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No, revenue is not funding. Funding is debt and equity. Revenue can become equity if you retain profits after expenses but the lions share of funding is debt an

No, revenue is not funding. Funding is debt and equity. Revenue can become equity if you retain profits after expenses but the lions share of funding is debt and contributed capital. Market share does mean something specific, but you chose to specify which market, and that wasn’t the important one, so your definition was not useful. Most of Apple’s revenue comes from the hardware sales. But the hardware sales are very expensive. Even at 110%+ markups. The App Store sales is by comparison basically free. The majority of Apple’s contribution margin is coming from sources like that. Which is doubly toxic because this is only due to Apple forbidding competition against itself on its hardware.

scarface_74 3y ago
Someone doesn’t know finance. Assets = liabilities + owners equity This formula is like high school finance. When Microsoft bought $250 million in Apple Stock, the Assets increased by $250 million and the owners equity increased by $250 million. This is simple double entry accounting. When Google pays Apple and Microsoft to be the default search engine, you still add the payment to Assets and owners equity. When you borrow money - say the same $250 million - you still add $250 million to Assets. But then you add $250 million to liabilities. You notice that in all three scenarios that Assets increase ? By that simple equation, “Assets” increase by three methods to “fund” the company - through the regular course of business, someone buying into the company and via debt. Again this is simple Finance 101. > Most of Apple’s revenue comes from the hardware sales. But the hardware sales are very expensive. Even at 110%+ markups. The App Store sales is by comparison basically free Now check your math against the publicly available breakdown of revenue and the overall profit and see how nonsensical your math is. > Market share does mean something specific, but you chose to specify which market, and that wasn’t the important one, so your definition was not useful. So which market share are you making up to make your comment logical? > Which is doubly toxic because this is only due to Apple forbidding competition against itself on its hardware. Are you really saying that Apple has no competition in the phone market??
- jncfhnb 3y ago
  That is not finance, that is accounting. Those are not the same thing. When Google pays a fee to other companies it becomes revenue. Revenue is a temporary account and does not feature in the balance sheet. Retained earnings does, which is revenue - expenses - distributions. This is all tangential to the point that the majority of funding for a company at any given time is likely debt and contributed capital. Apple is over 80% debt funded. Retained earnings accounts for less than 0.1% of Apple’s funding. I have passed the CPA exam so consider if you really think you’ve got the upper hand here. > Now check your math against the publicly available breakdown of revenue and the overall profit and see how nonsensical your math is. Products sales: 61B. Products COGS: 39B. Gross Income of 22B Services sales: 21B. Services COGS: 6B. Gross income of 15B. Consider then that the vast majority of their supporting expenses including 7B in R&D go towards their product (which is the hardware and OS) and I think you’d find this easily supports what I’m saying. It’s closer than I thought though. > So which market share are you making up to make your comment logical? The most important one. The US. > Are you really saying that Apple has no competition in the phone market?? No, you just didn’t read.
  - scarface_74 3y ago
    Well I have an MBA that I never used so there is that.., When Google pays Apple 18B to be the default search engine, it goes in two accounts. It’s recognized as revenue and it goes into owners equity. That revenue is then used to fund expenses. Just like when equity is injected into a company, it is used to fund continuing operations. And the only reason that Apple has any debt is because in a zero% interest rate environment, it made more sense than to have to repatriate earnings.
    - jncfhnb 3y ago
      Great. Your MBA level mastery failing to differentiate accounting 101 and finance 101 is very promising. Revenue is not owners equity. It is an income statement account. It eventually feeds into net income which can eventually flow into retained earnings, which is part of owners equity. But nobody calls things a “revenue funded company”. There’s a huge difference between a 6% stake in equity and a 6% source of revenue. And that shows because again, Apple’s retained earnings account is < 0.1% retained earnings. Even if, yes, they pay the bills using money they earn.

scarface_74 3y ago

Someone doesn’t know finance. Assets = liabilities + owners equity This formula is like high school finance. When Microsoft bought $250 million in Apple Stock, the Assets increased by $250 million and the owners equity increased by $250 million. This is simple double entry accounting. When Google pays Apple and Microsoft to be the default search engine, you still add the payment to Assets and owners equity. When you borrow money - say the same $250 million - you still add $250 million to Assets. But then you add $250 million to liabilities. You notice that in all three scenarios that Assets increase ? By that simple equation, “Assets” increase by three methods to “fund” the company - through the regular course of business, someone buying into the company and via debt. Again this is simple Finance 101. > Most of Apple’s revenue comes from the hardware sales. But the hardware sales are very expensive. Even at 110%+ markups. The App Store sales is by comparison basically free Now check your math against the publicly available breakdown of revenue and the overall profit and see how nonsensical your math is. > Market share does mean something specific, but you chose to specify which market, and that wasn’t the important one, so your definition was not useful. So which market share are you making up to make your comment logical? > Which is doubly toxic because this is only due to Apple forbidding competition against itself on its hardware. Are you really saying that Apple has no competition in the phone market??

jncfhnb 3y ago
That is not finance, that is accounting. Those are not the same thing. When Google pays a fee to other companies it becomes revenue. Revenue is a temporary account and does not feature in the balance sheet. Retained earnings does, which is revenue - expenses - distributions. This is all tangential to the point that the majority of funding for a company at any given time is likely debt and contributed capital. Apple is over 80% debt funded. Retained earnings accounts for less than 0.1% of Apple’s funding. I have passed the CPA exam so consider if you really think you’ve got the upper hand here. > Now check your math against the publicly available breakdown of revenue and the overall profit and see how nonsensical your math is. Products sales: 61B. Products COGS: 39B. Gross Income of 22B Services sales: 21B. Services COGS: 6B. Gross income of 15B. Consider then that the vast majority of their supporting expenses including 7B in R&D go towards their product (which is the hardware and OS) and I think you’d find this easily supports what I’m saying. It’s closer than I thought though. > So which market share are you making up to make your comment logical? The most important one. The US. > Are you really saying that Apple has no competition in the phone market?? No, you just didn’t read.
- scarface_74 3y ago
  Well I have an MBA that I never used so there is that.., When Google pays Apple 18B to be the default search engine, it goes in two accounts. It’s recognized as revenue and it goes into owners equity. That revenue is then used to fund expenses. Just like when equity is injected into a company, it is used to fund continuing operations. And the only reason that Apple has any debt is because in a zero% interest rate environment, it made more sense than to have to repatriate earnings.
  - jncfhnb 3y ago
    Great. Your MBA level mastery failing to differentiate accounting 101 and finance 101 is very promising. Revenue is not owners equity. It is an income statement account. It eventually feeds into net income which can eventually flow into retained earnings, which is part of owners equity. But nobody calls things a “revenue funded company”. There’s a huge difference between a 6% stake in equity and a 6% source of revenue. And that shows because again, Apple’s retained earnings account is < 0.1% retained earnings. Even if, yes, they pay the bills using money they earn.