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3 pages/≈825 words
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3
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
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MS Word
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Total cost:
$ 14.04
Topic:
Case Study on Financials
Essay Instructions:
Any company of your choosing would be fine.
Choose a publicly held company and, using the Internet, review its most current annual report. Evaluate the health of the corporation you picked based upon your analysis of its financial statements: balance sheets, income statements, cash flow statements, and statements of shareholders' equity. Then, research a similar sized competitor for comparison.
Instructions
Write a 3–4 page report suggesting ways to improve the company's financial health.
Conduct a vertical, horizontal, and ratio analysis on four financial statements.
Compare the ratio, which includes liquidity, profitability, and solvency, with the industry benchmark and one other comparable competitor.
Synthesize the results of the three financial analysis tests to determine the overall health of the organization.
Present an accurate interpretation of the company's current financial health, including risks. Support your conclusions.
Recommend three ways to improve the company's financial health, including one example for each that has been used in the industry.
Essay Sample Content Preview:
Case Study on Financials
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Case Study on Financials
Background and Overview
Samsung is a Korean conglomerate that has significantly specialized in the technology industry. The company, formed in 1938 by LeeByung-chul has succeeded in the industry and its main rival in the international market is Apple Inc. The worldwide financial success of Samsung and Apple will be compared and contrasted in this paper. Primarily, in this case, the income statement, balance sheet, cash flow statement, and shareholders' equity will be utilized in deriving financial ratios (Samsungsecuritie.com). Such ratios will then be used to evaluate the health of the corporation.
Ratio Analysis
The vertical and horizontal analysis of the company will generate the liquidity, profitability, and solvency ratios. Such ratios will be used in comparing the two companies while evaluating the financial health of Samsung. The liquidity ratio will primarily show the company’s current ability to meet its daily financial needs. The solvency ratio will evaluate the firm's ability to settle its current obligations through the use of the existing assets. Besides, the profitability ratios show the current income levels generated through the sale of goods and services by the firm.
(All values are in Million U.S. Dollars except for the ratios)
1. Liquidity Ratio
a). Current ratio =
For Samsung = 195,936,557/ 75,719,452 =2.59
For Apple = 143692/133973 = 1.07
The ratio aids management in noting whether the available assets can meet short term financial needs when they arise. From the ratio, it can be noted that Samsung is financially healthy because the value generated is higher than the industry benchmark of 1.7 (Yahoo Finance, 2023). The company has no financial risk because the current assets available can meet immediate financial needs with ease. The assets are higher than the current obligations. Besides, Samsung is performing better than its main rival, Apple Inc. The lower current ratio of 1.07, in the case of Apple, shows that the former's financial health is poorer, when compared to Samsung’s (NASDAQ, 2023). Based on such analysis, Samsung is financially healthier and is at no risk of suffering from low liquidity as compared to Apple Inc.
b). Quick ratio=
For Samsung = 144,310,683/ 75,719,452 =1.91
For Apple =137181/133973 = 1.02
The ratio will show whether the firm is able to meet its immediate ca...
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