ANALYSIS OF INCOME STATEMENT

Horizontal analysis & vertical analysis Sales: There is a decline in the sales of Samsung in 2008 at a rate of 1.5% but we have to
consider various situation such as us crisis which led to the weak economy and there is volatile situation in the value of foreign currency this are the various general factors that led to the drop .Total increase in no of units sold is 23% but the decline in revenue is 1.5% this happens because there is a increase in sales but there is a decrease in operating profit .

140 120 100 80 60 40 20 0 2007 2008 2009 operating profit sales

Samsung market has four major contributor such as digital media, telecommunication network, semi conductor and LCD

sales contribution by individuals

digital media telecommunication network semi conductor LCD

Semi conductor contributed to 22.35 % of market with a loss of 1.5% this is a area where they have to look to improve such as the reason they give for the loss in crisis and rapid decline in the price of semi conductor in 2008 .But if u look into detail there is a decline in profit in 2007 itself. Suggestions :-They got hold of 3,515 patents in 2008 effective use of them will lead to prosperous in future.

Cost of sales :-There is a slight increase in the cost of sales such as 1.78% .as with respect
to the inflation (8.5 in 2008).this figure shows a positive sign and the increase in price of raw material and most important thing is increase in oil price which lead to major changes in the cost of sales of many company but Samsung achived a sustainable level in controlling cost of sales .cost of sales contribute to 75% of the total sales as with a 25% gross profit is a positive sign . Suggestion:-As the semi conductor price is declining they can reduce the cost of sale of production

Gross profit: gross profit contribute to 25% of the sales .As when compared to 2007
figures.There are many reasons said for the decline such as crisis,inflation,decline in revenue ,increasing oil price and volatile market situation. Suggestion:-Considering the global market condition th25% gross profit is a positive sign .they can increase by concentraing more on global laser printer where they have 13.7% and global mobile phone where they have 16.7%.

Foreign exchange loss and gain :-there is volatile in market the international company
usually will have a loss and gain in the foreign exchange such as the price of the currency change will lead to this loss and gain . 2009 analysis

Sales:-in 2009 is said to be a year of recovery with that they have shown a 14.5% increase
in sales as there major player in 2009 is in LCD and mobile phone segment such as in LCD they introduced AmmoLCD and HD LCD which turned to be a major player and made them to no 2 in global consumer goods. There innovative way lead to increase in sales in other sector to such as front end washing machine with less vibration and multifunctional laser printer .

Cost of goods sold :-The problem with inflation and increase in oil price is still going on
with this had a major impact on the cost of goods sold such as there is a increase but what lead to decrease the percentage from past year is a positive sign as there is a decline of 3%

Expenses:-Selling general and administrative expenses, R &D expenses is 6.9 trillion as

9.5% of the total sales. It shows that they are in a process of innovating new technology which will lead to profit in future .Samsung had even started a institute to support its

innovation and R&D process .Samsung advanced institute of technology. In non operating expenses there is a 83% increase in other expenses. Suggestions:-They should concentrate more on reduce the other expenses.

120000000 100000000 80000000 60000000 40000000 20000000 0 2007 2008 2009 net income gross profit cost of sales sales sales cost of sales gross profit net income

Net income :-the major change 2009 market structure and aggressive performance of Samsung with high innovation lead to double its profit from 2008 and 4.5% increase from 2007 .though the doubled the income and the company moves up in sales there is a growing competition for Samsung from all the sectors. now the net income of the last three years is shown in a graph

net income
10000000 9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 2007 2008 2009 net income

Analysis Between Samsung And Its Competitor Nokia :With the sales figure Nokia there is a decline in sales in 2009 as compared to Samsung is having a increase and moreover they got hold of 3515 patents with this they become second position in global market . As patents help in future growth even though Nokia is having a major global market share .they are losing it and with high innovation Samsung is gaining the market share. in 2009 Samsung has shipped 216 million smart phones. Nokia Within a year Samsung made a grand increase (21.7) in their revenue from India which makes around 5,720 crore in the fiscal year 2008-2009. Even Nokia could earn revenue around 12,929 crore in 2008-09, it does not show any progress in the growth comparing with the past.

35.00% 30.00% 25.00% 20.00% samsung 15.00% 10.00% 5.00% 0.00% 2009 sales market share nokia

Even though Nokia dominating around 39% of the mobile market share .on the latest statistics it's sure that Nokia's supremacy will be questioned as competition gets more tightened. Samsung has grown much higher than its previous records. At present Samsung is able to sell around 30 lakh sets a month, which stimulates its growth. Overwhelming sales of Galaxy Tab and Wave series mobile sets have really boosted the share profit of Samsung. In 2009 Europe accounted for 24% of net Samsung sales ,Asia pacific 21% greater china18%,middle east & and Africa 13% latin America9%and north America 5% . Suggestions:-samsung should concentrate more on basic nersion and high end version as there is a huge demand in both the sectors.As in low end version nokia is dominating the market .Samsung should break it and enter new markets globally.with new patents and technical MOU .