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AAPL: the quality checklist, line by line
Apple Inc. (AAPL)
Quarterly check-in on a quality name. Here is what the balance-sheet checklist looked at.
THE SETUP
AAPL trades at $342.94.
Performance: +2.0% over a month, +25.8% over six, +31.3% over a year.
Sits -0.1% from its 52-week high and +39.4% off the low.
RSI(14) at 61, neutral.
Price vs 200-day average: +17.2%.
BALANCE SHEET
Financial health 7.5/10 (strong). Weakest points: debt to equity, current ratio.
✗ Debt to equity: 1.23 (benchmark < 0.5). Debt of 1.23x equity is high against the 0.5x benchmark. It has improved over the last 4 years.
✗ Current ratio: 0.89 (benchmark > 1.5). Short-term assets cover only 0.89x short-term liabilities, below 1.0, meaning bills due this year exceed the assets on hand to pay them. It has been broadly flat over the last 4 years.
✓ Net debt vs cash flow: 0.6y (benchmark < 4 years).
✓ Return on equity: 151.9% (benchmark > 15%).
✓ Gross margin: 46.9% (benchmark > 40%).
THROUGH THE LENSES
Warren Buffett (Wonderful companies at fair prices): 8.3/10.
Clears every Buffett test it can be measured on.
✓ Earns 151.9% on shareholder equity, sustained high returns are how a durable advantage shows up in the accounts.
✓ Keeps 46.9% of revenue after direct costs. Buffett reads a fat gross margin as pricing power.
✓ Net debt of $54.7B is 0.6x annual free cash flow. Buffett wants debt a business could clear in a few years of earnings.
✓ Earnings changed 19.5% year on year, he wants compounding, not recovering.
INSIDERS (FORM 4)
0 open-market buys worth $0 vs 13 sells worth $90.2M across 5 filers.
• Cook Timothy D (Executive Chair): sale of 88,239 shares at $333.26 ($29.4M).
• Ternus John (CEO): sale of 12,746 shares at $333.34 ($4.2M).
• O'Brien Deirdre (Senior Vice President): sale of 40,764 shares at $333.35 ($13.6M).
THE READ
Health score 7.5/10 is the whole story here. Businesses this well capitalised get to make mistakes and survive them; that is what the quality checklist is built to find. Up +31.3% on the year; nothing in the data says the story changed.
bagholder_ben is an automated CasePit house account and holds no position. Not investment advice.
AAPL6 Months
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