MOF, As.,Sidorov
-
Upload
nikita-sidorov -
Category
Documents
-
view
227 -
download
0
Transcript of MOF, As.,Sidorov
-
8/2/2019 MOF, As.,Sidorov
1/33
Assignment Cover Sheet
Student: Sidorov Nikita
Class: Managing Operations and Finance
Assignmen
t:
Financial Ratio Analysis of the
Sony Corporation
Lecturer : Bruce Gahir
Semester: 1st Semester 2011 Program: MSc International
Management
Due Date: 19.01.2012 Actual
Submission
Date:
19.01.2012
Evidence Produced (List separate items,
e.g. 1 report, 2 CDs)
Location (Choose one)
1.Report 1. Uploaded to the Learning Center(Moodle)
2. 2. Submitted to reception
3.
4. Optional: I have also handed a hard copy to thelecturer according to his/her request
Email submissions to the lecturer are not valid, and all
extensions are submitted directly to administration.
Student Declaration
I declare that the work contained in this assignment was researched and prepared by
me, except where acknowledgement of sources is made.
I understand that the college can and will test any work submitted by me for
plagiarism.
Note: The attachment of this statement on any electronically submitted assignments will bedeemed to have the same authority as a signed statement
-
8/2/2019 MOF, As.,Sidorov
2/33
Financial Ratio Analysis of the Sony Corporation
Signature:
Date: 19.01.2012
A separate feedback sheet will be returned to you after your work has been graded.
Refer to your Student Manual for the Appeals Procedure if you have concerns about the
grading decision.
Student Comments (optional)
Was the task clear? If not, how could it beimproved?
Was there sufficient time to complete the task?
If not, how much time should be allowed?
Did you need additional assistance with the
assignment?
Was the lecturer able to help you?
Were there sufficient resources available?
How could the assignment be improved?
For further comments, please use the reverse of this page.
-
8/2/2019 MOF, As.,Sidorov
3/33
Financial Ratio Analysis of the Sony Corporation
Financial Ratio Analysis of the Sony Corporation
Sidorov Nikita
Msc International Management,
Managing Operations and Finance
Prague College
-
8/2/2019 MOF, As.,Sidorov
4/33
Financial Ratio Analysis of the Sony Corporation
Introduction
The intention of this paper is to make an analysis of the financial ratios of the Sony
Corporation. The company operates in the field of producing consumer electronics,
computers and high-tech devices. This field is familiar to the author and it was interesting to
find out the financial situation of the companies which was among the leaders of the market
for the last several years before the financial crisis in 2008 and after the crisis faced
difficulties due to the decreased demand on the production. To evaluate the current situation
of the Sony Corp. the financial ratios will be analyzed and compared with the industrys
average and with one of the key competitorPanasonic Corporation.
The first company to analyze is Sony Corporation. The company is one of the biggest on the
market of consumer electronics, communications and information, music recording,
computers. It operates worldwide since 1946 and has 168000 employees. The information for
the research was downloaded from the official web-site of the Sony Corporation. The
numbers of the financial statements were converted from Japanese Jen to American Dollars.
The second company to analyze is the Panasonic Corporation. This company is one of the
major competitors to the Sony Corporation. Panasonic was founded in Japan in 1918.
Corporation produces consumer electronics, television products, telecommunication devices
and computers. Panasonic Corporation is represented worldwide and has approximately
330000 employees. The information for the financial analysis was downloaded by the author
from the official web-site of the Panasonic Corporation. The numbers of the financial
statements were converted from Japanese Jen to American Dollars.
Both companies are UK quoted, which means that their shares are traded on the UK stock
exchange.
-
8/2/2019 MOF, As.,Sidorov
5/33
Financial Ratio Analysis of the Sony Corporation
Financial analysis
Most common definition of the financial analysis is that it is the process of evaluating
companies, budgets and finance-related entities to determine their suitability for investment.
In most cases, financial analysis is used to analyze whether an entity is stable, solvent, liquid,
or profitable enough to be invested in. When looking at a specific company, the financial
analyst will often focus on the income statement, balance sheet, and cash flow statement. In
addition, one key area of financial analysis involves extrapolating the company's past
performance into an estimate of the company's future performance (Friedlob, 2003). The role
of the financial analysis in the company could hardly be overestimated. This type of
monitoring the financial health of the company helps to predict furure problems, find out
unprofitable parts of the business and could be the base to the future financial and strategic
planning.
Starting to analyse the companies mentioned above the entire logics and plan of the research
will be determined. Each company within this research will be analized by profitability,
liquidity ratios, investing prospects, etc. This will bring the whole picture of the companys
finances and we can easily compare the company with the key competitor and the entire
industry to determine its strengths and weaknesses. In other words, the aim of this paper is to
evaluate the company from the view point of its finances and discover their advantages and
disadvantages.
-
8/2/2019 MOF, As.,Sidorov
6/33
Financial Ratio Analysis of the Sony Corporation
Sony Corporation Financial Analysis
1. Profitability
1.1Gross Profit Margin
Sony Panasonic
Year 2010 2011
Gross Profit 20202 20594
Sales and
Oper. Rav.
88331 88341
Year 2010 2011
Gross Profit 25431 28337
Net Sales 90829 106934
GPM(2010)=22.87%
GPM(2011)=23.31%
GPM(2010)=28%
GPM(2011)=26.5%
This ratio indicates the level of the mark up and can be used to evaluate companys pricing
policy. However, it becomes less relevant when the variety of goods sold by the company
increases. In our case we have this type of situation, since the price mark-up is dependent on
the type of the device produced. But still we can estimate the financial health of the company
the stability and smooth growth of this ratio can be positively evaluated.
