Samsung Electronics Co Ltd is a multiple consumer electronics business which manufactures and sells IT and Mobile Communications and Device Solutions around the world. They have diversified products from home appliances to health and medical equipment aside from smartphones, semiconductor chips, printers and telecom network equipment. Samsung was ranked as one of the top 10 global in technology..
Samsung is a public company traded as KRX: 005930. The company was founded on January 13, 1989 by Lee Byung-chul. The company was headquartered in Suwon, South Korea.
Samsung Electronics Co Ltd (005930) Extended Graph Analysis
1. SAMSUNG CASH FLOW
|Net cash flow provided by operating activities||36,975,389,000,000||40,061,761,000,000||47,385,644,000,000||62,162,041,000,000||67,031,863,000,000||48,093,855,000,000|
|Net cash used for investing activities||-32,806,408,000,000||-27,167,787,000,000||-29,658,675,000,000||-49,385,216,000,000||-52,240,453,000,000||-37,225,406,000,000|
|Net cash provided by (used for) financing activities||-3,057,109,000,000||-6,573,509,000,000||-8,669,514,000,000||-12,560,867,000,000||-15,090,222,000,000||-18,480,578,000,000|
|Free cash flow||13,608,139,000,000||12,679,658,000,000||22,195,003,000,000||18,386,067,000,000||36,454,940,000,000||23,597,384,000,000|
- Net cash flow from operations was KRW 48 trillion. In the trailing twelve months.
- Net cash used for investing activities was -KRW 37 trillion in the trailing twelve months.
- New cash provided by (used for) financing activities was -KRW 18 trillion in the trailing twelve months.
- Capital expenditure was KRW 24 trillion in the trailing twelve months.
- Free cash flow was KRW 23.597 trillion in the trailing twelve months.
- Net income, depreciation and amortization have a significant amount in the cash from operating activities.
- Net cash from operations were increasing year-over-year from 2014 to 2018. Moreover, the growth was 81 percent in five years.
- The net cash used for investing activities were property, plant and equipment and purchases of investments.
- The net cash provided by (used for) financing activities were debt repayment, dividends paid and other financing activities.
- Capital expenditures were purchases of property, plant and equipment, and purchases of intangibles.
- Free cash flow was erratic in movement in the last five years, however the company has managed to provide a free cash flow for the business operations.
The cash flow shows that the company is liquid, the management managed to provide a free cash flow per share at KRW 4555.25 in the trailing twelve months. Cash was provided for dividends payment and debt repayment. The net income was sufficient to provide cash from operations.
2. SAMSUNG BALANCE SHEET
|Net property, plant and equipment||80,872,950,000,000||86,477,110,000,000||91,473,041,000,000||111,665,648,000,000||115,416,724,000,000||116,855,571,000,000|
|Total non-current assets||115,276,932,000,000||117,364,796,000,000||120,744,620,000,000||154,769,626,000,000||164,659,820,000,000||167,343,851,000,000|
- Total cash was KRW 101.9 trillion in Q3 2019.
- Current assets were KRW 186 trillion in Q3 2019.
- Net property, plant and equipment was KRW 116.856 trillion in Q3 2019.
- Non-current assets are KRW 167 trillion in Q3 2019.
- Total assets are KRW 353 trillion in Q3 2019.
- Current liabilities are KRW 63 trillion in Q3 2019.
- Non-current liabilities are KRW 34.7 trillion in Q3 2019.
- Total liabilities were KRW 97.982 trillion in Q3 2019.
- Retained earnings were KRW 252 trillion in Q3 2019.
- Stockholders equity was KRW 255 trillion in Q3 2019.
- Total cash was increasing year over year and has a growth of 63 percent in five years.
- Current assets increase year-over-year and have a growth of 62 percent in five years.
- Net property, plant and equipment increase year-over-year and have a growth of 44 percent in five years.
- Total non-current assets increase year-over-year and have a growth of 45 percent in five years.
- Total assets increase year-over-year and have a growth of 53 percent in five years.
- Current liabilities represent 65 percent of the total liabilities.
- Non-current liabilities represent 35 percent of the total liabilities.
- Total liabilities represent 28 percent of the total liabilities and stockholders equity.
- Retained earnings represent 99 percent of stockholders equity and has a growth of 49 percent in five years.
- Stockholders equity represents 72 percent of total liabilities and equity.
The company has a strong balance sheet and is liquid and financially healthy. It has 3 times current assets than current liabilities. Its liquid assets are enough to pay for its current obligations. The stockholders have more stake in the company than of the creditors. It is using more of the stockholders’ investment for the operation of the business.
