Analysis of Property, Plant and Equipment
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- Income Statement
- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
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Property, Plant and Equipment Disclosure
Apple Inc., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
- Land and Buildings
- The value of land and buildings displayed a consistent upward trend over the observed periods, increasing steadily from $17,085 million in 2019 to $24,690 million in 2024. This indicates ongoing investment or appreciation in the company's land and building assets.
- Machinery, Equipment, and Internal-use Software
- This category showed overall growth from $69,797 million in 2019 to $80,205 million in 2024, despite a slight decline between 2022 and 2023 where the value dropped from $81,060 million to $78,314 million before recovering to $80,205 million in 2024. The trend suggests continuous upgrades or additions with minor fluctuations possibly due to asset disposals or revaluations.
- Leasehold Improvements
- Leasehold improvements consistently increased each year, rising from $9,075 million in 2019 to $14,233 million in 2024. This steady growth reflects ongoing expenditures to enhance leased property assets.
- Gross Property, Plant, and Equipment
- The total gross property, plant, and equipment demonstrated a rising pattern, increasing from $95,957 million in 2019 to $119,128 million in 2024. The growth was particularly significant between 2022 and 2023, albeit more moderate in the final year, suggesting continued capital investments in tangible assets.
- Accumulated Depreciation
- Accumulated depreciation showed an increasing absolute value each year, moving from negative $58,579 million in 2019 to negative $73,448 million in 2024, except for a slight reduction between 2022 and 2023 from -$72,340 million to -$70,884 million. The general increase is consistent with aging assets and periodic depreciation expense recognized over time. The decrease observed in 2023 could indicate asset retirements or adjustments.
- Property, Plant, and Equipment, Net
- Net property, plant, and equipment initially declined slightly from $37,378 million in 2019 to $36,766 million in 2020, followed by a steady upward trend to $45,680 million in 2024. The overall increase signifies effective asset management and investment outweighing depreciation effects, leading to growth in net asset value over the analyzed period.
Asset Age Ratios (Summary)
Apple Inc., asset age ratios
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
- Average age ratio
- The average age ratio exhibits a gradual increase from 61.05% in 2019 to a peak near 64.49% in 2020, followed by a slight decrease and stabilization around 61.65% by 2024. This pattern indicates a relatively consistent asset aging profile over the period, with a modest peak and subsequent balancing of the asset age relative to expected useful life.
- Estimated total useful life
- The estimated total useful life of the assets shows a clear upward trend, rising from 8 years in 2019 to 15 years in 2024. This significant increase suggests either an extension of asset longevity due to improved maintenance or upgrades, or a shift in asset composition towards those with longer service lives.
- Estimated age, time elapsed since purchase
- The estimated age advances steadily from 5 years in 2019 to 9 years in 2024. This linear increase aligns with the passage of time, indicating a typical aging of assets without evidence of large-scale retirements or replacements that would otherwise reduce the average age.
- Estimated remaining life
- Contrasting with the rise in elapsed age, the estimated remaining life increases from 3 years in 2019 to 6 years in 2024. This growth corresponds with the rising total useful life estimate, offsetting the aging effect by extending expected asset longevity. It suggests a trend toward sustained or improved usability of property, plant, and equipment over time.
Average Age
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2024 Calculations
1 Average age = 100 × Accumulated depreciation ÷ Gross property, plant and equipment
= 100 × ÷ =
- Gross Property, Plant, and Equipment
- The gross value of property, plant, and equipment exhibited a consistent upward trend throughout the analyzed periods. It increased from approximately 95.96 billion US dollars in 2019 to 119.13 billion US dollars in 2024. This growth suggests ongoing investments in long-term assets over the years, with the most significant increments occurring between 2019 to 2020 and 2023 to 2024.
- Accumulated Depreciation
- Accumulated depreciation also showed a steady increase from 58.58 billion US dollars in 2019 to 73.45 billion US dollars in 2024. The increasing balance of accumulated depreciation reflects the aging of the fixed assets and continuing depreciation expenses recognized annually. Notably, the increase in accumulated depreciation is somewhat proportional to the increase in gross property, plant, and equipment, indicating a balance between asset acquisition and asset consumption.
- Average Age Ratio
- The average age ratio, representing the proportion of accumulated depreciation to gross property, plant, and equipment, fluctuated slightly but remained relatively stable over the years. It rose from 61.05% in 2019 to a peak of 64.49% in 2020, then gradually declined to 61.65% by 2024. This stability suggests a consistent asset replacement or renewal strategy, maintaining the average age of the asset base without significant aging or premature disposal.