We see that either Sony or Panasonic have stable ratios, although Sony showed a growth and
Panasonic a bit decrease in its ratios. In comparison with industry average of 28% this ratio
could be concluded that companies have rather healthy finances. But the ratio of GPM can
-
8/2/2019 MOF, As.,Sidorov
7/33
Financial Ratio Analysis of the Sony Corporation
help us in deducting the cost associated with its production and sales activities, not
concerning other costs of the company.
1.2Net Profit Margin
()
Sony Panasonic
Year 2010 2011
Net income
(loss)
(500) (3193)
Sales and
Oper. Rev.
88331 88341
Year 2010 2011
Net Income
(loss)
(1267) 911
Net Sales 90829 106934
NPM(2010)= -3.61%
NPM(2011)= -0.57%
NPM(2010)= -1.39
NPM(2011)= 0.85
Net Profit Margin shows in percentage how much of every dollar of sold goods/services
company goes to companys earnings. This ratio is often used to compare the profitability of
the two companies operating in the similar field. How much money the company earns per
one dollar is easy-comparable and rather crucial thing, but from my point of view to see the
whole picture it is not enough to compare the static values of the ratio, but to monitor the
dynamics of the NPM.
It turns out that Sony in comparison with its competitor was less successful in finances in
2010 and 2011. But both companies faced losses, and comparing the ratio values with the
average industry value of 6.66% (consumer goods) in 2010 it could be seen that the
-
8/2/2019 MOF, As.,Sidorov
8/33
Financial Ratio Analysis of the Sony Corporation
production of electronics recovered from the 2008 crisis slower than the entire industry. This
can be explained by the unwillingness and inability of people to spend money on electronics.
Graphic analysis can show the differentiation between the GPM and NPM. The explanation
of this situation was mentioned above and will be proved when analyzing other ratios.
-5,000
0
5,000
10,000
15,000
20,000
25,000
Jan 1,
2006
Jan 1,
2007
Jan 1,
2008
Jan 1,
2009
Jan 1,
2010
Jan 1,
2011
GPM
NPM
-
8/2/2019 MOF, As.,Sidorov
9/33
Financial Ratio Analysis of the Sony Corporation
2. Rate of Return
2.1Return of Equity
()
Sony Panasonic
Year 2010 2011
Net Income (500) (3193)
Stockholders
Equity
36313 31344
Year 2010 2011
Net Income (1267) 911
Shareholders
Equity
31480 34192
ROE(2010)= -10.19%
ROE(2011)= -1.38%
ROE (2010)= -3.71
ROE (2011)= 2.89
Being the one of the main ratios, used to evaluate financial performance of the company,
ROE shows how effective the capital of the company is being used. The interest rate of the
borrowed money have to be lower than the ROE rate if the company pretends to earn
something of the money it borrowed. At a glance could be seen, than Sony has negative
numbers so they might be deeply in lossesfor every dollar they have of they own they have
loss and for every dollar they borrow they have loss + pay interest rates. The comparison with
an industry (the average ROE within the entire consumer-goods industry was 14.04%) shows
more than Sonys ratios are about 2 times lower than average, but taking a glance on the key
competitor could make the situation clearer. ROE ratio can be the second proof to the Net
Profit Margin when saying that condition of these values are among normal when we talk
-
8/2/2019 MOF, As.,Sidorov
10/33
Financial Ratio Analysis of the Sony Corporation
about electronics producers. The key competitorPanasonic has better values, company
shows that it recovers more rapidly and brings positive values in 2011.
2.2Return on Assets (ROA)
()
Sony Panasonic
Year 2010 2011
Total Assets 157539 158998
Net Income (500) (3193)
Year 2010 2011
Total Assets 102339 96234
Net Income (1267) 911
ROA(2010)= -0.32%
ROA(2011)= -2.01%
ROA(2010)= -1.24
ROA(2011)= 0.95
ROA shows how the assets are used to generate profits, in other words how much money
company gets for every dollar of the assets it has. The ratio can be used in aggregate with
ROE and profit ratios. Negative trend could be noticed in SonyROA decreased from
2010 to 2011, while the key competitor show positive processesincreasing the ROA
from 2010 to 2011 year. While comparing with average industry values could be noticed
that unlike the situation with ROE the gap is not very big-0.32 to 4.72 (2010 average).
Taking in consideration the condition of the entire industry and comparing Sonys
profitability with key competitors the negative gap in ROE value could be mentioned.
Then comparing the ROA and ROE we conclude that Sonys losses could be caused by
-
8/2/2019 MOF, As.,Sidorov
11/33
Financial Ratio Analysis of the Sony Corporation
increased long-time debts. In this case could be suggested that Sony borrowed money but
with the ineffective asset-management the situation of the increased liabilities and
decreased return on the assets played their role, worsening companys ratios.
3. Liquidity
3.1The Current Ratio (Working Capital Ratio)
Sony Panasonic
Year 2010 2011
Cur. Assets 50605 47288
Cur. Liab-s 50769 49711
Year 2010 2011
Cur. Assets 46603 42931
Cur. Liab-s 34479 35023
Cur. Ratio(2010)=1.02
Cur. Ratio(2011)=0.93
Cur. Ratio (2010)=1.35
Cur. Ratio (2011)=1.23
This shows us the ratio of current assets to current liabilities, that means if its value is bigger
than 1 than it means that assets are bigger than liabilities in the short run. We see that Sony
shows decrease from 2010 to 2011. The same thing shows Panasonic, but the values are
bigger then 1, which is obviously better. In comparison with average industry ratio of 1.17,
Sonys values seemed not to be that bad in 2010, but it can be the sign that the problems of
the company is in the long term liabilities as we began to notice this trend before, while
discovering the profitability ratios.
