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Technology Stocks : Apple Inc.

AAPL 273.40

-0.1%

Dec 26 9:30 AM EST

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To: Kurt Starnes who wrote (14172)	5/30/1998 5:29:00 PM
From: Eric Yang	Read Replies (6) of 213177

"Certainly to the untrained eye it looks like Apple collected $200 million in revenues out of their stash of sold-but-not-paid-for computers and have only $100 million to show for it." Alomex is implying that Apple's profit for the last two quarter was somehow artificially produced at the expense of lowering asset and Apple's net equity is dropping. Nothing could be further from the truth. This is so typical of the bears on this thread. They jump into conclusion without thoroughly examining the facts or doing the necessarily research. Alomex, I'm no accountant but I can still give you a basic listen in accounting. If you look at Apple's balance sheet there are three terms you need to understand: Liability,Assets and Shareholder Equity. Specifically, assets and equity are not the same thing. Shareholder Equity = Assets - Liability As a bear I know you get your jolly off the minute you saw that Apples asset has been dropping but at least take a minute to understand what's on the balance sheet. I did a bit of research and here is what I found for the last 4 quarters. (in $ millions) Quarters 97Q3 97Q4 98Q1 98Q2 Assets 4341 4233 4126 3963 Liabilities 3145 3033 2882 2575 Shareholder Equity 1196 1200 1244 1388 Assets on the balance sheet includes things like cash, property owned, account receivable, inventory...etc. Lowering asset isn't necessarily a bad thing. In this case it simply means that Apple has been able to lower its inventory, account receivable..etc. As a result Apple's cash increased from $1.2 billion to $1.8 billion over the last 4 quarters. I know you're wondering.."If one form of asset (inventory) has been converted to another (cash..etc) why did asset drop from 4341 mil to 3963 mil?" The answer is obvious when you look at the company's liability. It has dropped from 3145 mil to 2575 mil. Part of the assets were diverted to reduce Apple's liability. What really matters in all of this is Shareholder's Equity, which is how much Apple is worth on paper (Asset-Liabilities). As one can see shareholder equity has been rising steadily from 1196 to 1200 to 1244 to 1388 mil. Therefore, the book value of our shares has been rising. That's the bottom line. Eric PS. The bears on this thread are generally ill informed and don't do enough research to support their statements. When AAPL goes up they get a bit quiet and claim that they knew the company was turning around all along but as soon as AAPL dips the revert back to their old ways and bitch about things that they don't even understand. I find it annoying that over 80% of the time I spent on this thread goes towards correcting misinformation dished out by these bears. I ask myself "What the hell for?" Are they ever going to get it? No! Will they ever invest in AAPL. No! Their reason for being on this thread often seems to be for entertainment purposes only. Well...not at my expense.

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