PROJECT

OF
MANAGERIAL
FINANCE
SUBMITTED TO:

MISS SAIRA ANUM

SUBMITTED BY:

BINISH MAHMOOD (1921109009)

KAINAT EJAZ (1921109029)
MINAHIL SOHAIL (1921109045)
NAJM-UL-SEHAR IRFAN (1921109049)
NOOR FATIMA (1921109051)
RUQAYA GULL (1921109053)
SAMRAN FAROOQI (1921109058)
DATE OF SUBMISSION:
2 JUNE, 2022
SAMSUNG:

Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the next three
decades, the group diversified into areas including food processing, textiles, insurance, securities,
and retail. Samsung entered the electronics industry in the late 1960s and the construction and
shipbuilding industries in the mid-1970s; these areas would drive its subsequent growth. Following
Lee's death in 1987, Samsung was separated into five business groups – Samsung
Group, Shinsegae Group, CJ Group and Hansol Group, and Joongang Group. The Samsung Group
(or simply Samsung, stylized as SΛMSUNG) (Korean: 삼성 [samsʌŋ]) is a South Korean
multinational manufacturing conglomerate headquartered in Samsung Town, Seoul, South Korea.[1]
It comprises numerous affiliated businesses.

Samsung Galaxy

Manufacturer Samsung Electronics

Type Smartphone, Tablet, Phablet, Smartwatch

Release date 29 June 2009; 12 years ago

Units sold 2 billion (as of February 2019)[1]

 Operating Android

system Windows 10 (Galaxy TabPro S & Galaxy

Book)

Tizen (Galaxy Watch)

Chrome OS (Galaxy Chromebook)

System on a Samsung Exynos

chip Qualcomm Snapdragon

MediaTek

Intel Core (for Samsung Galaxy Tab Pro S)

Spreadtrum

NovaThor

Marvell

Nvidia Tegra

Broadcom

Input Touch screen, stylus, keyboard

Executive Summary

Executive Summary of Samsung company Samsung is a company

that have been progressively been growing throughout the years.
Nowadays Samsung is well known as the most cutting edge,
quality brands in the electronic industry. Samsung company go
all out to be maintainable and achieve competitive advantage by
been one of the best in the digital market. Samsung have globally
competitive business environment, electronics companies are
under intense pressure to provide inventive products in a very
short time with reduced cost and with improved quality. The five
latest technologies used by samsungs are Smart TV, Camera,
Smart Phones, Tablets and Samsung Gear Series which are like
watches.
 Income statement:
Fiscal year is January-December. All values KRW Millions. 2021 2020 2019

