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Brief1. SMART objectives of projectMotorola was founded in 1928; it is one of the worlds wealth hundred businesses. The business scope of this company covers the broadband communications, embedded systems and wireless networks.In this report I will use Motorolas annual report during 2004 to 2008 which I found in Motorolas website and try to raise the veil of its financial situation by analyze Motorolas cash flow position and profitability ratios. I hope this will help the shareholders of Motorola to have a clear see of this companys advantages, disadvantages and the risk in the future then do the best invest. The main objective of the project should be achieved within 17 weeks in 30, December.2. Statement of the issue to be investigatedA companys cash flow performance will show the development trend of the company and the companys future, profitability ratios will reveal the companys ability of making profit, it relate to shareholders return of investment. Both of cash flow position and profitability ability are the most be concerned by people. In this report I will analyze Motorolas cash flow and profitability ratios to help the shareholders make investment decision by be awarded with its advantages, disadvantages and risks.3. Reasons of the choice of the issueThe reasons of me to choose this issue will be show as follow: As we all know an economic crisis outreached in 2008 and it still will continue for a period of time. In this situation it is harder for shareholders who have poor knowledge of finance to have a clear view of the company and invest correctly; therefore I will help them to see clearly of the situation. Maximum profitable is every profitability companys goal so it has the necessary to analyze companys profitability. Cash is the most liquid assets of all business, without sufficient cash flow a business will be unable to pay current liabilities or unable to fund investment in new fixed assets, eventually the business will grind to a half. To analyze the companys cash flow will help shareholders to know the companys future and do the invest best. My major is accounting, I have learned this fields knowledge in class and I show big interest in it. Relevant information could be referred to the HND student Guide DE39 34, Business Accounting: Advanced.4. Justification for the choice of busingMotorola has weathered tough macro environments and reinvented itself many times by being much focused on innovation and customers over the past 80 years. In 2008, amidst the most challenging global economic environment in decades, Motorola delivered solid financial results in their Enterprise Mobility Solutions and Home and Networks mobility business. To chose Motorola company has the following reasons: Motorola has a strong global brand, talented people and a proven record of creating disruptive technologies and innovative products that advance the way the world connects. We can have a rough idea of the whole mobile phone industry by analyze Motorola as an example. In the economic crisis which outreached in 2008, Motorola displayed unfavorable position compare with its biggest opponent Nokia. It is worth to analyze Motorolas financial performance right now. There are many Motorolas loyal customers at every corner of the world that who are very concern about it. 5. Sources of information and reasons to chose it.The two main sources of the information I will use in this report are: secondary data and primary data.5.1 Secondary dataData is that has already been collected by someone else for a different purpose to yours is secondary data.The information we get from internet, books, newspapers, profession journals and others report are all called secondary data.The secondary data can provide: large amounts of information, quickly, and cheaply5.2 Primary dataWhen the data collector is the one using the data for analysis, the source is primary.The data which collect by observation, experimental research, telephone surveys, interview, etc. are primary data.To use primary data we can get following benefits: fill the information gap addresses specific research issues know the truth6. Conduct investigation and methods choseI will use secondary and primary research as a tool to help my investigation.6.1 Secondary researchIn this report I will mainly use secondary data because it is hard for the common customer to get the companys financial statements personally but it is easy for us to get Motorolas financial information from internet and library. Internet Nowadays, computer almost penetrating every Conner of the world, therefore on-line research is the most convenient way to find out ideal information. I found out Motorola Corporations annual report from year 2004 to year 2008 on .Advantage: ease of access low cost to acquire may allow the researcher to cover a wider geographic or temporal rangeLibraryThe data collection process is informed by expertise and professionalism that may not available to smaller research projects. I will find some data about Motorolas background and history after days research in the Beijing International Studies University library, it will help me a lot by know the company better. Advantage: save time, save money, convenient to gain,6.2 Primary researchThere was some information that I can not found in secondary data so I tried to research it personally. It is more heard method to get information by many limits I will do a telephone survey to fill the information gap.Telephone surveyI will find Motorolas financial departments telephone number in telephone directory and try my best to get the information I will be wanted.Advantage Addresses specific research issues Greater control Efficient spending for information Proprietary information7. Statement