Financial Analysis of Samsung and Apple Companies

Running head: FINANCIAL ANALYSIS
Financial Analysis
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Author’s Note:

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FINANCIAL ANALYSIS
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................3
Horizontal Analysis of the Companies........................................................................................3
Vertical Analysis of the Companies............................................................................................9
Ratio Analysis............................................................................................................................14
Corporate Social Responsibility of Companies.........................................................................19
Reference.......................................................................................................................................22

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FINANCIAL ANALYSIS
Introduction
The main purpose of this assessment is to analyze the financial statements of the two
companies over a period of 4 years. The companies which are considered for analysis in this
assessment are Samsung and Apple companies which are considered to Software and Tech giants
in the Industry. The focus of the discussion is to consider the financial performance of both the
companies over a time period for which purpose tools such as ratio analysis and vertical and
horizontal analysis for the purpose of comparing the financial performance of both the
companies (Fleisher and Bensoussan 2015). The financial performance of the business is
conducted for the purpose of reviewing which company has a better performance.
Overview of the Companies
Apple Inc is an American Multinational Company which is engaged in the business of
technology and the business has headquarters in California. The business develops software,
consumer electronics and computer software. The major products which are introduced by Apple
Inc are Iphone, Ipad, Macbook and several other electronic products (Apple. 2018). The
company is known for innovation and the products of the company are known to be of highest
quality.
Samsung Inc is a company which has its headquarters in Seoul and the business is a
South Korean Multinational Conglomerate. The company is engaged in the business of
Technological development and produces consumer’s electronics. The major products which the
company has introduced are Samsung Galaxy, Samsung J series and similar other products
(Samsung global. 2018). The company is considered to be one of the leading competitors in
Technology and Consumer electronics Market.

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FINANCIAL ANALYSIS
Discussion
The assessment requires analysis of the financial performance of companies which are
Apple and Samsung which are considered to be close rivals of the business. Both of the business
is engaged in the business of providing consumers with consumer electronics and are leading
competitors in the market. In order to analysis the financial performance of the two companies,
tools such as ratio analysis and horizontal and vertical analysis of the financial statements of the
company are to be conducted (Edmonds et al. 2013). The tools will be used so that the
comparison between the two companies can be effectively.
Horizontal analysis considers percentage change in the items of the financial statements
from the last year in order to ascertain whether the performance of the business is appropriate in
comparison with previous year estimates. This is also known as trend analysis and is considered
to be an efficient tool in measuring the changes which takes in the financial estimates over the
years (Weygandt, Kimmel and Kieso 2015). On the other hand, vertical analysis of a financial
statement considers a constant base which is considered to be a financial performance indicator
on the basis of which the percentage of each item of the financial statement is computed. In the
case of analysis of the performance, both vertical analysis and horizontal analysis is undertaken
for both apple and Samsung company.
Horizontal Analysis of the Companies
Apple Inc

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FINANCIAL ANALYSIS
Figure 1: (Horizontal Analysis of Profit and Loss Statement of Apple Inc)
Source: (Created by Author)

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FINANCIAL ANALYSIS
Figure 2: (Horizontal Analysis of Balance Sheet of Apple Inc)
Source: (Created by Author)
The horizontal Analysis of Apple Inc is conducted on both profit and loss statement and
the balance sheet of the company in order to analyze the growth trends (Needles, Powers and
Crosson 2013). There has been a significant increase in the sales revenue of the business as
shown by the trends which shows that there has been an increase of 6%. This suggest that the
operational efficiency of the business has improved as shown in the table above. Due to the