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Financial Analysis Management & Entrepreneurship Assignment

Added on - 22 Oct 2020

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FINANCIAL ANALYSISMANAGEMENT &ENTREPRENEURSHIP
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Vertical analysis..........................................................................................................................5Horizontal analysis......................................................................................................................62. CSR report of Apple and Samsung.........................................................................................7CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11APPENDIX....................................................................................................................................13
INTRODUCTIONFinancial analysis refers to a measurement of stability, profitability of the company.Chief financial officer prepare report by using key ratio and information would be taken byfinancial statement and other report reports. Financial analysis management is essential for takeinvestment decision by comparing past performance and future performance of the company. Ithelps to analysis to meet long term obligations, liquidity. Stability and profitability so companycan achieve goals and objectives. Present report based on financial analysts of apple andSamsung company both company deals in electronic items like laptop, mobile, I-pad andrefrigerator etc. Apple Company is the largest company all over the world. Financial analysts andmanagement report includes compare the financial performance and financial position of theApple company and Samsung company by using last four years data. It also includes analysis oftheir corporate social responsibility sections over the last years.MAIN BODYRatios analysis– It is quantitative analysis that represent financial position and financialhealth of the company. It involves evaluating the financial position and performance byevaluating current data and historical data of the company . It provides liquidity position ,operational performance, profitability and profitability of the company . It provide information tocustomers , investor and employees of the company . It is essential to comparison of one'scompany with other company . It is better way to understand profitability and efficiency of thecompany.Profitability ratios-it is use to assess the business earning capacity from the sales of thecompany over a specific year. Higher profitability ratio shows positive impact on investors andcustomers. It includes net profit margin , gross profit margin etc.Liquidity ratio- it represents the relationship between current assets and current liabilities.It shows company have sufficient assets to meet out its current liabilities . Assets must be higherthan liabilities to reduce their debt. It includes quick ratio, current ratios.Solvency ratios- it measure the companies abilities to meet out its long term debt of thecompany. It is mostly used by lenders and investors to determine companies abilities to pay theirdebt. It includes equity debt ratios, debt to assets ratio etc.Ratio analysis of apple1
Profitability ratio analysisAppleSamsungParticularsFormula20142015201620172014201520162017GP ratioGross profit /sales * 10038.59%40.06%39.08%38.47%37.79%38.46%40.42%46.03%NP ratioNet profit /sales * 10021.61%22.85%21.19%21.09%.11.19%9.32%11.10%17.26%Interpretation:From the above table can evaluate that apple company have 40.06 % it was the Highestgross profit over the years. However, from 2015 company gross profit ratio decreased year byyear because company fails to manage all direct expenses. On the other hand Samsung followstrong strategy for adjust direct expenses and purchases of raw material so there is increase intrends company increase their gross profit ratio from 37.79% to 46.03%.Net profit ratio represent the relationship between net profits and revenue or net sales ofcompany. Apple's net profit ratio have been decreasing trends because there indirect expenseswas high rather than indirect receivable. On 2015 net profit ratio was 21.61% but on 2017 netprofit ratio was decrease till 21.09% . On the other hand company indirect expenses was high sothere net profit ratio was lower than other year but from 2016 company was decrease indirectexpenses so net profit ratio was improved.2
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