-
8/2/2019 MOF, As.,Sidorov
12/33
Financial Ratio Analysis of the Sony Corporation
3.2. The Acid Test Ratio (Quick Ratio)
()
()
Sony Panasonic
Year 2010 2011
Quick
Assets
32603 29576
Cur. Liab-s 49711 50769
Year 2010 2011
Quick
Assets
29227 25880
Cur. Liab-s 34479 35023
Acid Test Ratio(2010)=0.66
Acid Test Ratio(2011)=0.58
Acid Test Ratio (2010)=0.85
Acid Test Ratio (2011)=0.74
Quick ratio or Acid test ratio shows how fast could company sell their stocks in case of
emergency. The negative trend in both of the companies is the bad sign and means the
decrease in liquidity of the corporations. Comparing the quick and the current ratio we
find out that the difference between them is not that high, which means that Sony have
the adequate stock size. Panasonics the size of the stocks are bigger but they are more
liquid too, however Panasonic shows negative tendency too. The average ratio of 0.79
-
8/2/2019 MOF, As.,Sidorov
13/33
Financial Ratio Analysis of the Sony Corporation
stands between the two companies and says that Sony is a bit under the average values
and the Panasonic is the bit higher. The increased long-term liabilities of the Sony
Corporation could be the reason of decreasing the liquidity ratio.
3.3.Total Asset Turnover
Sony Panasonic
Year 2010 2011
Revenue 88331 88341
Total Assets 157539 158998
Year 2010 2011
Net Sales 90829 106934
Total Assets 102339 96234
Total Asset Turnover(2010)=0.56
Total Asset Turnover(2011)=0.55
Total Asset Turnover(2010)=0.88
Total Asset Turnover(2011)=1.11
Ratio compares the entire turnover with the assets used to generate this turnover. If the value
is bigger than 1 it means that the turnover is bigger than total assets, so extra money are
generated within this process. In the case of Sony in 2010 it meant that on every dollar of
assets they have they generated sales of 0.56 dollars. And the situation in 2011 became a
bit worse. The ratio didnt change much in these two years so we cant properly define any
trend. Lets than take a glance on Panasonic assets turnover increased from 2010 to 2011.
The amount of the total assets decreased but net sales gone upwards. This means that the
assets are good managed and we can expect this ratio to grow in next year with the growth of
the total assets of the Panasonic. This trend goes up together with an average industry ratio,
which means that Sonys competitor is doing well managing its assets.
-
8/2/2019 MOF, As.,Sidorov
14/33
Financial Ratio Analysis of the Sony Corporation
4. Working Capital Management.
4.1Stock Turnover
Sony Panasonic
Year 2010 2011
Stocks(Inventory) 7903 8661
Sales and
Operating Rev.
88331 88341
Year 2010 2011
Stocks(Inventory) 11187 11027
Net sales 90829 106934
Stock Turnover(2010)=11.18
Stock Turnover(2011)=10.20
Stock Turnover(2010)=8.12
Stock Turnover(2011)=9.7
This ratio shows how many times the companies inventories are sold and replaced over the
year. The higher the better as money are blocked in stocks for the less time. This ratio almost
always evaluated in comparison with the average industrys ratio, which is in our case 10.28.
Then we have that both companies have positive values but Sonys trend to decrease is not
the positive sign. That means that more money is stuck in stocks what could be caused by the
decreasing of the demand on production.
5. Gearing
5.1. Gearing Ratio
-
8/2/2019 MOF, As.,Sidorov
15/33
Financial Ratio Analysis of the Sony Corporation
Sony Panasonic
Year 2010 2011
Long Term Liab. 11316 9992
Sharehold. Funds 40231 36362
Year 2010 2011
Long Term Liab. 12599 14298
Sharehold. Funds 45056 36245
Gearing Ratio(2010)=0.28
Gearing Ratio(2011)= 0.274
Gearing Ratio(2010)=0.27
Gearing Ratio(2011)=0.39
The ratio compares the long term liabilities to equity shareholders fund, in other words the
ratio of funding the companys funds by the borrowed money. In general it concerned
liabilities to be significantly lower than the funds. In comparison with the industrys average
of 0.47, Sonys ratios show good values, but they are still decreasing, which is obviously the
problem, especially in comparison with the key competitor which shows significant increase
in its ratios.
6. Investor Ratios
6.1. Earnings Per Share (EPS)
()
-
8/2/2019 MOF, As.,Sidorov
16/33
Financial Ratio Analysis of the Sony Corporation
Sony Panasonic
Year 2010 2011
Profit (loss)
to Stockhlds.
(Millions)
(500) (3193)
Issued
Shares
1003531808 1004636664
Year 2010 2011
Profit (loss)
to Stockhlds.
(Millions)
(1297) 911
Issued
Shares
2070605489 2070293396
EPS(2010)= -0.50
EPS (2011)= -3.
EPS(2010)= -0.61
EPS(2011)= 0.44
As an indicator of the companys profitability, EPS shows the profit of the company allocated
too each share of the common stock. The first thing to analyze here is the value of the ratio
itself and we see that again Sony shows recession in its values. Being negative in 2010, EPS
became even worse in 2011. Despite of the fact that Panasonic had lower EPS value in 2010
it showed significant growth in 2011. In connection with EPS it is important to take a glance
on the companys capital. The less investments company need to generate the EPS number
the better it operates. Sonys values of investments were 64888 and 72489 respectively in
2010 and 2011 when Panasonic had 7797 and 7008 respectively. That fact discovers that
Sonys capital management in comparison with Panasonics is catastrophic and explains why
the company is facing losses and showing negative trends.
