Never mind the cash, it's about total equity

Discussion in 'Apple, Inc and Tech Industry' started by smoledman, May 1, 2012.

  1. smoledman macrumors 68000

    Joined:
    Oct 17, 2011
    #1
    Apple - $102 billion
    Microsoft - $69 billion
    Samsung Electronics - $0
     
  2. sviato macrumors 68020

    sviato

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    HR 9038 A
  3. smoledman thread starter macrumors 68000

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    Oct 17, 2011
    #3
    Equity = Cash - liabilities. In the end that's what really matters.
     
  4. sviato macrumors 68020

    sviato

    Joined:
    Oct 27, 2010
    Location:
    HR 9038 A
    #4
    That's not quite true: Accounting equity = assets - liabilities. Having cash is good, but having too much cash doesn't send good signals either.
     
  5. miniConvert macrumors 68040

    miniConvert

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    #5
    Mhm, I think this is the established view, but it's not one I share. Having large amounts of readily available cash allows businesses to stay agile in quickly changing business environments, pre-pay for goods/services, make larger orders to secure supply, and make simplified acquisitions where necessary. So long as the business is healthy I don't think there's such a thing as too much cash.

    At the same time, as Apple have found out, eventually shareholders will have a reasonable case to make for a dividend, and if the business doesn't need the cash then returning it to shareholders is a responsible thing to do.

    I do agree that equity is important. That said, unless Samsung is heavily indebted I still see it as being reasonably strong. What I don't believe in is companies existing that have to service massive yet avoidable debts.
     

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