Sales/Revenue 279,604,799 236,806,988 230,400,881

Sales Growth 18.07% 2.78% -5.48%

Cost of Goods Sold (COGS) incl. D&A 170,653,676 148,612,196 151,017,841

COGS excluding D&A 136,406,315 118,276,580 121,420,203

Depreciation & Amortization Expense 34,247,361 30,335,616 29,597,638

Depreciation 31,285,209 27,115,735 26,573,816

Amortization of Intangibles 2,962,152 3,219,881 3,023,822

COGS Growth 14.83% -1.59% 11.64%

Gross Income 108,951,123 88,194,792 79,383,040

Gross Income Growth 23.53% 11.10% -26.83%

Gross Profit Margin 38.97% - -

SG&A Expense 57,318,320 52,200,916 51,614,531

Research & Development 20,233,496 19,073,269 18,169,761

Other SG&A 37,084,824 33,127,647 33,444,770

SGA Growth 9.80% 1.14% 4.05%

EBIT 51,632,803 35,993,876 27,768,509

Unusual Expense 47,688 - -

Non Operating Income/Expense 190,360 (1,546,734) 277,052

Fiscal year is January-December. All values KRW Millions. 2021 2020 2019

Non-Operating Interest Income 1,278,278 1,974,458 2,660,024

Equity in Affiliates (Pretax) - - -

Interest Expense 431,540 583,013 692,687

Interest Expense Growth -25.98% -15.83% 2.68%

Gross Interest Expense 456,448 586,910 692,687

Interest Capitalized 24,908 3,897 -

Pretax Income 52,622,213 35,838,587 30,019,229

Pretax Income Growth 46.83% 19.39% -50.92%

Pretax Margin 18.82% - -

Income Tax 13,444,377 9,937,285 8,693,324

Income Tax - Current Domestic 10,940,284 7,700,788 5,736,019

Income Tax - Deferred Domestic 2,504,093 2,236,497 2,957,305

Equity in Affiliates 729,614 506,530 412,960

Consolidated Net Income 39,907,450 26,407,832 21,738,865

Minority Interest Expense 663,659 316,986 233,811

Net Income 39,243,791 26,090,846 21,505,054

Net Income Growth 50.41% 21.32% -51.00%

Net Margin 14.04% - -

Net Income After Extraordinaries 39,243,791 26,090,846 21,505,054

Net Income Available to Common 39,243,791 26,090,846 21,505,054

Fiscal year is January-December. All values KRW Millions. 2021 2020 2019

EPS (Basic) 5777.37 3841.03 3165.92

EPS (Basic) Growth 50.41% 21.32% -51.00%

Basic Shares Outstanding 6,793 6,793 6,793

EPS (Diluted) 5777.37 3841.03 3165.92

EPS (Diluted) Growth 50.41% 21.32% -51.00%

Diluted Shares Outstanding 6,793 6,793 6,793

EBITDA 85,880,164 66,329,492 57,366,147

EBITDA Growth 29.48% 15.62% -32.80%

EBITDA Margin 30.71% - -

EBIT 51,632,803 35,993,876 27,768,509

Income Statement

REVENUE

(1Bn KRW)

Title 2019 2020 2021

New Orders 7,048 9,601 7,044

 Title 2019 2020 2021

Backlog 14,214 16,430 16,385

Revenue 6,392 6,749 7,487

OPERATING PROFIT

(1Bn KRW)

Title 2019 2020 2021

Gross Profit 800 672 861

Oprating Profit 423 361 503

Profit Before Income Tax 438 352 530

Net Income 324 252 351

OPERATING PROFIT(%)
 (%)

Title 2019 2020 2021

Gross Profit (%) 12.5% 10.0% 11.5%

Operating Profit (%) 6.6% 5.4% 6.7%

Profit Before Income Tax (%) 6.8% 5.2% 7.1%

Net Income (%) 5.1% 3.7% 4.7%

FINANCIAL STATEMENT ANALYSIS OF SAMSUNG 
The above income statement shows that the profit increased
by 9.10% whiles the net income increased by
19.90%. Therefore, this shows that the net income
has increased from the year 2019 to 2021.

BALANCE SHEET:

2022 2021 2020 2019

Period Ending: 31/03

Total Current Assets 232369082 218163185 212793019 191118524

Cash and Short Term Investments 125874689 124150192 120240975 110860939
Cash - - - -
Cash & Equivalents 48944982 39031415 32675040 30683788
 Short Term Investments 76929707 85118777 87565935 80177151
Total Receivables, Net 50117403 45210672 47100626 39937192
Accounts Receivables - Trade, Net 44464968 40713415 42369691 35624916
Total Inventory 47590731 41384404 37801695 33592385
Prepaid Expenses 3042846 2336252 2916308 2595336
Other Current Assets, Total 5743413 5081665 4733415 4132672
Total Assets 439326959 426621158 410420718 384777669
Property/Plant/Equipment, Total -
149618019 149928539 143029384 139389862
Net
Property/Plant/Equipment, Total -
- 377471994 - -
Gross
Accumulated Depreciation, Total - -227543455 - -
Goodwill, Net - 5844259 - -
Intangibles, Net 20010694 14391985 20753637 20747013
Long Term Investments 23539285 24423434 23177896 22485214
Note Receivable - Long Term - - - -
Other Long Term Assets, Total 13789879 13869756 10666782 11037056
Other Assets, Total - - - -
Total Current Liabilities 90463701 88117133 81871964 72461451
Accounts Payable 15133906 13453351 13865671 11052623
Payable/Accrued - - - -
Accrued Expenses 25100718 27928031 25182366 23018504
Notes Payable/Short Term Debt 13885889 13687793 15117140 12887851
Current Port. of LT Debt/Capital
864905 1329968 1271589 1204289
Leases
Other Current liabilities, Total 35478283 31717990 26435198 24298184
Total Liabilities 132935089 130383461 122089510 110617143
Total Long Term Debt 3299563 3374388 2680837 2642732
Long Term Debt 521356 509732 514096 490459
Capital Lease Obligations 2778207 2864656 2166741 2152273
Deferred Income Tax 23705374 23198205 22487982 20561350
Minority Interest 8899049 8662234 8434910 8163740
Other Liabilities, Total 6567402 7031501 6613817 6787870
Total Equity 306391870 296237697 288331208 274160526
Redeemable Preferred Stock, Total - - - -
Preferred Stock - Non Redeemable,
- - - -
Net
Common Stock, Total 897514 897514 897514 897514
Additional Paid-In Capital 4403893 4403893 4403893 4403893
 Retained Earnings (Accumulated
301743152 293064763 284826992 275085185
Deficit)
Treasury Stock - Common - - - -
ESOP Debt Guarantee - - - -
Unrealized Gain (Loss) 4001442 4616639 4151967 3932276
Other Equity, Total -4654131 -6745112 -5949158 -10158342
Total Liabilities & Shareholders' Equity 439326959 426621158 410420718 384777669
Total Common Shares Outstanding 6792.67 6792.67 6792.67 6792.67
Total Preferred Shares Outstanding - - - -

ANALYSIS OF FINANCIAL STATEMENTS

Financial statements are the reports prepared by a company's management to present the
financial performance and position at a point in time. There are basically three types of financial
statements which can be stated as follows:
1. A balance sheet/statement of financial position, states company's assets,
liabilities, and owners’ equity at a given point in time.
2. An income statement/statement of comprehensive income, statement of
revenue & expense, P&L or profit and loss report, states company’s income,
expenses, and profits over a period of time. A Statement of changes in
equity or equity statement, reports on the changes in equity of the company
during the stated period.
3. A cash flow statement states company's cash flow activities, majorly its
operating, investing and financing activities.

TYPES OF RATIOS AND ITS CALCULATION

1. Profitability ratios are a set of tools used to determine the ability of a business to create
earnings. These ratios are favourable when they improve over a trend line or are comparatively
better than the results of competitors. These are derived from a comparison of revenues to
different groupings of expenses within the income statement. The main ratios are as follows:
 Contribution margin ratio: - This is used to determine the proportion of sales still available after
all variable costs to pay for fixed costs and generate a profit.

Formula: variable expenses *100/Sales

  Gross profit ratio: - This is used to determine the proportion of sales still available after goods
and services have been sold to pay for selling and administrative costs and generate a profit.

Formula: cost of goods sold – expenses *100/sales

 Net profit ratio: This is used to determine the net amount of earnings generated in a reporting
period, net of income taxes.

Formula: net profits/sales

 Return on assets is an indicator of how profitable a company is relative to its average total assets

Formula: net profits/average total assets

 Return on equity. The ROE is a profitability ratio that measures the ability of a firm to generate
profits from its shareholders investments in the company.

Formula: net profits/total equity.

