4 ms·

RIM has $3 Billion in cash? I guess I'm not that surprised, but that's quite a bit of "help us get back on our feet money." With some clear direction (which the

by hvs 15y ago

RIM has $3 Billion in cash? I guess I'm not that surprised, but that's quite a bit of "help us get back on our feet money." With some clear direction (which they may or may not get from their current executives) they could definitely regain some of their previous market. The more competition the better, and having another player in the mobile space can only improve things for the consumer (and the enterprise).

sc68cal 15y ago
I wonder though, if the fact that they have so much money (and thus so much to lose) is part of the reason why RIM has lost their direction? Surely that has to have some sort of cultural impact?
- hvs 15y ago
  Could be. Microsoft seems to have suffered a similar fate. My original point was that with a company that is that fiscally responsible, it is much less likely for it to go belly up than to flounder for a bit and then refocus and find its market.
  - sc68cal 15y ago
    I agree. Your comment made me think, what would I do if I was the CEO of RIM? To be honest, it caused a sense of great dread, having to try and turn a company with that kind of inertia around, without screwing the pooch. Especially if $3 Billion is on the line. I find it more comfortable to be a little guy, where I can make a mistake that only wastes a little bit of money, or time. I'd prefer to have small and frequent failures than one HUGE one! That's what got me thinking about the culture in RIM - and perhaps the culture in any sufficiently large firm.
    - SoftwareMaven 15y ago
      That is exactly why proven "turn-around" CEO's get paid so much money.
TomOfTTB 15y ago
It really isn't that much. Look at it this way... The way a corporate balance sheet works you don't spend money manufacturing your product. What you do is convert the asset from money to a physical product you can sell. But that asset is still on your books as being worth whatever you paid to manufacture it. RIM claims to have "shipped" 13.2 Million smartphones in the last quarter (as opposed to "sold"). Assume their phones cost about as much as Apple's iPhone (Via iSuppli: $187 to build) and you have $2.46 billion worth of assets in the channel. And that's only smartphones. It doesn't count the playbook. Keep in mind carriers can return shipped phones. So really RIM's $3 billion only serves to put them at even every quarter So in the grand scheme of things it isn't that much.
- hvs 15y ago
  I understand that part of accounting, but I didn't think that it was listed as "cash" on the balance sheet.
- dirtyaura 15y ago
  Interesting. Are you saying that this inventory can still be listed under Cash & Equivalents (1,986M on 28/5/2011) on balance sheet? Or is it under Accounts Receivable (3,772M)? Does Total inventory (943M) then has phones that are not yet shipped? (Values are from latest Balance Sheet data http://www.google.com/finance?q=NASDAQ:RIMM&fstype=ii http://www.google.com/finance?q=NASDAQ:RIMM&fstype=ii ) I've recently started to learn to read financials more carefully, but all these nuances of corporate accounting can make it a fruitless effort.
  - shaggyfrog 15y ago
    If you check your link's "Balance Sheet" tab, you'll see inventory listed under Assets as "Total Inventory". It would most certainly not be listed as Cash & Equivalents.
    - dirtyaura 15y ago
      Yeah, I was curious because it doesn't sound likely that shipped-but-not-sold phones would be listed under Cash & Equivalents (which is ~ $2B). But if his math about value of shipped phones ($3B) is approximately correct, then it doesn't fit under Total Inventory (<$1B) either, so it must be under Receivables (~3-4B), right?

by hvs 15y ago

sc68cal 15y ago

I wonder though, if the fact that they have so much money (and thus so much to lose) is part of the reason why RIM has lost their direction? Surely that has to have some sort of cultural impact?

hvs 15y ago
Could be. Microsoft seems to have suffered a similar fate. My original point was that with a company that is that fiscally responsible, it is much less likely for it to go belly up than to flounder for a bit and then refocus and find its market.
- sc68cal 15y ago
  I agree. Your comment made me think, what would I do if I was the CEO of RIM? To be honest, it caused a sense of great dread, having to try and turn a company with that kind of inertia around, without screwing the pooch. Especially if $3 Billion is on the line. I find it more comfortable to be a little guy, where I can make a mistake that only wastes a little bit of money, or time. I'd prefer to have small and frequent failures than one HUGE one! That's what got me thinking about the culture in RIM - and perhaps the culture in any sufficiently large firm.
  - SoftwareMaven 15y ago
    That is exactly why proven "turn-around" CEO's get paid so much money.

TomOfTTB 15y ago

It really isn't that much. Look at it this way... The way a corporate balance sheet works you don't spend money manufacturing your product. What you do is convert the asset from money to a physical product you can sell. But that asset is still on your books as being worth whatever you paid to manufacture it. RIM claims to have "shipped" 13.2 Million smartphones in the last quarter (as opposed to "sold"). Assume their phones cost about as much as Apple's iPhone (Via iSuppli: $187 to build) and you have $2.46 billion worth of assets in the channel. And that's only smartphones. It doesn't count the playbook. Keep in mind carriers can return shipped phones. So really RIM's $3 billion only serves to put them at even every quarter So in the grand scheme of things it isn't that much.

hvs 15y ago
I understand that part of accounting, but I didn't think that it was listed as "cash" on the balance sheet.
dirtyaura 15y ago
Interesting. Are you saying that this inventory can still be listed under Cash & Equivalents (1,986M on 28/5/2011) on balance sheet? Or is it under Accounts Receivable (3,772M)? Does Total inventory (943M) then has phones that are not yet shipped? (Values are from latest Balance Sheet data http://www.google.com/finance?q=NASDAQ:RIMM&fstype=ii http://www.google.com/finance?q=NASDAQ:RIMM&fstype=ii ) I've recently started to learn to read financials more carefully, but all these nuances of corporate accounting can make it a fruitless effort.
- shaggyfrog 15y ago
  If you check your link's "Balance Sheet" tab, you'll see inventory listed under Assets as "Total Inventory". It would most certainly not be listed as Cash & Equivalents.
  - dirtyaura 15y ago
    Yeah, I was curious because it doesn't sound likely that shipped-but-not-sold phones would be listed under Cash & Equivalents (which is ~ $2B). But if his math about value of shipped phones ($3B) is approximately correct, then it doesn't fit under Total Inventory (<$1B) either, so it must be under Receivables (~3-4B), right?