Linked by David Adams on Fri 29th Jul 2011 03:15 UTC
In the News Apple is now more liquid than the United States government, the Financial Post reports. As the government struggles to resolve the debt ceiling debate, the operating balance in Washington is at US$73.768 billion and falling. Meanwhile, Apple has US$75.876 billion.
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Poor analysis
by malxau on Sat 30th Jul 2011 00:20 UTC
Member since:

Companies don't keep banknotes. They keep securities - ie., somebody promises to pay them back.

The article is trying to make a point based on the cost of "Cash and Cash Equivalents" on Apple's balance sheet at 25 June. Unfortunately over $20bn of that is directly in US Treasury and agency securities, which could get very illiquid very fast if the government starts defaulting.

Even those assets which aren't directly US government securities are likely to be composed of the same when traced back far enough. Those money market funds, mutual funds, commercial paper and certificates of deposit entries would be shaky.

The reason Apple is in a better position is that it doesn't need access to credit markets in event of a default. Companies that do need access to short term credit might find themselves falling over.

Reply Score: 3

RE: Poor analysis
by SilConGeeky on Mon 1st Aug 2011 20:07 in reply to "Poor analysis"
SilConGeeky Member since:

Seems people were brain washed by the article that suggests Apple has more cash on hand than the US Govt. Malxau, you were the only one that picked this out.. or came close. Kodus...

Actual "cash on hand" for operations is only
$2,769M ($2.7B) per apples SEC disclosure.
They have other investments they used cash to purchase since god know how long including US Bonds, CD, Mutual Funds, Stocks of other companies, etc etc.

I cant beleive why so many missed this.

Reply Parent Score: 1