This work is related to the fiscal analysis of telecommunication company Motorola and its comparing with the figure one taking company Nokia. This besides covers the comparing of the both companies on the behalf of fiscal analysis.
THE OBJECTIVE OF THE WORK:
This coursework is based on the purpose to cognize and understand about the importance of the fiscal direction for the companies. This is really of import for the pupils and every bit good as for the direction to hold a proper cognition about the fiscal direction.
MOTOROLA is known company in the communicating sector. From the last few old ages it ‘s traveling to be increasing its growing. In this competitory market there are many competitory challengers to which this has to vie. For this the company has to done the fiscal analysis so that it came to cognize about the present place of his company or its competitory challengers in the industry. Simultaneously there is comparing of the both companies this will besides include decision and recommendation.
On the other manus the 2nd company discussed is NOKIA which is taking company of the universe. There is rating of the public presentation of the company.
Contented Page
Abstract aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
Brief description of companies aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦4
Motorola aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..5
Nokia aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..5
Fiscal Analysis of Motorola aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦.6
Ratios aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..6
Fiscal Analysis of Nokia aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦7
Ratios aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ … 7
Comparison of Both Companies aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦.8
Decision aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦10
Recommendations aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦.10
Mentions aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..11
Appendixs aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..12
Brief DESCRIPTION OF COMPANIES
Motorola
Motorola Inc. is one of the leading and good cognize company fundamentally US corporation concern and it was established in 1928, it is a transnational company in the telecommunication sphere and is based in the Schaumburg, Illinois in the metropolis Chicago ( beginning – Motorola Website, 2010 ) . The rank of this company was on 65th of Fortune 500 ranking system but now it known to be have 2nd rank in the telecommunication and networking the company has it one-year locale in US dollar is 22063 million harmonizing to Cnnmoney ( 2010 ) . It was stated antecedently that this company involved in the fabrication of radio telephone French telephones ( Mobiles ) and is good known for his engineering and services and good merchandises. As stated earlier Motorola is a manufacturer of radio telephone French telephones provides best of all time experient engineerings, merchandises and services ( Motorola Website, 2010 ) . In accretion to this company Motorola moreover engaged in intriguing and trading of the radio substructure for the setup like signal amplifiers and cellular transmittal signal setup ( Source – Motorola Website, 2010 ) .
On the other manus, in add-on to all this the company has involved in the industry of the equipments for the place base and for the broadcast medium of the web systems. Its fabrication and direction patronages consist basically of radio right to be heard and broadband agreements utilize to set up clandestine webs and community protection interactions systems such as “ Astro ” and “ Dimetra ” ( Source- Motorola Website, 2010 ) . The company has focus over the increasing the gross revenues of French telephones excessively by adding the new engineerings and manners to their merchandises and by utilizing the “ Google unfastened beginning ” Android Cellular technique of work. For the twelvemonth 2007 the company had loss of | $ 1.2 billion and due to this in the coming twelvemonth the company has cut is the occupations by 3500 worker for clip and so 4000 occupation cuts in 2008. Due to this market portions of Motorola has fallen by 18.4 % to 6 % but in twelvemonth 2009 the company had earned the net income of $ 26 million and increased its portions to 12 % Then in 2010 following the net income scheme the company has got the net income of $ 162 million and this is the first clip in old ages that the company had net income with the net incomes of $ 87 Million.
Nokia
In the present scenario the company nokia has at the taking place in the communicating market. The company is functioning its clients in 130 states of the universe and interesting is that there is 3 % of the entire grosss are coming from its originated land i.e. Finland. This taking company has started its concern in 1865 as the paper factory situated at the river of Nokia from its got his name Nokia in the state Finland. The company started its concern in the wood mush and paper devising till 1800 century and so company began to diversify affecting the gum elastic merchandises. Then in 1922 the Nokia Corporation had joined with a overseas telegram company Finish Cable Works ( FCW ) from where it started fabricating the overseas telegrams of telephone, equipments for the telephones and power overseas telegrams. This manner the company entered into the market of telecommunication.
From this start, they go into several planetary markets.A A In the 1980 ‘s, they set in gesture to concentrate on the fabrication of nomadic phones.A A Nowadays, Nokia is the biggest provider of nomadic phones at the universe broad level.A A The company has achieved about 33 % of the market portion in the nomadic phone industry, through their subsequently nearby opposition conveying up the rear behind at 17 % .A A This market place portion translates into over 133 million nomadic phones that are sold in the 2000 ( beginning – Business Week, Jan. 22, 2001 ) .A At present the company possesses production installations in 10 states with development and research Centres in 12 states of the universe. A The company has emploted more than 55,000 people at the universe broad and this is in existent means a planetary company in the universe. ( www.nokia.com )
Corporate construction of Nokia
Fiscal analysis of Motorola
For the company Motorola there is considered the fiscal statement, balance sheet and ratio expression for the analysis intent of the company. By this reader came to cognize about the place of the company. The analysis is for clip period 2006-2009. Harmonizing to the informations in appendixes the tabular array gave the analysis of the company fiscal profile in brief. From the informations given in the statement it has noticed that company has decrease in the current assets and even in the entire assets. There is besides decrement in the gross net income of the company from 2006-2009. This indicates that the company need to pay attending over the schemes for growing of the net incomes for the hereafter.