-
8/2/2019 MOF, As.,Sidorov
17/33
Financial Ratio Analysis of the Sony Corporation
6.3 Price/Earnings Ratio (P/E)
Sony Panasonic
Year 2010 2011
Share Price 27.16 25.42
EPS (0.5) (3)
Year 2010 2011
Share Price 12.53 12.24
EPS (0.61) 0.44
P/E(2010)= -54.32
P/E (2011)= -8.5
P/E (2010)= -20.54
P/E (2011)=27.8
Ratio between the market share price compares share price with its per-share earnings. It can
be interpreted how much the investor wants to pay per one dollar of earnings. Sony shows
negative dynamics because EPS decreased three times within a period and market share price
has fallen a bit. In comparison with the Panasonic which showed increasing values and
positive numbers in 2011. The industrys average is 17.16 for the 2010.
-
8/2/2019 MOF, As.,Sidorov
18/33
Financial Ratio Analysis of the Sony Corporation
Conclusion
The aim of the finance analysis was to evaluate the condition of the Sony Corporation.
Obviously, the Japanese computer and consumer-electronics giant Sony is not in its best
condition. Sony faced difficulties in 2008 when the worlds global financial crisis started and
it was rather hard for the company to recover. The demand on the electronics significantly
decreased within crisis period. To add more, Sony always positioned itself as a producer of
the top-level computers and electronics, so the prices on its production were a bit higher than
on competitors. The premium segment in electronics in a crisis time is from my point of
view one of the worst thing to sell. Back in the 2008 Sony had very weak product line in a
segment of the budget electronics, and they began to urgently develop the lower-price
segment line right after financial crisis. The borrowed money together with the few failed
products (like some Sony-Ericsson cell phones) lead to the situation we can see now.
I suppose that Sony could be on the level of the Panasonic (which is rather stable, recovering
from crisis step by step and showing the results of average or little bit higher) if avoided the
situation mentioned above.
From my point of view the good finance planning together with new competitive product line
could help the Sony in generating profits and recovering its finances.
-
8/2/2019 MOF, As.,Sidorov
19/33
Financial Ratio Analysis of the Sony Corporation
Appendixes
Appendix 1
Sony Corp., Consolidated Statement of
Financial Position, AssetsUSD $ in millions, translatedfrom JPY
Mar 31,2011
Mar 31,2010
Mar 31,2009
Mar 31,2008
Mar 31,2007
Mar 31,2006
Cash and cash equivalents 12,479 14,591 7,099 11,966 7,160 5,907
Marketable securities 7,949 7,096 5,016 4,711 4,416 4,512Notes and accounts receivable,trade, less allowance fordoubtful accounts and salesreturns 9,149 10,917 9,169 12,009 12,262 8,280
Inventories 8,661 7,903 8,735 11,252 8,422 6,761
Deferred income taxes 1,637 2,419 2,038 2,611 2,182 1,859Prepaid expenses and othercurrent assets 7,414 7,678 6,840 12,629 6,258 4,351
Current assets 47,288 50,605 38,898 55,179 40,701 31,671
Film costs 3,388 3,797 3,297 3,351 2,763 3,028
Affiliated companies 2,731 2,805 2,544 4,199 4,012 2,402Securities investments andother 69,758 62,083 49,008 43,556 30,799 27,172
Investments and advances 72,489 64,888 51,552 47,755 34,811 29,574Property, plant and equipment,net 11,377 12,342 12,633 13,695 12,725 11,667
Intangibles, net 4,811 4,640 4,258 2,902 2,088 1,739
Goodwill 5,770 5,374 4,770 3,353 2,727 2,512Deferred insurance acquisitioncosts 5,268 5,125 4,302 4,371 3,528 3,219
Deferred income taxes 2,947 4,941 3,857 2,188 1,943 1,502
Other 5,659 5,828 5,500 5,468 3,595 4,213
Other assets 24,456 25,907 22,687 18,282 13,881 13,186
Noncurrent assets 111,710 106,933 90,168 83,083 64,181 57,454
Total assets 158,998 157,538 129,067 138,261 104,882 89,126Source: Sony Corp., Annual
Reports
-
8/2/2019 MOF, As.,Sidorov
20/33
Financial Ratio Analysis of the Sony Corporation
Appendix 2
Sony Corp., ConsolidatedIncome StatementUSD $ in millions, translatedfrom JPY
12 months endedMar 31,
2011Mar 31,
2010Mar 31,
2009Mar 31,
2008Mar 31,
2007Mar 31,
2006
Net sales 77,554 77,054 76,386 90,339 67,741 56,232
Financial services revenue 9,823 10,264 5,622 6,093 5,588 6,054
Other operating revenue 964 1,013 1,038 1,282 931 817
Sales and operatingrevenue 88,341 88,331 83,047 97,714 74,261 63,104
Cost of sales -59,434 -59,906 -60,813 -69,281 -52,722 -43,282
Financial services expenses -8,313 -8,223 -5,886 -5,841 -4,835 -4,468
Gross profit 20,594 20,202 16,348 22,592 16,704 15,354Selling, general andadministrative -18,475 -18,916 -18,114 -18,884 -16,010 -12,830Gain (loss) on sale, disposalor impairment of assets andother, net 165 -526 -412 417 -52 -621Equity in net income (loss)of affiliated companies 173 -370 -270 1,110 704 111
