I took the liberty of making a financial summary of SONY CORP. Each report has been customized for the company to provide the information it needs to compare its annual business performance to comparable companies. With this information it is possible to determine if the commercial strategy is competitive within the industry and to identify the strengths of your company, as well as the weaknesses. It will also allow you to compare company performance over time, allowing you to chart the business process, analyze company performance more effectively, and make more informed decisions about company management.
For this, each report should be carefully reviewed as it is important that the data presented here is fully understood. It should be noted that the analysis presented is based on historical figures, it is not a prediction for the future, but rather a tool to monitor the progress of the company over time. This information is a factor in your decision making, but it certainly should not be the only factor in the company.
Sony Corp. is a Japanese multinational company based in Tokyo and one of the world's largest manufacturers of electronics, audio and video, computing, photography, video games, mobile phones, professional products.
Liquidity ratios measure a company's ability to meet its short-term obligations that are due, in other words, can the company quickly convert its assets into cash without a loss of value if necessary to meet its short-term obligations ? Favorable liquidity ratios are critical to a company and its creditors within a business or industry that does not provide stable and predictable cash flow.
They are also a key predictor of a company's ability to make payments by meeting obligations with lenders when faced with an unforeseen event.
BALANCE SHEET
To begin to analyze this company, we have its balance sheet that of total assets has $ 19,065,538, which represent 100%. We will focus on the 3 accounts with the highest percentage, which are the most important, influence this balance sheet, it should be noted that not all balance sheets are the same accounts.
Long-term investments: this account has a total of $ 10,756,058, which represents 56% of the company's total assets, which means that the company invests a lot of money in these types of accounts, which usually do not make profits immediately, but the objective is simply to create a base that will generate the desired benefits in the future.
Other total long-term assets: This account has a total of $ 1,336,254, which represents 7% of the company's total assets. This type of investment is used for company operations and these may include plant and equipment, but not inventory or accounts receivable.
Total, accounts receivable: this account has a total of $ 1,203,485, which represents 6% of the total assets of the company, normally in this account the increases and cuts related to sales of concepts other than service products are recorded. It consists of bills of exchange, credits and notes payable to the company
On the other hand, the company presents a total of liabilities and equity of $ 19,065,538, which represents 100% of current liabilities, and we will highlight the 4 accounts that have the highest percentage for this part of the balance sheet.
Other liabilities: this account has a total of $ 8,715,316 which represents 46% of the total liabilities, here you have short-term obligations of the company, in this context a short term is a maturity period of less than one year.
Other current liabilities: this account has a total of $ 4,430,376, which represents 23% of total liabilities
Retained income (accumulated deficit): this account has a total of $ 1,440,387, which represents 8% of total liabilities, in this account are net income that is not reported among the shareholders and that the company decides to reinvest, therefore, they are the income that the company decides not to distribute as dividends among its shareholders
Common Stock: This account has a total of $ 865,678 that represents 5% of the total liabilities, here are the actions that most people are thinking about when they use the term "stock". Since the shares are partially owned by a corporation, they are also known as "shares."
STATEMENT OF INCOME
To continue we will analyze the income statement of SONY CORP, we have total income of $ 8,543,982 at the end of March 2018, which represents 100%, in the attached file you can see that it compares with the previous year with a total of $ 7,215,698, in this Analysis we will focus on 2018 and we will present the accounts with the highest percentage for this income statement, these accounts may change for other companies or even for the same company in the coming year.
Cost of income: with a total of $ 6,230,422 which corresponds to 73%
Gross profit: with a total of $ 2,313,560 corresponding to 27%
Sales, general, adm., Expenses: with a total of $ 1,583,197 corresponding to 19%
CASH FLOW
In the cash flow we can see that it compares with the previous year, it can be seen that, compared to 2017, in the year 2018 it increases, in this analysis we will focus on the year 2018
Net income / starting line: with a total of $ 547,279, the total income that the company generated throughout this year (March 2017- March 2018)
Cash from operating activities: with a total of $ 1,254,972, usually refers to cash and other equivalent liquid assets, cash and its equivalents are considered the same for accounting purposes, including their inclusion in the statement of cash
Cash from investing activities: with a total of - $ 822,197, are the payments that originate from the acquisition of non-current assets and other assets not included in cash and other equivalent liquid assets, such as intangible assets, materials, real estate investments or financial investments
Cash from financing activities: with a total of $ 246,456, they include collections from the acquisition by third parties of securities issued by the company or resources granted by financial entities or third parties, in the form of loans or other financing instruments, as well as payments made for amortization or return of the amounts contributed
Currency exchange: with a total of - $ 53,044
Net cash change: totaling $ 626,187
Current radius = Current assets / Current liabilities
This ratio reflects the number of times that short-term assets cover short-term liabilities and is an accurate indicator of a company's ability to meet its current obligations. A higher number is preferred because it indicates a great ability to meet short-term obligations. The composition of current assets is a key factor in evaluating this relationship. Depending on the type of company or current industry, assets may include slow inventories that could affect a company's liquidity analysis.
The question to be asked here is: How long could it potentially take to convert raw materials and inventory into finished products? In order to respond, the quick ratio may be preferable to the current ratio because it removes inventory and prepaid expenses from this ratio for a more accurate indicator of the liquidity and the ability of a company to meet short-term obligations.
