Interpretation and Comparative Analysis of Financial Statements of Samsung PLC

This report contains the evaluation of the various sources of the financial data that can be used in making the business strategy and did the analysis of risk that is being related business decision that is being based on the financial business decision.

FINANCE FOR STRATEGIC
MANAGERS

Contents
INTRODUCTION.................................................................................................................................4
TASK 2....................................................................................................................................................4
Interpretation and the comparative of the financial statements of the Samsung PLC so that they
assess the current viability of the organisation. As the comparative analysis is being done by the
help of ratio.......................................................................................................................................4
Recommendations to the Samsung PLC that is being based on the analysis and interpretation of the
financial position:..............................................................................................................................5
REFERENCES......................................................................................................................................7

INTRODUCTION
This report is about the Pietro yon who was an Italian born organist and the composer
who has made their career in the United States. Pietro yon born in Settimo Vittone and served
for the time as an organist in the Vatican and at the royal church in the Rome. In the year
1926 he become the assistant organist of St. Patric Cathedral, New York. He is the local
businessman who owes and manages the retail stores who has been sell the number of home
wares and also become the member of the local business and chamber of commerce and is
being asked to chair the committee for the research and did the research on the success of
Samsung PLC. This report contains the evaluation of the various sources of the financial data
that can be used in making the business strategy and did the analysis of risk that is being
related business decision that is being based on the financial business decision. This report
also contains the interpretation of the financial statements of the Samsung PLC to find out the
current viability of the business. This report also elaborate the limitations of the ratio analysis
as a tool for the strategic decision making (Christensen and et.al., 2015).
TASK 2
Interpretation and the comparative of the financial statements of the Samsung PLC so that
they assess the current viability of the organisation. As the comparative analysis is being
done by the help of ratio.
Profitability ratio
analysis
Particulars Formula 2017 2018
Gross Profit 110284715 111377004
Net profit 41344569 43890877
Sales revenue 239575376 243771415
Earnings before interest and tax
or operating profit 53645038 58886669
GP ratio Gross profit / sales * 100 46% 46%
NP ratio Net profit / sales * 100 17% 18%
Liquidity ratio analysis
Particulars Formula 2017 2018
Current assets 146982464 174697424
Current liabilities 67175114 69081510
Inventory 24983355 28984704
Prepaid expenses 5588892 5497974
Quick assets
Current assets - (stock +
prepaid expenses) 1.16E+08 1.4E+08
Current ratio
Current assets / current
liabilities 2.188049 2.528859

Quick ratio
Quick Assets/current
liability 1.732937 2.0297
Solvency ratio analysis
Particulars Formula 2017 2018
Long-term debt 2710269 996935
Shareholder's equity 207213416 240068993
Debt-equity ratio
Long-term debt /
shareholders equity 0.01308 0.004153
Efficiency ratio analysis
Particulars Formula 2017 2018
Cost of goods sold 129290661 132394411
Average Inventory
(Current + past inventory)
/ 2 21668429 26984030
Turnover or sales revenue 239575376 243771415
Average total assets
(Current + past total
assets) / 2 281963207 320554667
Average fixed assets
(Current + past fixed
assets) / 2 101569345 113541186
Receivables or debtors 27695995 33867733
Stock turnover ratio (In
times)
Cost of goods sold
/Average Inventory 5.966776 4.906399
Total assets turnover ratio
Turnover or sales revenue
/Average total assets 0.849669 0.760468
Fixed assets turnover ratio
Turnover or sales revenue
/Average fixed assets 2.358737 2.146987
Receivables or debtors
turnover ratio (in days)
(Debtors * 365) / Credit
sales 42.19565 50.7103
Investment ratios
Particulars Formula 2017 2018
Earnings per share
(Net income - preferred
dividend) / Number of
shares outstanding 5,997 6,461
Recommendations to the Samsung PLC that is being based on the analysis and interpretation
of the financial position:
As the profitability ratio is the most valuable for the business and one of the most frequently
used tool in doing the financial analysis of ratio that is being used to determine the
company’s bottom line and return to its investors. As the Samsung PLC is having the positive
impact of this ratio and it shows the company’s overall efficiency as well as performance.

In the case of liquidity ratio of Samsung PLC is also having the positive impact on the
business from the previous year as they are the important class in the financial matrix as it is
being used to determine the ability of the debtors to pay off their current debt obligations
without raising the external capital on the company. From the above analysis it is being
clearly interpret ate that the company is having the ability to pay off its debt obligation and
maintains the margin of safety through the various calculations and the company is having
the ability that they can convert their cash very quickly and it shows the company is having
more liquid and having the better coverage of its outstanding debt.
Solvency ratio is the ratio that shows the company ability to meet its long term obligations so it is
important to keep the eye on the solvency ratio and it helps the company in preventing the bankrupt
and the company has maintain the good solvency ratio (Wuttke and et.al., 2013).
As the company is having the favourable Efficiency ratio that shows the company is how well in
utilising its assets to generate the income , as the company often looks to collect the cash from the
customer or it represent the time the company convert its inventory into the cash. As Samsung is good
in selling its product with the average price at high volumes.
Investment ratio is also increasing as it assess the company performance of distributing its shares by
giving the dividend and the company has paid good amount of dividend.
Overall the company is doing the growth as the Samsung is being reached the economies of scale by
outsourcing its production to different countries and gain the competitive advantage in producing the
quality as well as maintain the small cost as by offering the product at low cost from its competitors.
As Samsung is doing the continuous growth and now it becomes the one of the most recognisable
brand in the world. As company has did the financial growth from 2017 to 2018 as the earning per
share is being increased from that the investors will invest more in the company (Yazdanfar and
Öhman, 2015).

REFERENCES
Books and journals
Wuttke, D.A., Blome, C., Foerstl, K. and Henke, M., 2013. Managing the innovation
adoption of supply chain finance—Empirical evidence from six European case
studies. Journal of Business Logistics. 34(2). pp.148-166.
Yazdanfar, D. and Öhman, P., 2015. Debt financing and firm performance: an empirical
study based on Swedish data. The Journal of Risk Finance. 16(1. pp.102-118.
Christensen, D.M., Dhaliwal, D.S., Boivie, S. and Graffin, S.D., 2015. Top management
conservatism and corporate risk strategies: Evidence from managers' personal political
orientation and corporate tax avoidance. Strategic Management Journal. 36(12).
pp.1918-1938.
Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk
management: Review, critique, and research directions. Long range planning. 48(4).
pp.265-276.