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The paper seeks to carry out a comparison of five account balances for Apple, Inc. and Samsung Electronics Co. Ltd. The two companies closes their financial year in different months. Apple, Inc. closes the year in the month of September. Therefore, the analysis will be carried out for the year 2013 and 2014. On the other hand, Samsung Electronics closes the year in the month of December. Therefore, financial data for the year 2012 and 2013 will be used because the company has not yet published the financial results. The comparison will be made for the year ended 2013 and 2014.
Currently 1 South Korean Won is equivalent to 0.000898080 of a dollar. The data for Samsung Electronics will be converted to USD for each of the comparison. The converted data is presented below.
The information in the table above shows that the revenue for the two companies rose during the two year period. However, the increase in revenue for Samsung Co. ($24,576) was higher than that of Apple, Inc. ($11,885). Besides, it can be noted that the level of revenue for Samsung Co. is higher than that of Apple, Inc. From a managerial perspective, there is a direct relationship between sales and cost of sales. Thus, as sales increases, the cost of sales also increases. This explains why the cost of sales for the two companies rose during the period. Besides, it can be observed that the cost of sales for the two companies rose during the period. Further, the cost of sales for Samsung Co. is higher than that of Apple, Inc. The balances of accounts receivables for the two companies rose during the period. Further, it can be observed that Samsung Co. had a higher balance of the receivables than Apple, Inc. From a managerial perspective, a higher value of accounts receivable can be attributed to high volume of sales or the inability to collect the debtors’ balances effectively.
The accounts payable for Apple, Inc. was higher than that of Samsung Co. Besides, the balance of account payable for the two companies rose during the period. From a managerial perspective, a higher balance for accounts payable, like in the case of Apple, Inc. is an indication of inefficiency in paying trade creditors. Finally, the inventory balance for Samsung Co. is higher than that of Apple, Inc. by a large margin. The high balance is an indication that Apple Inc. is more effective in managing inventory than Samsung Co. All the financial statements are interrelated. For instance, revenue in the income statement yields accounts receivable when sold on credit. This explains why a company with a higher value of revenue has a higher balance of accounts receivables. Further, the cost of goods sold on the income statement is connected to inventory and accounts payable in the balance sheet. In conclusion, it can be observed that Samsung Co. performed better than Apple, Inc.
Morningstar Inc. (2015a). Apple Inc. Web.
Morningstar Inc. (2015b). Samsung Electronics Co. Ltd. Web.
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