Case 2- Nokia Financial Statement Comparisons - Ifrs

In: Business and Management

Submitted By ngocnga81
Words 656
Pages 3
To compare Nokia's Parent Company's financial statement prepared under the Finnish Accounting Standards (FAS) to the Consolidated Profit and Loss Statement prepared under IFRS, we performed two different analyses. The first compares performance over time (2007 to 2008) as well as 2008 results as a percentage of net sales:

Parent Company (FAS) Consolidated Company (IFRS) 2008 results (displayed as % of net sales) Compared to 2007 2008 results
(displayed as % of net sales) Compared to 2007
Net sales 100.00% Down 12.84% 100.00% Down 0.68%
Gross profit margin 30.54% Down 16.99% 34.26% Up 0.56%
Operating profit margin 10.02% Down 46.74% 9.79% Down 37.80%
Profit before taxes 8.54% Down 70.13% 9.80% Down 39.89%
Net profit margin 6.49% Down 72.49% 7.86% Down 44.65%

The second reviews key ratios of each statement:

Parent Company (FAS) Consolidated Company (IFRS)
Cost of sales/Sales 69.46% 65.74%
Profit before taxes/Sales 8.54% 9.80%

As we can see, all of the 2008 percentages for the Consolidated Company are better:

• Lower cost of sales as a percentage of sales
• Higher profit before taxes as a percentage of sales
• Higher gross profit, net profit margin, and profit before taxes (as a percentage of net sales)
• Operating profit margin is comparable on both statements

By comparing with 2007 results, the Consolidated Company also shows a less severe downturn:

• Sales decreased 0.68% for the Consolidated Company while it decreased 12.84% for the Parent Company
• Gross profit margin increased 0.56% for the Consolidated Company while it decreased 16.99% for the Parent Company
• There was a less steep fall in operating profit margin for the Consolidated Company
• Profit before taxes decreased 39.89% for the Consolidated Company while it decreased 70.13% for the Parent Company
• Net profit margin decreased 44.65% for the Consolidated…...

Similar Documents

Financial Statement Analysis

...INTERNATIONAL FINANCIAL STATEMENT ANALYSIS INTERNATIONAL FINANCIAL STATEMENT ANALYSIS CFA Institute is the premier association for investment professionals around the world, with over 95,000 members in 134 countries. Since 1963 the organization has developed and administered the renowned Chartered Financial Analyst® Program. With a rich history of leading the investment profession, CFA Institute has set the highest standards in ethics, education, and professional excellence within the global investment community, and is the foremost authority on investment profession conduct and practice. Each book in the CFA Institute Investment Series is geared toward industry practitioners, along with graduate-level finance students, and covers the most important topics in the industry. The authors of these cutting-edge books are themselves industry professionals and academics and bring their wealth of knowledge and expertise to this series. INTERNATIONAL FINANCIAL STATEMENT ANALYSIS Thomas R. Robinson, CFA Hennie van Greuning, CFA Elaine Henry, CFA Michael A. Broihahn, CFA John Wiley & Sons, Inc. Copyright © 2009 by CFA Institute. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section......

Words: 354804 - Pages: 1420

Financial Statement Analysis Case Study

...Financial Statement Analysis Case Study Blockbuster versus Netflix By Deng Pan December 9, 2013 Financial Statement Analysis is one of the mainly used methods to evaluate a business. The Return of Equity (ROE) basically provides a big picture of how the business runs. This ratio can be decomposed to three parts: 1) Profit margin (Net income / Total revenue) 2) Asset turnover (Total revenue / Assets) 3) Leverage ratio (Assets / Equity) These ratios represent the profitability, activity, and solvency of the business respectively, which are the three main categories that analysts look at to approach the coverall value of the business. In this paper, I would follow this method, and give the vertical and horizontal analysis of Blockbuster Video’s and Netflix’s performance through 2001 to 2009. Blockbuster Video Business Introduction Blockbuster started their home movie and video game rental services business in 1985. They originally provided the rental service through owned franchised video rental shops, and later added DVD-by-mail, streaming, video on demand and cinema theater into the service category. The company generates the revenue from the movie and video rental fees. The main costs of the revenue are the store rental expense, and the inventory cost. After experiencing a fast growth in late 1980’s and 1990’s, the company peaked in 2004 with up to 60,000 employees and more than 9,000 stores. [1][2] However, if we look at their books from 2001 to 2009...

