In the grand scheme of things, how big is Apple?

Apple, Inc., producer of the iPhone, announces quarterly earnings on Tuesday.

This WSJ article claims that the cash and cash equivalents on APPL’s balance sheet will exceed $250 billion dollars. I put this article together to give you some idea what that looks like.

Relative to the World:

$250 billion is about the same size as the nominal GDP of Venezuela, Pakistan, Chile, Bangladesh, or Finland. It’s about the same size as the combined GDP’s of the smallest 61 countries in the world. I repeat, Apple could afford to buy the smallest 61 countries in the world using ONLY CASH!!

Switching to revenue as a metric:

Apple, at $233.72b, would be the 47th largest country in the world, between Vietnam and Peru. For relativity, Toyota Motor produces $236.6 b in revenue each year. The largest company in the world is Walmart at $482.13 b in revenue. Walmart would sit between Poland and Belgium if you allow sales to be a metric compared with GDP. Walmart is bigger than Belgium, UAE, Norway, Hong Kong, South Africa, Denmark; the list goes on and on.

Of the top 15 largest corporations in the world (FORBES), six are commodity producers, two are automotive producers, two tech (Apple, Samsung), and two conglomerates, one is utilities, one pharma, and one financial. Apple makes up 6% of the revenue of the top 15 companies in the world.

top15

In terms of Geography:

Five are USA based, four Chinese, and one from each of the following: UK, Germany, Japan, S. Korea, Switzerland, and Netherlands.

bygeography

This is the world represented by the top 15 companies sorted by sales revenues. Note: Eight (8) countries represented.
percentsgeography

This is the world represented by the top 8 economies sorted by GDP. Strangely similar eh?

top8gdp

Grexit: Should we be worried?

Without another bailout, Greece is set to default in June on yet another debt payment of $7.0b.  If Apple agreed to pay instead of the Greek government, it would represent just 2.8% of the cash on Apple’s balance sheet.

The entirety of Greece’s nominal debt in dollars is $375.6 billion. Apple’s total debt is around $100 billion. Apple’s total cash is around $250 billion. Apple could afford to buy two-thirds of Greece’s debt using ONLY CASH. It would only need about $125 billion in nehw debt to completely refi te whole country.

Remind me, why are we worried about Greece again?

Food for thought. Thanks for reading.

– Tommander-in-Chief

Sauce:

1.) http://statisticstimes.com/economy/countries-by-projected-gdp.php

2.) http://fortune.com/global500/list

3.) https://www.wsj.com/articles/apples-250-billion-cash-pile-enlivens-hopes-fuels-expectations-1493566748

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In the grand scheme of things, how big is Apple?

Sick of the RNC

 

 

Sick of the RNC yet? Enough of the political mumbo jumbo. Here’s some stuff you might already know, but haven’t seen the data.

The last row of the following table shows GDP per Capita growth of Sweden, UK, Germany, Greece, Spain, and Italy relative to the United States.

Screen Shot 2016-07-21 at 1.50.43 PM.png

Over the time period, German production per head grew 16.54% faster than in the United States . Since 2005, Germans “gained” on the United States in terms of wealth. Countries in duress, such as Spain, Italy, and Greece lost in terms of wealth over the time period relative to the US. Americans became wealthier than the UK, Greece, Spain, and Italy over the 10 year time period. Americans lost wealth relative to Sweden and Germany.

relativegdp.jpg

The above graph shows per capita growth of the economies of Sweden, the UK, Germany, Spain, Italy,  and Greece relative to the United States.

Savings and Unemployment rates:

Theoretically, we would expect savings rates to rise as unemployment falls, and vice versa. As economies go through booms, people will spend more but also save more. As economies recess, people will lose jobs and spend less, but savings is spent. Dueling effects:

  1. Wealth Effect – As unemployment rises, wealth falls. As wealth falls, savings rates increase. This effect results in unemployment and savings rates to move together.
  2. Income (cyclical) Effect – Consumption rises and falls with the business cycle. In other words, as unemployment rises, incomes fall. As income falls and more people are in between jobs, savings must be spent. This effect results in unemployment and savings rates to move inversely.

Correlation between Savings Rates and Unemployment:

Screen Shot 2016-07-21 at 3.27.28 PM.png

From the correlations between Savings Rates and unemployment, we can infer about the was a country behaves in times of boom and bust. (break it down into time periods). The marginal propensity to save (mps) is an economics term used to describe what percentage of each paycheck we save. From the above data, we can safely assume that Americans will save more when the economy is in recession relative to others, whereas the savings rate in Sweden is relatively impervious to fluctuations in unemployment. Italy actually has a positive correlation coefficient between Unemployment and Savings rates! This means as unemployment goes up savings rates go up! The dominating effect here is the wealth effect. People will spend much less when they don’t have a job. The dominating effect in the US economy is the cyclical effect.

Perhaps this is a result of work force participant optimism. Perhaps the fear of getting another job in the near future after being let go is small in the United States. This could also be the result of cultural differences between Italy and the US, such as employee turnover rate. However, turnover rate in Italy is higher.

Italy’s job turnover rate has been declining over the last ten years (http://tinyurl.com/zefsqc2). This metric is computed by dividing the number of employees who left jobs by the total number of employees still working. In the United States, the figure for May of 2016 was 3.4%, or 11.8% annually. In Italy, the figure was 23.9% in 2004 and 17.3% in 2014. This higher turnover rate means Italians are leaving jobs at a higher frequency, both by choice and otherwise. The rate in the United States has largely remained unchanged since 2002, hovering around 12% annually.

Perhaps it is cultural differences. Maybe Italians are more prone to save when they don’t have a job because they have a firmer family structure than the average American. They are taken care of at home, and aren’t forced to spend on groceries and rent. Again, this is all guesswork.

Side note: Here is the annualized employee turnover rate in the US broken down over each month. More people leave jobs in January and August than any other months in the year.

jobturnover

Just something to think about.

– tommander-in-chief

 

Sick of the RNC