Samsung Vs Nokia Finacial Analysis Critical Evaluation Marketing Essay

Samsung Vs Nokia Finacial Analysis Critical Evaluation Marketing EssayIn todays era of digital there are companies drifted towards the digital technology. The partnership Samsung has made his position in the market by themselves and now days recognised as the most innovative and good quality brand in the sector of electronic industry. The Samsung follow the policy of we will devote out human resources and technologies to create superior products and services thereby contri barelying a best(p) world(prenominal) society. In this assignment there is financial analysis of the Samsung Company in relation to the pop off five social classs summary. The various aspects are discussed critically in this assignment work. In addition to this there is comparison of the Samsung Company with respect to the Nokia Company a big rival of the Samsung Company in the market. at that place is comparison of the financial positions of both of the companies to make the differentiation between their st rategies so they in future they can be benefited by this.The Samsung Company is famous confederacy in the area of electronic industry. This social club was established in 1969 in Taegu, Korea. The founder of this caller was Byung Chull Lee. At the very first time the companion has started seam with the manufacturing of Black and White TVs. At the early period of time the company was at the steady maturateth and after the end of course 2004 the company has got close to the sale of 52 billion and has assets about 38 Billion. At this time the company had employed approximately 113 thousand at the worldwide. In this year the company got the competitive advantage too as it go ahead to its competitive rivals like Kodak, Philips, and Panasonic etc. (Barney and Hesterly, 2008, PC-2 -1). At that time the company involved in the manufacturing of TVs, Computers and Av equipments, Mobile Phones, Networking Equipments, LCD Screens, Notebook computers, Laptops, HDTVs , Washing Machines a nd other electronic equipments etc. (Barney and Hesterly, 2008, PC-2 -6). According to the company the success they achieved is purely depend on their contribution that how they reign over their company in an effective way by considering the things like contribution to society and mutual prosperity at the worldwide level among the people. The chairman of the company has told that the group of Samsung always guide their employees to pat emphasise over the efficiency and design of the products. Under the observation of the formal chairman the company able to take a leak the leading position in the electronic market (Barney and Hesterly, 2008, PC-2 -6). In relation to this the below diagram has shown the organisational structure of the company.Source- Samsung 2008 (www.samsung.com)Financial Analysis of the Company (Samsung)The Samsung is continued to grow and gain profit in the market at high rate. From the financial rehearsal of the last five eld of the company has clearly showed that how the company is on the track of the progress. From year 2005 to 2010 there is increase in the net profit of the company. For the year 2005 the company has gained the profit with 31 % but in the near year it was decreased by 1 % and become 30% then for the coming consecutive years there is decrease as that was recession period but still in recession it made the profit of 28% in both 2007 and 2008. For the further improvement in next year of 2009 there is essential gross profit is by 33.5 % and fro the next and present year of 2010 the company has the highest profit of 35.3 % as a gross profit of the company. From the financial statement give in the appendixes it is clear that the company has got the improvement in last five years. Till year 2010 there is total assets of the company are 125,677 billion as Korean KRW.Source http//www.corporateinformation.com/Company-Snapshot.aspx?cusip=C410P0400Ratio Analysis of the company SamsungThe avocation add-in show the ratios for t he company over last five years. The different ratios find in the table are ROE in which there are ratios of Profitability, assets turnover ratio and leverages are included and there is average ration of ROE is given. For the next there is Debt/ beauteousness ratio for the five years followed by the Net debt/equity ratio and in the last column there is total gelt per share are given.ROE = NPM * TAT * A/E = ROA * A/EFinancialRatios200520062007200820092010ROE19.617.714.39.317.522.5Profitability (Net Income/Sales)0.090.090.080.050.080.11Asset Turnover (Sales/Asset)1.121.101.131.221.501.32Leverage (Asset/ uprightness)1.841.741.681.671.531.54Debt /Equity39.530.225.927.712.912.9Net Debt/Equity15.39.84.86.5-15.7-12.6Earnings per share KRW149,96952,88049,50237,68420,73128,842The ratios are calculated from the balance sheet