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Apple (NAS:AAPL) Altman Z-Score

: 8.32 (As of Today)
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Good Sign:

Altman Z-score of 8.28 is strong.

Apple has a Altman Z-Score of 8.32, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Apple's Altman Z-Score or its related term are showing as below:

AAPL' s Altman Z-Score Range Over the Past 10 Years
Min: 3.62   Med: 4.67   Max: 8.28
Current: 8.28

During the past 13 years, Apple's highest Altman Z-Score was 8.28. The lowest was 3.62. And the median was 4.67.


Apple Altman Z-Score Historical Data

The historical data trend for Apple's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Apple Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Altman Z-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.24 6.33 6.99 6.56 7.68

Apple Quarterly Data
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23
Altman Z-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.56 6.47 8.06 8.91 7.68

Competitive Comparison

For the Consumer Electronics subindustry, Apple's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Apple Altman Z-Score Distribution

For the Hardware industry and Technology sector, Apple's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Apple's Altman Z-Score falls into.



Apple Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Apple's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*-0.0049+1.4*-0.0006+3.3*0.3337+0.6*10.2338+1.0*1.0871
=8.32

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Sep. 2023:
Total Assets was $352,583 Mil.
Total Current Assets was $143,566 Mil.
Total Current Liabilities was $145,308 Mil.
Retained Earnings was $-214 Mil.
Pre-Tax Income was 26998 + 22733 + 28382 + 35623 = $113,736 Mil.
Interest Expense was -1002 + -998 + -930 + -1003 = $-3,933 Mil.
Revenue was 89498 + 81797 + 94836 + 117154 = $383,285 Mil.
Market Cap (Today) was $2,972,286 Mil.
Total Liabilities was $290,437 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(143566 - 145308)/352583
=-0.0049

X2=Retained Earnings/Total Assets
=-214/352583
=-0.0006

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(113736 - -3933)/352583
=0.3337

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=2972286.436/290437
=10.2338

X5=Revenue/Total Assets
=383285/352583
=1.0871

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Apple has a Altman Z-Score of 8.32 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Apple  (NAS:AAPL) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Apple Altman Z-Score Related Terms

Thank you for viewing the detailed overview of Apple's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Apple (NAS:AAPL) Business Description

Address
One Apple Park Way, Cupertino, CA, USA, 95014
Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and AirPods, among others. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Fitness, Apple Card, and Apple Pay, among others. Apple's products include internally developed software and semiconductors, and the firm is well known for its integration of hardware, software, semiconductors, and services. Apple's products are distributed online as well as through company-owned stores and third-party retailers.
Executives
Alex Gorsky director JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Monica C Lozano director
Deirdre O'brien officer: Senior Vice President ONE APPLE PARK WAY, CUPERTINO CA 95014
Robert A Iger director C/O WALT DISNEY CO, 500 S BUENA VISTA STREET, BURBANK CA 91521-1062
Andrea Jung director C/O APPLE INC, ONE APPLE PARK WAY, CUPERTINO CA 95014
Susan Wagner director C/O BLACKROCK, INC., 40 EAST 52ND STREET, NEW YORK NY 10022
James A Bell director C/O THE DOW CHEMICAL COMPANY, 2211 H.H. DOW WAY, MIDLAND MI 48674
Albert Jr Gore director C/O APPLE INC, 1 INFINITE LOOP, CUPERTINO CA 95014
Ronald D Sugar director 10877 WILSHIRE BLVD., SUITE 1650, LOS ANGELES CA 900274
Katherine L. Adams officer: SVP, General Counsel APPLE INC., 1 INFINITE LOOP, CUPERTINO CA 95014
Luca Maestri officer: Senior Vice President, CFO 1 INFINITE LOOP, CUPERTINO CA 95014
Angela J Ahrendts officer: Senior Vice President 1 INFINITE LOOP, CUPERTINO CA 95014
Jeffrey E Williams officer: COO ONE INFINITE LOOP, CUPERTINO CA 95014
Philip W Schiller officer: Senior Vice President C/O APPLE INC, ONE INFINITE LOOP, CUPERTINO CA 95014
Eduardo H Cue officer: Senior Vice President 1 INFINITE LOOP, CUPERTINO CA 95014