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Apple and Samsung: Interpret the 5-year Trend and Best Performer

Internal financial information is not available to public, so we have to rely on external information for our analysis. Review financial statements for two years. Use the same companies you selected in Module 2 for the SLP assignments in this course. Make a comparison of

revenues;
cost of good sold;
accounts receivable; and
accounts payable
inventory

for the two years and show trends for all five categories for each company. Keeping the case analysis in mind, discuss and interpret the changes over the three year period. Which company is the best performer and why? How is this information useful to you from a managerial perspective? Explain your reasoning and support with the numbers you have pulled out for the comparison above. Don't forget to comment on the interaction of the balance sheet and income statement.

Solution Preview

Samsung is traded on the Korean Exchange (KSE) 005930.

My analysis is on Apple and Samsung, both major electronics and computer firms. I analyzed 2009-2011 (FY 2012 for Apple that has a fiscal year end, not a calendar year end). See the five required data points for each firm for the three years and the gross margin computed in the Excel spreadsheet attached and shown below:

Apple Financial Data (millons) Samsung Financial Data (thousands)
FY2012 FY2011 FY2010 2011 2010 2009
revenues $ 156,508 $ 108,249 $ 65,225 $ 143,069,254 $ 134,076,414 $ 119,103,403
cost of goods sold $ 87,846 $ 64,431 $ 39,541 $ 97,238,463 $ 89,020,051 $ 84,785,803
gross profit $ 68,662 $ 43,818 $ 25,684 $ 45,830,791 $ 45,056,363 $ 34,317,600
43.9% 40.5% 39.4% 32.0% 33.6% 28.8%
accounts receivable $ 10,930 $ 5,369 $ 5,510 $ 20,742,537 $ 18,476,402 $ 14,619,877
accounts payable $ 21,175 $ 14,632 $ 12,015 $ 16,049,155 $ 13,916,414 $ 7,055,971
inventory $ 791 $ 776 $ 1,051 $ 13,627,603 $ 11,588,072 $ 8,552,754 ...

Solution Summary

Your tutorial is 766 words and an Excel spreadsheet with three years of data and a horizontal analysis for Apple and Samsung (in US dollars). I cut and pasted pages from the financial reports into Excel because the reports were so large that they could not be uploaded.

$2.19