ANALYSIS (values are in US Dollars $)

. Return on assets.
Formula: net profits/average total assets
Samsung Electronics Co. Ltd
Net Profits= $ 21311230000
average total assets = $(226044667000+208805303000)/2
= $217424985000
Hence
$21311230000 = $.0980
$217424985000

. Return on equity.
Formula: net profits/Total equity
Samsung Electronics Co. Ltd
Net Profits = $21311230000
Total equity = $166371229000
Hence
$21311230000/$ 166371229000 = $.1280
2. Liquidity ratios
Liquidity ratios basically analyse the ability of a company to pay off both its current liabilities as
they become due as well as their long-term liabilities as they become current. Thus, these ratios
show the cash levels of a company and the ability to turn other assets into cash to pay off
liabilities and other current obligations.

Current asset ratio.

The current ratio is a liquidity and efficiency ratio that measures a firm's ability to pay off its
short-term liabilities with its current assets. It is called “current” because, unlike some other
liquidity ratios, it incorporates all current assets and liabilities.
The current ratio is also known as the working capital ratio.
Analysis
Samsung Electronics Co. Ltd
Current assets = $ 121939593000
Current liabilities = $47165446000
Hence
$121939593000/$47165446000 = $2.5853

3. Debt Ratios
Debt equity ratio
Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage. The D/E ratio
indicates how much debt a company is using to finance its assets relative to the amount of value
represented in shareholders’ equity. This form of D/E may often be referred to as risk or gearing.
The formula for calculating D/E ratios:
Debt / Equity Ratio = Total debt / Total equity
Samsung Electronics Co. Ltd
Total debt = $50774000
Total equity = $166371229000
Hence
$50774000/$166371229000 = $.0030
RATIO/YEAR 2021 2020 2019
DEBT RATIO 25% 27% 29%
TIMES INTEREST 40.46 87.29 0.0030
EARNED RATO
 4.Market/Book (M/B) Ratio
With the market/book ratio, analysts can compare a company's market value to
its book value. The ratio can be calculated by dividing the market value per share
by the book value per share. For example, if a company has a book value per
share of $8 and the stock currently is valued at $10 per share, the M/B ratio
would be calculated by dividing $10 (stock price) by $8 (book value per share). 
Year Market cap
2022 $356.84 B
2021 $455.63 B
2020 $500.83 B
2019 $319.73 B

5. Profitability Ratios
Profitability ratios are a type of accounting ratio that helps in determining the financial
performance of business at the end of an accounting period. Profitability ratios show how well a
company is able to make profits from its operations.
Let us now discuss the types of profitability ratios.

Types of Profitability Ratios

The following types of profitability ratios are discussed for the students of Class 12 Accountancy
as per the new syllabus prescribed by CBSE:
1. Gross Profit Ratio
2. Operating Profit Ratio
3. Net Profit Ratio
4. Earnings per share
5. Return on Investment (ROI)

Gross Profit Ratio

 Gross Profit Ratio is a profitability ratio that measures the relationship between the gross profit and
net sales revenue. When it is expressed as a percentage, it is also known as the Gross Profit Margin.

Formula for Gross Profit ratio is

Gross Profit Ratio = Gross Profit/Net Revenue of Operations × 100 

A fluctuating gross profit ratio is indicative of inferior product or management practices.

Operating Profit Ratio

 Operating profit ratio is a type of profitability ratio that is used for determining the operating profit
and net revenue generated from the operations. It is expressed as a percentage.

The formula for calculating operating profit ratio is:

Operating Profit Ratio = Operating Profit/ Revenue from Operations × 100 

Or  Operating Profit Ratio = 100 – Operating ratio 

Net Profit Ratio

 Net profit ratio is an important profitability ratio that shows the relationship between net sales and
net profit after tax. When expressed as percentage, it is known as net profit margin.

Formula for net profit ratio is

Net Profit Ratio = Net Profit after tax ÷ Net sales

Or

Net Profit Ratio = Net profit/Revenue from Operations × 100

It helps investors in determining whether the company’s management is able to generate profit from
the sales and how well the operating costs and costs related to overhead are contained.

Earnings Per Share (EPS)

 Earnings per share or EPS is a profitability ratio that measures the extent to which a company earns
profit. It is calculated by dividing the net profit earned by outstanding shares.

