Running Head: FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 1

Financial Statement Analysis of Samsung

Ram Shankar Shah

BUS 550 Financial Management

Professor: Mr. Rajan Kadel

Westcliff University
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 2

Abstract

This study is directed with examine the monetary articulation of Samsung hardware co.

Ltd. This paper indicates the graphs from claiming deals Furthermore expense from claiming

products sold Also net pay of the Samsung. This paper indicates the annualized rate progress in

bargains again days gone by five A long time. This investigation may be directed to would level

and verthandi dissection of Samsungs accounting report whats more wages proclamation. This

examine additionally indicates the twenty distinctive proportion examination of the previous two

quite a while. The yearly P/E proportion from claiming Samsung alternately days gone by five A

long time is additionally demonstrated in this ponder.

The discoveries of this contemplate will assistance on figure out if will purchase the offer

of the Samsung hardware co. Ltd or not.

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 3

Introduction

Financial Analyses investigation may be those methodology about recognizing the

monetary danger and benefit of a benefits of the business by dissecting those segments about

monetary record Also money proclamations. Fiscal explanations provide for the practically

comprehensively open information with respect to general population corporations budgetary

exercises ahead which moguls and different stakeholders need aid depended to assess those

arrange Also execution from claiming organizations Also corporate chiefs (Healy & Palepu,

2012).

Financial Analyses could be investigated utilizing two methods:

Horizontal and Vertical Analysis

. Use of ratios (Liquidity ratio, Activity ratio, Leverage ratio and profitability ratio)

Graphs of Sales and Cost of Goods Sold (COGS)

Year 2012 2013 2014 2015 2016

Sales 201,103,613 228,692,667 206,205,987 200,653,482 201,866,745

Cost of Goods 126,651,931 137,696,309 128,278,800 123,482,118 120,277,715

Sold
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 4

400000000

350000000

300000000

250000000

200000000 Cost of Goods Sold

Sales
150000000

100000000

50000000

0
1 2 3 4 5

Graph of Net Income

Year 2012 2013 2014 2015 2016

Net
Income 23,185,375 29,821,215 23,082,499 18,694,628 22,415,655

35000000

30000000

25000000

20000000
Net Income
15000000 Year

10000000

5000000

0
1 2 3 4 5

Question no. 2:
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 5

The annualized percentage change in sales over the last five years:

Year 2012 2013 Rate 2014 Rate 2015 Rate 2016 Rate
Sales 201,103,613 228,692,667 13.72 206,205,987 -9.83 200,653,482 -2.69 201,866,745 1.006

Question no. 3:

Horizontal Analysis:

Horizontal analysis is a financial statement analysis method that evaluates an

arrangement of financial statement information through a timeframe (Kimmel, Weygandt &

Kieso, 2010).Horizontal analysis will be Additionally called pattern dissection Concerning

illustration it aides should assess the pattern circumstances What's more bearing for particular

figures alternately ratio over a timeframe.

Concerning horizontal analysis is the correlation about fiscal majority of the data of the

association for days gone by fiscal data over a period frame, it aides the management

Furthermore investigator should have the capacity will survey those execution of the association

in examination with past time. Likewise a result, such examination could be used to explore

whatever reasons to concern and take care of issues.

Solution:

Samsung Electronics Co. Ltd

Horizontal Analysis of Balance Sheet

Particulars 2015 2016 Amount % Remarks

Changed Chang
e
Assets
Current assets
Cash:
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 6

