from investing in Dell or MS stock.
Some could be currency, some could be derivatives.
Originally posted by ChevalierMalFet
Every once in awhile you hear this or that about where Apple is investing it's money, I've never seen a comprehensive list, though. But then, I've never paid a lot of attention to this individual snippets either, though the Akamai investment and I think it was Samsung they invested in for LCD production, and recently for flash memory though I think they downscaled the investment due to a Samsung product info leak or some such.
That's a different kind of investment. Also, they divested most of their shares of akamai long ago.
They gave money to several companies, such as LG, some years ago, to insure product delivery.
Well, it certainly wasn't from investing in Dell or MS stock.
Heh.