Running head: Apple 1

Assignment

Apple

Name:

Institute:
Running head: Apple 1

Q: What is the firm’s cash position? Does the firm reflect positive cash balances for the last three

years?

Ans: The cash position of Apple firm can be described well from its balance sheet statement.

Balance sheet statement of apple is very important for late party investor. If cash position on the

balance sheet is well defined and have positive trend then it attract investors. Apple firm release

their balance sheet statement frequently and cash position is a major component of balance sheet.

Apple firm cash position in the last three year on hand at the end of trimester which is start of July

2022 was $48.231B, which is almost 22% less than the last year and it is regularly decline with this

rate from the last three years as shown in the below table (Shapiro, n.d.).

Year Cash position Rate of decline

2021 $62.639B 32% from 2020

2020 $90.943B 9.56% from 2019

As its income is decline over the year but its cash position is strong because Apple hold cash of

$34.94B and also a market security of $27.79B which can be convert into cash money easily. So,

investor never hesitate to invest. Another plus point of Apple company is it has also non-current

market security of $127.88B.Therefore, it has a good cash chest. Major share of Apple company

are exist in the foreign countries and the firm would have to give United State taxes on the cash to

transport back into the United States. Due to this reason company borrowed money instead of

transfer back its revenue to the country. The money received in the accounts is almost $26.32

billion. This shows the revenue owed by the Apple utilize in other business with for example,

satellite network firm, dealers, and government and private universities for research and

development. There is a risk in broaden their credit in business transactions, and Apple owed its

credit insurance to mitigate its risk. Liabilities also contribute in the decline rate of the companies,

Apple has also liabilities and worth of its liabilities is about to $125.48B. Out of this money a huge
Running head: Apple 1

amount of money of worth $54.76B are used in business with other companies. Apple company has

also a $109B long term debit which comprises fixed interest rate and to move interest rate company

has a floating rate debit. Another thing that build the strong cash position of Apples firm is certain

ratios that provides the ideas to firm so that they can manage their risk. For example, one important

certain ratio is known as current ratio, which determine the company strength that how easily firm

manage the payment to its creditors (Piestrzeniewicz et al., 2013). In order to determine the cash

money of Apple has available on the balance sheet, one must require to acquire the right of getting

the balance sheet through lat-us SEC filing. It is usually be yearly performance document or a four

months data filing. Design your own approach to access the section of balance sheet and below

"Assets" and then "Current Assets," "cash" will be on the top f the list item.

Q#2: What methods does the firm use to ensure and maintain positive cash flows?

Ans: As the cash flow of Apple firm is very strong and durable therefore Apple is producing the

abhorrent quantity of money. The firm currently documented about $6.2B of free cash flow for first

quarter of the year which they self declare a weakest quarter of the year. It means next quarter are

worth most. After the years. Apple firm got their revenue nearly $52B of independent cash flow. It

is a huge money and greater in the United State as well as of any firm in worldwide. It is simple to

glorify or highlight Apple's financial attainment to the iPhone and they declare it a day. Although,

for the case of sharp investigations, business model of the firm Apple may take to the decline

before time if the firm to cash produce dissimilar to rest of the companies in the great Silicon valley.

Actually, the firm Apple presently have the excellent business model as compared to other best

model in the world in the case of producing cash money. Many companies follows the Apple

business model of cash generating but still it is need to improve following things for example:

 monitor your abilities to generate profit

 prepare cash flow projection every year

 avoid draining cash

Running head: Apple 1

As Apple itself a financial pillar of the world economy and it has per year revenue is $2.6T dollar

which is more than the combine revenue of Amazon+Facebook+alphabet. Therefore, it has already

best business model.

Q: What methods of short-term financing does the firm use?

Ans: As we mentioned earlier companies like Apple, it is more suitable to do short-term financing

as compare to transfer back its overseas money to the United States where huge taxes are waiting to

pay. It means short-term financing is more suitable for Apple. On the record of last four year from

2017 to 2021 Apple borrowed the money nearly $6B to be run at median short-term financing. In

past five year Apple's short-term financing peaked was reached to $11.977 billion. Apple

documented its short-term financing of almost $11 Billions for the last year ending June 25, 2022

on its balance sheet statement as well as in its income statement (Vasilaki & Tsakalidis, 2019).

The following table concludes the Apple’s Short-term financing and shared size in the last half

decade:

years Revenue Short-term financing %revenue

September 30, 2017 $230B $12 B 5.4%
September 29, 2018 $270 B $12.2 B 4.9%
September 28, 2019 $261 B $6 B 2.4%
September 26, 2020 $275 B $5 B 2%
September 25, 2021 $366 B $5.9 B 1.7%

Apple short-term financing in last four quarters are listed below:

Quarters Revenue Short-term financing % Revenue

September 25, 2021 $85 billion $6.2 billion 7.5%
December 25, 2021 $125.2 billion $4.9 billion 3.9%
March 26, 2021 $98 billion $7 billion 7.5%
June 25, 2021 $83 billion $11 billion 13.5%

from above tables and market surveys shows that Apple firm used short-term financing in their

fiscal year which generate a huge revenue. They used some methods for this purpose such as bank
Running head: Apple 1

loan, trade credit, commercial paper approach and safe loan schemes etc. Apple firm used all of

these approaches and get the revenue as listed in above tables.

Final recommendations:

It is common practice in the market, all firms have some rewards associated with risks. Therefore,

Apple firm also have some rewards and hazards for investors. Apple firm put huge money as market

security but the cash position is declining from the last three years. There is a risk for investing

because of a negative sign of trading in Apple stocks. It is not a buy currently. It required to make a

new fundamental line in the current market condition before fixing a potential investing point. New

investor should keep on eyes on the stock market and take care of the following four points of

Apple company in case of potential investment (Feldman & Ewing, 2011).

 Apple company found a new market China. It suits the company because China is the largest

market and have potential to growth revenue. So investor should think about that. Due to

positive response Apple is going to approach new market and areas which suit new investors

to invest their money and get rewards

 Apple firm frequently announce rewards for their shareholders in the form of capital return

program which is also attractive for investors

 trailing ration of price and earning, Apple firm has large ratio almost 18x which make this

company an attractive valuation

 cash position of this Apple company is power and they share their balance sheet statement

with public which cause attraction for the investors.

Running head: Apple 1

References

Feldman, R., & Ewing, T. (2011, September 6). The Giants Among Us. Papers.ssrn.com.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1923449

Piestrzeniewicz, C., Sadowski, A., Dziuban, R., Odziemkowski, S., & Wrona, D. (2013). Results of

ten-year rootstock testing with apple cultivar Rubin on fertile soil. Horticultural Science, 40(No. 1),

31–36. https://doi.org/10.17221/223/2012-hortsci

Vasilaki, M., & Tsakalidis, G. J. (2019). Apple Inc. Equity Valuation. Repository.ihu.edu.gr.

https://repository.ihu.edu.gr/xmlui/handle/11544/29354

Shapiro, I. (n.d.). Apple cash may grow despite return program. Policycommons.net. Retrieved

August 23, 2022, from https://policycommons.net/artifacts/1413257/apple-cash-may-grow-despite-

return-program/2027519/