Compare Samsung and Apple Ratios to the industry (peer) averages and comment on
ID: 2483503 • Letter: C
Question
Compare Samsung and Apple Ratios to the industry (peer) averages and comment on how they stand when you benchmark the results. What does this activity teach you?
Company Name
Total Asset Turnover - 2014
Net Profit Margin % - 2014
ROE % (Net) - 2014
ROA % (Net) - 2014
Total Debt to Equity - 2014
Interest Coverage - 2014
Inventory Turnover - 2014
Current Ratio - 2014
Peer Avr: 1.16
Peer Avr: 7.44
Peer Avr: 17.24
Peer Avr: 6.89
Peer Avr: 0.16
Peer Avr: 3243.48
Peer Avr: 14.55
Peer Avr: 1.34
Apple Inc
0.84
21.61
33.7
18.06
0.32
-
57.94
1.08
Samsung Electronics Co., Ltd.
0.93
11.19
15.06
10.39
0
-
7.04
2.21
Company Name
Total Asset Turnover - 2014
Net Profit Margin % - 2014
ROE % (Net) - 2014
ROA % (Net) - 2014
Total Debt to Equity - 2014
Interest Coverage - 2014
Inventory Turnover - 2014
Current Ratio - 2014
Peer Avr: 1.16
Peer Avr: 7.44
Peer Avr: 17.24
Peer Avr: 6.89
Peer Avr: 0.16
Peer Avr: 3243.48
Peer Avr: 14.55
Peer Avr: 1.34
Apple Inc
0.84
21.61
33.7
18.06
0.32
-
57.94
1.08
Samsung Electronics Co., Ltd.
0.93
11.19
15.06
10.39
0
-
7.04
2.21
Explanation / Answer
Solution.
Company Name
Total Asset Turnover - 2014
Net Profit Margin % - 2014
ROE % (Net) - 2014
ROA % (Net) - 2014
Total Debt to Equity - 2014
Interest Coverage - 2014
Inventory Turnover - 2014
Current Ratio - 2014
Peer Avr: 1.16
Peer Avr: 7.44
Peer Avr: 17.24
Peer Avr: 6.89
Peer Avr: 0.16
Peer Avr: 3243.48
Peer Avr: 14.55
Peer Avr: 1.34
Teaching:
Apple assumes higher risks as compared to Samsung. But it has higher returns as well. Thus higher the risk, greater the returns can be.
Company Name
Total Asset Turnover - 2014
Net Profit Margin % - 2014
ROE % (Net) - 2014
ROA % (Net) - 2014
Total Debt to Equity - 2014
Interest Coverage - 2014
Inventory Turnover - 2014
Current Ratio - 2014
Peer Avr: 1.16
Peer Avr: 7.44
Peer Avr: 17.24
Peer Avr: 6.89
Peer Avr: 0.16
Peer Avr: 3243.48
Peer Avr: 14.55
Peer Avr: 1.34
Both Samsung as well as Apple are lacking in this ratio when compared to peer. This shows they are less efficient in producing sales from their assets. When compared with each other Samsung has got an edge above Apple. When compared to Peer both Apple and Samsung are ahead in Net Profit Margin. This shows that they are unable to generate more profits in their sales. This is found in companies possessing better goodwill in the market. Amongst them Apple is ahead of Samsung. Both Apple and Samsung are able to generate greater returns on their stockholder's investments as compared to Peer. And return generated by Apple is more then twice of Samsung's return on Equity. Both Apple and Samsung are able to generate greater returns on their assets as compared to Peer. And return generated by Apple is more then Samsung's return on its assets. Apple Inc seems to be more risky as compared to Peer and Samsung. Whereas Samsung seems to be Risk free as it does not depend on Debt to operate. Since both the companies have Nill Interest Coverage, it means their financial obligations are none as compared to the Peer. This shows that Apple Inc is able achieve more sales to its inventory as compared to its Peer. And Samsung is behind its Peer. Apple has a lesser ratio then its peer showing that it a little less capable of meeting it s current obligations as compared to peer and samsung. Whereas Samusung has higher ratio then its Peer stating higher capacity to meet the obligations.Related Questions
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