Never mind the cash, it's about total equity

[smoledman]

Apple - $102 billion
Microsoft - $69 billion
Samsung Electronics - $0

 

[sviato]

so then you list their cash amounts?

 

[smoledman]

so then you list their cash amounts?

Equity = Cash - liabilities. In the end that's what really matters.

 

[sviato]

Equity = Cash - liabilities. In the end that's what really matters.

That's not quite true: Accounting equity = assets - liabilities. Having cash is good, but having too much cash doesn't send good signals either.

 

[miniConvert]

but having too much cash doesn't send good signals either.

Mhm, I think this is the established view, but it's not one I share. Having large amounts of readily available cash allows businesses to stay agile in quickly changing business environments, pre-pay for goods/services, make larger orders to secure supply, and make simplified acquisitions where necessary. So long as the business is healthy I don't think there's such a thing as too much cash.

At the same time, as Apple have found out, eventually shareholders will have a reasonable case to make for a dividend, and if the business doesn't need the cash then returning it to shareholders is a responsible thing to do.

I do agree that equity is important. That said, unless Samsung is heavily indebted I still see it as being reasonably strong. What I don't believe in is companies existing that have to service massive yet avoidable debts.