The formula for calculating EPS is:

Earnings per share = Net Profit ÷ Total no. of shares outstanding

Having higher EPS translates into more profitability for the company.

Return on Investment (ROI)

 Return on capital employed (ROCE) or Return on Investment is a profitability ratio that measures
how well a company is able to generate profits from its capital. It is an important ratio that is mostly
used by investors while screening for companies to invest.

The formula for calculating Return on Capital Employed is :

ROCE or ROI = EBIT ÷ Capital Employed × 100

Where EBIT = Earnings before interest and taxes or Profit before interest and taxes

Capital Employed = Total Assets – Current Liabilities

 Profitability: TTM vs 5 Year Average Margins
 TTM (%)
 
Operating margin
  TTM (%)19.31%

 5 Year Avg. (%)18.52%

 

Gross margin TTM 41.1% 40.96

Gross Margin 5YA 41.49% 41.32
Operating margin TTM 19.31% 19.2
Operating margin 5YA 18.52% 18.38
Pretax margin TTM 20.09% 19.96
Pretax margin 5YA 19.31% 19.15
Net Profit margin TTM 15.1% 15
Net Profit margin 5YA 14.19% 14.07

6. Activity Ratio:
An activity ratio is a type of financial metric that indicates how efficiently a
company is leveraging the assets on its balance sheet, to generate revenues
and cash.
Inventory
Inventory turnover measures how efficiently a company is able to manage
its inventory.
Inventory Turnover = Cost of Goods Sold / Average Inventory
A low inventory turnover ratio is a sign that inventory is moving too slowly
and is tying up capital. On the other hand, a company with a high
inventory turnover ratio can be moving inventory at a rapid pace;
however, if the inventory turnover is too high, it can lead to shortages and
lost sales.
Receivable turnover
Accounts receivable turnover is described as a ratio of average accounts receivable for
a period divided by the net credit sales for that same period. The formula looks like the
following:
 Step 1: Beginning accounts receivable + ending accounts receivable / 2 = net
accounts receivable
  Step 2: Net credit sales / accounts receivable = accounts receivable turnover

Asset Turnover Ratio:

How do you calculate total asset turnover?
Asset Turnover Ratio = Net Sales / Average Total Assets

It is the gross sales from a specific period less returns, allowances, or discounts taken
by customers.

Activity Ratios Ratios of SEC

Ratio/Year 2019 2018 2017
2016
Inventory Turnover EE
FE EB -EE
Receivable Turnover -E-
 BE- B
Total Asset Turnover -E
 . 
RATIO/ YEAR 2021 2020 2019
INVENTORY 5.50 4.57 5.18
TURNOVER
RECEIVABLE 6.56 7.02 8.56
TURNOVER
TOTAL ASSETS 0.65 .072 0.79
TURNOVER
 
 FINANCIAL STATEMENT ANALYSIS OF SAMSUNG model hailing each year, the interest for
Samsung phones may be high. The most recent model about Samsung Galaxy S8 will be
completing delicately in the market which hails with best features What's more base cost.
Therefore, however there are large portions rivals emerging for example, Huawei, Gionne,
Oppo, those showcase and deals for Samsung will be still setting off solid. Thus, i will
definitely purchase those impart about Samsung, however the net pay of Samsung
diminished

Conclusion:
 
This consider indicates the horizontal and vertical analysis of Samsung Electronics Co.
Ltd’s balance sheet and income statement which indicates the
decline to net pay starting with those quite a while 2019 with 2021. The ponder likewise
indicates the graphical representational of the sales Furthermore cosset from claiming
merchandise sold Furthermore net pay of the
Samsung hardware co. Ltd’s. This inv
estigation . Additionally indicates the twelve-month p/e proportion from claiming Samsung
for as far back as five quite some time and the twenty different proportion examination of
the secret word two quite a while for Samsung hardware co .Ltd