ксте тинки на Project LABA CFO part 2 Name Surname Samsung Electronics: global revenue 2005-2019 Samsung Electronics is a global leader in semiconductors, telecommunications and digital media technologies, and one of the most valuable technology brands in the world. Headquartered in Suwon, South Korea, the company was founded in 1969. Samsung employs more than 300 thousand people worldwide and spends nearly 18 billion U.S. dollars on research and development each year. Samsung also ranks amongst companies with the most U.S. patents granted. . 1 Revenue/Operating Expenses Total Revenue decreased from 240 B, KRW in 2017 to 230 B, KRW in 2019 during 3 years.CAGR=-2% Total Revenue comparing to `1718 years from 4B,KRW to `18-19 years fall down to -13 B, KRW. Total Operating Exp. decreased from 57 B, KRW in 2017 to 55 B, KRW in 2019 year.CAGR=-1% Total Operating Exp. comparing to `17-18 years from -4 B,KRW to `1819 years grow to 3 B, KRW. 2 In 2017-2018 years Total Revenue from 4B,KRW comparing to Total Operating Expenses fall down to -4 B, KRW. In 2018-2019 years Total Revenue from -13B,KRW comparing to Total Operating Expenses grow to 3 B, KRW. This downward trend is a clear sign that 2017-2018 year's devices failed to demonstrate competitiveness. Old type bestsellers been stopped to produce. Samsung is losing to Chinese competitors in major markets — in China and India. Head of the company Lee JaeYong In 2017 was sentenced to five years in prison. He was released in 2018. Lee Jae-Yong took the main part in planning Samsung's long-term strategy, as well as actively establishing a dialogue with competitors — Apple and Google. Company start restructuring the management system and suspending the adoption of important business decisions. 3 Продажи In 2017-2018 years Total Revenue from ,KRW comparing to Total Operating Expenses fall down to -4 B, KRW. This downward trend is a clear sign that 2017-2018 year's devices failed to demonstrate competitiveness. Old type bestsellers been stopped to produce. Samsung is losing to Chinese competitors in major markets — in China and India. In 2018-2019 years Total Revenue from 13B,KRW comparing to Total Operating Expenses grow to 3 B, KRW. Head of the company Lee JaeYong In 2017 was sentenced to five years in prison. He was released in 2018. Lee Jae-Yong took the main part in planning Samsung's long-term strategy, as well as actively establishing a dialogue with competitors — Apple and Google. Company start restructuring the management system and suspending the adoption of important business decisions. 3 In the end of 2019 year Samsung has beat out Apple and Huawei in global smartphone sales with a worldwide market share of 21,6 percent. Huawei on 2 place strengthened positions on Chinese and Indian markets. The 3rd place Apple, market strategy focuses on the higher end smartphone industry, while Samsung tries to cast as wide of a net as possible. Samsung should take care different branches of business through this sometimes loses in marketing and forming a drawdown in opening sales on a global and Asian market innovative gadgets. This trend is observed in comparing quarterly financial reports of competitors. 4 Net Income/Operating Income Net Income falls from 41 B, KRW in 2017 to 22 B, KRW in 2019 during 3 years.CAGR=-28% Net Income comparing to `17-18 years from 3 B,KRW to `18-19 years fall down to -22 B, KRW. Operating Income falls from 54 B, KRW in 2017 to 28 B, KRW in 2019 during 3 years.CAGR=-28% Operating Income comparing to `1718 years from 5B,KRW to `18-19 years fall down to -31 B, KRW. 5 Even in difficult times for the company, the inability to quickly implement new strategies and solve serious problems with new flagship on time, the decline in planned sales and the effectiveness of collaborations with competitors did not change the company's focus on increasing acquisition and investment in current and total assets of the company. Total Assets raised in 2017-2019 years from 302 B, KRW to 353 B, KRW in 2019.CAGR=8% Total Current Assets raised in 20172019 years from 147 B, KRW to 181 B, KRW in 2019.CAGR=11% 6 Changing focus in diversification of assets. 