Financial Report: An Analysis of Samsung's Performance in the Market

This report presents a financial analysis of Samsung, examining its performance in the international market. It begins with an executive summary and table of contents, followed by an introduction to accounting and financial analysis. The discussion section provides an overview of Samsung, its role in the global market, and the impact of internal and external environmental changes. The core of the report focuses on performance analysis using financial ratios, including liquidity ratios (current and quick ratios) and asset management ratios (average collection period and stock turnover). The analysis covers the years 2017 and 2018, offering insights into Samsung's financial health, efficiency in asset utilization, and cash flow management. The report concludes with a summary of findings and a bibliography of sources used.

Running head: Accounting Financial Report
Accounting Financial Report
Name of the Student
Name of the University
Author Note

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Accounting Financial Report
Executive Summary
The report consists of the meanings of the financial analysis and how it helps the company to
know its performance and how to change it as per their requirements. The report is based
upon the company named Samsung, and it also includes the background of the company and
how it forms its role in the international market. Lastly, the report concludes about the
financial analysis of the company which is done with the help of financial ratio, and it shows
how the company is performing in the market and how it can increase its position in the
current market structures.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Overview of Company...........................................................................................................3
Role of the company in the international market...................................................................4
Changes in the internal environment......................................................................................5
Changes in the External environment....................................................................................5
Performance Analysis of company........................................................................................6
Conclusion................................................................................................................................12
Bibliography.............................................................................................................................13

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Accounting Financial Report
Introduction
Accounting is the process from which the transaction of the business is recorded in the
financial book of the company. Financial analysis is the process from which the evaluation of
the activity of the company is done. This process helps the company to know how they are
performing in the business and how they can improve their performance. The analysis is done
in both internal as well external way. In many internal methods reused and the company
analysis their performance in regards to the previous year performance. In external review
has been done with regards to the competitors of the company and also the industry in which
the company has been situated. It helps them to know the overall performance of the
company and also help them to make future strategies regarding the vision and mission of the
company.
Financial analysis is being done in many ways such as trend analysis of the company, ratio
analysis of the company and also the comparative analysis of the company. In all the analysis
the financial statement of the company is being used, and all the figures have been covered in
different parameters so that it can analyse each figure more easily and effectively so that it
can judge the performance of the company easily. The financial analysis also help the
financial user to make a decision regarding the economic and financial position of the
company as they can know the real value of the firm so they can easily judge the overall
performance and can decision accordingly.
Discussion
Overview of the Company
The assignment is based upon the company named Samsung. It is a conglomerate industry
based company which was founded by the Lee Byung-Chul in the year 1938. It is doing its
business worldwide, and it has diversified its business unit as it deals with consumers

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electronic products, apparel, medical equipment and automotive chemicals. This show that
the company is a very large one and the company had it’s headquartered in Samsung Town,
Seoul. It even offers many services like financial services, hospitality, construction and
Advertising services.
Role of the company in the international market
The company group is one of the leading group in the market as it holds a leading position in
the international market as it has such a large scale of business. The group includes more than
30 companies under it which all the company provides different activities and are in the
different sector, so this helps them to diversify the resources, and as a result, it helps them to
gather more amount of the market. The activities which are performed by the company can be
described as manufacture, suppliers and also the engineering process and it even offers many
services. As the company started its business in international markets as a high tech company
but after some years of experience, it expands its business by producing T.V., microwaves
and also different types of screens, this diversification helps the company to make more
money and help them to gain an edge in the international market. It became one of the biggest
manufacture and sellers of the mobile phone and easily able to dominate the mobile market of
the company.
As the company take advantages of the different activities which are done by the
different companies, the company used the leveraging which is gained in the country, so it
helps them to quickly assess the market and help them to get more customers in respect of the
competitors. To gain advantages in the international market, the company select the proper
location for its product and services which help them to get an edge over the market and also
help them to make proper use of the resources available to the company. As to get the proper
market it does its market research till the product comes out of the industry this helps them to

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overcome the customer's problem which they can face in the company product also help them
to overcome the different issue in the company products.
To meet the requirement of the international market the company have dual option of hiring
process as it follow the Korean process in which the experience and seniority is given priority
so that it helps them to get more skilled and professional employee and on the other hand the
also hire western work culture which is based upon the meritocracy so it has to maintain a
good combination in both hiring process so that it can help them to gain an edge over the
market and also help them to overcome the distance barrier.
Changes in the internal environment
The changes which the company do in the internal is that it changes its product as the
company work in the technology industry, so it has to change its product, because the change
is required by the customers as they want each time an upgrade version of the product to meet
the requirement of the customers company to bring changes and innovate its product. As this
help the company to get more amount of sale and also help them to get an edge over the
market by their product as the change which they bring in the product will help them to get
over the market and also it will help them to increase their price as they have added new
technologies so they can able to increase the price and it will help them to get more amount
of profit. The increase in earning will help them in the expansion of the business.
Changes in the External environment
The changes which can come in the external environment is the change in the need and
preference of the company if there is a change in the taste than it will affect directly to the
profit of the company as the sale of the company will do down, and it will not be able to
sustain in the market. Another change is the law related to the industry may affect the
company financials as if the government impose more amount of tax than it will be hard for