Cash and cash 22,636,744 32,111,442.00 9,474,698 41.86 Improved

equi %
Short term 48,856,330 56,070,871.00 7,214,541 14.77 Improved
investment %
Total cash 71,493,074 88,182,313.00 16,689,239 23.34 Improved
%
Receivables 25,168,026 24,279,211.00 -888,815 - Deteriorat
3.53% ed
Inventories 18,811,794 18,353,503.00 -458,291 - Deteriorat
2.44% ed
Prepaid expenses 4,876,635 4,942,021.00 65,386 1.34% Improved
Other current 4,465,196 5,672,656.00 1,207,460 27.04 Improved
assets %
Total current 124,814,725 141,429,704.0 16,614,979 13.31 Improved
assets %
Non Current
Assets
Property, plant
and equip:
Gross property, 205,287,524 225,172,654.0 19,885,130 9.69% Improved
plant
Accumulated - (133,699,613) -14,889,199 12.53 Deteriorat
Depr: 118,810,414 % ed
Net Property, 86,477,110 91,473,041.00 4,995,931 5.78% Improved
plant and equip
Goodwill -
Intangible assets 5,396,311 5,344,020.00 -52,291 - Deteriorat
0.97% ed
Deferred Income 5,589,108 5,321,450.00 -267,658 - Deteriorat
taxes 4.79% ed
Prepaid pension 557,091.00 557,091 100.00
beneficial %
Other Long term 19,902,267 18,049,018.00 -1,853,249 - Deteriorat
assets 9.31% ed
Total non- 117,364,796 120,744,620.0 3,379,824 2.88% Improved
current assets 0
Total Assets 242,179,521 262,174,324.0 19,994,803 8.26% Improved
0
Liabilities and
stockholders
equity
Liabilities
Current
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 7

liabilities:
Short term debt 11,376,973 13,979,606.00 2,602,633 22.88 Improved
%
Capital leases -
Accounts 6,187,291 6,485,039.00 297,748 4.81% Improved
payable
Tax payable 3401625 2,837,353.00 -564,272 - Deteriorat
16.59 ed
%
Other current 29,537,020 31,402,097.00 1,865,077 6.31% Improved
liabilities

Total current 50,502,909 54,704,095.00 4,201,186 8.32% Improved

liabilities

Non-current
liabilities:
Long term debt 1,424,046 1,237,653.00 -186,393 - Deteriorat
13.09 ed
%
Capital leases 72,944 65,127.00 -7,817 - Deteriorat
10.72 ed
%
Deferred Tax 5,154,792 7,293,514.00 2,138,722 41.49 Improved
Liabilities %
Minority Interest 6,183,038 6,538,705.00 355,667 5.75% Improved
Other long term 5,965,025 5,910,902.00 -54,123 - Deteriorat
liabilities 0.91% ed
Total non- 18,799,845 21,045,901.00 2,246,056 11.95 Improved
current %
liabilities
Total liabilities 69,302,754 75,749,996.00 6,447,242 9.30% Improved

Stockholders
equity:
Preferred stock 119,467 119,467.00 0 0.00% Unchange
d
Common stock 778,047 778,047.00 0 0.00% Unchange
d
Additional paid 4,403,893 4,403,893.00 0 0.00% Unchange
in capital d
Retained earning 185,132,014 193,086,317.0 7,954,303 4.30% Improved
0
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 8

Treasury stock
Accumulated -17,556,654 (11,963,396.00 5,593,258 - Deteriorat
other com ) 31.86 ed
%
Total 172,876,767 186,424,328.0 13,547,561 7.84% Improved
stockholders 0
equity
Total liabilities 242,179,521 262,174,324.0 19,994,803 8.26% Improved
and 0
stockholders
equity

In above balance sheet says that Samsung Electronics Co. Ltds total assets increased by

8.26% But total liabilities increased by 9.30% The total stockholders equity increased by

7.84%.

