FIN 419 rewriting work
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FIN419SignatureAssignmentFinancialStatementAnalysisandFirmPerformanceSamsung.pptxKyle Perez
FIN / 419
November 26th, 2018
Kate Stowe
Financial Statement Analysis and Firm Performance
SAMSUNG GROUP:
Multinational conglomerate company
The company that I choose for this assignment is Samsung Group
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EXECUTIVE SUMMARY:
Samsung group is a South Korean multi national company that was created in 1938 by a man named Lee Byung-Chul, is a very popular electronic company. Samsung is well known for their TVs, and cell phones, but have expanded out to things such as Home appliances and entertainment systems. Apple was the number one seller when it came to devices such as cell phones but according to the 2012 annual report Samsung they knocked Apple down by producing better structures for digital appliances, printers, cameras and system LSI. Samsung introduced a new line of cell phones called the Galaxy and the Note which are now the strongest competitive competitors with Apple.
Based on current market trends and Samsung’s impressive strategic management, its position as a top electronic producer and IT solutions provider is undisputed.
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EXECUTIVE SUMMARY: cont. Here is a list of things Samsung is known for their excellence.
Impressive Speed, Reliability
Energy Saving
Cheap Costing
Strong Customer Service
Great Product Quality
Constantly Creating New Technology
Great Warranties for their devices
One of the best specs in the quality in Samsung's devices is their High Definition screens and picture perfect resolutions.
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EXECUTIVE SUMMARY: cont. Here is a list of things Samsung can improve on.
Battery Life on their Products
Lower Cost For Newer Devices
Better Advertising and Promotions
Can do promos such as Student Discounts
Some competitive companies such as Apple offer students discounts on their monthly bills in order to attract more customers.
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Description of the foreign country:
The country that I picked to open a Samsung headquarters would be Vietnam. There are several reasons why I choose that country. Mainly being the difference between their VND and our USD. For every 1 USD we transfer we would get 22,886 VND, making our $300,000 loan go a long way. Another main reason that I chose Vietnam is because of the neighbor countries that are surrounding can also be future ventures that we can take the business into.
Vietnam not only has a great currency ratio, but they also have a lot of land and not that much competition with a population of around 95 million people as of 2017.
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Description of the foreign country: cont.
Vietnam is a country that has many strengths and weaknesses for businesses. Overall the business in Vietnam is not a risk because according to Global Edge their environment is rated a B and the best part is that the country as a whole is only growing. One major strength, that is also a weakness is the trade within Vietnam. It is a strength because this is where the country is growing the most drastically. Over the last two years, Vietnam has also became the United States’ fastest growing export market.
Vietnam is a county located in the southern region of Asia. It is also popularly known for its beaches, which means a lot of tourist and potential customers.
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Market and Company Analysis:
Samsung's Market includes typically individuals between the ages 18 and 45 that have an active lifestyle. The company can also include another segment for its smart watches by Gender. Usually the newer generations or known as Millennia's are the perfect market for this type of item because they are the ones who are trying to track their lifestyles and are living their life on the go and can not always hold a phone to their ear. This is also the generation that is used to the new day technology such as video games, social media and apps.
Samsung's target audience is different for each device, but most of the devices typically have the same age range.
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Market and Company Analysis: cont.
Samsung Has Continuously been a market leader in memory chip technology, year after year remaining ahead of their competitors. However the industry is expected to experience a cyclical downturn. The memory industry is experiencing rivalry as Samsung faces new challenges from places such as Chinese entrants. Many mainland Chinese firms who have focused on the logic chip market are now transitioning over to the memory chip even though the barriers to entry are high in the memory industry. Competitors have noticed the high capital investment that comes along with switching.
Samsung's target audience is different for each device, but most of the devices typically have the same age range.
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Market and Sales Operational Plan:
Samsung could take advantage of the market by lowering the prices of their devices in order to make it difficult for the competition to compete. The main buyers are OEMs and no individual one controls more than 20% of the market. Since OEMs are price conscious and pay a 1% premium they would remain loyal to the Samsung brand for price and quality. Another option Samsung has is to collaborate with competitors in order to gain access to cheap resources, and tap into other markets.
The operational plan for Samsung is to open a headquarter in Vietnam and allow the devices to sell for cheaper then ones that are already available, giving the people greater items for lesser money.
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Market and Sales Operational Plan: cont.
Samsung Groups vision is aimed at inspiring the world and creating the future. Being one of the leading global electronic companies, Samsung is characterized by innovative products, new technologies, and creative solutions. Samsung’s vision statement is dynamic and changes after every ten years to match current technology and business related climate. Samsung’s vision is focused on developing its brands and being an innovative leader in new markets.
My sales plan for Samsung is that we offer deals for new customers that can either bring in their older items that are different brands, and also for people that do not make enough money.
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How you plan to use the $300,000:
First I would take some of the money to buy land and pay local construction workers to build a building for the business. Then once the building is ready I would have to buy inventory and other needs to get the business started.
Promotional Art
Display devices
Inventory for customers to purchase
Hire Employees
Marketing Materials
Pay to create promotional commercials
Billboards and flyers
After the business is up and running, if I have any money left over from the loan, I would use that money to put towards the loans yearly payments.
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Unquestionably, Samsung's financial statements provided us with an overview of the financial health of the company. Therefore, this analysis helps users of financial information make decisions, and plan financial strategies for the growth of the enterprise. By comparing Samsung's SEC-10K form, and the financial ratios of 2018 though 2021, and its biggest competitor in the industry such as Apple, you can see that Samsung's success will continue to climb financially.
Financial Statement Forecasts (3 years):
Business Health Assessment: Liquidity Ratios
Samsung has assets worth $ 600,000 while the liabilities stand at 300,000 dollar
The current ratio is 600000/30000 which stand at 2%
The company has an inventory of 150,000 dollars
The quick ratio in this case will be 600,000-150,000= 450,000
The quick ration will be 450,000/300000= 1.5%
With this the company seems to be going in the right direction.
Business Health Assessment: Solvency Ratios
Solvency ratio = (After Tax Net Profit + Depreciation) / Total liabilities
Samsung has net profit of 419,000 dollars. The company has depreciated by 50,000 dollars. The company has total liability of 300,000 dollars
In this case the solvency ration will be 419,000+50,000= 469,000
469,000/300,000=1.56%
Again I believe that Samsung is in the green with these ratios as well.
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Business Health Assessment: Asset management ratios
Assets management ratio are used in the process of calculating the businesses shop success in process of managing the assets to the sales.
Samsung has net sale of 419,000 while the total assets is at 250,000
To calculate the assets turnover ratio= net sales divided by the average total assets
419 divided by 250 equals 1.676
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Business Health Assessment: Profitability ratios
Profitability ratio measures the company performance
Gross margin ratio
Samsung sold devices worth 2,00,0000 and had a net profit of 419,000 dollars
419,000 / 2,000,000 = 0.295 x 200 = 29.5%
Operating margin
All sales of $120000, and our operating income was $1000000.operating margin.
120000/1000000=0.12X100= 12%
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Business Health Assessment: Market Value Ratios
Some of the ratios that can be used include
Dividend yield
Market value per share
Price ratio
Earning per share
Book value per share
