Accounting Analysis Statement of Konica Minolta

Running head: ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
Accounting analysis statement of Konica Minolta
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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
Table of Contents
Introduction......................................................................................................................................2
Description of the company’s principal products or services..........................................................2
Industry outlook...............................................................................................................................4
Financial Statement.........................................................................................................................6
Income statement and its effects......................................................................................................7
Balance sheet...................................................................................................................................8
Cash flow statement.........................................................................................................................9
Accounting policies.........................................................................................................................9
Revenue.........................................................................................................................................10
Cash and cash equivalents.............................................................................................................11
Inventories.....................................................................................................................................11
Property, Plant and Equipment......................................................................................................11
Financial Analysis and ratios.........................................................................................................11
Financial Risk................................................................................................................................12
Market indicator financial ratios....................................................................................................13
Conclusion.....................................................................................................................................14
Reference.......................................................................................................................................14

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
Introduction
Company: Konica Minolta
Stock Code: 4902
Name of CEO: Shoei Yamana
Location of Headquarter Marunouchi, Chiyoda, Tokyo, Japan
Ending date of the last fiscal year: March 31, 2019
Description of the company’s principal products or services
The Products and services that the company can be divided into two segments that is
Healthcare Business and Industrial Business. Healthcare Business depicts product expansion,
manufacturing, sales and provisions of the diagnostic systems service. The measuring
instruments of manufacturing and sales, typical lenses for industrial and professional utilization
is came under Industrial Business. The have occupied many products and services segments like
Business solutions, Healthcare, Measuring instruments, industrial inkjet, optical products,
performance materials. These are the primary product segments of the company. Became a world
leader in the context of print industry, the company is recognized for inventive the technologies.
This business solution is also engaged to offer the office equipment, provide multi-function
printers, production printers.

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
Main geographic area of activity
The company has presences in various geographic are like Asia/ Pacific, Americas and
Europe. In Asia, the presence in Japan, China, Hong Kong, India, Korea, Malaysia. In America it
is USA, Mexico, Canada and Brazil.
Name of the independent auditor: KPMG
One of the big four KPMG has audited the company’s account and report to all the
shareholders and Board of Directors of Konica Minolta. They have audited complementary
consolidated financial statements and its consolidated subsidiaries. It involves combined
financial statements as on 31 March 2019, combined report on profit and loss, combined
statements of revenue, collective report of changes of equity and collective statement of cash
flows for the year ended and prepared key auditors note (konicaminolta.com, 2020). After
analyzing the independent auditor’s report it can be noted that the combined financial statement
are presented legitimately, the combined financial position and its combined subsidiaries
presented their combined financial performance and cash flows for the year ended 31 march
2019 are being followed by International Financial Reporting Standards (Klychova et al, 2015).
Recent price of the company’s stock: 680 JPY.
Dividend per share:
March 2019 March 2018 March 2017 March 2016 March 2015
Dividend per
share (yen)
15.0 15.0 15.0 15.0 10.0

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
As per the current fiscal year the board of director’s meeting which was held on 13 may 2019,
company has declared dividend per share 15 JPY (konicaminolta.com, 2020).
Industry outlook
Konica Minolta, a company comes under the electronic industry. So before going to brief
about the company analysis it is required to understand the industry positions and its outlook.
The global market of electronic components has been growing very vastly over the last few
years. Behind such growth of this electronic industry, the key components are expanding of the
internet of things (IoT) and introducing the automation across various industries. On the other
hand, improvement in computerized system and increasing progress for portable devices is
pulling up the growth of the electronic industry (Ogasavara, 2014). The study also scrutinize to
the most extent based on demand and supply that increasing price of the raw materials and the
shortage of supply in electronic components are the real factor of dwindling the growth on a
scale of global economy. It is anticipated to touch USD 332.20 billion by 2020, increasing at a
CAGR of 10.57% from 2016 to 2022. Global analysis and forecast of the industry from 2018 to
2023 are as follows:
 To run the key analyzing factor that has certain affect for market growth.
 Thorough analysis of the market organization along with the projection of various
sectors.
 To forecast the revenues of their geographical area.
 To deliver the country level investigation of the marketplace with respect to the recent
market size situation.

