Comparasion of Apple and Samsung Essay Example | Topics and Well Written Essays - 3500 words - 1

Comparasion of Apple and Samsung - Essay Example A comparison of the stock prices provides us with the information on the relative investor confidence on the two companies. A comparative analysis of the two companies helps the investors to reach an investment decision on the common stocks of Apple and Samsung. A comparison between two publicly traded companies Apple and Samsung could be done with the help of financial ratio analysis. The profitability ratio, liquidity ratio, investment value ratio and debt ratio has been taken into consideration for this comparison. The financial ratio has been determined by considering the financial statements of the two companies for the last two years. The return on assets for Apple is much higher with respect to Samsung. While Samsung produced an 8.83% return on assets in 2011, Apple registered an ROA of 22.28% in 2011. Apple focused to increase its asset base in 2012. The rate of increase in ROA for Samsung is more than that of Apple but the percentage return on assets for Apple is 23.70% which is more than 13.17% ROA for Samsung in 2012 (Bragg, 2012). The return on equity gives an indication of the efficiency of fund management by the companies to increase the wealth of the shareholders. The net income earned by the companies could be expressed as a percentage of the total equity of the company. The return on equity for Apple is more than the return on equity for Samsung in the last two years. In 2011, Samsung achieved a return on equity of 13.58% as compared Apple’s return on equity of 33.83%. From the 2011 to 2012, rate of increase in ROE for Samsung is more than Apple. Despite that, Apple recorded an ROE of 35.30% in 2012 which is more than 19.63% ROE for Samsung. A comparison of the asset turnover of Apple and Samsung provides a measure of utilization of assets of the two companies. Asset turnover indicates the amount of revenue generation of