of the criteria I will indicate the companys cash flow position by analyze the companys cash flow trend. Nokia is a strong competitor for Motorola I will show the shareholders the companys position by compare with Nokia.8. Timescales for conducting the investigationPrimary /Secondary researchSources of informationTimeInvestigation methodActivitiesDuration(days)Money(¥)Secondary dataSeptember 9- 28InternetIn this time period I will research Motorolas financial statements on line and print its annual report.1970Secondary dataOctober.8-20LibraryThe internet search should be done at the end of September, so at this stage I will go to library to find the data cannot be getting from internet. I will photo copy it as material of my report.1220Primary dataOctober.22-30Telephone Survey I will also need the data which will focus the theme of my report the practical way for me to get data personally is to call the companys financial department. 8108Total29198Timescale for stageStagesWeeksActivitiesPlanning stage1Our teacher will give us a lecture to introduce great unit 2 and interpreter every issues, I should decide which issue I will be chose.2After fixed the issue I will start the data research, both of secondary research and primary research will be use. 4When the materials are prepared already I will start my reports planning part writing.5In the fifth week our teacher will give us a face-to-face interview; he will point out the drawbacks of my report and give me advice.6The reports planning part should be finish in this week every student will submit their planning part. Development stage7To analyze the information I have collected in the planning stage. 9Write Motorolas cash flow analysis to help the shareholder position the company.10Have interview with my teacher ask him to grade my report.11Start the Motorola profitability ratio analysis let shareholders do best investment. 12Let teacher mark my profitability ratio analysis part.13Finish the developing writing after correction.Evaluating stage14I will assess my report planning stage and developing stage to see they are did or didnt work effectively.16Also have an interview with my teacher let him give a judgment of my whole report.17Carry out the last time correction, and finish the report in the dead-line.Executive summaryThis report is through analyzing Motorolas profitability position from 2006 to 2008 to help the shareholders of this company have a clear view of its strength, weakness and the risk of the company then help them do better invest decision in relation to Motorola in the future.The resources of this report are mainly collected by two ways: Secondary research and Primary research. The Secondary data, Motorolas annual report from 2006 to 2008 are to be obtained from Motorolas website and Campus library. The Primary data are to be collected through a telephone interview with financial department manager of Motorola in Beijing. To achieve above purposes three analysis methods will be use to analyze Motorolas financial figures related to profitability: analysis on trends of Absolute profit numbers in the financial statements; analysis on conventional profitability ratios and analysis comparison on profitability ratios with those of in Nokia, its major competitor, to find out Motorolas relative disadvantages in profit making.By reading the analysis shareholders will recognize Motorolas strength, weakness, risk and its real position in the market. 1 Introduction:Motorola, Inc. is an American, multinational, Fortune 100, telecommunications company based in Schaumburg, Illinois. It is a manufacturer of wireless telephone handsets, and also designs and sells wireless network infrastructure equipment such as cellular transmission base stations and signal amplifiers. Motorolas home and broadcast network products include set-top boxes, digital video recorders, and network equipment used to enable video broadcasting, computer telephony, and high-definition television. Its business and government customers consist mainly of wireless voice and broadband systems used to build private networks and public safety communications systems like Astro and Dimetra. Motorolas handset division is now focusing on smart phones using Googles open-source Android mobile operating system, including the first phones to ship using Android release 2.0.Motorola help meet the needs of consumers, businesses and governments around the world. As it enter Motorolas 80th year, their goal is to build on their strong foundation, to renew and strengthen the company and to create increased value for their shareholders. But in recent years Motorolas performance seems did not satisfied their shareholders needs. In 2008, amid the most challenging global economic environment in decades, Motorola delivered poor financial results in their Enterprise Mobility Solutions and Home & Networks Mobility businesses. And the Turnover, Gross profit and Net profit before tax are all presented decline trends during 2006 to 2008. The shareholders of Motorola should pay more attention to the companys financial information, especially when it has a poor performance. The shareholders who may have less financial knowledge can see Motorolas Absolute numbers and profitability ratios analysis during 2006 to 2008 in this report by showing the trends of financial figures in its financial statements and comparing its profitability ratios with its major competitor Nokia.2 Findings:Motorola provides technologies, products and services that make abroad range of mobile experiences possible. Their Portfolio includes wireless handsets, wireless accessories, digital entertainment devices, wireless access systems, voice and data communications systems, and enterprise mobility products.Motorola reports financial results for the