From the course: Corporate Financial Statement Analysis

Unlock this course with a free trial

Join today to access over 25,200 courses taught by industry experts.

Compare debt ratios across companies

Compare debt ratios across companies

From the course: Corporate Financial Statement Analysis

Start my 1-month free trial Buy for my team

Compare debt ratios across companies

“

Now, let's take a look at some different debt ratios and how they can be applied. We're going to illustrate using the tech sector, four companies with which we are all familiar, Microsoft, Google, Apple, and Amazon, the big four. Here is some information from each company's balance sheet. There is a lot of information here, but that's because we're going to make a lot of points. First of all, notice that for Google, Microsoft, and Apple, from 13 to almost 35% of their assets consist of investment securities. For Apple, for example, they have over $126 billion in investment securities. That is money that they have invested in other companies. The reason I point this out is that you can also see that Apple has $86 billion in long-term debt. They have gone to a bank and borrowed almost 86 billion dollars. Why do that when they have all those investment securities? Why not just cash some of those securities in instead of borrowing money? Well that's a discussion for another day but let me…

Contents