Foundation in Natural

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FOUNDATION IN NATURAL & BUILT ENVIRONMENTS

SUBJECT: BASIC ACCOUNTING [ACC30205/FNBE0145]

ASSIGNMENT: FINANCIAL RATIO ANALYSIS

LECTURER: CHANG JAU HO

GROUP MEMBER:

NUR AQILAH SYAZA BT. USIN, 0317731

SABRINA WIORA SAIDI, 0317776



SAMSUNG’S HISTORY

semiconductors, memory, and system integration. Today Samsung's innovative and top

quality products and processes are world From its inception as a small export business in Taegu,

Korea, Samsung has grown to become one of the world's leading electronics companies,

specializing in digital appliances and media, recognized. This timeline captures the major

milestones in Samsung's history, showing how the company expanded its product lines and

reach, grew its revenue and market share, and has followed its mission of making life better for

consumers around the world.

MARCH 1938 – 1970

SAMSUNG’S BEGINNINGS

March 1, 1938, founder, Byung-

Chull Lee started a business in

Taegu, Korea, with 30,000 won.

1951, Samsung Moolsan

established. (now known as

Samsung Corporation)

1954, Cheil Industries Inc.

founded.

1958, Ankuk Fire & Marine

Insurance acquired. (renamed as

Samsung Fire & Marine

Insurance in 1993)

1963, DongBang Life Insurance

acquired.(renamed as Samsung

Life Insurance in 1989)

1966, Joong-Ang Development

established.

(known today as Samsung

Everland)

1969, Samsung-Sanyo Electronics

established.(renamed Samsung

Electro-Mechanics in March

1975 and merged with Samsung

Electronics in March 1977)

1970, Black-and-white TV

(model: P-3202) production

started by Samsung-Sanyo.

1970-1979, Diversifying in Industries and Electronics.

1972

Began production of black & white TVs for

domestic sale.

1974

Samsung Heavy Industries incorporated.

Samsung Petrochemical established.

Began washing machine and refrigerator

production.

1976

1 million black & white TV produced.

1977

Samsung Precision Co. established. (now

known as Samsung Techwin)

Started export of color televisions.

Samsung Fine Chemicals established.

Samsung Construction established.

1978

4 million black & white TV produced.

1979

Began mass production of microwave ovens.



1980-1989, Entering the Global Marketplace.

1980

Began producing air-conds.

1981

First microwave ovens

(model: RE-705D) exported

to Canada.

1 million color TV produced.

1982

Name changed from

Korea

Telecommunications

Corp. to SamsungSemiconductor &

Telecommunications Co.

SEG established in

Germany.

10 million black-and-

white TV produced.

1983

Began production of computers .

1984

Samsung Data Systems

established. (Renamed

as Samsung SDS)

First VCRs exported tothe US.

1986

Developed the world's smallest,

lightest 4mm video tape

recorder.

1987

Samsung Advanced Institute of

Technology opened for R&D

purposes.

1988

Samsung Semiconductor

& Telecommunications

Co merged with

Samsung Electronics.

Home appliances,

telecommunications,

and semiconductors

selected as core

business lines.

1989

Samsung BP Chemicals

founded.

1 million color TV

produced.

1990-1993 Competing in a Changing Tech World.

1991

Samsung supported

installation of Korean

Pavilion at the Royal

Museum of England.

Developed mobile

phone handset

1992

Developed mobile

phone system.

Development of 250MB

hard disc drive.

Development of world's

first 64M DRAM.

Acquired KukjeSecurities Co.

10 million industrial

robot produced.

1993

Samsung Advanced

Institute of Technology

(SAIT) developed first-

ever DVD-R

Samsung Electronics

acquired U.S. firm HMS



1994-1996 Becoming a Global Force.

1994

Samsung Heavy

Industries developed

first Korean-built

electric car (SEV-III) Development of world's

first 256M DRAM.

30 million microwave

oven produced.

