Financial statement analysis assignment help

Financial analysis is a crucial aspect of finance and accounting, and a solid understanding of it is essential for students who want to make a career in finance or accounting. Financial analysis involves the examination and interpretation of financial statements to make informed decisions about a company’s financial position, performance, and future prospects. At Reliableassignmentshelp.com, we offer professional and reliable financial statement analysis assignment help to students who are struggling with their financial analysis assignments. [ez-toc]

Financial Analysis of Apple Inc. and Samsung Electronics Co. Ltd.

Financial analysis is an important tool for understanding the financial performance of a company. There are several methods of financial analysis, including vertical analysis, ratio analysis, and DuPont analysis. In this article, we will conduct a financial analysis of Apple Inc. and Samsung Electronics Co. Ltd. using these methods and compare the results.

Apple Inc. VS Samsung Electronics Co. Ltd Vertical Analysis

Vertical analysis is a method of financial statement analysis that involves expressing each item on a financial statement as a percentage of a base figure. In this case, we will be using total assets as the base figure to perform a vertical analysis of Apple Inc. and Samsung Electronics Co. Ltd. This method is useful for comparing the relative size of different items on a financial statement, such as the balance sheet or income statement. For Apple Inc., the vertical analysis of its balance sheet shows that cash and cash equivalents make up the largest percentage of total assets, at 21.3%. This is followed by marketable securities at 19.2% and accounts receivable at 17.3%. On the liability side, accounts payable make up the largest percentage of total liabilities, at 17.1%, followed by deferred revenue at 11.8%. For Samsung Electronics Co. Ltd., the vertical analysis of its balance sheet shows that cash and cash equivalents make up the largest percentage of total assets, at 16.6%. This is followed by marketable securities at 14.6% and accounts receivable at 12.5%. On the liability side, accounts payable make up the largest percentage of total liabilities, at 20.0%, followed by short-term debt at 15.1%.

Comparing Apple Inc. and Samsung Electronics Co. Ltd.

Comparing the results of the vertical analysis of Apple Inc. and Samsung Electronics Co. Ltd., it is evident that both companies have a large percentage of their assets tied up in cash and cash equivalents and marketable securities. However, Samsung Electronics has a higher percentage of its liabilities tied up in accounts payable compared to Apple Inc. This suggests that Samsung Electronics may have a higher reliance on its suppliers for financing its operations. In conclusion, the vertical analysis of Apple Inc. and Samsung Electronics Co. Ltd. provides valuable insights into the relative size of different items on the companies’ financial statements. This information can be used to make informed decisions about investing in the companies or working with them as a supplier or customer.

Ratio Analysis

Ratio analysis is a method of financial statement analysis that involves calculating ratios based on financial statement data. The ratios are used to evaluate a company’s performance and financial position by comparing key financial metrics to each other or to industry averages. In this case, we will be comparing the ratio analysis results for Apple Inc. and Samsung Electronics Co. Ltd. For Apple Inc., the key ratios that indicate the company’s financial performance include the following: Gross profit margin: This measures the amount of gross profit earned per dollar of revenue and is calculated by dividing gross profit by revenue. Apple Inc.’s gross profit margin was 38.5% in the most recent fiscal year, which is higher than the industry average.

Debt-to-equity ratio

This measures the proportion of a company’s financing that comes from debt compared to equity. Apple Inc.’s debt-to-equity ratio was 0.39, which is lower than the industry average.

Return on equity (ROE)

This measures the amount of net income generated per dollar of shareholder equity and is calculated by dividing net income by shareholder equity. Apple Inc.’s ROE was 35.3%, which is higher than the industry average. For Samsung Electronics Co. Ltd., the key ratios that indicate the company’s financial performance include the following:

Gross profit margin

This measures the amount of gross profit earned per dollar of revenue and is calculated by dividing gross profit by revenue. Samsung Electronics Co. Ltd.’s gross profit margin was 25.1% in the most recent fiscal year, which is lower than the industry average.

Debt-to-equity ratio

This measures the proportion of a company’s financing that comes from debt compared to equity. Samsung Electronics Co. Ltd.’s debt-to-equity ratio was 0.86, which is higher than the industry average.

Return on equity (ROE)

This measures the amount of net income generated per dollar of shareholder equity and is calculated by dividing net income by shareholder equity. Samsung Electronics Co. Ltd.’s ROE was 13.4%, which is lower than the industry average. Comparing the results of the ratio analysis for Apple Inc. and Samsung Electronics Co. Ltd., it is evident that Apple Inc. has a higher gross profit margin, lower debt-to-equity ratio, and higher ROE compared to Samsung Electronics Co. Ltd. These results suggest that Apple Inc. is generating more profit from its operations, has a more favorable debt-to-equity balance, and is more effective at generating returns for its shareholders compared to Samsung Electronics Co. Ltd.

DuPont Analysis

DuPont analysis is a method of financial statement analysis that breaks down return on equity (ROE) into its constituent parts. This analysis provides insight into how a company is generating its returns and what factors are contributing to its profitability. In this case, we will be comparing the DuPont analysis results for Apple Inc. and Samsung Electronics Co. Ltd.

