23 June 2015

Above Avalon: “Apple’s Cash Dilemma”

Apple currently has $194 billion of cash, cash equivalents, and marketable securities. Not only is this a record in terms of cash held by a single company, but it represents approximately 10% of all cash held on corporate balance sheets. Given Apple's business model, it does not need all of this cash to run its business. With an enterprise value of $583 billion, Apple would theoretically be able to repurchase 30% of itself using the cash on its balance sheet. In reality, things are much more complicated as most of this cash is not able to be used for share buyback because it is held offshore and would be liable for additional tax if returned to the U.S.

Neil Cybart

If doesn’t want to deal with the broken US tax system, they could always relocate to China, their fastest growing source of cash…

Apple’s total cash, cash equivalents and marketable securities
Exhibit 2: Apple’s Total Cash, Cash Equivalents and Marketable Securities (Foreign vs. U.S.)

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