Samsung Aerospace

developed the world's

first four-power zoom

camera.

1995

Samsung Entertainment

Group started.

Samsung Advanced

Institute of Technologydeveloped world's first

real-time MPEG-3

technology.

World's first 33" double-

screen TV introduced.

1996

Development of 1G

DRAM.

Developed world's

fastest CPU, the Alphachip.

Began mass

production of 64M

DRAM.

1997-1999 Advancing the Digital Frontier.1997

Became a Worldwide

Olympic Partner (TOP)

in the wireless

communications

category

Signed contract to

become an Olympic

Partner in wireless

equipment category for

Nagano WinterOlympics

Developed world's

lightest PCS (105g)

Developed world's

largest TFT-LCD (30)

Development of world's

first 30" TFT-LCD

completed

Announced 2nd phase

of New Management

1998

Achieved top share of

world’s TFT-LCD market

Mass production of

world's first digital TV

begun

Began mass production

of the world’s first

digital TV

Development of

completely flat-screenTV completed

Served as Olympic

Partner at Nagano

Winter Olympics

World's first 128M

SDRAM introduced

Developed world's first

128MB Synchronous

DRAM and 128MB Flash

memory

1999

Samsung Aerospace

(known today as

Samsung Techwin),

Daewoo Heavy

Industries, and

Hyundai Space and

Aircraft formed a

single business entity,

Korea Aerospace

Industries

First in the world to

mass-produce and

offer a full line up of

digital TVs

Developed the world's

first 3D TFT-LCD

Monitor

Developed wireless

Internet phone

(Smartphone), a small,

multi-function phone



2000 – PRESENT

For over 70 years, Samsung has been dedicated to making a better world through diverse

businesses that today span advanced technology, semiconductors, skyscraper and plant

construction, petrochemicals, fashion, medicine, finance, hotels, and more. Our flagship

company, Samsung Electronics, leads the global market in high-tech electronics

manufacturing and digital media.

Through innovative, reliable products and services; talented people; a responsible approach

to business and global citizenship; and collaboration with our partners and customers,

Samsung is taking the world in imaginative new directions.

A digital leader. A responsible global citizen. A multi-faceted family of companies. An ethicalbusiness. Samsung is all of these and more.

“’At Samsung Group and Samsung Electronics, we uphold a belief in shared responsibility – to

our people, our planet and our society. Across the company, we hold ourselves to the highest

standards so that we can more effectively contribute to a better world.”

VALUES

Quite simply, a company is its people. At Samsung, we’re dedicated to giving our people a

wealth of opportunities to reach their full potential.

Everything we do at Samsung is driven by an unyielding passion for excellence—and an

unfaltering commitment to develop the best products and services on the market.

In today’s fast-paced global economy, change is constant and innovation is critical to a

company’s survival. As we have done for 70 years, we set our sights on the future, anticipating market

needs and demands so we can steer our company toward long-term success.



Operating in an ethical way is the foundation of our business. Everything we do is guided

by a moral compass that ensures fairness, respect for all stakeholders and complete transparency.

A business cannot be successful unless it creates prosperity and opportunity for others.

Samsung is dedicated to being a socially and environmentally responsible corporate citizen in every

community where we operate around the globe.

Vision 2020

"Inspire the World, Create the Future."





















Profitability Ratios 2012 2013 Interpretation

Return on Equity (ROE)

21.7% 22.4 %

During the 2012-2013 period

the ROE increased from

21.7% to 22.4%. If profit is

going up, This means that

company is earning a higher

return in his capital.

Net Profit Margin (NPM)

11.85% 13.32 %


the NPM increased from

11.85% to 13.32%. This

means business is getting

better in controlling its

overall expenses.

Gross Profit Margin (GPM)

37.02% 39.79%


the GPM increased from

37.02%to 39.79%.COGS has

decreased, This means the

business is getting better in

managing its COGS.