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
 To report strategic movement for the company, comprehensive analyzing the core
abilities and economic analysis for the market.
Some findings are noted below:
 As per the concern of the product segment, the integrated circuit is important in the
market to generate the highest revenue growth of USD 87.22 billion.
 Consumers electronics is projected a high market growth. It is expected to reach at the
highest CAGR of 11.95% and prospective to generate high market value of USD 144.7
billion.
 The study also justified in geographically that the North America hold the largest market
share in globally in the context of electronic components followed by Asia-Pacific.
This paper very critically analyses the data reported on the annual report and provide a brief
about the transformation of the business and correlate with future plans. The company wants to
take a “Medium Term Business Plan” followed by “SHINKA 2019” evolution. Keeping the
vision of the Fiscal 2021 the company wants to establish an IoT business model in a much-
digitalized manner. When the company had, a business plan called as TRANSFORM 2016 they
have achieved a return on equity of 6.1 in the year 2016 but after introducing SHINKA 2019 the
company have gained also the same ROE in 2017 as compared to previous year but their
operating profit has got increased that is 53.8 billion. Apparently, it can be said that their
SHINKA program is moderately successful because in 2018, their operating profit is 62.4 billion
but the ROE is 7.7 and they have projected 60.00 billion operating profit along with 6.7 ROE in
2019. Now the company proceeds a Medium Term Targets by 2021 where it has been projected
100.00 billion or more operating profit along with 10.00 to 11.00 ROE will come into the

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
business. In shortly if the company achieve 100.00 billion operating profit then it will get 10.00
ROE and if the company achieve more than 100.00 billion then it will get 11.00 ROE
(konicaminolta.com, 2020) The company has aimed to achieve the higher profitability for the
transformation of the business portfolio. Under the Medium Term Business Plan, SHINKA 2019
has acknowledged the business areas like Core, Growth and New. It has been summarized that
the company is trying to increase the level of profitability and what cash will generate that will
reinvest into the Growth and New Businesses. By doing this the company will transform the
business portfolio.
The management also conveyed a message to the shareholders that they have a certain aim to
become a highly profitable company with some perception to the social issues of 10 years in the
future and building up a high value added business model it can get a sustainable growth. The
company will surely improve the profitability and transform the profit structure in the fiscal 2019
by expanding the earning power of the core business and enlarging the sales in the new and
growth business (Carayannis, Sindakis & Walter, 2015).
Financial Statement
As the organization follows all the circumstances that is postulated for a “Specified
Company under Designated International Accounting Standards” as regarded in Article 1-2 of
the “Ordinance on Terminology, Forms and Preparation methods of consolidated Financial
Statements”. The company has projected the financial statements following with the
“International Financial Reporting Standards” (IFRS) as reported in Article 93 under the equal
ordinance (Tsunogaya Hellmann & Scagnelli, 2015). The study examines the company’s
financial statements, which contains “income statement”, “balance sheet” and “cash flow”.

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
Income statement and its effects
The company delivered it income statement in a multiple-step format (Easton & Sommers,
2018), since the operating revenues and the operating expenses are isolates from the non-
operating revenues, expenses, gain and losses. The gross profit is shown 508,888 million of yen
in 2019, compared to 489,803 million of yen in 2018. The company’s operating expenses are
458,194 and 443,196 million of yen in 2019 and 2018 respectively. From these figures, it can be
clearly said that operating income improved year on year as sales remained strong, total
comprehensive income of 2019 and 2018 are 41,654 and 34,642 million of yen, resulting in a
7012 million yen difference in one year of operation. The gross profit, operating income and net
income of the Konica Minolta are evaluated very critically based on the declaration of
company’s annual report and it presented below:

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
After critically evaluate the above calculation it can be suggested that Gross profit will
increase from the relevant previous year, Operating income also increase as compared to
previous year. Referring to the Net income, it also get increases from the previous year. In 2018,
last year gross profit is 489803 billion JPY and it has increased by 19086 billion. In case of
operating income, in 2018, it was 53844 and it was increased by 8601 whereas net income in last
year 32207 and it also increased by 9522 billion (konicaminolta.com, 2020).
Balance sheet
Total Assets Total Liabilities Total equity Total Liabilities and Equity
201
9 1218,986 653,002
+
565,983
=
1,218,986
201
8 1203,907 668,318 535,588 1,203,907
Even though the assets and liability side is same of the company, but there is some
changes in current assets and current liabilities. Balance sheet is a financial report, which
comprise entity’s assets, liabilities and shareholders’ equity at a exact point of period (Bauman &
Shaw, 2016). The calculation of the position of the company’s liabilities and share equity should
be same as assets position. Therefore, the representation of the evaluation of the balance sheet
proving by it formula are, Assets = Liabilities + (Equity + Capital).
Cash flow statement
This statement reveals materials to the stockholders and managers of the company’s
financial statements to ascertain that the company has such ability to create cash and cash
equivalents and the requirements of the entity to utilize of those cash flows. AASB 107

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
represents (Yu, 2016). Konica Minolta has generated cash flow from its operating activities
57,166 million yen in 2019, 65,367 million yen in 2018. Cash flow from investing activities
(41,480) yen and (133,737) yen in 2019 and 2018 respectively. Cash flow from financing
activities (40,246) and 126,638 yen in 2019 and 2018 respectively. From the cash flow
statement, it reveals that the company has generated cash through operating activities
moderately. The source of financing activities is short-term borrowings and bonds. In 2019, short
term loans payable 11,722 million yen. In shortly company’s cash and cash equivalents has
decreased. Cash position at the end of the year is 124,830 yen.
Accounting policies
The company has implemented IFRS 15, (Oncioiu & Tănase, 2016) which was effective
from the financial year ended March 31, 2019. The organization has applied the exemption from
the reflective application as per the transitional provisions. The entity has also applied IAS 18
Revenue to comparative information (Uyar, Kılıç & Gökçen, 2016).
There is no changes in substantial accounting strategies (Bui & De Villiers, 2017) as such
to the company’s combined financial statement. The combined financial statements of the group
has been prepared based depending on the financial statements of the company, its subsidiaries,
group’s associates and joint ventures which interpreted the accounting policies regularly.
Accounting policies that the company has applied to comparative information are as follows:
Revenue
Revenue from the sales of properties in the sequence of conventional commercial
activities is calculated at the true value of the contemplation, which was received, and
receivables, deduct returns, discounts and repayments. The organization has recognized its
revenue when the group moved the significant risks to the buyer and get plunders of the

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
ownership of the goods. Revenue generated from the selling of goods is acknowledged when
regulator of the goods are being relocated to the customers and revenue is determined at an
amount, which was mentioned in the contract to the consumers less discounts, rebates, returns
and other similar items. Revenue from providing services is acknowledged when the service is
being completed and performance compulsions is being satisfied at a point in interval (Khamis,
2016).
The organizations has recognized the revenues based on the following steps:
 Identify the agreements with the consumers
 Identify the performance responsibilities in the agreement
 Determination of the contract price
 Allocate the contract price based on the performance responsibilities in the covenant
 When a performance obligation is being satisfied, revenue would be accepted.
Cash and cash equivalents
Cash and cash equivalents involves cash in hand and payments in bank that can be
withdrawn as per desirable, it refers the liquidity position of the company. It also indicates short-
term investments that are transformed into cash easily with some minute risk. It depends on the
changes in value. In 2019 cash and cash equivalents is 14660 billion, comparatively higher than
the previous year 2018 that was 11687 billion (Sankar, & Kumar, 2018).
Inventories
Following the IFRS, the inventory cost has included cost of purchases, cost of processing
and all other cost, which is related to the inventories. It is measured at net achievable value.