Words: 1713 - Pages: 7

Case Study of Financial Statement Analysis

...Problem 3.25 a. Construct the cash flow statement GTI, Inc.Cash Flow Statement(amounts in thousands) | December 31: | Year 9 | Year 8 | Operations | | | Net income (loss) | (2691) | 417 | Depreciation | 625 | 641 | Patent amortization | 40 | 25 | Deferred income taxes | 24 | (37) | (Increase) Decrease in Accounts Receivable | 1391 | (168) | (Increase) Decrease in Inventories | 872 | (632) | (Increase) Decrease in Prepayments | 148 | (154) | Increase (Decrease) in Accounts Payable | (13) | (769) | Increase (Decrease) in Other Current Liabilities | (82) | (299) | Cash Flow from Operations | 314 | (976) | Investing | | | Acquisition of Property, Plant, and Equipment | (54) | (1433) | Other Investing Transactions | 63 | (391) | Cash Flow from Investing | 9 | (1824) | Financing | | | Increase (Decrease) in Short-Term Debt | 2182 | 220 | Increase (Decrease) in Long-Term Debt | (2608) | 2339 | Increase in Common Stock issued | 0 | 2 | Increase in additional paid-in capital | 3 | 7 | Increase in Preferred Stock issued | 0 | 289 | Dividend paid on Preferred Stock | (8) | (12) | Cash Flow from Financing | (431) | 2845 | Change in Cash | (108) | 45 | Cash at begin of the year | 475 | 430 | Cash at end of the year | 367 | 475 | b. From the Income Statement, Year 8 had a net gain while Year 9 had a net loss. However, from the Cash Flow Statement, the operating cash flow showed......

Words: 811 - Pages: 4

Ch 2 Financial Statement and Cash Flow Analysis

...Chapter 2—Financial Statement and Cash Flow Analysis MULTIPLE CHOICE 1. Which of the following items can be found on an income statement? a. Accounts receivable b. Long-term debt c. Sales d. Inventory ANS: C DIF: E REF: 2.1 Financial Statements 2. If you only knew a company’s total assets and total debt, which item could you easily calculate? a. Sales b. Depreciation c. Total equity d. Inventory ANS: C DIF: E REF: 2.1 Financial Statements 3. How do we calculate a company’s operating cash flow? a. EBIT - taxes + depreciation b. EBIT - taxes - depreciation c. EBIT + taxes + depreciation d. EBIT - Sales ANS: A DIF: E REF: 2.2 Cash Flow Analysis 4. Holding all other things constant, which of the following represents a cash outflow? a. The company sells a machine. b. The company acquires inventory. c. The company receives a bank loan. d. The company increases accounts payable. ANS: B DIF: E REF: 2.2 Cash Flow Analysis 5. Which of the following is a liquidity ratio? a. Quick ratio b. P/E- ratio c. Inventory turnover d. Equity multiplier ANS: A DIF: E REF: 2.3 Analyzing Financial Performance Using Ratio Analysis NARRBEGIN: Bavarian Sausage, Inc. Bavarian Sausage, Inc. Bavarian Sausage, Inc. posted the following balance sheet and income statement. Balance Sheet Cash Accounts Receivable Inventories Net Plant and $ 50,000 125,000 225,000 Accounts Payable Notes Payable Long-term debt $185,000 125,000 115,000 Equipment 525,000 Total Assets $925,000 Common......

Words: 5588 - Pages: 23

Gaap and Ifrs Comparison

...GAAP and IFRS Comparisons Mark Evans ACC/291 June 16, 2014 Michael Mosley GAAP and IFRS Comparisons Accountability requires standards. Standards are used in accounting processes to ensure accuracy and continuity of information for intended audiences. Generally Accepted Accounting Principles (GAAP) is the set of standards used in the United States. International Financial Reporting Standards (IFRS) is the set of standard accepted internationally. Each set of rules has similarities and differences. The Financial Accounting Standards Board (FASB) is the entity responsible for developing GAAP and the International Accounting Standards Board (IASB) is the organization responsible for the IFRS development (Beltratti, Spear, & Szabo, 2013). Within recent years the organizations that govern these sets of principles has worked to make them more compatible to each other. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (Ernst & Young, 2013). The FASB and IASB have been working towards ensuring that the concept of fair value will have the same meaning for both GAAP in the United States and IFRS internationally. First there is the issue of defining the meaning of fair value measurement. Also there is the issue of valuation techniques used to determine fair value. And there is the way each board mandates disclosure and reporting of these......