7 CashFlow & OutFlow Net CF from Operating activities start extremely fall down to 45 B, KRW in 2019 CAGR=-15% because of paying big income tax, low dividends received, extremely small received interest, Changes in assets and liabilities arising from Operating Activities etc. Net Out Fl. From Financing activities fall down in 2019 to -10 B, KRW CAGR=-13% because of decreased Dividends paid decrease short-term borrowings, Acquisition of treasury stock and Proceeds from long-term borrowings and debentures. Net Out.Fl. From Investing activities fall down to -40 B, KRW. CAGR=10%. 8 Critical situation Net CF from Operating Activities Comparing to `17-`18 years decreased from 5 B, KRW to -22 B, KRW in `18-`19 years. Net OutFl. From Finance Activities from`17-`18 years was -3 B,KRW became 6 B, KRW in`18-19 years. Net OutFl. From Investing Activities from `17-`18 years from -3 B, KRW raised to 12 B, KRW in `18-`19 years. Through the all horizontal analysis is traced big problems in 2018-2019 years .If in 2017-2018 years company been balanced by all finance indicators comparable to 2018-2019 years regulation of processes control failed. 9 RATIO ANALYSIS • • • • • • • • • • • • • • Current ratio/The company has a good level of solvency Quick ratio/Good ability to pay short-term liabilities by selling the most liquid assets. Coef. Overestimated Cash ratio/Sufficiency of liquid assets for rapid settlement of current liabilities. Coef. is normal Net Working Capital/Confident increase of the company's liquidity and increase of its creditworthiness. Coef. Normally, but in 2019 it is worth paying attention to the effectiveness of the company's financial policy Equity multiplier/Stable financial condition. Coef. In norm. Receivables turnover/The rate of using all available assets is good. Days' sales in receivables/The fin indicator. Stability in the short-term perspective. Good. Payables Turnover/The indicator is normal. Days sales in payables/The indicator should be lowered. NWC turnover/The effect indicator. Use. the net working capital ratio is normal, but there is a downward trend. Total asset turnover/The indicator of the intensity of use of existing assets is normal, but there is a downward trend. Profit margin/The coefficient of profitability. the ratio of income to net profit is good, but there is a sharp downward trend in 2019. ROA/The coefficient is low. Significant decrease in Net profit from assets. ROE/The efficiency of capital investment is at a high enough level, in 2019 there is a serious drop of 2 times, which is already a 10-fold deficit % 10 Profitability (Effectiveness) ratios ROA decreased by 53% down to 6% in 2019 which is still above electronic companies and level of industry ROE plummeted 54% down to 8% which is still above industry average. NPM decreased by 48% down to 9% in 2019 which is still above NPM electronic companies and level of industry 11 General conclusions and future development of the company • • • • • • • • The company maintains a transparent policy towards investors, consumers and financial analysts even in hard times. Samsung has a tendency to develop "in a spiral" after serious falls in the market, next year it goes to the top of sales. Lee Jae- Vong, Vice Chairman and de facto head of Samsung Electronics, intends to continue working in the most innovative areas to find new sources of business growth. "We should not be tempted to seek immediate benefits. Samsung should focus on creating fundamental technologies for long-term business in a rapidly changing environment, " Li said. Financial risk management focuses on minimizing market risk, credit risk, and liquidity risk arising from operating activities. Company creates and protects the value of the product, does not" burn " the money of investors. In unstable times, investors are confident in the company and shares even have growth. New focus on non-memory chip sector to become the world's top industry player by 2030. the Corporation intends to invest 60 trillion won on production infrastructure, and the rest of the planned expenditures - on research and development. Samsung react to them big misses in strategy and products and tries to implement the right solutions as fast as huge company can. The Company monitors capital on the basis of the ratio of total liabilities to total equity. This ratio is calculated by dividing total liabilities by total equity in the consolidated financial statements. The Company has maintained “AA- ” and “Aa3” credit ratings from S&P and Moody’s, respectively.