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the company to get back to require position. The other external factor which can affect the
company change in the competitor's product and price so if the company competitors
decreases their price than it will directly affect the company so the company will not be able
to get more amount of business.
Performance Analysis of the company
The analysis of the company has been done with the help of financial ratio. Financial ratio
analysis helps the company to know how they are performing in the market and also what the
changes are required in the management of the company. It has been done in between two
similar types of companies, between the company and the industries in which the company is
working with and also inside the company in between different years. The analysis helps the
financial user to take the decision in regards to the company performance, and also it helps
them to know how the company is performing in the market. The analysis and the
explanation of the company financial ratio are listed below:
Liquidity Ratio
It is one of the types of financial ratio which help the company to know the liquidity
position of the company. It can be classified as Current and Quick Ratio.
Current Ratio
It helps the company to know how much it can pay its current liability debt in regards to the
current asset of the company.
Table No – 1

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Source – Author
The current ratio of the company is very good as in the current year that is 2018 it can be seen
it's 2.53 which is a good sign for the company as it has more amount current asset in
comparison to the current liability so it can easily pay off its short term debt. It can also be
seen that the company has also had perform well in regards with the liquidity as it has
increased from 2017 to 2018 in a good margin so this can show that the company is having a
good position in the market which is reflected by the current asset growth of the company.
Quick ratio
It is a type of liquidity ratio which help the company to know its liquidity position as it
compares the company cash position with the short term obligation, so it shows the real
liquidity position of the company.
Table No – 2
Source – Author
The quick ratio of the company is also good in the current year as it can be seen that in 2018
it is 2.11 so it show that the company is able to have more than sufficient amount of the cash
asset in order to pay the short term debt. It can also be seen that the company has done well in
the last year as its quick ratio have increased from 1.81 to 2.11, so this signifies that the
company is able to run its business smoothly and able to gain huge amount of cash inflow
which helps them to overcome the liquidity problem and also help them to get more liquidity
asset of the company.

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Asset Management Ratio
It is the ratio which helps the company to know the efficiency of their use of the asset in
order to generate the revenue. It checks how effectively the company is using its asset and
how well their management is in regards to the inventory and trade payables. It can be
classified as Average collection period and Stock turnover.
Average collection period
It is the analysis of the company length of the sale and the time they collect the cash. As it
helps them to know how easily rotate the cash of the company and also help them to know
the working turnover of the company.
Table No – 3
Source - Author
Average collection period of the company is increasing as it can be seen that the company
had increased the collection period in 2018 so this signifies that the company is making more
less policy in regards with the collection of cash it is done so that the company can increase
the sale of the business this helps them to get more amount of the sale and help them to
increase the profit of the company.
Stock Collection Period

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It is the indicator which helps the company to know how to company treats its stock in the
company. This show the level of the stock which the company maintained and how they treat
the stock in the financial statements
Table No – 4
Author - Source
As per the company it is seen that the stock collection period of the company is very high so
this signify that had a high level of stock turnover so it can create a shortage of inventory, but
this is a good sign as it has been decreased in the current year which shows a good position of
the company and is able to reduce the stock turnover of the company.
Leverage Ratio
It is the ratio which shows the debt management of the company. It shows the uses of the
debt in the company as it has a combination of the debt and equity and how the company uses
it in their business. It can be classified as Debt ratio and Debt-Equity ratio.
Debt ratio
It signifies the use of the debt in regards to the company total asset. It helps them to know
how the company uses the debt of the company and how much it’s leveraged in the company

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Table No – 5
Source - Author
It can be seen that the company having a good debt ratio in the current year as it 0.27 so this
signify the company had not much use of the debt in the financial statement of the company
and it can also be seen that the debt ratio has been decreased in the current year in respect of
2017 so this is a good sign as the company is able to manage its debt properly and also show
a good performance indicator in the financial statement of the company.
Debt-Equity Ratio
This ratio shows the users of the financial leverage of the company. It shows the
combination of the debt in regards to the equity and helps to know how good the company
use the combination of the debt and equity
Table No – 6
Source - Author
It can be seen from the above debt-equity ratio is a decrease in the current year, so this shows
a good sign for the firm that the company is having a balanced combination of the capital and
also show that the company is having an adequate number of the capital in regards with long
term viability of the company
Profitability Ratio

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The ratio shows the profit of the company, and it shows the firm ability to earn the
profit of the sale and the assets and equity. It can be classified as Gross profit and Net profit
Margin.
Gross Profit Margin
The gross profit of the company shows the profit of the company after deducting the
operating expenses. This show the initial amount of the profit which the company earn by
selling the product.
Table No – 7
Source – Author
It can be seen that the company is able to earn a good amount of gross profit as it had earned
45.69% in the current year so this show that the company is able to show that the company is
earning good amount of business, and it can also be seen that the company decreased in 2018
to compare to 2017 so this show that the company is not able to get more amount of business
in the current year so they should change their marketing style so that it can attract more
customers.
Net Profit Margin
This shows the real amount of the profit which the company have got after deducting the
expenses from the income of the company.

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Table No – 8
Source – Author
It can be seen that company had done very well in regards with the net profit of the company
so this show the company is having a good financial position in the market and also able to
sustain in the market. It can also be seen that the company has increased its net profit in the
current year compare to the previous year so this so that the company is able to reduce its cost
of goods and other expenses and as a result is able to increase the profit of the company.
Conclusion
The report concludes about the financial analysis which has been used by the company to
know the preformation in the business. This analysis helps the company where they are
standing and also help them to know who they can grow their position in the market.
Lastly, the report concludes about the company named Samsung and how it performs the
role as per the international market. The report also has the financial analysis of the company
with the help of the financial ratio, and it also has the analysis regarding the ratio and how the
company is performing in the industry, and it also compares in different years and how it has
grown in all the years.

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