Words: 871 - Pages: 4

Financial Statement Analysis a Case Study

...Financial Statements Analysis - An Introduction MODULE - 6A Analysis of Financial Statements 27 FINANCIAL STATEMENTS ANALYSIS - AN INTRODUCTION You have already learnt about the preparation of financial statements i.e. Balance Sheet and Trading and Profit and Loss Account in the module titled ‘Financial Statements of Profit and Not for Profit Organisations’. After preparation of the financial statements, one may be interested in analysing the financial statements with the help of different tools such as comparative statement, common size statement, ratio analysis, trend analysis, fund flow analysis, cash flow analysis, etc. In this process a meaningful relationship is established between two or more accounting figures for comparision. In this lesson you will learn about analysing the financial statements by using comparative statement, common size statement and trend analysis. Notes OBJECTIVES After studying this lesson, you will be able to : explain the meaning, need and purpose of financial statement analysis; identify the parties interested in analysis of financial statements; explain the various techniques and tools of analysis of financial statements. 27.1 FINANCIAL STATEMENTS ANALYSIS (MEANING, PURPOSE AND PARTIES INTERESTED) We know business is mainly concerned with the financial activities. In order to ascertain the financial status of the business every enterprise prepares certain statements, known as financial statements. Financial statements are mainly prepared...

Words: 5251 - Pages: 22

Healthcare Case Study: Financial Statements

...and energetic to learn Certifications: Associate Degree in Medical Insurance Billing and Coding November 2009 CPC April 2009 CPR certified Member of American Academy of Professional Coder April 2009 Ecole Normale Superieure June 1996 Haiti Université Quisqueya June 2004 Education: Everest University – South Orlando, FL Associates of Science Degree – Medical Insurance Billing and Coding Class of 2009 University of Phoenix – Maitland, FL Bachelors Degree – Health Care Administration Concentration – Health Management Class of 1012 Employment Experience: Marriott Village Orlando Loss Prevention Officer 2007-Present Take guest's statement and make a report. Also, handle 911 calls, patrol properties, call in claims for lost and found, investigate guests’, take complaints, inventory items found, and hold for guests to claim. Marriott Village Orlando Food Court Attendant 2006-2007 Responsible for cooking meals, providing excellent customer service, and cleaning kitchen. Hopital Sainte-Croix Leogane, Haiti Administrator 2001-2004 Report to General Manager, responsible for purchasing hospital supplies, medicines and equipment. Oversee hospital operations, scheduled transportation for patients and guests, develop and maintain reports, planning and scheduling guest accommodations and activities, on call 24 hours 7 days a week, managed staff of 100......

Words: 404 - Pages: 2

Financial Statement Analysis and Comparison of Kroger and Whole Foods

...Ross Wright (001) Nicolas Kim Omar Harb (001) (002) Kroger The Kroger Co. (referred to as Kroger) is a large grocery chain audited by PricewaterhouseCoopers LLP. Kroger ended its FY 2012 on February 2, 2013, FY 2013 on February 1, 2014, and FY 2014 on January 31, 2015 (Saturday nearest January 31). From page 39, we are told that 95% of inventories in 2014 and 2013 were counted using a LIFO costing method, stating the lower of cost or market. However, Kroger’s fuel inventory levels are determined using the FIFO cost method. The company uses the Link-Chain, Dollar-Value LIFO method to calculate its LIFO charge. Also on page 39, we are told that Kroger mainly uses the straightline method for depreciation and amortization expense. Buildings and land improvements are typically depreciated over 10-40 years, store equipment are depreciated over 3-9 years, leasehold improvements are amortized over 4-25 years, manufacturing plant and distribution center equipment are depreciated over 3-15 years, and information technology assets are generally depreciated over 5 years. Net Cash Provided by Operating Activities 4500 4163 Dollars (in millions) 4000 3573 3500 2954 3000 2500 2000 1500 1000 500 0 2014 2013 Year 2 2012 Whole Foods Whole Foods Market, Inc. (referred to as Whole Foods) is another large grocery chain, audited by Ernst & Young LLP. Whole Foods ended its FY2012 on September 30, 2012, its FY2013 on......

