AF3313 Business Finance
Written Assignment
Wong Ching Man, Suki
20106046D
Part A
Apple Inc. is a multinational corporation established in California by Steve Jobs, a
design house and manufactures consumer electronic products, including hardware and
software. Apple operates over a hundred retails stores globally as well as online stores
and iTunes stores providing online and offline products and services to consumers. The
famous products are iPhone, Macintosh computers, the Mac OS X, iPhone OS operating
system, etc. The company became the most valuable company in the world that records
a market capitalization of $2 trillion company in 2020. Also, Apple Inc. has a brawny
balance sheet with its special financial arrangement– shares repurchase program.
In case of Apple, share repurchase program as the company is a tool for removing
excess cash from the balance sheet. Apple have an excess cash phenomenon but
generate a low level of return and the company is fully funding its operation and
research and development. According to Apple fiscal statement, Apple’s net cash
position was $162.7 billion that reach the high-water mark in December 2017. The
company announced the need of becoming cash neutral. The company remove excess
cash from the balance sheet through stock buyback. Actually, Apple start the share
repurchase activities from 2013, spent over $400 billion on repurchase company’s
ordinary share. Apple have decrease 35% share from 26.5 billion to 17.1 billion after
stock splits adjustment. (Jones, 2021) Apple started to take on debt and repurchase share
at the same time. The company able to borrow at a low interest rate that can leverage
