Is Apple a debt free company?
As you can see below, Apple had US$111.1b of debt at September 2023, down from US$120.1b a year prior. However, it does have US$61.6b in cash offsetting this, leading to net debt of about US$49.5b.
Apple carries over $100 billion of long-term debt on its balance sheet. But the tech titan is also able to produce massive amounts of free cash flow. This easily covers interest payments and funds its stock buybacks and dividends.
Apple's debt ratio of 31% (comparing its debt to assets) has actually come down in recent years. And it demonstrates that there are ample assets backing the company. The business generated an incredible $114 billion in operating income in fiscal 2023. But it only made $3.9 billion in interest payments.
Total debt on the balance sheet as of December 2023 : $108.04 B. According to Apple's latest financial reports the company's total debt is $108.04 B. A company's total debt is the sum of all current and non-current debts.
Apple has a low net debt to EBITDA ratio of only 0.27. And its EBIT covers its interest expense a whopping 648 times over. So we're pretty relaxed about its super-conservative use of debt. The good news is that Apple has increased its EBIT by 4.1% over twelve months, which should ease any concerns about debt repayment.
Financial Strength Analysis
With an Altman Z-Score of 8.34, Apple Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.29, Apple Inc's strategic handling of debt solidifies its financial health.
Apple isn't just borrowing to benefit from inflation. They're strategically deploying this capital in areas that yield higher returns. One such area is stock buybacks. Over the past decade, Apple has reduced its outstanding shares from 26 billion to 16 billion, effectively boosting its stock price.
Total debt on the balance sheet as of December 2023 : $9.57 B. According to Tesla's latest financial reports the company's total debt is $9.57 B. A company's total debt is the sum of all current and non-current debts.
Apple net current debt for the twelve months ending December 31, 2023 was $-21.893B, a 1380.29% decline year-over-year. Apple annual net current debt for 2023 was $-3.978B, a 200.58% decline from 2022. Apple annual net current debt for 2022 was $3.955B, a 286.99% increase from 2021.
Bloomberg Daybreak Europe: Apple's Value Drop (Podcast)
Shares of the company slid 4.1% Thursday, erasing about $113 billion in market value and taking their year-to-date loss back to 11%. Once the world's most valuable firm at more than $3 trillion, Apple has underperformed both the Nasdaq 100 and the S&P 500 in 2024.
Why doesn't Apple pay its debt?
That's because Apple is reluctant to pay the corporate taxes, as much as 35%, required to move it back to the US. And so instead of using that money to pay off investors, Apple will borrow in the US in order to pay its $30 billion in planned dividends and stock-buy backs.
While it's difficult to find reasons not to like Apple's business, there's one important reason that investors should hesitate before buying the stock: valuation. As of this writing, shares trade at a price-to-earnings ratio of 29.8. This is significantly more expensive than Apple's trailing-10-year average of 20.8.
The risks lie in the company's future ability to keep those consumers while drawing in new ones in more markets. New technology makes consumers fickle. They want the newest and best, and brand loyalty will be sacrificed to own the next greatest gadget.
NASDAQ: AAPL
It's the only company in the world with a market cap of over $3 trillion and has an exceptionally loyal customer base. Interbrand recently crowned Apple as the best global brand for the 11th consecutive year. Its stock has been a big winner for investors through the years, too.
The ownership structure of Apple (AAPL) stock is a mix of institutional, retail and individual investors. Approximately 34.58% of the company's stock is owned by Institutional Investors, 0.11% is owned by Insiders and 65.31% is owned by Public Companies and Individual Investors.
While never actually filing for bankruptcy, Apple (AAPL) was on the verge of going bust in 1997. At the last minute, arch-rival Microsoft (MSFT) swooped in with a $150 million investment and saved the company.
Total debt on the balance sheet as of December 2023 : $135.61 B. According to Amazon's latest financial reports the company's total debt is $135.61 B. A company's total debt is the sum of all current and non-current debts.
Total debt on the balance sheet as of December 2023 : $28.50 B. According to Alphabet (Google)'s latest financial reports the company's total debt is $28.50 B. A company's total debt is the sum of all current and non-current debts.
The “world's richest man,” Elon Musk, purchased Twitter (since renamed X) for $44 billion in 2022. It's estimated he holds $13 billion of that amount as debt from bank and other loans, a sum the average working class person would obviously face severe repercussions for.
Musk paid $US44 billion (then $68 billion) for Twitter, loaded up the barely profitable business with $US13 billion of new debt and then promptly trashed both the service and the business' finances. It was apparent, even before he reluctantly completed a deal that he tried to walk away from, that Musk had overpaid.
What is the debt of Walmart?
Total debt on the balance sheet as of January 2024 : $61.32 B. According to Walmart's latest financial reports the company's total debt is $61.32 B. A company's total debt is the sum of all current and non-current debts.
These companies often become quite profitable while still pursuing programs that benefit their employees, the environment, and all of society. Apple, one of the largest software and computing companies in the world, practices conscious capitalism. Their many apps add value to the lives of their users.
The largest part of Apple's investment in recent years was attributed for purchases of marketable securities. In the company's 2023 financial year these investments amounted 29.5 billion U.S. dollars. Marketable securities are debts that are to be sold or redeemed within a year.
Apple Inc. had a return of -11.95% year-to-date (YTD) and 1.07% in the last 12 months. Over the past 10 years, Apple Inc. had an annualized return of 24.74%, outperforming the S&P 500 benchmark which had an annualized return of 10.52%.
It has been consistently ranked as one of the world's most valuable brands. Apple became the first publicly traded U.S. company to be valued at over $1 trillion in August 2018, then at $2 trillion in August 2020, and at $3 trillion in January 2022.