The current ratio of SONY CORP. The group is 0.92, indicating the company's ability to serve short-term obligations is satisfactory.
Quick Ratio = Cash + Marketable Securities + Trade Accounts Receivable / Current Liabilities
This relationship, also known as an acid test relationship, measures the immediate liquidity the number of times effect, accounts receivable and negotiable securities that cover short-term obligations. A higher number is preferred because it suggests that a company has a great ability to meet short-term obligations. This ratio is a more reliable variation of the current ratio because inventory, prepaid expenses, and other less liquid current assets are removed from the calculation.
Defensive interval days = (cash + marketable securities + trade accounts receivable) / (Operating expenses - other expenses) - (Interest expenses. Provision for income taxes - depreciation expenses) / (days)
This ratio measures the risk of insolvency for investors by calculating the number of days that a company can operate without cash returns while meeting its basic operating costs. In general this number should be between 30 to 90 days.
Inventory days for SONY is 0.72, indicates that the degree of the company insolvency protection may be ideal.
Accounts receivable from working capital = Trade accounts receivable / (Current assets - current liabilities)
This ratio measures the dependence of working capital on the collection of accounts receivable. A smaller number for this ratio is preferable, indicating that a company has a satisfactory level of working capital and accounts receivable constitute an appropriate part of current assets.
Accounts receivable at work capital ratio for SONY is 16.72, indicates that the company performance is sufficient in this area.
Inventory of working capital = Inventory / (current assets - current liabilities)
This ratio measures the dependence of working capital on inventory. A smaller number for this ratio is preferred to indicate that a company has a satisfactory level of working capital and inventory constitutes a reasonable portion of current assets.
Long-term liabilities with working capital = Long-term liabilities / (Current assets - Current liabilities)
This ratio measures the extent to which a company's long-term debt has been used to replenish working capital versus acquisition of fixed assets.
Accounts receivable rotation = Sales / Trade accounts receivable
This ratio measures the number of times accounts receivable are reversed in a year and reveals how successful the company is in collecting its outstanding accounts receivable. A higher number is preferred because it indicates a shorter time between sales and cash collection.
SONY accounts receivable turnover is 16.72, suggests that this ratio may not be on target.
Sales to assets = Sales / Total assets
This ratio measures a company's ability to produce sales relative to total assets to determine the effectiveness of the company's asset base in sales production. A higher number is preferred, indicating that a company is using its assets to generate successful sales. This relationship does not take into account the depreciation methods used by each company and should not be the only measure of effectiveness of a company in this area.
Sales to assets for SONY 0.58, indicates the company's performance in this area is good
Gross profit percentage = ((Sales - Cost of Sales) / Sales) * 100
This ratio measures the gross profit earned on sales and reports how much of each dollar of sale is available to cover operating expenses and contribute to profits.
The gross profit percentage for Sony is 27.1, it is somewhat low compared to those already mentioned.
Percentage profit margin on sales = Earnings before Taxes / Sales * 100
This ratio measures the amount of profit a company makes for each dollar of sales received and how well the company may face higher costs or lower sales in the future.
SONY's percentage profit margin on sales is 6.5%, indicating that sales may not be contributing enough for the company's bottom line
Return percentage of assets = Earnings before taxes / Total assets * 100
This ratio measures how effectively a company's assets are being used to generate profits. It is one of the most important proportions when evaluating the success of a business. A higher number reflects a well-managed company with a healthy return on assets. Strongly depreciated assets, a large amount of intangible assets, or any unusual income or expense can easily distort this calculation.
The percentage rate of return on assets for SONY is 2.87%, indicating that there is a need for improvement in this area to ensure the company can remain competitive and continue to operate successfully.
Equity Return Percentage = Earnings Before Tax / Total Share * 100
This ratio expresses the rate of return on capital employed and measures the ability of a company's management to obtain an adequate return on the capital invested by the owners in a company. A higher number is preferred for this commonly analyzed ratio.
The percentage rate of return on capital for SONY is 19.09%, indicates that the administration may not be effective based on the owners' investment in the company
Debt to total assets = Total liabilities / Total assets
This ratio measures how much of a company's debt is related to its assets. A ratio value of more than one indicates that a company has more debt than assets. Naturally, companies and creditors prefer a smaller number.
The debt to total assets ratio for SONY is 84.44%, indicating that the company should be able to bear losses without harming the interests of creditors or could obtain additional financing.
CONCLUSION
In conclusion, Sony fights for some financial reasons and although these two companies with which we compare it are not from the same industry, it defends itself, on the other hand, if we compare it with Mac or Samsung or even LG it could be evenly matched, Although comparing it with HTC or HUAWEI or ONEPLUS that with companies that do not have so much time in the industry, it could well beat them, or it may not, that already depends a lot on the market.
And finally, after analyzing the financial statements of this company that is SONY, although it is not bad, but I think that with the size it has and especially for the variety of products and / or services it has, it should be in a status somewhat higher than the level it presents, although the market or rather the markets in which Sony participates are not easy at all, since it has too much competition and although for many people other brands are better, personally I I like the brand and I usually consume many of the products it offers. Although the markets that Sony manages are not easy in this analysis we saw that it is not in bad condition, but it could well be improved and use a few strategies to achieve it.
Bibliography:
- https://www.sony.net/
