WSJ: Apple Gets Paid for its Products Faster Than It Pays to Make Them
The Wall Street Journal takes a look at Apple's judicious use of capital employed in a new report by Rolfe Winkler.
Most notably, Apple gets paid for its products faster than it pays to make them.
Cash comes in before it goes out in part because Apple has incredible negotiating leverage vis-à-vis its suppliers. On average, in fiscal 2011 it didn't pay suppliers for 83 days after being invoiced, according to Sanford C. Bernstein analyst Toni Sacconaghi. Yet Apple collected on its customer invoices much faster, 18 days on average. Meanwhile, it paid to keep just four days of inventory on hand in 2011, versus an already impressive 10 days in 2010.
Apple is also able to keep its cash investments small by outsourcing the production of its hardware devices. Hit the link below for more information. Apple's third quarter results conference call will take place on July 24, 2012.
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