Financial Analysis Management and Enterprises
Added on 2020-12-29
15 Pages3955 Words373 Views
Financial AnalysisManagement & Enterprise
Table of ContentsINTRODUCTION...........................................................................................................................11. Overview of Samsung and Apple...........................................................................................1TASK ..............................................................................................................................................22. Analyses..................................................................................................................................22.1 Vertical analyses...................................................................................................................22.2 Horizontal analyses...............................................................................................................32.3 Ratio analyses........................................................................................................................33. Conclusion...............................................................................................................................94. Corporate social responsibility................................................................................................95. Appendix...............................................................................................................................11REFERENCES..............................................................................................................................13
INTRODUCTIONFinancial analyses management is the process of evaluating a company's financialstatements in order to ascertain their true financial position in the market. This analyses isperformed with the aim of detect whether the specific company is stable, consistently growing,solvent or not. This evaluation can be done by various tools such as ratio analyses, horizontalanalyses and vertical analyses. In this project report two competitive companies oftelecommunication sector are chosen, which are Apple and Samsung.1. Overview of Samsung and Apple Samsung electronics is engaged in telecommunication sector which was established in1969 and since then, this organisation is showing considerably growing rate. Current, thiscompany is managing 220 subsidiaries and generating average annual revenue of 220 trillion.This company is engaged in manufacturing products like printers, monitors, smartphones,televisions, refrigerators, air conditioners, tablets and many more. The main objective ofSamsung electronics is to produce innovative products which can improve the standard of livingof their consumers. Samsung is considered as the world's largest manufacturers of television andsmartphones since 2011. Headquarters of Samsung is in South Korea and it operates in numerouscountries and have access across the globe. This company is the major vendor of tablet,especially tablets which are Android powered. Vision statement of Samsung electronics is“Inspire the world, create the future”, by which they have to achieve their aim of manufacturingmost innovative units of electronics.Apple Inc. is an American multinational technology company which has its headquartersin California and was established in 1976. This company designs, develops and sells electronicsand computer software. This company has a wide range of products including iPhone, iPad, iPod,Mac book and many more. Apple is also engaged in providing various services such asnetworking solutions. Examples of services provided by this company are iTunes, Apple music,Mac app etc. Apple was founded by Steve Jobs and incorporated as Apple Computers, Inc.Apple has captured major market share in the field of smartphones by introducing variousinnovative and modern units of smartphones. Total revenue earned by this company is onaverage 229 Billion per year along with high level brand loyalty. Marketing strategies of AppleInc., focuses of sophistication so that they can attract upper class segment of the market.1
TASK 2. AnalysesIn this project product, various analyses such as vertical, horizontal and ratio analyses areconducted in order to evaluate financial position of both the companies. Vertical and horizontalanalyses is done to ascertain growth of the company by measuring performance in percentage.Ratio analyses is done to determine various aspects such as profitability, solvency and liquidityability of the organisation.2.1 Vertical analysesVertical analyses of Apple2014201520162017Revenue100.00%100.00%100.00%100.00%Gross profit38.60%40.10%39.10%38.46%Research and development expenses 3.30%3.50%4.70%5.05%Earnings before interest and taxes33.80%36.20%34.00%26.76%Vertical analyses of Samsung2014201520162017Revenue100.00%100.00%100.00%100.00%Gross profit37.70%38.46%40.41%45.98%Research and development expenses6.97%6.83%6.99%6.80%Earnings before interest and taxes12.13%13.16%14.48%22.36%Comparison of both the companiesAccording to the vertical analyses, Apple company has much more profit earning abilitythan Samsung. Samsung shows increasing trend when it comes to profitability, but Apple showsirregular trend in its profitability. Latest results of both these companies reflect that Apple earns26.76% of profit against its sales revenue and Samsung earns 22.36% of profit against its salesrevenue. Gross profit earning power is relatively same of both the companies, that is 45.98% ofSamsung and 38.46% of Apple but due to several costs involvement such as research anddevelopment expenses, operating expenses, selling expenses etc. Samsung is earning lowincome.Conclusion2
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