Operating income (loss) 2,458 389 -2,447 5,235 1,346 2,013
Interest and dividends 145 162 240 377 253 210Gain on sale of securitiesinvestments, net 176 122 14 61 132 81
Foreign exchange gain, net 114 522 61
Gain on initial public offeringof Sony Financial Holdings 893
Other 118 253 286 254 468 705
Other income 553 537 1,062 1,646 852 995
Interest expense -294 -276 -262 -253 -244 -244
Loss on devaluation ofsecurities investments -94 -36 -48 -144 -12 -33
Foreign exchange loss, net -133 -169 -26
Other -101 -151 -185 -238 -156 -190
Other expenses -489 -596 -494 -635 -581 -492Income (loss) beforeincome taxes 2,522 330 -1,880 6,247 1,618 2,516
Income taxes -5,232 -171 781 -2,241 -482 -1,483
Net income (loss) -2,710 159 -1,098 4,005 1,135 1,033Net (income) lossattributable to noncontrolling
interests -483 -658 35 64 -4 5
-
8/2/2019 MOF, As.,Sidorov
21/33
Financial Ratio Analysis of the Sony Corporation
Net loss attributable toSony Corporationsstockholders -3,193 -500 -1,063 4,069 1,131 1,039
Source: Sony Corp., Annual Reports
-
8/2/2019 MOF, As.,Sidorov
22/33
Financial Ratio Analysis of the Sony Corporation
Appendix 3
Sony Corp., Consolidated Statement of Financial Position,Liabilities and Stockholders' EquityUSD $ in millions, translatedfrom JPY
Mar 31,2011
Mar 31,2010
Mar 31,2009
Mar 31,2008
Mar 31,2007
Mar 31,2006
Short-term borrowings 661 597 3,262 696 468 1,200Current portion of long-termdebt 1,348 2,887 1,585 3,215 386 1,626Notes and accounts payable,
trade 9,759 10,005 6,025 10,143 10,560 6,834Accounts payable, other andaccrued expenses 12,462 12,284 11,139 9,876 8,672 7,183
Accrued income and other taxes 973 847 502 2,212 629 733Deposits from customers in thebanking business 20,270 18,483 14,250 12,605 6,735 5,041
Other 5,296 4,608 4,180 5,568 4,344 4,272
Current liabilities 50,769 49,711 40,942 44,315 31,795 26,888
Long-term debt 9,992 11,316 7,092 8,030 8,961 6,427Accrued pension and severancecosts 3,338 3,619 3,929 2,547 1,553 1,531
Deferred income taxes 3,767 2,896 2,024 2,958 2,337 1,819Future insurance policy benefitsand other 51,979 47,463 37,828 36,331 27,192 23,058
Other 2,792 2,303 2,694 2,864 2,521 2,173
Noncurrent liabilities 71,867 67,597 53,567 52,731 42,564 35,007
Total liabilities 122,636 117,308 94,509 97,046 74,359 61,895Redeemable noncontrollinginterest 238
Common stock, no par value 7,761 7,724 6,777 6,945 5,612 5,244
Additional paid-in capital 14,266 14,177 12,409 12,683 10,236 9,550
Retained earnings 19,268 22,664 20,595 22,683 15,393 13,465Accumulated othercomprehensive income (loss) -9,893 -8,192 -7,880 -4,092 -1,034 -1,314
Treasury stock, at cost -57 -57 -50 -53 -33 -26Sony Corporationsstockholders equity 31,344 36,316 31,851 38,166 30,174 26,919
Noncontrolling interests 4,780 3,914 2,707 3,049 349 312
Total equity 36,125 40,230 34,557 41,215 30,523 27,230
Total liabilities and equity 158,998 157,538 129,067 138,261 104,882 89,126
Source: Sony Corp., Annual Reports
-
8/2/2019 MOF, As.,Sidorov
23/33
Financial Ratio Analysis of the Sony Corporation
Appendix 4
Sony Corp., ConsolidatedStatement of Cash FlowsUSD $ in millions, translatedfrom JPY
12 months endedMar 31,
2011Mar 31,
2010Mar 31,
2009Mar 31,
2008Mar 31,
2007Mar 31,
2006
Net income (loss) -2,710 159 -1,098 4,005 1,135 1,033Depreciation and amortization,including amortization ofdeferred insurance acquisition
costs 4,003 4,543 4,356 4,714 3,581 3,208Amortization of film costs 3,078 3,400 2,747 3,365 3,298 2,408Stock-based compensationexpense 24 27 37 45 34 1Accrual for pension andseverance costs, lesspayments -187 -120 179 -194 -204 -64Gain on the transfer to theJapanese Government of thesubstitutional portion ofemployee pension fund, net -617
(Gain) loss on sale, disposalor impairment of assets andother, net -165 526 412 -417 52 621(Gain) loss on sale ordevaluation of securitiesinvestments, net -82 -86 34 84 -120 -48(Gain) loss on revaluation ofmarketable securities held inthe financial service businessfor trading purpose, net 135 -610 837 623 -106 -378(Gain) loss on revaluation orimpairment of securities
investments held in thefinancial service business, net 62 -661 1,086 662 2
Gain on initial public offeringof Sony Financial Holdings -893
Deferred income taxes 3,782 -425 -1,647 221 -118 673Equity in net (income) lossesof affiliated companies, net ofdividends -141 443 703 -149 -610 82
(Increase) decrease in notesand accounts receivable, trade 1,286 -653 2,344 2,045 -3,204 147(Increase) decrease in
inventories -1,379 1,819 1,724 -1,550 -1,067 -1,384(Increase) decrease in film -3,002 -3,634 -2,841 -3,892 -2,865 -2,854