Samsung Electronics Co. Ltd

Horizontal Analysis of Income Statement

Particulars 2015 2016 Amount %Change Remarks

Changed

Revenue 200,653,482 201,866,745.00 1,213,263 0.60% Improved

Cost of revenue 123,482,118 120,277,715.00 -3,204,403 -2.60% Deteriorated

Gross profit 77,171,364 81,589,030.00 4,417,666 5.72% Improved

Operating expenses

Research and 13,705,695 14,111,381.00 405,686 2.96% Improved

development

Sales, General and 22,827,216 24,171,604.00 1,344,388 5.89% Improved

Adm

Restructuring and - 14,065,373.00

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 9

merger

Other operating 14,225,011 14,065,373.00 -159,638 -1.12% Improved

expenses

Total Operating 50,757,922 52,348,358.00 1,590,436 3.13% Improved

Expenses

Operating income 26,413,442 29,240,672.00 2,827,230 10.70% Improved

Interest expenses 567,181 351,009.00 -216,172 -38.11% Deteriorated

Other income 114,734 1,823,989.00 1,709,255 1489.75% Improved

Income before tax 25,960,995 30,713,652.00 4,752,657 18.31% Improved

Provision for income 6,900,851 7,987,560.00 1,086,709 15.75% Improved

Net income from 19,060,144 22,726,092.00 3,665,948 19.23% Improved

Other -365,516 (310,437.00) 55,079 -15.07% Improved

Net income 18,694,628 22,415,655.00 3,721,027 19.90% Improved

Net income available 18,694,628 22,415,655.00 3,721,027 19.90% Improved

Earnings per share: 0

Basic 126305 157,967.00 31,662 25.07% Improved

Diluted 126303 157,967.00 31,664 25.07% Improved

Weighted Average

Share

Basic 149 142.00 -7 -4.70% Deteriorated

Diluted 149 142.00 -7 -4.70% Deteriorated

EBITDA 47,459,033 51,777,626.00 4,318,593 9.10% Improved

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 10

The above income statement shows that the profit increased by 9.10% whiles the net

income increased by 19.90%. Therefore, this shows that the net income has increased from the

year 2015to 2016.

Vertical Analysis:

Vertical analysis is a financial statement analysis technique for assessing that monetary

articulation information which indicates each thing done a monetary articulation Similarly as a

rate of a base measure (Kimmel, Weygandt & Kieso, 2010). Since vertical examination will be

carried out As far as rate basis, they need aid less demanding with get it Also translate. vertical

Investigation will be a suitable apparatus to those association Concerning illustration it serves

investigator Furthermore oversaw economy make restorative movement when compared with

sales, In those expense for products sold alternately different liabilities show up more

stupendous. Similarly, vertical dissection will be the practically viable route with think about a

organizations monetary articulation to business averages..

Solution:

Samsung Electronics Co. Ltd

Vertical Analysis of Balance Sheet

Particulars 2015 2016 Remarks

Amount Percentage Amount Percentage

Assets

Current assets

Cash:

Cash and cash equip. 22,636,744 9.35% 32,111,442.0 12.25% Increased

0
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 11

Short term investment 48,856,330 20.17% 56,070,871.0 21.39% Increased

0
Total cash 71,493,074 29.52% 88,182,313.0 33.63% Increased
0
Receivables 25,168,026 10.39% 24,279,211.0 9.26% Decreased
0
Inventories 18,811,794 7.77% 18,353,503.0 7.00% Decreased
0
Prepaid expenses 4,876,635 2.01% 4,942,021.00 1.89% Decreased

Other current assets 4,465,196 1.84% 5,672,656.00 2.16% Increased

Total current assets 124,814,725 51.53% 141,429,704. 53.94% Increased

00
Non Current Assets 0.00%

Property, plant and 0.00%

equip:

Gross property, plant 205,287,524 84.77% 225,172,654. 85.89% Increased

00
Accumulated Depr: -118,810,414 49.06% (133,699,613 -51.00% Decreased
.00)
Net Property, plant 86,477,110 35.71% 91,473,041.0 34.89% Decreased
0
and equip

