Apple’s cash holdings well above debt


One of the first tasks Steve Jobs took on when he returned to Apple almost 25 years ago was working out debt that threatened to break the company’s neck. The Mac manufacturer should only step into the future with a black zero in the result and no interest payments – the gigantic heap of cash that later formed thanks to the iPhone is always available for possible investments.

The successor to Job, who died in 2011, Tim Cook, is very different here: He burdened Apple with gigantic debts, primarily to finance share buybacks and, in part, also dividends. But this “investment in Apple itself” was by no means a bad decision: on the contrary, Apple even saves taxes because the interest can be deducted.

At the same time, the cash machine from Cupertino succeeds in surpassing the current debt level of unbelievable-sounding 122 billion US dollars. The company announced this after announcing its quarterly figures this week. The deficit is now offset by 194 billion US dollars in cash and investment funds that can be quickly converted into cash.

This is all the more astonishing since Apple has been striving since 2018 to become “cash-neutral” in the coming years, i.e. to reduce its cash holdings to zero. Because cash held in the company is actually considered to be inefficiently invested from an economic point of view.

More from Mac & i

More from Mac & i

More from Mac & i

More from Mac & i

Nevertheless, the cash position is again 72 billion dollars above the pile of debt piled up by Cook and his CFO Luca Maestri. Before the major US corporate tax reform carried out by ex-President Donald J. Trump, Apple kept its foreign profits in Ireland, among other places.

Due to the once very high tax rates, it was worthwhile to issue bonds for distributions and share buybacks instead of bringing the funds back home. Nowadays, Apple is paying taxes on foreign profits again in the US, but is still making tax-saving debts and amassing more cash.


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