There's long been a game to play, finding out things that Apple is worth more than. Often the calculations are wrong: it may be true, for example, that the value of Apple stock is greater than the GDP of Poland. But this does not mean that Apple is worth more than Poland. GDP is the amount produced each year, not the capital value of what is doing the producing. Apple's stock value is of course the capital value of the company.
But it is still possible for there to be quite astonishing comparisons made which are indeed entirely valid. Such as this one from the Financial Times:
Apple became the world’s most valuable-ever company two weeks ago. It is worth $624bn, more than all the listed companies in Portugal, Ireland, Greece and Spain together. The employer of 63,300 people – each valued at $10m – is more valuable than all the shares available to investors in the MSCI China index, the international benchmark.
That is making iPhones and iPads seems to create more value than the entire stock markets of four different countries added together.
When you think through it though it's not all that surprising...OK, no, it's still surprising, but it's explainable. The total GDP (rough numbers, and using nominal) for the four countries is around $2.2/2.3 trillion ($1.5 trillion for Spain, $200-$250 billion for Ireland and Portugal each, then $300 billion for Greece). From the national income accounts (in fact, one of the ways we can calculate that GDP) corporate profits are in the 10-20% of GDP range in most economies. However, this includes depreciation so a more comparable number would be at the low end. Say 10%*.
Which gives us total corporate profits, in something like the manner a company would report them, of perhaps $220 billion across all four countries. Apple doesn't make anything like this of course, what are we guessing for the full current year? $40 billion or so? A little higher?
The explanation of this difference isn't, as you might think, that Europe is mired in recession (in fact, for those four countries, we'd probably say somewhere between a recession and a depression, Ireland possibly just a recession, Greece pretty much a depression) although that certainly contributes. It's that most companies are not in fact listed on stock exchanges. And we are indeed only counting the value of companies that are listed.
Further, a smaller portion of the total number of businesses is quoted in the southern countries than is in the more Anglo Saxon economies. It therefore wouldn't surprise me at all to find that the reported profits of all of the quoted companies in those countries was around and about the reported profits from Apple. Sure, could be higher or lower but we're going to be within the right order of magnitude certainly and it really wouldn't surprise me to find that the numbers are within $10 billion of each other at all.
As I've said several times, this is a very rough calculation. But I can see why it is true, or at least provide plausible reasoning for why it is. Doesn't make it any less surprising when you first hear it though, does it?
* Yes, I agree, this is very rough. But it's meant to be, it's a sighting shot, that's all.
