Financial Data and Strategic Decision Making

Financial Data and
Strategic Decision
Making

Contents
INTRODUCTION...........................................................................................................................3
TASK 1 Financial Data and Strategic Decision Making.................................................................3
(Covered in PPT).........................................................................................................................3
TASK 2 Discussion Paper...............................................................................................................3
2.1 Interpretation of financial ratios of Samsung PLC to analyse the current viability of the
Company......................................................................................................................................3
2.2 Comparative analysis of financial ratio for Samsung PLC:..................................................5
2.3 Recommendation to Samsung PLC based on evaluation and interpretation of financial
position......................................................................................................................................10
TASK 3 Information Leaflet.........................................................................................................11
3.1 Effect of innovative accounting methods on strategic choices............................................11
3.2 Ratio analysis's shortcomings as a tool for strategic decision-making................................11
3.3 The significance of cash flow management when assessing capital spending proposals....12
3.4 Methods and tools are recommended to help businesses analyse financial data for the aim
of making strategic decisions.....................................................................................................12
TASK 4 Capital Expenditure Appraisal........................................................................................13
4.1 Assessment of capital expenditure proposal with the help of suitable financial technique:13
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Finance refers to the procedure of increasing funds that help company to meet their day to
day operational need and wants. All businesses have financial needs since they support the
corporations' demand for operating capital (Cao, Guo and Zhang., 2020). In the below report,
Financial statements of the company is assessed which include income statement, statement of
financial position and cash flow statement which help company to analyse their financial
performance. There are other risk categories that have an impact on company strategy, such as
credit risk, market risk, liquidity risk, etc. These categories have been briefly outlined. This
report delivers a financial analysis of Samsung PLC's financial data, including ratio analysis for
several accounting periods so that success may be assessed. It has been suggested to Samsung
PLC that they improvise their approach in order to enhance commercial operations and
procedures. At the conclusion of this report, a capital budgeting choice has been taken regarding
the substitute of an out-dated machine with a new one using various financial techniques,
including the Net Present Value method, Internal Rate of Return method, Profitability index, etc.,
and a determination has been made as to whether or not such a replacement is advantageous to
the entity.
TASK 1 Financial Data and Strategic Decision Making
(Covered in PPT)
TASK 2 Discussion Paper
2.1 Interpretation of financial ratios of Samsung PLC to analyse the current viability of the
Company
Samsung is named as Samsung electronics limited established during the year 1969 and
registered as stock market listed company during the year 1975. They deals in different product
segments which includes consumer electronics, mobile telecommunication, information
technologies etc. Where Consumer electronics includes various products like television,
washing machines, air conditioners etc. Mobile telecommunication includes mobile handsets,
telecommunication networks, workstations etc. Financial accounting books is prepared by the
Korean firm which known as Korean IFRS (Dieci and He, 2018).

Analysing the financial statement of the group, which are expressed in USD thousand for the
years 2021, 2020, 2019 and 2018, and evaluating changes in financial figures have been done,
and the results are listed below: -
 Statement of financial Position: After examining Samsung Plc's financial sheet data, it
was determined that the company's total current assets for the fiscal years ending
December 2021 and 2020 were USD 190,685,555 and 173,250,348 respectively. Their
current assets for the years ended 2019 and 2018 were 155,634,050 and 149,895,684
respectively, showing a reduction in current assets, which may have been caused by
Samsung PLC's rising and falling operating cash operations. However, a rise in another
asset, a fall in their liabilities or equity, or any operational expenditure, might quickly
counteract such a decline. They also have non-current assets of 372,888,268 and
330,596,969 in 2021 and 2020, respectively. The majority of these assets are in the form
of property, plant, and equipment, accounting for about 53 % assets. This merely shows
that Samsung has made investments in the creation of fixed infrastructure around the
world in order to grow their business as they deal in a variety of products. Analyzing the
non-current assets for 2019 and 2018, which were 302,511,023 and 291,178,800
respectively, similar flows were seen. Here, Samsung Plc's creation of intangible assets of
17,764,234 and 12,777,442 in addition to property, plant, and equipment makes a
difference. The total current liability for the years 2021 and 2020 is 77,018,789 and
66,081,991 respectively, reflecting an increase in current liability. This could be because
Covid 19 affected the operating cycle of many businesses during that year, and as a result
Samsung needs more money to flow into their working capital since the products and
services are not consumed during that time by consumers, whether residential or
institutional. Similar figures for the 2019 and 2018 periods are 54,727,544 and
59,274,029 respectively, which indicate a decrease in current liabilities and indicate that
Samsung has recovered from the epidemic and is able to earn enough cash to meet its
short-term obligations (Goyal, Wahal and Yavuz., 2020).
 Statement of financial Performance: The gross profit for Samsung was 110,284,715 in
2017, and it climbed to KRW 110,284,715 in 2018. After that, it decreased to 83,161,332
in 2019 and then increased to 92,318,692 in 2020. The cost of doing business for the
company has gone up since 2017. In 2017, Samsung's net profit was 41,344,569, while in