- Overall Insights
- The data indicates a balanced approach towards asset management, reflected in steady increases in asset base and accumulated depreciation while maintaining a stable average age ratio. The company's investments in property, plant, and equipment appear to be aligned with its depreciation patterns, ensuring the asset base remains current without excessive aging. This may imply efficient capital expenditure planning and asset utilization over the analyzed period.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2024 Calculations
1 Estimated total useful life = Gross property, plant and equipment ÷ Depreciation expense on property, plant and equipment
= ÷ =
- Gross property, plant, and equipment
- There is a clear upward trend in the gross property, plant, and equipment over the six-year period. The value increased steadily from 95,957 million USD in 2019 to 119,128 million USD in 2024. The growth appears consistent each year, with the largest increments occurring between 2019 and 2021, followed by more moderate increases through 2024.
- Depreciation expense on property, plant, and equipment
- The depreciation expense shows a downward trend over the same period. Starting at 11,300 million USD in 2019, it decreases progressively each year to reach 8,200 million USD by 2024. This decline suggests improvements in asset management, potential changes in depreciation methods, or extensions in asset lifespan.
- Estimated total useful life
- The estimated useful life of the property, plant, and equipment has lengthened significantly over the years. It starts at 8 years in 2019, increases to 11 years by 2020, and continues to rise gradually, reaching 15 years by 2024. This extension correlates with the reduction in depreciation expense, indicating that assets are being depreciated over longer periods.
In summary, the gross property, plant, and equipment values have been steadily increasing, reflecting ongoing investments or acquisitions. Meanwhile, depreciation expenses have decreased, likely due to the elongation of the estimated useful life of assets. These patterns suggest strategic asset management aimed at optimizing asset value and extending usability, which may positively impact the company's financial standing over time.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense on property, plant and equipment
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation has exhibited a consistent upward trend from 58,579 million US dollars in 2019 to 73,448 million US dollars in 2024. This steady increase indicates ongoing wear and usage of property, plant, and equipment over the years, reflecting the company's continued investment and aging of its fixed assets.
- Depreciation Expense on Property, Plant, and Equipment
- Depreciation expense has shown a declining trajectory, decreasing from 11,300 million US dollars in 2019 to 8,200 million US dollars in 2024. This reduction in annual depreciation expense may suggest a slowdown in new asset acquisitions, a shift towards assets with longer useful lives, or changes in depreciation methods or estimates.
- Time Elapsed Since Purchase
- The average time elapsed since purchase has gradually increased from 5 years in 2019 to 9 years in 2024. This indicates that the asset base is aging, which aligns with the decreasing depreciation expense, as older assets typically incur lower depreciation charges due to accumulated depreciation and possible nearing of their useful life.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2024 Calculations
1 Estimated remaining life = Property, plant and equipment, net ÷ Depreciation expense on property, plant and equipment
= ÷ =
- Property, Plant, and Equipment, Net
- The net value of property, plant, and equipment has shown a consistent upward trend over the six-year period. The value increased from 37,378 million US dollars in 2019 to 45,680 million US dollars in 2024. This represents a steady growth, with notable increments each year, indicating ongoing investments or capital expenditures outpacing depreciation or disposals.
- Depreciation Expense on Property, Plant, and Equipment
- Depreciation expense demonstrates a clear decreasing trend throughout the period. Starting at 11,300 million US dollars in 2019, it declines each year to reach 8,200 million US dollars by 2024. This gradual reduction suggests either improvements in asset longevity, a shift in the asset base composition towards longer-lived assets, or changes in depreciation methods or rates.
- Estimated Remaining Life
- The estimated remaining life of the property, plant, and equipment has increased over time. Initially at 3 years in 2019, it extends to 6 years by 2024. This increase correlates inversely with the depreciation expense trend and implies an extension in asset useful lives. This may reflect asset upgrades, maintenance policies, or capital expenditure focusing on longer-lived assets.
- Overall Analysis
- The combined data exhibits a scenario where the company boosts its net investments in property, plant, and equipment while experiencing decreasing annual depreciation expenses and longer estimated asset lives. The increase in net asset value alongside reduced depreciation expenses enhances asset sustainability and may positively impact the company's future earnings and cash flows by lowering non-cash charges. The prolonging estimated asset life aligns with strategic asset management aimed at maximizing the value and utility of capital investments over an extended period.