Apple Debt to Equity Ratio Insights (2024)

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Apple Debt to Equity Ratio Insights? ›

Apple (AAPL) Debt-to-Equity : 1.41 (As of Mar. 2024)

Debt to Equity History and Analysis

Debt Level: AAPL's net debt to equity ratio (47.2%) is considered high.

The debt-to-equity (D/E) ratio compares a company's total liabilities with its shareholder equity and can be used to assess the extent of its reliance on debt. D/E ratios vary by industry and are best used to compare direct competitors or to measure change in the company's reliance on debt over time.

A good debt to equity ratio is around 1 to 1.5. However, the ideal debt to equity ratio will vary depending on the industry because some industries use more debt financing than others. Capital-intensive industries like the financial and manufacturing industries often have higher ratios that can be greater than 2.

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.

Apple has a strong current ratio, which evaluates its current assets in relation to its current liabilities, of 1.07. Apple's debt-to-equity ratio has been increasing over the past five years as it takes on more debt to finance share buybacks, increase dividends, and grow.

Thus we consider debt relative to earnings both with and without depreciation and amortization expenses. Apple's net debt is only 0.38 times its EBITDA. And its EBIT easily covers its interest expense, being 470 times the size. So you could argue it is no more threatened by its debt than an elephant is by a mouse.

The maximum acceptable debt-to-equity ratio for more companies is between 1.5-2 or less. Large companies having a value higher than 2 of the debt-to-equity ratio is acceptable. 3. A debt-to-equity ratio indicates that a company may not be able to generate enough cash to satisfy its debt obligations.

Generally, a lower ratio is better, as it implies that the company is in less debt and is less risky for lenders and investors. A debt-to-equity ratio of 0.5 or below is considered good.

There isn't a universal "good" or average long-term debt to equity ratio, but it should be at least 3% of total assets for small businesses. Large companies should have more than 40% of long-term debt to equity.

What is Apple's debt ratio? ›

Its total debt in 2023 was $123.93 billion, down from $132.48 billion in 2022. As I said previously, its debt/equity ratio, according to the Barchart data, is 1.63. If I divide its debt ($123.93 billion) by its equity ($62.15 billion), I get 1.69.

Toyota Motor's operated at median debt / equity of 105.3% from fiscal years ending March 2019 to 2023. Looking back at the last 5 years, Toyota Motor's debt / equity peaked in March 2021 at 111.0%. Toyota Motor's debt / equity hit its 5-year low in March 2022 of 102.5%.

For example, if a property is purchased with $1,000,000 in debt and $500,000 in equity, the debt to equity ratio is 2:1. Generally, a good ratio is 70% debt and 30% equity or 2.33:1, but this may vary depending on the type of property involved.

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 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 has the Financial Strength Rank of 7.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is.

A new study says that Apple is one of the world's most indebted tech companies, with $109.28 billion of debt. That's according to BusinessFinancing.co.uk, who used data from Companies Market Cap to visualize the world's most indebted tech companies based on total debts for the most recent fiscal year.

Apple has a low net debt to EBITDA ratio of only 0.38. And its EBIT covers its interest expense a whopping 470 times over. So we're pretty relaxed about its super-conservative use of debt.

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.