Introduction

Group 11: Samsung Company

MemberNguyen Duong 332956 Pham Thien Kim 332963 Le Hoang Phuong Anh 332935

Good afternoon everybody, today our group will present to you about Samsung company, these are 3 members in group. 10s1

IntroductionSamsung: - is a large worldwide company founded in 1938 - means "three stars" - has many different businesses, including 'Samsung Electronics' - is one of the world's top twenty global brands

Move to the Introduction I will tell a little bit about the background of Samsung. As all of you know that Samsung is one of the most famous and biggest multinational company in the world. Since 1990s, Samsung has increasingly globalized its activities, electronics and particularly mobile phones. At the present, Samsung is one of the world's top twenty global brands25s2

Performance Review from 2008 to 2014

Now, lets have a quick look at Samsung Performance From 2008 to 2014 (5s)3

SAMSUNG INCOME STATEMENTPeriord Ending20082009201020132014Total Revenue$96,495,083$119,103,403$135,771,646$216,708,677$195,882,955Cost of Revenue$71,409,988$84,785,803$90,145,600$130,480,725$121,856,939Gross Profit$25,085,095$34,317,600$45,626,046$86,227,952$74,026,016Selling General and Administrative$20,286,477$24,396,734$31,980,340$51,370,553$50,253,744Operating Profit$4,798,618$9,920,866$15,187,054$34,857,399$23,772,272Non-operating incomeInterest and dividend income$508,702$366,738---Foreign exchange gains$5,758,661$6,593,601---Gain on foreign currency translation$353,749$1,133,056---Gain on valuation of equity method investments$833,114$1,304,345---Others$1,156,967$1,042,156---Total Non-operating income$8,611,193$10,439,896$6,554,683$2,302,237$3,611,054Non-operating expenseInterst expense$533,231$468,315---Foreign exchange losses$6,044,264$6,987,712---Loss on foreign currency translation$742,991$903,261---Loss on valuation of equity method$166,553$104,286---Others$689,856$1,130,221---Total Non-operating expenses$8,176,895$9,593,795$6,770,997$1,529,468$2,146,611Operating Income or LossEarnings Before Interest And Taxes$5,814,351$11,963,297$18,857,041$40,393,231$29,421,733Interest Expense$581,435$1,196,330$1,885,704$4,039,323$2,942,173Income Before Tax$5,232,916$10,766,967$16,971,337$36,353,908$26,479,560Income Tax Expense$546,986$2,000,968$2,794,039$7,476,087$4,256,366Net Income$4,685,930$8,765,999$14,177,298$28,877,821$22,223,194

Samsung Income Statement 3s4

BALANCE SHEETPeriod Ending20082009201020132014AssetsCurrent AssetsCash And Cash Equivalents$7,012,441 $9,285,255 $8,841,651 $14,705,156 $15,207,212 Short Term Investments$2,857,070 $7,394,809 $11,457,755 $34,469,253 $40,555,441 Net Receivables$18,753,829 $21,449,979 $19,241,877 $25,185,919 $25,541,576 Inventory$7,551,796 $8,552,754 $12,068,165 $17,278,786 $15,637,706 Other Current Assets$2,781,551 $6,504,173 $3,837,089 $6,144,337 $4,012,953 Total Current Assets$38,956,687 $53,186,970 $55,446,538 $100,016,525 $103,976,861 Property Plant and Equipment$33,807,726 $34,118,241 $47,827,028 $68,173,238 -Intangible Assets$710,885 $1,134,175 $2,509,833 $3,088,320 -Total Assets$83,771,400 $101,355,174 $121,262,967 $193,309,741 $208,071,931 LiabilitiesCurrent LiabilitiesAccounts Payable$9,051,120 $13,092,467 $14,492,970 $7,618,737 $7,146,978 Short Term Debt$1,800,621 $2,680,375 $8,626,950 $10,077,961 $10,172,764 Other Current Liabilities$14,770,431 $16,548,616 $11,097,702 $20,470,461 $19,337,263 Total Current Liabilities$25,622,172 $32,321,458 $36,070,083 $46,337,814 $46,968,563 Long Term Debt$4,593,442 $3,037,714 $1,103,212 $1,999,046 $1,246,024 Deferred Long Term Liability Charges$1,182,408 $750,407 $1,492,358 $679,660 $1,119,659 Others$2,314,544 $2,645,516 $1,915,166 $8,828,764 $6,954,051 Total Liabilities$33,712,566 $38,755,095 $40,580,820 $57,845,284 $56,288,297 EquityPreferred Stock$95,041 $102,371 $4,787,171 $4,787,171 $4,787,171 Retained Earnings$44,088,760 $55,065,299 $76,768,139 $153,085,232 $134,186,055 Treasury Stock($7,088,413)($7,202,049)($3,673,240)($11,422,305)($8,541,543)Capital Surplus$5,241,735 $5,700,180 $70,147 $74,409 Others$7,816,752 $47,791,744 $7,587,248 ($6,268,626)$26,064,713 Total Stockholder Equity$50,058,834 $101,355,174 $80,682,147 $135,464,448 $151,783,634

