Google is worth more than Apple, according to one analyst

Google

As measured by market capitalization, Apple may be worth more than Google at first glance.. but when using a different method of measurement, one analyst concludes Google is actually in the lead.

As of Wednesday, Apple was worth a total of $374 billion compared to Google’s $290 billion. Rolfe Winkler from The Wall Street Journal’s Moneybeat points out in a recent blog post, however, that Google actually beats Apple when you use a slightly different measure of assets:

“Strip out Apple’s $145 billion of net cash as of March, and Google’s $45 billion. This leaves an enterprise value of $233 billion for Apple, but $241 billion for Google, reflecting the underlying value of the companies’ actual operations.”

Winkler also described it in another way to make it easier to understand:

“If you bought a house for $378,000, but there was $145,000 of cash lying on the living room floor, all you really paid was a net $233,000.”

In other words, Google is worth more than Apple — if you go by that rather unconventional measure. Of course this measure ignores the fact that Apple’s boatload of cash has value in and of itself, but we will leave that debate to the professionals.

Moneybeat also outlined that Apple is no longer the world’s biggest company. They’ve been passed over by oil company Exxon Mobil who regained the crown recently, after losing it to Apple last year. Although, it seems like Google might soon push Apple further down that ladder.

What do you think folks? Let us know in the comments below!

[via BGR, Moneybeat]

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1 comment

  1. Louis

    Total market capitalisation, as we all know, reflect the total current market value of these companies’ outstanding ordinary shares.

    It merely reflects the market’s current subjective view of the companies’ worth, which is in turn affected by a myriad of variables many of which have nothing to do with the companies’ actual performance or underlying operations.

    Hence it’s definitely not “reflecting the underlying value of the companies’ actual operations.” — rather at best it reflects the market’s (subjective) perception of these companies’ future performance. There’s a heck of a difference.

    In any event, the true value of a company’s “underlying value of actual operations” would require quite a technical and objective accounting calculation, and can’t be based on market perceptions.

    That can turn on a dime, and there’s a lot of cash that can change that market perception, these companies don’t sit on cash for no reason.

    So it’s pure and utter horse manure.