Summary of fiscal statement and balance sheet is as follow:
Fiscal
Valuess
2006
2007
2008
2009
Entire current Assetss
30 975
22 222
17 363
16 032
Entire Assetss
38 593
34 812
27 869
2 5603
Entire current Liabilitiess
15 425
12 500
10 620
8 261
Entire Liabilitiess
21 451
19 365
18 362
15 828
Entire Common Equity
17 142
15 447
9 507
9 775
Entire Equity
17 142
15 447
9 507
9 775
Entire Liabilitiess and Equity
38 593
34 812
27 869
25 603
Entire Gross
42 847
36 622
30 146
22 044
Gross Net income
12 768
10 333
8 851
7 135
Operating Income
4 158
812
412
571
Net Income
3 661
-49.0
-4 244
-51
Ratio analysis
For Motorola on the footing of balance sheet and fiscal statement the ratios are found out. For this followers are the ratios calculated.
Tax return on Assetss ( ROA ) = 3.15 %
Tax return on Equity ( ROE ) = 3.50 %
Tax return on Capital ( ROC ) = 5.78 %
Entire Assets Turnover = 0.9
Fixed Assets Turnover = 11.2
Inventory turnover = 10.0
Current Ratio = 2.0
Quick Ratio = 1.5
Entire debt/Equity = 32.5
Entire liabilities / Entire assets = 59.7
Fiscal analysis of Nokia
It is good known that this company is at present taking company in the universe. There is increase in the entire assets from twelvemonth 2006 – 2007 but in the following approaching twelvemonth it once more autumn and continue in the twelvemonth 2009. Even holding looked at the gross net income of the company it is seen that there is continues ruin in the gross net income of the company. The operating income and net income in besides decreased during that clip period of last five twelvemonth of the company. It is flooring that there is great decrease in the net income in 2009 twelvemonth.
Fiscal
Valuess
2006
2007
2008
2009
Entire current Assetss
18 586
29 294
24 470
23 613
Entire Assetss
22 617
37 599
39 582
35 738
Entire current Liabilitiess
10 161
18 976
20 355
15 188
Entire Liabilitiess
10 649
22 826
25 374
22 650
Entire Common Equity
11 968
14 733
14 208
13 088
Entire Equity
11 968
14 733
14 208
13 088
Entire Liabilitiess and Equity
22 617
37 599
39 582
35 738
Entire Gross
41 121
51 058
50 710
40 984
Gross Net income
13 379
17 586
17 775
13 415
Operating Income
5 362
8976
6 161
2 559
Net Income
4 306
7 205
3 988
891
Ratio analysis of Nokia
On the footing of above informations collected there are deliberate ratios for the Nokia Company.
Tax return on Assetss ( ROA ) = 4.66 %
Tax return on Equity ( ROE ) = 16.02 %
Tax return on Capital ( ROC ) = 8.47 %
Entire Assets Turnover = 1.2
Fixed Assets Turnover = 21.6
Inventory turnover = 12.3
Current Ratio = 1.5
Quick Ratio = 1.1
Entire debt/Equity = 43.3
Entire liabilities / Entire assets = 63.7
Comparison of Nokia and Motorola
From the above analysis it has been noticed that the Nokia is taking company than that of Motorola. The Motorola has to maintain it up to go reside in the competition and to achieve the good topographic point.
Motorola
Nokia
Company
1Q10
Unit of measurements
1Q10 Market Share ( % )
1Q09
Unit of measurements
1Q09 Market Share ( % )
Nokia
110,105.6
35.0
97,398.2
36.2
Motorola
9,574.5
3.0
16,587.3
6.2
Source – “ hypertext transfer protocol: //www.pluggd.in/mobile-handset-sales-worldwide-nokia-297/ ”
From the above charts and tabular arraies and analysis of the statements of both companies it is seen that there is large difference between these companies. The nokia has got the 35 % of market portion on the other manus the Motorola has merely 3 % of the market portions in the portion market. One thing is common between these two companies is that they intend to fall in loss from last five twelvemonth there is no advancement and growing seen in the companies.
Decision
From above treatment it is found that there is really difficult competition in the telecommunication market and it is non easy to acquire a better topographic point in the market. Due to holding incorrect follow up of the schemes there is menace of lose and even to acquire the decrease in the market portions and net income to company. For the better apprehension there are taken two illustrations for the analysis of the industry so that there can be better understanding sing the fiscal direction for the companies in the industry. It is compulsory for the directors to hold good and skill full cognition of all the facets of the direction. Financial direction is the most of import facet of the direction and there should be proper cognition and apprehension of this country is at that place. Furthermore the fiscal statement, balance sheets and fiscal ratios are the cardinal factors to understand the place and stand up of the company and by holding proper apprehension of them there is good direction of the concern. Hence the fiscal direction and planning is the indispensable and important portion of all the industries. It is how the company set up their ends for the hereafter planning ‘s.
Recommendations
From above treatment it is recommended for the both companies that they has to reexamine over their policies sing the fiscal direction as they are falling in continues loss in the market. There must be proper rating of the market and analyze the assorted schemes for the better execution and usage of finance in the field where it is needed. By following up suited scheme the companies can do net income in the market. It is really competitory market and is non easy to acquire in advancement as this is the epoch of globalization.