Apple Inc APPLE Bond
| 0R2V Stock | USD 236.00 234.29 13,701% |
Apple Inc holds a debt-to-equity ratio of 2.107. The value of Net Debt is estimated to slide to about 89.7 B. The value of Long Term Debt is estimated to slide to about 107.7 B. Apple's financial risk is the risk to Apple stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Apple's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Apple's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Apple Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Apple's stakeholders.
For most companies, including Apple, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Apple Inc, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Apple's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 35.3415 | Book Value 3.852 | Operating Margin 0.2923 | Profit Margin 0.2468 | Return On Assets 0.209 |
Apple |
Given the importance of Apple's capital structure, the first step in the capital decision process is for the management of Apple to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Apple Inc to issue bonds at a reasonable cost.
| Popular Name | Apple APPLE INC |
| Specialization | Consumer Durables & Apparel |
| Equity ISIN Code | US0378331005 |
| Bond Issue ISIN Code | US037833EE62 |
| S&P Rating | Others |
| Maturity Date | 8th of February 2041 |
| Issuance Date | 8th of February 2021 |
| Coupon | 2.375 % |
Apple Inc Outstanding Bond Obligations
Understaning Apple Use of Financial Leverage
Leverage ratios show Apple's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of Apple's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Net Debt | 93.3 B | 89.7 B | |
| Long Term Debt | 109.6 B | 107.7 B | |
| Short and Long Term Debt | 14.2 B | 13.8 B |
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectCheck out the analysis of Apple Fundamentals Over Time. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.