Words: 1716 - Pages: 7

A Comparison and Contrast Analysis of United States Generally Accepted Accounting Principles (Gaap) and International Financial Reporting Standards (Ifrs)

...A Comparison and Contrast Analysis of United States Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) This paper examined the relationship between United States Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) and found merging both accounting standards into a worldwide standard is ideal for investors. Corporate financial statement requirements depend on location. The two accepted accounting standard systems are GAAP and IFRS. The differences between GAAP and IFRS are GAAP is rules-based and IFRS is principle-based. How can a worldwide accounting standard benefit the world economy? The answer depends on political will, culture, countries history, and business structure. Research indicated there are only slight differences between GAAP and IFRS. These slight differences must be explored further to predict the impact on companies, economic, and financial markets. GAAP and IFRS have to be reconciled as a worldwide accounting standard to efficiently allow investors to compare foreign companies. GAAP set the accounting standard for the United States since its inception in 1929. GAAP evolved over the last 60 years (Măciucă, Ursache, Moroşan, & Apetri, 2014). IFRS was established in 1973 (Smith, 2012). IFRS used GAAP as a source document for its standards, either to imitate, modify, or omit (Chevis, 2014). The European Union established IFRS as the standard in 2005......

Words: 1271 - Pages: 6

Financial Statements

...Finnlines Plc FINANCIAL STATEMENTS 2013 CONTENTS BOARD OF DIRECTORS’ REPORT ................................................................................................................................ 4 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS ...................................................................... 9 CONSOLIDATED STATEMENT OF FINANCIAL POSITION, IFRS ............................................................................. 10 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY, IFRS .............................................................................. 11 CONSOLIDATED STATEMENT OF CASH FLOWS, IFRS ........................................................................................... 13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.................................................................................. 14 1. CORPORATE INFORMATION ........................................................................................................................ 14 2. ACCOUNTING PRINCIPLES ........................................................................................................................... 14 BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS ............................................................................. 14 IMPLEMENTATION OF STANDARDS ....................................................................................................................... 14 ADOPTION OF NEW AND AMENDED......

Words: 31417 - Pages: 126

Ifrs (Dawson Financial Ratio Case)

...DAWSON STORES, INC.'s Financial Condition Analysis for the Period from 01.02.2007 to 31.01.2010    1. DAWSON STORES, INC.'s Financial Position Analysis       1.1. Structure of the Assets and Liabilities       1.2. Net Assets (Net Worth)       1.3. Financial Sustainability Analysis          1.3.1. Key indicators of the company's financial sustainability          1.3.2. Working capital analysis       1.4. Liquidity Analysis    2. Financial Performance       2.1. Overview of the Financial Results       2.2. Profitability Ratios       2.3. Analysis of the Business Activity (Turnover Ratios)    3. Conclusion       3.1. Key Indicators Summary       3.2. Rating of the Financial Position and Financial Performance of DAWSON STORES, INC.    4. Appendix       4.1. Bankruptcy Test (Altman Z-score)       4.2. Calculation of the Final Rating of the Financial Condition 1. DAWSON STORES, INC.'s Financial Position Analysis The analysis given in this report on DAWSON STORES, INC.'s financial state and activity efficiency is made for the period from 01.02.2007 to 31.01.2010 based on the financial statements data prepared according to International Financial Reporting Standards (IFRS). 1.1. Structure of the Assets and Liabilities Indicator | Value | Change for the analysed period | | in thousand USD | % of the balance total | thousand USD (col.5-col.2) | ± % ((col.5-col.2) : col.2) | | 31.01.2007 | 31.01.2008 | 31.01.2009 | 31.01.2010 | at the beginning of the......

Words: 4805 - Pages: 20

Comparisons of Financial Statements

...Comparisons of Financial statements Understanding these measurements can give an overview of organizations’ financial health. The following ratios were conducted on all of the industries: Current Ratio Most organizations measure their short term liquidity which is the ability to pay their short-term obligations. For every industry, the acceptable current ratio differs. The formula used for determination of the current ratio is current assets/current liabilities. A) Apple Inc. : 89,378,000/80,610,000 = 1.1 times B) Verizon Inc.:22,280,000/35,052,000=0.64 times C) Target Inc. : 13,624,000/11,736,000=1.2 times Apple Inc.’s and Target Inc.’s current ratio shows that their current liabilities are covered 1.1 times and 1.2 times respectively. Apple’s current ratio is actually higher than the acceptable current ratio of a manufacturing industry which is 1.03 while Target is a bit lower than the acceptable current ratio of the retail industry of 2.14. Both are able to pay off their short-term obligations, but Apple is definite with its current ratio. Verizon’s current ratio shows that their current liabilities are covered 0.64 times which is half of the service industry’s acceptable current ratio of 1.29 .This shows that their liabilities are greater than their assets which shows they would not be able to pay off short-term obligations at this point and their working capital is negative. See (Appendix 1, Appendix II, Appendix III (Income Statement and Balance......