Goodwill - 0.00%

Intangible assets 5,396,311 2.23% 5,344,020.00 2.04% Decreased

Deferred Income 5,589,108 2.30% 5,321,450.00 2.03% Decreased

taxes

Other Long term 19,902,267 8.23% 557,091.00 0.21% Decreased

assets

Total non-current 117,364,796 48.47% 18,049,018.0 6.88% Decreased

0
assets

Total Assets 230,422,958 100 242,179,521 100% Increased

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 12

Liabilities and 0.00%

stockholders equity

Liabilities 0.00%

Current liabilities: 0.00%

Short term debt 11,376,973 4.69% 13,979,606.0 5.33% Increased

0
Capital leases - 0.00%

Accounts payable 6,187,291 2.54% 6,485,039.00 2.47% Decreased

Tax payable 3401625 1.40% 2,837,353.00 1.08% Decreased

Other current 29,537,020 12.20% 31,402,097.0 11.98% Decreased

0
liabilities

Total current 50,502,909 20.85% 54,704,095.0 20.87% Increased

0
liabilities

Non-current 0.00%

liabilities:

Long term debt 1,424,046 0.59% 1,237,653.00 0.47% Decreased

Capital leases 72,944 0.03% 65,127.00 0.02% Decreased

Deferred Tax 5,154,792 2.13% 7,293,514.00 2.78% Increased

Liabilities

Minority Interest 6,183,038 2.55% 6,538,705.00 2.49% Decreased

Other long term 5,965,025 2.46% 5,910,902.00 2.25% Decreased

liabilities

Total non-current 18,799,845 7.76% 21,045,901.0 8.03% Increased

0
liabilities
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 13

Total liabilities 69,302,754 28.62% 75,749,996.0 28.89% Increased

0
Stockholders equity: 0.00%

Preferred stock 119,467 0.05% 119,467.00 0.05% Increased

Common stock 778,047 0.32% 778,047.00 0.30% Decreased

Additional paid in 4,403,893 1.82% 4,403,893.00 1.68% Decreased

capital

Retained earning 185,132,014 76.44% 193,086,317. 73.65% Decreased

00
Treasury stock - - 0.00%

Accumulated other -17,556,654 -7.25% (11,963,396. -4.56% Increased

00)
com

Total stockholders 172,876,767 71.38% 186,424,328. 71.11% Decreased

00
equity

Total liabilities and 242,179,521 100% 262,174,324. 100.00% Increased

00
stockholders equity

In the above balance sheet of Samsung Electronics Co. Ltd, we can see that the total

current assets increased by 53.94% while the total current liabilities decrease by 20.87% from the

year 2015 to 2016.

Samsung Electronics Co. Ltd

Vertical Analysis of Income Statement

Particulars 2015 2016 Remarks

Amount Percentage Amount Percentage

Revenue 200,653,482 100.00% 201,866,745.00 100.00%

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 14

Cost of revenue 123,482,118 61.54% 120,277,715.00 59.58% Decreased

Gross profit 77,171,364 38.46% 81,589,030.00 40.42% Increased

Operating expenses

Research and 13,705,695 6.83% 14,111,381.00 6.99% Increased

development

Sales, General and 22,827,216 11.38% 24,171,604.00 11.97% Increased

Adm.

Restructuring and - 14,065,373.00 6.97% Increased

merger

Other operating 14,225,011 7.09% 14,065,373.00 6.97% Decreased

expenses

Total Operating 50,757,922 25.30% 52,348,358.00 25.93% Increased

Expenses

Operating income 26,413,442 13.16% 29,240,672.00 14.49% Increased

Interest expenses 567,181 0.28% 351,009.00 0.17% Decreased

Other income 114,734 0.06% 1,823,989.00 0.90% Increased

Income before tax 25,960,995 12.94% 30,713,652.00 15.21% Increased

Provision for 6,900,851 3.44% 7,987,560.00 3.96% Increased

income

Net income from 19,060,144 9.50% 22,726,092.00 11.26% Increased

Other -365,516 -0.18% (310,437.00) -0.15% Increased

Net income 18,694,628 9.32% 22,415,655.00 11.10% Increased

Net income 18,694,628 9.32% 22,415,655.00 11.10% Increased

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 15

available

Earnings per share:

Basic 126305 0.06% 0.00% Decreased

Diluted 126303 0.06% 157,967.00 0.08% Increased

Weighted Average 0.00% 157,967.00 0.08%

Share

Basic 149 0.00% 142.00

Diluted 149 0.00% 142.00

EBITDA 47,459,033 23.65% 51,777,626.00 25.65% Increased

Question no. 4:

Ratio Analysis:

Formula 2015 2016

1. Current Ratio Current Assets/Current Liabilities 2.47 2.59

2. Quick Ratio Total Current assets - Inventory/ Current 2.1 0.34

Liabilities

3. A/C receivable Sales/ A/c receivable 7.97 8.31

Turnover

4. Inventory Turnover Cost of goods sold/ Inventory 6.56 6.56

5. Total Assets Turnover Sales/ Total Assets O.83 0.77

6. Fixed asset turnover sales/net fixed assets 2.32 2.33

7. Days sales uncollected A/c receivable / Net Sales 0.125 0.12

8. Days sales in inventory Ending Inventory / COGS 0.152 0.15

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 16

9. Debt ratio Total Liabilities / Total Assets 0.29 0.29

10. Equity Ratio Total Equity / Total Assets 0.7138 0.71

11. Debt to Equity Ratio Total Liabilities/ Total Equity 0.4 0.41

12. Times Interest Earned Income before interest expense and 83.68 147.51

income taxes / Interest Expense

13. Profit Margin Net Income/ Net Sales 0.09 0.11

14. Gross Margin Net Sales- COGS/ Net Sales 0.3846 0.40

15. Pay Out Ratio Dividends Paid/ Net Income 0.147 0.16

16. Price-Earnings Ratio Price per share/ earnings per share 0.099 0.118
(P/E)
17. Return on Total Assets Net Income/ total Assets 0.077 0.09

18. Return on Equity Net income/ Total Owner Equity 0.1081 0.12
(ROE)
19. Book value per share Total Owner Equity/ Number of Shares 7.02 9.19
Outstanding
20. Earnings Per Share Net Income/Number of Shares 0.9985 0.9934
Outstanding

Question no. 5:

The average annual P/E ratio of Samsung Electronics Co. Ltd is:

Formula 2012 2013 2014 2015 2016

Price/Earnings Price per share/ Earnings per 15 9.8 8 9.9 11.79
Ratio (P/E) share

Question no. 6

Yes, i will without a doubt purchase all the the offer from claiming Samsung hardware

co. Ltd for myself. It may be a result Samsung may be those biggest cell phone creator in the

planet best keen telephone offers. However those net pay expanded from 2015 should 2016, the

interest from claiming Samsung Smartphone may be verwoerd at present high. With its new
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 17

model hailing each year, the interest for Samsung phones may be high. The most recent model

about Samsung Galaxy S8 will be completing delicately in the market which hails with best

features What's more base cost. Therefore, however there are large portions rivals emerging for

example, Huawei, Gionne, Oppo, those showcase and deals for Samsung will be still setting off

solid. Thus, i will definitely purchase those impart about Samsung, however the net pay of

Samsung diminished.
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 18

Conclusion

This consider indicates the horizontal and vertical analysis of Samsung Electronics Co.

Ltds balance sheet and income statement which indicates the decline to net pay starting with

those quite a while 2015 with 2016. The ponder likewise indicates the graphical representational

of the sales Furthermore cosset from claiming merchandise sold Furthermore net pay of the

Samsung hardware co. Ltds. This investigation Additionally indicates the twelve-month p/e

proportion from claiming Samsung for as far back as five quite some time and the twenty

different proportion examination of the secret word two quite a while for Samsung hardware co.

Ltd.
FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 19

Reference

Haley, P.M., & Palepu, K. G. (2012). Business Analysis Valuation: Using Financial Statements.

Boston: Cengage Learning.

Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2010). Financial Accounting: Tool for Business

Decision Making. New Jersey: John Wiley & Sons, Inc.