Essay About Much Cash And Financial Policy

Financial Policy at Apple Suggested Assignment Solutions
Financial Policy at Apple Suggested Assignment SolutionsExample 1Financial Policy at Apple Individual Case Report Assignment #3Due by October 22, 2015 9:00amWhy does Apple hold so much cash? How much “excess” cash do they have? How much cash would they have after five years if they distributed all of their “excess” cash to shareholders in 2012? Use Exhibit 10 to forecast Apples financial status over the next five years. (5 Marks)High Growth rate in sales, successful new product launches. CAGR from 2008-2012 was 33.1%High gross margin 43.87% in 2012Operating margin: has grown steadily in the past ten years. Low of -6.21% in 2001, high of 35.30% in 2012.Net margin: has grown steadily in the past ten years. Low of -0.47% in 2001, high of 26.67% in 2012.Cash flow margin: has also been large and growing, and has been greater than their net margin in each year presented. Low of 1.55% in 2002, high of 34.67% in 2011. It has been more than five percentage points larger than the net margin. Cash flow was only $89 million in 2002 and increased over 571 times to $50.856 billion in 2012, in excess of their net income of $41.733 billion in 2012Negative Cash conversion cycleSome discussion as to what is considered to be “excess cash”. Any reasonable assumption acceptable. e.g.         FY 2012         Cash and Marketable Securities$121,251Cash Held Overseas (69% of all cash)$83,663Repatriation Tax$29,282Cash Left after Repatriation$91,969Sales, General, & Admin$10,040Required Cash (2*SG&A)$20,080Excess Cash$71,889Accounts receivable as % of sales:11.9%11.9%Inventory as % cost of goods:0.9%0.9%Cost of goods as % of sales:56.1%56.1%R&D as % of sales:2.2%2.2%Sell, genl, admin as% of sales:6.4%6.4%Effective Tax Rate22.9%22.9%Net PPEN as % of COG17.6%17.6%