following three operating business segments: The Mobile Devices segment designs, manufactures, sells and services wireless handsets with integrated software and accessory products, and licenses intellectual property. The segments net sales in 2008 were $12.1 billion, representing 40% of the Companys consolidated net sales. The Home and Networks Mobility segment designs, manufactures, sells, installs and services: digital video and wireless access system. The segments net sales in 2008 were $10.1 billion, representing 33% of the Companys consolidated net sales. The Enterprise Mobility Solutions segment designs, manufactures, sells, installs and services analog and digital two-way radio, voice and data communications products and systems for private networks, wireless broadband systems and end-to-end enterprise mobility solutions to a wide range of enterprise markets, including government and public safety agencies. The segments net sales in 2008 were$8.1 billion, representing 27% of the Companys consolidated net sales.As enter 2008, they face a very challenging global economic environment and with reduced visibility and slowing demand. Meeting all of these challenges requires consistent operational planning and execution and investment in technology, resulting in innovative products that meet the needs of their customers around the world. As they execute on meeting these objective, they remain focused taking the necessary action to design and deliver differentiated and innovative products and services that will advance the way the world connects by simplifying and personalizing communications and enhancing mobility. The results of the external environment change and their internal action are: the Companys Net sales, Gross margin and Net profit before tax are all presented decline trend during 2006 to 2008. Net sales were $30.1 billion in 2008, down 33% compared net sales of $42.8 billion in 2006. Gross margin was $8.4 billion in 2008; compared to $12.7 billion in 2006 it had a decrease of 34%. Net profit before tax was $-2.6 billion in 2008, down 157% compared Net profit before tax of $4.6 billion in 2006.3 CriteriaThere are three criteria will be used to analyze Motorolas profitability position during 2006 to 2008: analysis on Absolute numbers trends of the financial statements; analysis on conventional profitability ratios and comparison of its profitability ratios with its major competitor Nokias profitability ratios.3.1 Trend analysisIn this part Motorolas three Absolute numbers will to be present and analyze: Net sales, Gross margin and Net profit before tax. Through analyze the company Absolute numbers historical change trend and degree in 2006 to 2008, its strength, weakness and risk in the future will be found and to let shareholders of Motorola have a clear see of its profitability situation. 3.1.1 Net salesMotorolas net sale is show in following table:200620072008Net sales$42847$36622$30146The Net sales during 2006 to 2008 are showed a decline trend: it decrease from $42.8 billion in 2006 to $36.6 billion in 2007 and dropped to $30.1 billion in 2008.It is not a good sign which will not only bring negative influence to its profit directly but also disappoint their shareholders, at the same lead an attack for the confidence of themselves.As blow are the reasons of the performance. 2006-2007The decrease in net sales reflected a 9.4 billion decrease in net sales by the Mobile Devices segment, partially offset by a 2.3 billion increase in net sales by the Enterprise Mobility Solutions segment and an 850 million increase in net sales by the Home and Networks Mobility segment.1) The 33% decrease in net sales in the Mobile Devices segment was primarily driven by:a) A 27% decrease in unit shipmentsb) A 9% decrease in ASP c) Decreased revenue from intellectual property and technology licensing.2) The 43% increase in net sales in the Enterprise Mobility segment was primarily driven by net sales from the Symbol business acquired in January 2007, as well as higher net sales in the government and public safety market due to strong demand in North America.3) The 9% increase in net sales in the Home and Networks Mobility segment was primarily driven by a 51% increase in unit shipments of digital entertainment devices, partially offset by lower net sales of wireless networks due primarily to lower demand for iDEN and CDMA infrastructure equipment.2007-20081) The decrease in net sales reflects a 6.9 billion in net sales in Mobile Devices segment, partially offset by:a) A 364 million increase in net sales in the Enterprise Mobility Solutions segmentb) A 72 million increase in net sales in the Home and Networks Mobility segment. 2) The 36% decrease in net sales in the Mobile Devices segment was primarily driven by a 37% decrease in unit shipments.3) The 5% increase in the Enterprise Mobility Solutions segment net sales reflects an 8% increase in net sales to the government and public safety market, partially offset by a 2% decrease in net sales to the commercial enterprise market.4) The 1% increase in net sales in the Home and Network Mobility segment reflects a 16% increase in the net sales in the home business, partially offset by an 11% decrease in net sales in the networks business.The Net sales of Motorola during 2006 to 2008 were all presented decline trend. In 2007 it down 15% compared to Net sales in 2006, in 2008 they down 18%.It is an unhealthy sign. The mainly reason for the decline in the three year is poor performance in Mobile Devices segment: in 2007 the segment had a Net sales decrease of 33%; in 2008 it had a 36% decrease. 3.1.2 Gross marginMotorolas Gross margin is show in following table:200620072008Gross margin$12727$9952$8395The Gross margin during 2006 to

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