-
8/2/2019 MOF, As.,Sidorov
24/33
Financial Ratio Analysis of the Sony Corporation
costs
Increase (decrease) in notes
and accounts payable, trade -223 3,208 -4,038 -2,593 3,241 -76Increase (decrease) inaccrued income and othertaxes -99 779 -1,753 1,530 -129 244Increase (decrease) in futureinsurance policy benefits andother 3,431 3,489 1,875 1,832 1,544 1,203(Increase) decrease indeferred insurance acquisitioncosts -851 -882 -738 -693 -551 -433(Increase) decrease inmarketable securities held in
the financial service businessfor trading purpose -370 -102 -280 -631 284 -297(Increase) decrease in othercurrent assets -1,101 -397 1,442 -268 -315 -74Increase (decrease) in othercurrent liabilities 690 65 -1,130 571 655 889Changes in assets andliabilities -1,619 3,694 -3,395 -3,650 -2,406 -2,636
Other 1,402 289 123 -72 484 -925Adjustments to reconcilenet income (loss) to netcash provided by operatingactivities 10,291 11,019 5,472 4,340 3,887 2,326Net cash provided byoperating activities 7,581 11,178 4,374 8,345 5,022 3,360Payments for purchases offixed assets -3,121 -4,139 -5,330 -5,227 -4,722 -3,886Proceeds from sales of fixedassets 231 192 1,648 1,594 782 321Payments for investments andadvances by financial servicebusiness -17,947 -19,369 -26,824 -25,151 -8,189 -11,495Payments for investments and
advances (other than financialservice business) -188 -512 -1,916 -1,135 -897 -310Proceeds from maturities ofmarketable securities, sales ofsecurities investments andcollections of advances byfinancial service business 10,752 13,818 20,662 15,877 6,085 7,204Proceeds from maturities ofmarketable securities, sales ofsecurities investments andcollections of advances (otherthan financial service
business) 373 665 124 572 204 206
-
8/2/2019 MOF, As.,Sidorov
25/33
Financial Ratio Analysis of the Sony Corporation
Proceeds from sales of sharesof Sony Financial Holdings 3,362
Proceeds from sales ofbusinesses 1,222 270
Other -110 -59 18 80 332 641Net cash used in investingactivities -8,789 -9,134 -11,617 -10,028 -6,404 -7,320Proceeds from issuance oflong-term debt 18 6,246 776 342 2,424 2,070
Payments of long-term debt -2,660 -1,764 -2,841 -382 -1,633 -1,166Increase (decrease) in short-term borrowings, net 75 -3,064 2,628 174 55 -93Increase in deposits fromcustomers in the financial
service business, net 2,821 3,385 2,811 5,353 2,448 1,599Increase (decrease) in callmoney and bills sold in thebanking business, net -901 723
Dividends paid -309 -307 -458 -276 -224 -208Proceeds from the issuance ofshares under stock-basedcompensation plans 1 4 82 50 39Proceeds from the issuance ofshares of Sony FinancialHoldings 317
Other -71 -27 -46 -43 1 59Net cash provided byfinancing activities -124 4,469 2,873 5,568 2,219 3,024Effect of exchange ratechanges on cash and cashequivalents -847 -13 -203 -729 30 299
Net increase (decrease) incash and cash equivalents -2,180 6,500 -4,573 3,156 867 -639
Cash and cash equivalents atbeginning of the fiscal year 14,659 8,091 11,672 8,810 6,294 6,546
Cash and cash equivalents
at end of the fiscal year 12,479 14,591 7,099 11,966 7,160 5,907Source: Sony Corp., Annual
Reports
-
8/2/2019 MOF, As.,Sidorov
26/33
Financial Ratio Analysis of the Sony Corporation
Appendix 5
Sony Corp., Consolidated Statement ofComprehensive IncomeUSD $ in millions, translatedfrom JPY
12 months endedMar 31,
2011Mar 31,
2010Mar 31,
2009Mar 31,
2008Mar 31,
2007Mar 31,
2006
Net income (loss) -2,710 159 -1,098 4,005 1,135 1,033
Cumulative effect of anaccounting change, net of tax -49 -34
Unrealized gains (losses) onsecurities -191 597 -611 -247 -132 320Unrealized gains (losses) onderivative instruments -19 19 19 -25 9 4
Pension liability adjustment -41 290 -806 -281 Minimum pension liabilityadjustment -25 422Foreign currency translationadjustments -1,464 80 -2,653 -2,360 773 1,180Other comprehensiveincome (loss), net of tax -1,715 986 -4,051 -2,913 625 1,926Comprehensive income
(loss) -4,425 1,145 -5,149 1,043 1,726 2,959Comprehensive (income) lossattributable to noncontrollinginterests -431 -856 204 157 -4 5Comprehensive income(loss) attributable to SonyCorporations stockholders -4,856 289 -4,944 1,200 1,722 2,965Source: Sony Corp., AnnualReports
-
8/2/2019 MOF, As.,Sidorov
27/33
Financial Ratio Analysis of the Sony Corporation
Appendix 6
Panasonic Corp., Consolidated Statement ofFinancial Position, AssetsUSD $ in millions, translatedfrom JPY
Mar 31,2011
Mar 31,2010
Mar 31,2009
Mar 31,2008
Mar 31,2007
Mar 31,2006
Cash and cash equivalents 11,992 13,590 10,463 13,381 11,070 14,009
Time deposits 860 1,127 2,034 772 2,018 92
Short-term investments 21 522 834 477
