Apple’ Debt Ratio
Alongside Google, Amazon, and Facebook, Apple is another of the tech giants based in Cupertino, California. The company's specialty is in the provision of online services as well as the sale of computer and mobile applications, and design and development of computer and mobile phones among other electronics. In 2018 the company had a total liability of $258,578,000 an increase from the previous year’s total liability of $241,272,000. The total assets in the same year were $365,725,000 a remarkable decrease from the previous year’s $375,319,000 (Investor.apple.com, 2019). Thus, the total debt ratio computed by the division of the total assets from the total liabilities will be;
In 2018,
D.R. = 258,578,000 ÷ 365,725,000 = 0.707
In 2017,
D.R. = 241,272,000 ÷ 375,319,000 = 0.643
Google’s Debt Ratio
Google LLC is another tech giant among the big four global technology firms and is specialized in cloud computing, online advertising, development and design of applications and hardware, and search engine. In 2017, the company had a total asset base of $197,295,000, and the figure increased to $232,792,000 in the following year. The company's total liabilities in the same year were $44,793,000 while in 2018, the total liabilities increased to $55,164,000 (Alphabet Inc, 2019). Thus, the debt ratio was;
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In 2018,
D.R. = 232,792,000 ÷ 55,164,000 = 4.220
In 2017,
D.R. = 197,295,000 ÷ 44,793,000 = 4.405
Financial Leverage
Since the debt ratio is used as an indicator of a company’s obligations that are covered for by the assets, Google LLC seems to have a higher debt ratio in comparison to Apple, Inc. This means that a bigger part of the company’s assets are funded through debt, which places the company at a higher risk than Apple as it has more financial obligation than properties.
References
Alphabet Inc. (2019). (GOOGL) Balance Sheet. Retrieved August 18, 2019, from https://finance.yahoo.com/quote/GOOGL/balance-sheet?p=GOOGL&.tsrc=fin-srch
Investor.apple.com. (2019). Investor Relations. Retrieved August 18, 2019, from https://investor.apple.com/investor-relations/default.aspx
