Question

In: Accounting

Find financial statements for Samsung Technology enter the company symbol go to menu on left side...

  • Find financial statements for Samsung Technology
    1. enter the company symbol
    2. go to menu on left side of screen
    3. go to financial results
    4. go to financial ratios
  • Complete a ratio analysis for that company's last year's financial data. At a minimum, list and discuss the company performance vs. its industry average for these 4 ratios:
    • Profit as percent of sales
    • Current ratio
    • Debt to equity ratio
    • ROE
  • Comment on the following:
    • How do these ratios depict the financial health of this company as compared to the industry average?
    • What might the company do to get better in each area?

Solutions

Expert Solution

Financial Ratio Analysis:

Particulars Samsung Technology Industry Average
Profit as a percentage of Sales = Profit / Sales 18,652,605 / 197,690,938 = 9.44% 9.68%
Current Ratio = Current Assets / Current Liabilities 155,634,050 / 54,727,544 = 2.84 2.58
Debt to Equity Ratio = Debt / Equity 7.22% 6.65%
Return on Equity = Profit / Equity 18,652,605 / 225,559,368 = 8.27% 11.63%

The company's current ratio and debt to equity ratio are good when compared to the industry average. Profitability ratio is also good but can be improved while compared to the industry average. The company's return of equity is less than the industry average when compared to the industry.

The company can increase its profit margin on sales which will help the company to perform as good as the industry in which it is functioning. The company shall maintain its financial health in respect of current ratio and debt-equity ratio since it is doing better than the industry. The company has to increase the return from its products or reduce the equity employed to meet industry average or exceed it. It indicates that the company has employed excess equity capital but generates lower profit than the industry average.


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