Business Finance

Topics: Financial ratio, Balance sheet, Financial statements Pages: 8 (2037 words) Published: April 28, 2013
Financial Analysis on Samsung Electronics

9th March 2013
Xingzi Ge


1. Introduction 1.1 Purpose of The Report 3 1.2 Analysis of Electronics Industry 3 2. Summary of Samsung Electronics 2.1 Introduction of Samsung Electronics 3 2.2 Summary of Performance of Samsung Electronics in 2011 4 2.3 Future Strategy 4 3. Financial Ratio Analysis on Financial Report From 2009-2011 3.1 Profitability 5 3.2 Liquidity 5 3.3 Solvency 6 4. Conclusion 7 Bibliography 8 Appendix 1 10 Appendix 2 11 Appendix 3 12 Appendix 4 14

1 Introduction
1.1 Purpose of The Report
The objective of the report is to analyze Samsung Electronics Co., Ltd in relation to the last three years financial summary, with the aim of predicting future development of Samsung Electronics based on its past performance as well as providing some suggestions to clients about investment.

1.2 Analysis of Electronics Industry
Samsung Electronics belongs to electronics industry, which is defined as a “propulsive sector” (Hirschman, 1958). Mann and Kirkegaard (2006) state that the electronics industry is the world’s most essential goods-producing business. On one hand, it has more employees as well as earns higher profit than other industries; on the other hand, electronic products often bring benefit to other sectors’ productivity and stimulate the whole economy. From the high proportion of engineers and technicians that electronics sector employs, it can be found that technological innovation plays a vital role in this industry’s development. Therefore competition in electronics industry is often fierce because of the rapid updating and renewing of electronic products. For Samsung Electronics, which operates in Asia, Europe and the United States, often faces more competitors, such as Panasonic, Sony, LG, Apple and so on. These integrated companies are also highly competitive because that they all have wide range of business and high quality products. In terms of the averages of electronics industry, revenue and profit is 7.9 billions compared to Samsung, which generates revenue of 180.99 billions and profit of 21.46 billions, it is obvious that Samsung performs much better than average and is in a strong position in the global market.

2. Summary of Samsung Electronics
2.1 Introduction of Samsung Electronics
Samsung Electronics, which was established in 1938 in Seoul, South Korea, is referred to as the flagship company of Samsung Group. Samsung Electronics leads the global market in manufacturing of semiconductors, information technology products and telecommunication infrastructure systems (Global markets direct, 2009). It enjoys wide range of product portfolio, which ranges from set products to components, such as camera, mobile phone, and memory chips. The aim of Samsung Electronics is that providing superior services and high technical electronic products with customers thereby contributing a better global society.

2.2 Summary of Performance of Samsung Electronics in 2011
It seems that although the weakening economy and increased pressure from competitors and new entrants, Samsung Electronics has been maintaining a steady growth. In 2011, six of businesses Samsung...

Bibliography: Samsung Electronics 2010 and 2011 Annual Report
Balch, K., 2012
Catherine, M., and Jacob, K., 2006. Accelerating the Globalization of America: The Next Wave of Information Technology. Washington, DC: Institute for International Economics.
Korea Associates Business Consultancy Ltd., 2012. Global Value Chain Analysis on
Samsung Electronics
Malikova1, O., and Brabec, Z., 2011. The influence of a different accounting system on informative value of selected financial ratios. [Online]. Available at: <URL:> [Accessed 9th March 2013].
Mclaney, E., and Atrill, P., 2012. Accounting: an Introduction. 6th ed. London: Pearson.
M2 PRESSWIRE, 2012. Research and Markets: Analysis of Samsung 's Competitiveness in 2012(C)1994-2012 M2 COMMUNICATIONS
Riley, J., 2012
Appendix 3: Financial Statements in 2009, 2010, and 2011
Calculation 2009=10925259/(73045202 + 4930163) * 100% = 14%
Calculation 2010=17296536/(89349091 + 4994932) * 100% = 18.3%
Calculation 2011=16249717/(101845323 + 9466917) * 100% = 14.6%

Calculation 2009=(54211297-9839329)/34204424=1.30
Calculation 2010=(61402589-13364524)/39944721=1.20
Calculation 2011=(71502063-15716715)/44319014=1.26

Calculation 2009=4930163/(4930163+73045202)=6.3%
Calculation 2010=4994932/(4994932+89349091)=5.3%
Calculation 2011=9466917/(9466917+101845323)=8.5%
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