3. SAMSUNG INCOME AND MARKET
- Revenue was KRW 230 trillion in the trailing twelve months.
- EBIT was KRW 31 trillion in the trailing twelve months.
- Net income was KRW 22 trillion in the trailing twelve months.
- Market capitalization was KRW 376 trillion in the trailing twelve months.
- Intrinsic value was KRW 619.972 trillion in the trailing twelve months.
- Revenue was averaging KRW 221 trillion in five years and has a growth of 17 percent from 2014 to 2018..
- EBIT was averaging KRW 37 trillion and has a growth of 135 percent from 2014 to 2018.
- EBIT represents 14 percent of the revenue.
- Net income was averaging KRW 28 trillion and has a growth of 67 percent from 2014 to 2018.
- Net income represents 9 percent of the revenue.
- Market capitalization was erratic in movement in the last five years, however it has a growth of 88 percent in five five years.
- Intrinsic value is greater by 65 percent against market capitalization.
The company was profitable and the management is capable of generating sufficient revenue for the business operation. The financials have not seen any negative bottomline in the last five years.
4. SAMSUNG FINANCIAL RATIOS
|Asset turnover (average)||0.93||0.85||0.8||0.85||0.76||0.67|
|Return on assets %||10.39||7.91||8.89||14.66||12.03||6.26|
|Return on equity %||15.07||11.17||12.49||21.02||17.26||8.83|
|Return on invested capital %||13.41||10.01||11.23||19.01||15.56||7.66|
- Asset turnover was averaging 0.67 in the trailing twelve months.
- Return on asset was 6.26 percent in the trailing twelve months.
- Return on equity was 8.83 percent in the trailing twelve months.
- Debt/Equity ratio was 0.01 in the trailing twelve months.
- The return on invested capital was 7.66 percent in the trailing twelve months.
- Interest coverage was 48.71 in the trailing twelve months.
- Asset turnover indicates that for every one KRW in asset, the company generates 67 chon of sales.
- Return on asset indicates that for every KRW invested in assets, the company generates 6.3 chon of net income.
- Return on equity indicates that for every KRW of shareholders equity, the company generated 8.83 chon of profit.
- Debt/Equity ratio means that the company has KRW 0.01 in debt for every KRW of asset.
- Return on invested capital indicates that the return generated from its investment was 7.66 percent.
- Interest coverage indicates that the company has more than enough cash to pay for the interest payment.
The company is liquid and financially healthy.
5. SAMSUNG KEY EXECUTIVE COMPENSATION
|Kinam King||Vice Chairman and CEO|
|Hyun Suk King||President and CEO|
|Dong Jin Koh||President and CEO|
|Oh-Hyung Kwon||Executive Director,Vice Chairman and CEO|
|Boo-Keun Yoon||Executive Director,President and Co-CEO|
|Jong-Kyun Shin||Executive Director,President and Co-CEO|
|Sang-Hoon Lee||Executive Director,President and Chief Financial Officer|
The company does not disclose its key executive compensation.
6. SAMSUNG LOBBYING AND CONTRIBUTIONS
The company, Samsung Electronics Mfg and Equipment have been incurring lobbying and contributions expenses since 1998 and onwards. The figures above are the calculations by the Center of Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 from January 1 to December 31. Prior years include spending from January through December, according to the Center for Responsive Politics.
Total spent on Electronics Mfg and Equipment in 2019 was USD 156,390,837, the number of clients was 262.
The number of lobbyists /percent of former government employees was 1,089 at 72.73 percent.
Source: OpenSecrets.org Center for Responsive Politics
7. SAMSUNG FINANCIAL STRENGTH
|Market value of equity||375,782,850,000,000|
|Book value of total liabilities||99,288,251,000,000|
|A – Working Capital / Total Assets||0.0003||1.20||0.00|
|B – Retained Earnings / Total Assets||0.71||1.40||1.00|
|C – EBIT / Total Assets||0.09||3.30||0.31|
|D – Market Value of Equity / Book Value of Total Liabilities||3.78||0.60||2.27|
|E – Sales / Total Assets||0.68||1.0||0.68|
Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.
Samsung Electronics Co Ltd. has a Z-Score of 4.25. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.
Samsung Electronics Co Ltd.was profitable and is financially healthy and liquid. The calculated financial strength was strong. Based on the calculation of its intrinsic value, the stock was undervalued on the date of posting of this article and could be a good candidate for a Buy.
Research and written by Criselda