Financial Reporting Problem Part 2
If cash is King, then Apple is the King. Apple has piled up $81.6 billion in cash/investments. Most people think that Apple only has $26 billion in cash, but the way Apple reports it on the balance sheet can be confusing. From an investor’s standpoint, they love companies with cash, the ability to generate cash and that virtually have little or no debt. Apple is one of the company’s that does not have any debt. Whether short term or long term, Apple invests in relatively safe securities made up of mutual funds, U.S. Treasury and agency securities, non-U.S. government securities, CD’s, commercial paper, corporate securities and municipal securities. All of these items together, pure cash, short-term and long-term marketable securities, added up to $81.6 billion as of Apple's last quarter ending in September 2011 (Garvey, 2012). On September 25 2011, Apple entered its current fiscal year with the strongest product line in the company's history. Apple had an extraordinary fiscal year in 2011 revenue and earnings growth performance, nearly 25% of recognized revenue had flowed to the net income line. In the fiscal year 2012, Apple will surpass HP in revenue to become the nation's largest technology company and maintain its position as the most highly valued enterprise in the industry measured by market capitalization. In three of the four most recent fiscal years, Apple's revenue growth has exceeded 50%. The exception is the recession year of 2009 in which the rate of revenue growth dipped to 14.4% (Leitao, 2011). A balance sheet is the snap shot of a company’s financial condition. The balance sheet is the only financial statement that applies to a single point in time of a business calendar year. Apple has the correct order for listing their assets on their balance sheet. They have their cash and equivalents, short term investments, cash and short term investments, accounts and noted receivables, inventories and prepaid...
Please join StudyMode to read the full document