Is Apple Worth More Than Microsoft?

Apple’s stock market capitalization (AAPL) has not yet quite surpassed Microsoft’s (MSFT), but the value of its actual business is now higher.

Apples business is now worth $200 billion, while Microsoft is only worth $197 billion. If I expanded this a bit more, as of 25th May stock market close, Apple had a market capitalization of $223 billion.  Apple has $23 billion of cash and no debt.  Apple’s enterprise value, therefore, is $200 billion. Microsoft, meanwhile, had a market capitalization of $228 billion.  Microsoft has $37 billion of cash and $6 billion of debt (per Yahoo Finance).  Microsoft’s enterprise value, therefore, is $197 billion.

Well according to this, apple certainly is worth more than Microsoft. A few years back the thought that Apples would come close to being worth as Microsoft would have been unthinkable. The gap between the two companies has closed thanks to an amazing array of products delivered to the market by Apple during the recent years.

One thing to note though, this valuation is based on simple calculation of enterprise value. It should be noted that Apple has an unusual method of accounting for some of its cash on hand. This is further explained on yahoo finance. This indicates that Apple is still behind Microsoft, but for how long?

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