Words: 604 - Pages: 3

Nokia 2nd Quarter Financial Results Presentation

...Investor Relations Disclaimer It should be noted that certain statements herein which are not historical facts are forward-looking statements, including, without limitation, those regarding: A) the expected plans and benefits of our strategic partnership with Microsoft to combine complementary assets and expertise to form a global mobile ecosystem and to adopt Windows Phone as our primary smartphone platform; B) the timing and expected benefits of our new strategy, including expected operational and financial benefits and targets as well as changes in leadership and operational structure; C) the timing of the deliveries of our products and services; D) our ability to innovate, develop, execute and commercialize new technologies, products and services; E) expectations regarding market developments and structural changes; F) expectations and targets regarding our industry volumes, market share, prices, net sales and margins of products and services; G) expectations and targets regarding our operational priorities and results of operations; H) expectations and targets regarding collaboration and partnering arrangements; I) the outcome of pending and threatened litigation; J) expectations regarding the successful completion of acquisitions or restructurings on a timely basis and our ability to achieve the financial and operational targets set in connection with any such acquisition or restructuring; and K) statements preceded by "believe," "expect," "anticipate," "foresee,"......

Words: 2294 - Pages: 10

Femsa, Financial Statement Analysis

...FEMSA 2007: THE FINANCIAL STATEMENT ANALYSIS IMPACT OF DIFFERENCES IN MEXICAN AND US GAAP 1. Compute the following ratios for 2007 using the financial statements prepared using Mexican FRS and expressed in pesos. [Assume the weighted average number of shares outstanding is 17,891,000] a. Current Ratio: Current assets/Current liabilities b. Inventory Turnover: Cost of Goods Sold/Average Inventory c. Profit Margin on Sales: Net Income/Net Sales d. Debt to Assets Ratio: Total Liabilities/Total Assets e. Book Value per Share: Common Stockholders’ Equity/Outstanding Shares 2. Compute the same ratios listed in 1 using the amounts expressed in US$. What are the implications for international financial statement analysis? The importance for credit analysts to consider in reviewing Mexican financial statements is because the net effect of inflation accounting will be to produce financial statements that will not have the conservative bias of statements produced under U.S. GAAP. For example, some of the differences will show on the balance sheet where in Mexican statements all non-monetary assets are restated at current value and the disclosure requirements on Mexican statements are not as comprehensive as in the U.S. When considering the notes to the financial statements in Mexico these notes may contain information about contingent liabilities, debt maturities, and loan covenants - information of vital importance to determining the......

Words: 2287 - Pages: 10

Acc 561 Week 2 Financial Statement Analysis

...Financial Statement Analysis NAME ACC/561 Accounting DATE University of Phoenix PROFESSOR Introduction Samsung – International Manufacturing Company Samsung served as the manufacturing industry and international company analyzed. Samsung has been in business for over 70 years and manufactures products for diverse markets, including: digital media, high -tech electronics, home appliances, information technology and telecommunication. Samsung's motto is to "inspire the world and create the future" by leveraging three key strengths: new technology, innovative products and creative solutions.   | Samsung | Wells Fargo | AT&T | Current Ratio | 1.4101 | 1.1500 | 1.6467 | Debt to Equity Ratio | 0.6768 | 9.8100 | 0.9675 | Profitability Ratio | 0.2881 | 2.3500 | 0.3069 | Return on Sales | 0.0736 | 2.0900 | 0.9563 | Dupont Ratio | 0.1200 | 0.6900 | 0.3496 | Financial Leverage | 1.1317 | 1.3500 | 1.0724 | Total Asset Turnover | 2.5035 | 0.0100 | 0.9003 | When you compare Samsung to AT&T, the retail sales company we profiled, Samsung has a lower current ratio by 20%. Samsung's debt to equity ratio is almost 30% lower than AT&T. Samsung's profitability ratio is very similar to AT&T, though 2% lower. Samsung's return on sales is comparable to AT&T, thought slightly lower. AT&T is much strong on return on equity, with almost 3X the Dupont ratio of Samsung. Samsung's financial leverage is slightly higher than AT&T. The key......

Words: 1409 - Pages: 6

تحميل | Atypical | Gravity Falls