Financial Statements Analyses- Apple vs Samsung

Financial Statements Analyses- Apple vs Samsung

US-based Apple Inc. and South Korea’s Samsung plc. hold a significant share of the global electronics and multimedia devices market. The electronics industry is highly competitive, and both companies have to put up with other equally strong players. The key contributor to the growth of these companies is the rising demand for electronic devices such as smartphones. The brief report outlines their financial performance in 2016 and 2017. Hire our assignment writing services in case your assignment is devastating you.

Samsung Plc

Liquidity Ratios
		2017	2016
Current Ratio	Current Assets/ Current liabilities	2.19	2.59
	Current Assets	129,949,219	125,039,948
	Current Liabilities	59,390,443	48,364,643
Quick Ratio	Current Assets-Inventories / Current Liabilities	1.82	2.25
	Current Assets	129,949,219	125,039,948
	Inventories	22,088,128	16,226,585
	Current Liabilities	59,390,443	48,364,643
Cash Ratio	Cash / Current Liabilities	0.45	0.59
	Cash	27,005,370	28,390,168
	Current Liabilities	59,390,443	48,364,643

Apple Inc.

Liquidity Ratios
		2017	2016
Current Ratio	Current Assets/ Current liabilities	1.28	1.35
	Current Assets	128,645	106,869
	Current Liabilities	100,814	79,006
Quick Ratio	Current Assets-Inventories / Current Liabilities	1.23	1.33
	Current Assets	128,645	106,869
	Inventories	4,855	2,132
	Current Liabilities	100,814	79,006
Cash Ratio	Cash / Current Liabilities	0.20	0.26
	Cash	20,289	20,484
	Current Liabilities	100,814	79,006

Comparative Analysis

Current Ratio

The current ratio for Apple and Samsung remained above average in 2016 and 2017, signifying a healthy financial position. There would be an alarm if any of the account ratios were less than one. Apple’s current liabilities increased in the two years due to increased borrowing. On the other hand, Samsung’s existing assets were almost double its current liabilities. This shows that Samsung’s stocks continue to strengthen; hence it would pay to invest in the company.

Quick Ratio

Quick ratio values followed a similar declining trend, just like the current ratio values. Samsung had more inventories than Apple, implying that its short-term strategies to increase sales and control inventory worked (Apple Inc., 2017). On the other hand, Apple’s stock rose, but its proportion to current assets remained low.

Cash Ratio

Samsung’s cash ratio was high compared to Apple’s, but both companies maintained healthy cash ratios implying that neither company will experience cash problems. Both companies operated efficiently in the 2016 and 2017 financial periods. Samsung’s cash position improvement is due to the company’s decision to invest in developing markets (Telan & Nobanee, 2020). Apple’s operating cash flow, on the other hand, declined. Based on this, as an employee, I would prefer to work for Samsung.

References

Apple Inc. (2017). CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited). https://www.apple.com/newsroom/pdfs/fy17-q4/Q4FY17ConsolidatedFinancialStatements.pdf

Telan, K., & Nobanee, H. (2020). Ratio Analysis of Samsung Electronics. https://www.researchgate.net/publicaation/342703045_Ratio_Analysis_of_Samsung_Electronics

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Choose two companies in the same industry whose financial statements are available online. Complete several financial ratios for each company and compare them. Share your analysis and answer the following questions in a minimum of 175 words:

What did your analysis tell you about these companies?
What sorts of decisions would this analysis help you make; such as buying stocks, considering accepting an employment offer, etc.?