and income statements for the last five years of the company. The ratios calculated are shown in the following table for the years 2005-2010.Introduction to NokiaThe co mpany Nokia has started in year 1856 at the banks of Nokianvirta River. The company at that time is major force in the industry. After that it undergoes coalition with Cable Company to enter into the market of electronic by the name of Nokia Corporation. The new company successfully entered into the market and play a pioneering role in the area of officious communications. Due to the globalisation the company soon grow at fast pace and there is good position attained by the company. The most strategic decision taken by the company was in 1992 that to concentrate on the telecommunication business only.At present the Nokia Corporationis enmeshed in the business of communication and manufacturing of the mobile. This company is at the number one position in the market. The company had over 123000 employees at present working in the company. The company has its roots in 120 countries of the world. The annual sale of the company is 41 Euro billion and has profit about 1.2 euro Billion as on the year of 2009. This company is recognised as the worlds largest manufacturer of mobile phones and even it provides the navigation system too in addition. The market shares of the company was 30% of the global market in the third quarter of year 2010 operating profit of 1.2 billion as of 2009. It is the worlds largest manufacturer ofmobile telephones its global devicemarket sharewas 30% in the third quarter 2010, but this value is less than to year 2009 when it was 34 %. The Nokia is continuing to growing by introducing advance technology according to the global needs of the society and market.Financial analysis of NokiaFor the financial analysis of Nokia there is servant of the annual statements for the last five years of Nokia and also there is consideration of the balance sheet of the Nokia for the last five years from 2005- 2009. The following table is formulated for the explanation purpose to analyse the financial position of the company.Financial years2009200820072006 2005Fixed Assets12 12515 1128 3054 0313 501Current assets23 61324 47029 29418 58618 951Total equity14 74916 51017 33812 06012 514Long term liabilities5 8012 7171 286396268Current liabilities15 18820 35518 97610 1619 670Total Assets3573839582375992261722452Ration Analysis of NokiaThe following table shows the ratio analysis of the company on the bases of above table which represents the overall financial statement of the company.Ratio analysis20092008200720062005ROEProfitabilityNet profit margin6.52.920.637.59.797.8653.515.6414.1135.513.3510.4727.113.5710.58Equity ratio41.942.346.754.056.4Net Debt/EquityReturn on Assets-250.73-1410.08-6219.16-6919.04-7716.22From above table of ratios it has been seen that there is deterioration in the ROE ratios from 2007 to 2008 and from 2008 to 2009. There is also deterioration in the ROA ratio with the same pace.Comparison of Nokia and SamsungThe both companies are reputed companies in the mobile sector. The Nokia is leading than the Samsung Compa ny. At present the nokia is number one company but there is deterioration in the sales of the company and even in the ratios of the company if it continues it will be hard for the company to compete with its rivals. On the other hand the company Samsung is continue to grow. There is continue growth has seen in the company. As from the financial analysis of the company and the ratios calculated it has seen that at present the company has raised itself from the 1fifth position to the 5th position and this is milestone in the register of telecommunication industry. The company is continuing on this track to progress.The following presentation shows the comparison between these two companies.Nokia 2009Samsung 2009Position in Market1st5thOperating income( 1716)8973Net profit0.63 %15.4%From above table it is clear that Samsung is making profit regularly. On the other hand there is continues deterioration in the Nokia from last four consecutive years.Vendor1Q10 Unit Shipments1Q10 Market S hare1Q09 Unit Shipments1Q09 Market ShareYear-over-year Change1. Nokia107.836.6%93.238.4%15.7%2. Samsung64.321.8%45.918.9%40.1%Source http//www.palminfocenter.com/news/6470/worldwide-mobile-phone-market-grows-22/ConclusionFrom the above continue it is concluded that the financial analysis is very important for the companies in every field. This is profitable in find out the level of company and moreover this is useful in having comparison with the other companies so that for the future welfare possible steps should be taken. The financial analysis make the company knows about the pay they have to spend and where they need to spend this. This even gives the evaluation for the profit and loss for the company.