Balance Sheet 3s5

SAMSUNG ELECTRONICS CO LTD (SSNLF) Statement of CASH FLOWFiscal year ends in December. KRW in thousands except per share data.20082009201020132014Cash Flows From Operating ActivitiesDepreciation & amortization$9,632,816$8,165,496$10,174,938$15,355,194Investments losses (gains)-$1,042,978Stock based compensationInventory-$661,939-$780,495-$4,297,871-$2,892,401Prepaid expenses-$435,736-$440,524Accrued liabilities$2,111,961Other working capital-$2,401,274-$1,405,028-$146,911-$10,009Other non-cash items$6,954,815$7,571,836$15,096,021$30,525,024Net cash provided by operating activities$13,524,418$13,551,809$20,826,177$43,611,055$35,124,337Cash Flows From Investing ActivitiesInvestments in property, plant, and equipment-$13,442,924-$6,321,274-$20,431,452-$21,622,397Property, plant, and equipment reductions$281,763$115,612$1,111,473$352,423$192,746Acquisitions, net$15,918-$99,768$247,958-$325,137-$683,766Purchases of investments-$12,025-$3,786,448-$3,042,327-$19,535,947-$20,939,435Sales/Maturities of investments$209,509$2,281$8,222$1,610,762$366,306Purchases of intangibles-$872,776-$1,258,010Sales of intangibles$4,260Other investing activities$420,636-$83,029$1,095,793-$1,391,784Net cash used for investing activities-$12,527,121-$10,172,627-$21,010,332-$41,780,597-$31,164,062Cash Flows From Financing ActivitiesDebt issued$4,785,102$228,372$1,791,214$24,904$1,653,437Debt repayment-$2,139,442-$684,648-$271,543-$3,015,847-$3,134,412Common stock issued$242,476$164,575$32,110Common stock repurchasedDividend paid-$1,255,235-$603,832-$1,712,482-$1,166,827-$2,122,072Other financing activities$458,319-$182,104-$107,766$262,886Net cash provided by (used for) financing activities$1,848,743-$999,736-$136,002-$3,862,774-$2,904,065Effect of exchange rate changes-$308,189-$528,057Net change in cash$2,846,040$2,379,447-$320,156$528,153$528,153Cash at beginning of period-$844,102$7,055,398$11,863,564$17,545,714$15,469,535Cash at end of period$2,001,939$9,434,846$11,543,408$15,205,210$15,997,688Free Cash FlowOperating cash flow$13,524,418$13,551,809$20,826,177$43,611,055Capital expenditure-$13,442,924-$6,321,274-$20,431,452-$22,495,173Free cash flow$81,494$7,230,536$394,726$21,115,882

And The Cash Flow 5s6

Significant changes in Financial Statements from 2008 to 2014

During the period there is some significant changes in Samsung Financial Statements 10s7

Source: http://www.vietnamplus.vn/loi-nhuan-cua-samsung-trong-nam-2014-giam-32-so-voi-2013/304890.vnp

Firstly, Samsung had positive changes in revenue. Its revenue in 2014 has been seen a double increase compare to 2008. (Ni ci vng trn) However from 2013 to 2014, with changes in Samsungs leadership team it lead to a situation of reducing Samsungs revenue 25s8

Comment:

Next, looking at the revenue growth between Samsung and the industry. It can be clearly seen that Samsungs revenue growth is much higher than the industry.(Ni ci vng trn) In 2014, another reason for significant decrease in Samsung's revenue is that there were many competitor with cheaper products from China and other countries. 9

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Summary Ratios

LIQUILITY20082009201020132014Current ratio 1.521.651.532.162.214Quick ratio1.221.381.21.791.88Cash ratio0.270.290.250.320.32

FINANCIAL LEVERAGE RATIOS20082009201020132014Debt ratio0.40.380.330.30.27Time interest earned9.8122.9933.26120.135113.64Cash coverage ratio10.9924.6236.35412.26386.34

ASSETS MANAGEMENT RATIOS20082009201020132014Inventory turnover9.4569.9139.327.557.793Days' sales in inventory38.636.8237.348.34446.84Receivables turnover5.1455.5535.358.6047.67Days' sale in receivable70.9465.7359.2442.42247.59Total asset turnover1.1521.1751.121.120.94

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PROFITABILITY RATIOS20082009201020132014Profit Margin0.040.0640.090.120.11Return on Assets0.0560.0870.110.150.11Return on Equity0.090.0860.170.210.096

Significant changes in Ratiosfrom 2008 to 2014

Sources: http://www.macrumors.com/2011/12/16/samsungs-new-texas-factory-for-a5-chip-production-now-fully-operational/

Summary Working Capital Management

Production Cycle2008-122009-122010-122013-122014-12Average Inventory $6,9B $8,0B $10,3B $12,6B $16,4BInventory Turnover 10.30 10.58.748.97.4Production Cycle35.4434.7641.7641.0149.32

Collection Cycle2008-122009-122010-122013-122014-12Average Account Receivables$19,1B $20,1B $20,3B $23,1B $25,3B Account Receivables Turnover3.724.24.45.64.8Collection Cycle98.1286.9082.9565.1876.04

Account payable cycle - Samsung2008-122009-122010-122013-122014-12Accounts Payable$9,0B $11,0B $13,7B $7,6B $7,3B Account Payable Turnover7.897.666.5417.1316.51Account Payable Cycle46.2647.6655.8521.3122.11

Significant changes in Working Capital Management from 2008 to 2014

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ConclusionSamsung has done a better job than the industry needs more consideration to financial issues.