Selling Exp. Ratio (SER)

11.29 % 13.48%

During the 2012-2013 periodthe SER increased from

11.29% to 13.48%. This

means that the company has

to focus on its selling

expenses, as they are not

getting any better in

controlling it.

General Exp. Ratio (GER)

11.29 % 13.48%


the GER has increased from

11.29% to 13.48%. Thismeans business is getting a

bit worse at controlling its

general expenses.



Financial Exp. Ratio (FER)

3.95% 3.86%


the FER has decreased from

3.95% to 3.86%. This means

business is getting better at

controlling its financial

expenses.Stability Ratios 2011 2012 Interpretation

Working Capital (WCR)

1.86: 1 2.16 : 1

The working capital Ratio has

increased in this year 2013

from 1.86 to 2.16. This has

not satisfied the minimum

level that means the business

is unable to pay its current

liabilities. In addition, it doessatisfy the ratio 2:1.

Total Debt (TDR) 32.91% 29.92%

During the period

2012-2013 TDR has

decreased from

32.91% to 29.92%

This means the

business’s owner’s

liability has

reduced. But it islower than the 50%

maximum limit

which means the

business does not

need to reduce its



liability.

Stock Turnover (ITR)

48 days 49 days

During the period

2012-2013 period the

stock turnover has

increased from 48

days to 49 days. That

means that it takes

more time for a

company to sell its’

goods.

Interest Coverage

5 times 5 times

During the 2012-2013

period the ICR has

stayed the same from

5 times to 5 times.

This shows a greater

ability of the business

to pay its interest

expense and hasreached the minimum

of 5 times.

P/E Ratio

1 1

By looking at the

company’s P/E we

could say that the

price of it is quite

cheap. Meaning that

investors are notexpecting higher

earnings in the future.



Calculations

ROE (2012)

*100%=21.7%

ROE (2013)

100%=22.4%

NPM (2012)

NPM (2013)

GPM (2012)

GPM (2013)

SER (2012)

SER (2012)



SER=GER; GER (2012) =11.29% GER (2013) =13.48%

FER (2012)

FER (2013)

WCR (2012)

WCR (2013)

TDR (2012)

TDR (2013)

ITR (2012)

ITR (2012)



ICR (2012)

ICR (2013)

P/E Ratio (2012) =

P/E Ratio (2013) =

INVESTMENT RECOMMENDATION

PROFITABILITY

Samsung is demonstrating good profitability as most of the ratios have

shown growth from the previous year. It seems to be generating more

off its capital invested. Even though there is a slight increase in its

General & Selling expense, a large decrease has been seen in its

financial expenses.

STABILITY



The company is showing a greater ability to pay off its interest expense

which has reached the minimum of 5 times and also its ability to pay-

off current liabilities with current assets is increasing with time with the

minimum ratio which is 2:1.

PRICE

The P/E ratios (1) is also quite low meaning it will take the investor

even less amount of time to get back the money he/she invested in the

company.

Having said all this, we recommend the company’s shares for

investment as they show good profitability; strong financial stability

and the shares are available at a low price.

References

Reference for background



http://www.businessinsider.com/history-of-samsung-

2013-2?IR=T&op=1

Retrieved on 10 November 2

For finance

https://uk.finance.yahoo.com/q/hp?s=005930.KS&b=30

&a=11&c=2013&e=31&d=11&f=2013&g=d

Retrieved on 11 November 2014

This is for book reference,

Greg Mostyn, 2006 Volume 1 Basic Accounting Concepts,

Principles, and Procedures:

Building the Conceptual Foundation, USA.

SAMSUNG ELECTRONICS Annual Report (2011-2013)

Retrieved from:

http://www.businessinsider.com/history-of-samsung-2013-2?IR=T&op=1



https://uk.finance.yahoo.com/q/hp?s=005930.KS&b=30&a=11&c=2013&e=31&d=11&f=2013&g=d









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Foundation in Natural