Trying to figure out whether to invest in Apple.Just got through reading The Motley Fool Investment Guide...got my spreadsheets set up to capture the suggested company evaluation data for small caps, rule makers, and rule breakers.I analysed Apple using the Rule Maker strategy and it shows that Apple has too much short term debt (urrent assets - cash / current liabilities - short term & current long term debt = .90 for latest fiscal year).Does this mean is off the table as a Rule Maker investment?Chris
You might want to double check those numbers. Apple is famous for its huge mountain of cash. People have been asking them to do something with it. Make a major acquisition. Pay dividends. Buy back stock.They finally have agreed to begin paying dividends. But they have little reason to borrow.
Paul,Thanks for the reply.My bad. The Foolish Flow Ratio is fine. It is cash vs total debt that is an issue. Apple has 27 billion in accounts payable!The cash to total debt ratio based on the June 29, 2012 balance is27654b/51150b = .54. The investment guide recommends that this ratio be above 1.5.What's an amateur investor to do? Ignore the ratio and by anyway? Chris
You might get a better answer on the Rule Maker private discussion board. My view is that these numbers are guides, not hard rules. You have to decide when to make an exception. But the guide does cause you to ask the question and think about it.Personally I am a long term Apple owner. I plan to continue holding the stock as long as they deliver the numbers. No one does it better.