Net trade receivables 13,029 14,510 8,220 11,953 10,214 9,635Inventories 11,027 11,187 8,285 9,519 8,499 7,690
Other current assets 6,023 6,189 5,299 5,699 4,952 5,120
Current assets 42,931 46,603 34,322 41,846 37,587 37,024
Associated companies 1,929 2,169 1,332 1,693 1,282 1,123Other investments andadvances 5,078 5,628 4,596 7,583 9,515 8,120
Investments and advances 7,008 7,797 5,928 9,276 10,797 9,242Net property, plant andequipment 23,168 23,950 16,919 19,356 14,701 13,715
Goodwill 11,376 11,302 4,413 4,735 3,396 3,471
Intangible assets 6,677 7,406 1,297 1,420 1,035 875Other assets 5,075 5,282 5,915 5,354 3,176 2,591
Other assets 23,128 23,990 11,625 11,509 7,607 6,938
Noncurrent assets 53,303 55,737 34,472 40,141 33,105 29,895
Total assets 96,234 102,339 68,794 81,987 70,692 66,919Source: Panasonic Corp., Annual
Reports
-
8/2/2019 MOF, As.,Sidorov
28/33
Financial Ratio Analysis of the Sony Corporation
Appendix 7
Panasonic Corp., ConsolidatedIncome StatementUSD $ in millions, translatedfrom JPY
12 months endedMar 31,
2011Mar 31,
2010Mar 31,
2009Mar 31,
2008Mar 31,
2007Mar 31,
2006
Net sales 106,934 90,829 83,428 99,889 81,534 74,730
Cost of sales -78,597 -65,398 -60,886 -70,242 -57,241 -51,716
Gross profit 28,337 25,431 22,542 29,647 24,293 23,013
Selling, general andadministrative expenses -24,582 -23,099 -21,759 -23,926 -20,179 -19,533
Dividends received 78 83 123 114 68 55
Other income 726 586 566 776 1,025 1,238
Goodwill impairment -273 -421
Other deductions -2,164 -3,196 -5,627 -1,975 -1,089 -1,289Income (loss) beforeinterest and income taxes 2,396 -195 -4,155 4,637 3,845 3,065
Interest income 143 151 252 379 274 237
Interest expense -339 -315 -208 -224 -187 -182Income (loss) before
income taxes 2,200 -359 -4,111 4,791 3,931 3,120Provision for income taxes -1,267 -1,737 -401 -1,262 -1,718 -1,404Equity in earnings ofassociated companies 121 6 173 -109 9 -427
Net income (loss) 1,053 -2,090 -4,339 3,420 2,223 1,289
Net (income) loss attributableto noncontrolling interests -142 823 267 -315 -279 8Net income (loss)attributable to PanasonicCorporation 911 -1,267 -4,071 3,105 1,944 1,297Source: Panasonic Corp., Annual
Reports
-
8/2/2019 MOF, As.,Sidorov
29/33
Financial Ratio Analysis of the Sony Corporation
Appendix 8
Panasonic Corp., Consolidated Statement of Financial Position,Liabilities and Stockholders' EquityUSD $ in millions, translatedfrom JPY
Mar 31,2011
Mar 31,2010
Mar 31,2009
Mar 31,2008
Mar 31,2007
Mar 31,2006
Short-term debt, includingcurrent portion of long-termdebt 5,326 3,662 1,014 1,721 1,998 2,855
Trade payables 12,317 13,119 7,299 10,360 8,370 8,245
Accrued income taxes 522 479 281 649 551 430
Accrued payroll 2,365 1,827 1,245 1,479 1,251 1,198
Other accrued expenses 9,192 10,114 7,229 8,641 7,729 7,078Deposits and advances fromcustomers 818 784 655 865 749 761
Employees deposits 112 123 3 4 4 118
Other current liabilities 4,371 4,370 3,768 4,489 3,894 3,555
Current liabilities 35,023 34,479 21,491 28,208 24,545 24,240
Long-term debt 14,298 12,599 6,997 2,559 2,030 2,219Retirement and severancebenefits 6,064 5,336 4,344 2,626 2,515 3,481
Other liabilities 4,604 4,870 1,446 1,707 1,606 941
Noncurrent liabilities 24,966 22,804 12,788 6,892 6,152 6,641
Total liabilities 59,989 57,283 34,279 35,099 30,696 30,881
Common stock 3,183 3,168 2,780 2,850 2,316 2,174
Capital surplus 13,534 14,810 13,083 13,414 10,930 10,370
Legal reserve 1,159 1,142 996 993 793 735
Retained earnings 29,547 28,768 26,637 32,471 24,501 21,642Accumulated othercomprehensive income (loss) -7,692 -5,488 -6,386 -1,915 959 -219
Treasury stock, at cost -8,251 -8,208 -7,201 -6,593 -4,437 -2,879
Panasonic Corporationshareholders equity 31,480 34,192 29,910 41,220 35,062 31,823
Noncontrolling interests 4,765 10,864 4,605 5,668 4,934 4,214
Total equity 36,245 45,057 34,514 46,888 39,995 36,038
Total liabilities and equity 96,234 102,339 68,794 81,987 70,692 66,919Source: Panasonic Corp., Annual
Reports
-
8/2/2019 MOF, As.,Sidorov
30/33
Financial Ratio Analysis of the Sony Corporation
Appendix 9
Panasonic Corp., ConsolidatedStatement of Cash FlowsUSD $ in millions, translatedfrom JPY
12 months endedMar 31,
2011Mar 31,
2010Mar 31,
2009Mar 31,
2008Mar 31,
2007Mar 31,
2006
Net income (loss) 1,053 -2,090 -4,339 3,420 2,223 1,289
Depreciation and amortization 4,518 3,652 3,919 3,530 2,844 2,600
Net gain on sale of investments -139 -63 -145 -159 -359 -399
Provision for doubtfulreceivables 54 133 113 66 29 71
Deferred income taxes 173 1,025 -263 -150 648 594Write-down of investmentsecurities 339 85 989 351 28 297Impairment loss on long-livedassets 427 1,016 3,368 492 440 558
