Regardless of the lawsuits Apple may be facing now (and in the near future), one thing’s for certain: the company is doing well. Actually, that’s a bit of an understatement: Apple is actually doing ridiculously well for a company in a relatively rough economy. Up until today, people could only guess at just how much money Apple has on hand. Now we know that it’s a staggering $97.6 billion, according to Moody’s Investors Service.
Apple Leads All U.S. Corporations In Cash Reserve
As anyone who’s worked in business will tell you, it’s not unusual for even the most profitable companies to carry a bit of debt. General Motors (GM), for instance, has been amassing solid profits for several quarters now since the U.S. recession hit and yet still owes money to the U.S. government for loans. Apple, on the other hand, is one of the few major U.S. corporations that can boast about not having any debt whatsoever.
That’s because right now, Apple has $97.6 billion on hand, largely because of the massive success of the iPhone 4S and iPad 2. Even more impressive is the fact that Apple’s $97.6 billion helped lead U.S. corporations to amass a record total of $1.24 trillion in cash during 2011. And it looks like tech companies tend to do well in having massive amounts of cash on deck with no debt, as Microsoft, Cisco Systems, and Google all had rather impressive amounts of cash reserve last year. In fact, these four companies accounted for $276 billion of that $1.24 trillion number.
Will Apple’s Cash Reserve Increase or Decrease in 2012?
With such a large amount of money on hand, it’s no surprise that some may expect Apple’s cash reserves to drop in 2011. After all, the economy is still rather shaky and lots of people may find it hard to justify buying a new Apple gadget.
However, we actually expect Apple’s cash to increase in 2012. Why? Because Apple is already experiencing huge demand for their new iPad, as the pre-orders for the device have already sold out. Not only that, but it’s likely that Apple will release the new iPhone 5 this year as well. And it’s possible Apple may also bring out a new iPod as well as a new MacBook. All of these new devices–assuming that they come with new features that Apple users want–will translate to one thing: bigger sales. And as we all know, the bigger the sales, the bigger the profit. Which means we could be looking at a 2013 Apple with well over $100 billion in cash reserves.
Analysts Agree That Apple’s Cash Reserve May Approach $150 Billion By Year’s End
As mentioned above, we expect Apple’s cash reserves to increase–and analysts at Moody’s agree. They say that “unless Apple changes it philosophy towards liquidity by instituting a one-time or ongoing common dividend, or if Apple starts to buy back stock, we estimate Apple’s cash balances could increase by more than $50 billion in 2012 and approximate $150 billion.”
What Do You Think?
Do you think Apple’s cash will increase or decrease in 2012? Leave us a comment below and make your opinion heard.