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
Valuing the inventory the weighted average cost technique is adopted. If the net achievable value
is less than the actual price then the difference is to be accounted as write off and it will be
treated as expenses (Shin, Ennis & Spurlin, 2015).
Property, Plant and Equipment
This “property, plant and equipment” cost involves any cost directly proportionate to the
allocation that assets and dispose, subtraction, repair cost as well as cost of borrowing which is
acknowledged the capitalization of the company (Laing & Perrin, 2014).
Financial Analysis and ratios
Financial ratio analysis is a measureable method (Dalnial et al, 2014) of looking insight
into the company’s performance, liquidity, operational proficiency and productivity. It is a basic
part of the fundamental analysis.
Apparently, the company, Konica Minolta shows good performance in terms of profit in
the current fiscal year 2019. Profit is also increased from the previous year. From 32,207 to
41,729 yen.
Company’s current ratio has bit increased from the previous year. Current ratio is 2.14
and 2.13 in 2019 and 2018 respectively. It indicates a good liquidity position within the company
(Ulzanah & Murtaqi, 2015).
The working capital position of that company is higher in the current fiscal year. So the
liquidity is getting high from the previous year. 310,269 and 307,563 yen in 2019 and 2018
respectively. In other words, the company still managed to have enough current assets to meet
with its short-term liabilities (Mathuva, 2015).

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
The cash and cash equivalents of the company has decreased from 149,913 yen to
124,830 yen.
For the current period, it was 4.07 and for 2018, it was 3.93, so the company has
increased its collection mechanism, which is noble for the organization.
Net profitability margin for the 2019 is 3.13% and in 2018 is 3.94, so profit margin is
also bit decreased by 0.81%.
Therefore, the investor point of view the company performance is coming down. As its
return on equity is 6.15% from 7.12%. Company managed somehow its job.
Financial Risk
The executive officer are usually responsible for controlling the risk. This risk includes
financial risks, strategic risks, environmental risks, hazards risks (Sadgrove, 2016).
The company evaluating the risks, develop and monitor it. Konica Minolta has set up a
platform, which helps to minimize the business, and social impacts, which may arise from the
business risks. The committee identify the risk and ensure that, risk management system is
performing effectively. They have made revision where necessary. The activities performed by
the risk management committee, periodically reported to the audit team.
Market indicator financial ratios
In addition to all the above-mentioned ratios, the company has gained P/E ratio 8.6 and
dividend yield of 4.21.
Liquidity Ratios 2018 2019
Working Capital
310,26
9
307,56
3
Current Ratio 2.14 2.13
Receivables Turnover 4.07 3.93

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
Days Sales Outstanding 89.66 92.88
Inventory Turnover 3.93 3.87
Days Inventory 92.88 94.28
Accounts Payable 14.59 14.5
Payables Period 111.26 115.84
Operating cycle 6.63 6.74
Profitability and total assets management financial ratios
Net Margin % 3.13 3.94
Asset Turnover 0.93 0.87
Return on Assets % 2.92 3.44
Liquidity financial ratios
Cash Flow Yield 0.8 -78.76
Return on sales 3.93 3.12
Free Cash Flow 27,412 5,821
Financial Risk ratio
Debt to Equity Ratio 0.5 0.45
Return on Equity % 6.15 7.72
Interest Coverage 7.25 8.74
Operating assets managements (cash cycle) financial
ratios
Receivables turnover 4.07 3.93
Days sales uncollected 89.66 92.88
Inventory turnover 3.93 3.87
Days inventory on hand 92.88 94.28
Days payable 111.26
3 115.84
Operating cycle 6.63 6.74
Supplemental operating assets management financial
ratios
Working capital 310,26
9
307,56
3
Current ratio 2.14 2.13
Market indicator financial ratio 2018 2019
P/E Ratio 8.6
Dividend Yield Ratio 4.21 3.01
Conclusion
This paper describes about a japan-based company Konica Minolta. After analyzing all
the financial data of that company it can be suggested that at the point of company’s

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ACCOUNTING ANALYSIS STATEMENT OF KONICA MINOLTA
performance, all the key factors like “gross profit, operating income and net income” has
increased from the previous year. The company has adopted transparent accounting policies. The
analysis of financial ratios suggests that the company is viable to invest as the liquidity position
and inventory conversion is very well operated. In every aspect, company is growing along with
the respective industry maintaining a well CAGR.
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