Finance for Strategic Managers: Samsung PLC Analysis Presentation

This presentation analyzes Samsung PLC, a South Korean electronics company, focusing on financial data and its importance in strategic decision-making. It covers key financial data sources like the balance sheet, income statement, and cash flow statement, explaining their role in assessing a company's financial position and performance. The presentation highlights how financial data supports business strategy formulation, including the preparation of a Balance Score Card and the identification of efficiency through profitability ratios. It also addresses various risks related to business decisions, such as market, credit, operational, and liquidity risks, along with Samsung's financial risk management strategies. The presentation further explores capital expenditure, detailing methods like discounted cash flow (Net Present Value and Internal Rate of Return), payback period, and rate of return. This comprehensive analysis provides valuable insights for strategic managers seeking to understand and apply financial data in their decision-making processes.

Samsung PLC

Samsung PLC
1. It is a South Korean electronics company.
2. It has headquarter in Suwon, South Korea.
3. It is a public sector company traded at Koran Stock
Exchange (KRX).
4. Samsung is the parent company.
5. It is the world’s largest manufacturer of mobile phones
and memory chips.

Sources of Financial Data
The three main sources of financial data are:
1. Company’s Balance sheet- It outlines the physical and financial
resources available during the business activities of a company.
It helps in analysing the current financial position of a company.
2. Income Statement- It provides information on the company’s
performance. Revenues and expenses incurred from the
business operations can be known.
3. Cash Flow Statement- It shows the actual money a company
has generated from the business operations.

Sources of Financial Data of
Samsung PLC
 Statements of Financial Position
 Statement of Profit or loss
 Statement of Comprehensive Income
 Statement of Changes in Equity
 Statement of cash flows

Importance of Financial Data for
Business Strategy Formulation
 Financial Data helps in preparing the Balance Score Card, which helps in
monitoring and executing the business strategy.
 The net cash available from the financial data helps in identifying the
efficiency of the company, in terms of utilising the financial resources
 . The Profitability ratios helps in measuring the profits, sales and net worth
of a business. Financial data will help in finding the profitability ratios of a
company with respect to its business goals.

Various Risks Related to Business
Decisions
1. Market Risk- This is the risk of changing market conditions of a
business. Accordingly the business will have to change its decisions
on business strategy.
2. Credit Risk- This is the risk with suppliers.
3. Operational Risk- Various operational risks includes, fraud risk,
business model risk and personnel problems.
4. Liquidity risk-

Financial Risk Management of
Samsung PLC
 It focuses on market risk, liquidity risk and credit risks from the business
operation.
 Various financial risk policy and programs are implemented to manage the
risks.
 Derivatives are used to hedge the risks.

Capital Expenditure
Capital Expenditure are the funds used for doing
investments in new projects. These are the
expenses of a company.

Various Method for Appraising
Capital Expenditure Projects
 Discounted Cash flow- This is done by calculating the discount
rate of the future cash flow from the projects. The two types of
discounted methods are Net Present Value (NPV) and
International Rate of Return(IRR).
 Payback Period- This method is used to calculate the time period
required to recover the initial cash outlay form the projects.
 Rate of Return- This is used to calculate the expected profits from
the invested projects.

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