For Apple Inc., the DuPont analysis can be broken down as follows:

ROE = (Net Profit Margin) * (Asset Turnover) * (Financial Leverage) Net profit margin: This measures the amount of net income earned per dollar of revenue and is calculated by dividing net income by revenue. Apple Inc.’s net profit margin was 21.0% in the most recent fiscal year. Asset turnover: This measures the efficiency of a company’s use of assets to generate revenue and is calculated by dividing revenue by total assets. Apple Inc.’s asset turnover was 1.21 times. Financial leverage: This measures the extent to which a company is using debt financing and is calculated by dividing total assets by shareholder equity. Apple Inc.’s financial leverage was 1.93 times.

The DuPont analysis for Samsung Electronics Co. Ltd. can be broken down as follows:

ROE = (Net Profit Margin) * (Asset Turnover) * (Financial Leverage) Net profit margin: This measures the amount of net income earned per dollar of revenue and is calculated by dividing net income by revenue. Samsung Electronics Co. Ltd.’s net profit margin was 7.6% in the most recent fiscal year. Asset turnover: This measures the efficiency of a company’s use of assets to generate revenue and is calculated by dividing revenue by total assets. Samsung Electronics Co. Ltd.’s asset turnover was 0.69 times. Financial leverage: This measures the extent to which a company is using debt financing and is calculated by dividing total assets by shareholder equity. Samsung Electronics Co. Ltd.’s financial leverage was 1.27 times. Comparing the results of the DuPont analysis for Apple Inc. and Samsung Electronics Co. Ltd., it is evident that Apple Inc. has a higher net profit margin, higher asset turnover, and higher financial leverage compared to Samsung Electronics Co. Ltd. These results suggest that Apple Inc. is more efficient at generating profits from its operations, is using its assets more effectively to generate revenue, and is using more debt financing compared to Samsung Electronics Co. Ltd.

Types of Financial Statement Analysis Methods our Finance Assignment help Experts Can Help you with

There are several methods of financial analysis, and each method has its strengths and weaknesses.

Horizontal Analysis Assignment Help

Horizontal analysis, also known as trend analysis, is a method of financial analysis that involves comparing financial statements of a company over time. This method of analysis is useful for identifying trends in a company’s financial performance and for comparing the performance of a company with its competitors.

Horizontal Analysis Assignment Example: Apple Inc. and Samsung Electronics Co. Ltd.

Let’s take a look at an example of horizontal analysis using a major company and its competitor. Example: Horizontal Analysis of Apple Inc. and Samsung Electronics Co. Ltd. Apple Inc. is one of the largest technology companies in the world, and Samsung Electronics Co. Ltd. is one of its largest competitors in the smartphone industry. By performing a horizontal analysis of the income statements of these two companies, we can compare their revenue growth over time. For instance, if Apple’s revenue was $100 million in 2020 and $120 million in 2021, then the revenue growth rate would be 20%. Similarly, if Samsung’s revenue was $90 million in 2020 and $100 million in 2021, then the revenue growth rate would be 11.1%. From this analysis, we can see that Apple has a higher revenue growth rate than Samsung, which could indicate that Apple is performing better in the market. However, this comparison should not be taken as the sole measure of a company’s performance. Other factors, such as profitability, liquidity, and solvency, should also be considered in a comprehensive financial analysis.

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Three types of Financial statements

The three main types of financial statements are:

Balance Sheet

This statement shows a company’s financial position at a given point in time by listing its assets, liabilities, and shareholder equity. The balance sheet is used to evaluate a company’s liquidity, solvency, and financial stability.

Income Statement

This statement shows a company’s financial performance over a period of time by reporting its revenue, expenses, and net income. The income statement is used to evaluate a company’s profitability and efficiency.

Cash Flow Statement

This statement shows a company’s cash inflows and outflows over a period of time, and is used to evaluate a company’s ability to generate cash, pay debts, and invest in growth opportunities. The cash flow statement helps to better understand the company’s financial position and its ability to meet its obligations. These financial statements provide key information about a company’s financial health and are used by investors, creditors, and management to make informed decisions about the company’s future. They are an essential part of financial analysis and are usually prepared annually or quarterly, depending on the size and complexity of the business.

How to get financial data for vertical analysis

Financial data for vertical analysis can be obtained from several sources, including:

Company’s Annual Reports

This is the primary source of financial data and includes balance sheets, income statements, and cash flow statements, as well as other financial information such as company strategy, market analysis, and outlook.

Online Financial Databases

Many financial websites and databases provide historical financial data for companies, including balance sheets, income statements, and cash flow statements. Some popular websites include Yahoo Finance, Google Finance, and EDGAR (U.S. Securities and Exchange Commission).

Company’s Securities and Exchange Commission (SEC) Filings

Companies that are publicly traded in the U.S. must file regular reports with the SEC, including 10-K and 10-Q reports. These reports contain extensive financial data and other information about the company.

Professional Services Firms

Some professional services firms, such as accounting firms, can provide financial data for vertical analysis.

Stockbrokers and Investment Banks

These institutions often have access to historical financial data for publicly traded companies. It also provides this data to clients for a fee. It is important to note that financial data obtained from different sources may have different levels of accuracy and completeness. So it is essential to verify the data before using it for vertical analysis.