Trade receivables 1,025 -1,469 2,676 -624 448 -261
Inventories -672 1,231 226 -412 4 307
Other current assets -2 296 325 436 574 -487
Trade payables -158 1,025 -2,140 -458 -552 944
Accrued income taxes 160 82 -358 63 87 33Accrued expenses and othercurrent liabilities -300 1,258 -1,694 110 -356 312Retirement and severancebenefits -472 -106 -1,152 -1,420 -972 -615Deposits and advances fromcustomers 7 -90 -228 -175 -109 -112Cash effects of changes inoperating capital, excludingacquisition -412 2,227 -2,344 -2,480 -876 120
Other, net -241 410 -45 62 -209 -295Adjustments to reconcile net
income (loss) to net cashprovided by operatingactivities 4,719 8,485 5,592 1,713 2,544 3,546Net cash provided byoperating activities 5,772 6,396 1,253 5,133 4,767 4,835Proceeds from sale of short-term investments 79 8 278 352Purchase of short-terminvestments -78 -40 -462
Proceeds from disposition ofinvestments and advances 1,073 751 2,376 3,458 1,272 7,137
Increase in investments andadvances -109 -108 -373 -1,767 -2,596 -3,242
-
8/2/2019 MOF, As.,Sidorov
31/33
Financial Ratio Analysis of the Sony Corporation
Capital expenditures -5,178 -4,600 -5,604 -4,612 -3,682 -2,997
Proceeds from disposals of
property, plant and equipment 1,878 1,443 435 1,666 1,637 1,417(Increase) decrease in timedeposits, net 234 1,216 -1,464 1,837 -2,003 1,187Purchase of shares of newlyconsolidated subsidiaries, net ofacquired companies cash andcash equivalents -2,140 -752 Proceeds from sale of shares ofsubsidiaries and dividendsreceived 363 530
Other, net -394 -525 -414 -513 -310 -501Net cash used in investing
activities -2,497 -3,963 -5,044 -676 -5,083 3,420Increase (decrease) in short-term debt, net -419 -41 -370 -64 -52 126
Proceeds from long-term debt 6,214 651 4,754 15 301 258
Repayments of long-term debt -2,484 -671 -894 -515 -1,946 -2,758
Dividends paid to PanasonicCorporation shareholders -255 -317 -896 -763 -492 -329Dividends paid to noncontrollinginterests -155 -179 -223 -218 -146 -137
Repurchase of common stock -5 -1 -778 -1,136 -1,371 -732
Sale of treasury stock 0 0 6 3 3 2
Purchase of noncontrollinginterests -7,257 -136 Proceeds from issuance ofshares by subsidiaries 439
Other, net -2 -4 -1 -3 -125 -838
Net cash provided by (usedin) financing activities -4,362 -698 1,598 -2,242 -3,829 -4,407
Effect of exchange rate changeson cash and cash equivalents -575 -69 -396 -1,427 288 334Effect of changes inconsolidated subsidiaries -1,029
Net increase (decrease) incash and cash equivalents -1,662 1,666 -2,589 -240 -3,856 4,181Cash and cash equivalents atbeginning of year 13,654 11,924 13,051 13,621 14,926 9,828Cash and cash equivalents atend of year 11,992 13,590 10,463 13,381 11,070 14,009Source: Panasonic Corp., Annual
Reports
-
8/2/2019 MOF, As.,Sidorov
32/33
Financial Ratio Analysis of the Sony Corporation
Appendix 10
Panasonic Corp., Consolidated Statementof Comprehensive IncomeUSD $ in millions, translated fromJPY
12 months endedMar 31,
2011Mar 31,
2010Mar 31,
2009Mar 31,
2008Mar 31,
2007Mar 31,
2006
Net income (loss) 1,053 -2,090 -4,339 3,420 2,223 1,289
Translation adjustments -1,326 -120 -1,406 -1,515 562 700
Unrealized holding gains (losses)
of available-for-sale securities -300 657 -619 -1,313 139 611Unrealized gains (losses) ofderivative instruments 12 76 -99 42 -4 -43Minimum pension liabilityadjustment -52 515
Pension liability adjustments -789 1,306 -2,021 -536 Other comprehensive income(loss), net of tax -2,403 1,919 -4,145 -3,322 645 1,783
Comprehensive income (loss) -1,350 -171 -8,484 98 2,868 3,072Comprehensive (income) lossattributable to noncontrollinginterests 155 694 685 -88 -279 8Comprehensive income (loss)attributable to PanasonicCorporation -1,195 523 -7,798 10 2,589 3,081Source: Panasonic Corp., AnnualReports
-
8/2/2019 MOF, As.,Sidorov
33/33
Financial Ratio Analysis of the Sony Corporation
References
1. Davies, T. , 2002.Business Accounting and finance. 3rd ed. London: Financial
Times Publishing.
2. Holmes, G. , 2002.Interpreting Company Report and Accounts. 5th ed. Pearson:
Pearson Higher Education.
3. Roberts, c, 1998.International Financial Accounting. 1st ed. London: Financial
Times Pitman Publishing.
4. Sony Corporation. 2011. Sony Corporation Annual Report. [ONLINE] Available
at:http://www.sony.net/SonyInfo/IR/financial/ar/2011/. [Accessed 02 January 12].
5. Panasonic Corporation. 2011. Panasonic Corporation Annual Report. [ONLINE]
Available at:http://panasonic.net/ir/annual/. [Accessed 02 January 12].
http://www.sony.net/SonyInfo/IR/financial/ar/2011/http://panasonic.net/ir/annual/http://panasonic.net/ir/annual/http://www.sony.net/SonyInfo/IR/financial/ar/2011/