Review all data and comments bellow each section in Part 2 bellow and comment on the following two bullets for Part 4:

PART 4, CONCLUSIONS AND RECOMMENDATIONS

Summarize your analysis. Review your comments in the financial analysis section and provide your assessment of the overall status of the firm. Include any recommendations you think are appropriate.

List any other recommendations you have for the firm in view of your analysis.

PART 2, FINANCIAL OVERVIEW:

a. Sales and Income Record:

------------- Fiscal Years -------------

2016 2017 2018 2019 2020

Sales (Millions of US $) $52,824 $52,546 $40,825 $41,172 $41,908

Percent change in

sales each year -0.53% -22.31% +0.85% +1.79%

Net Income (Millions of US $) $7,215 $21,308 $11,153 $16,273 $9,616

Percent change in

net income each year +195.33% -47.66% +45.91% -40.91%

COMMENTS:

Sales trend: Sales have remained more or less the same for the years 2018, 2019 and 2020. The graphical representation of the sales shows a flat line for these 3 years. From 2018 to 2019, we observe a slight increase in sales by 1.79%. Sales value depends on various factors like product quality, demand, economic condition, competitors, operational efficiency etc. Further analysis is required to understand this stagnant sales figures.

Net Income trend: The net income has shown an upward and downward trend over the 5 years period from 2016 to 2020. The net income for 2020 saw a decrease by -40.91% when compared with 2019 figure. Further analysis is required to understand the cause of such a drastic fall and also the reason behind the trend.

b. Expense Distribution:

FY 2020

Major Expenses: (Millions of US $)

Cost of Goods: $8,692 (13%)

Research and Development Expenses: $9,405 (15%)

SG&A Expenses: $11,615 (18%)

Operating Expenses: $33,748 (53%)

Income Taxes: $477 (1%)

Total: $63,937 (100%)

COMMENTS: The total expense for the year 2020 stands at $63,937. When compared with the sales (2020) $41,908, we can see why the net income is in negative(loss). The major share of total expenses is related to operating expenses (53%). SG&A expenses (18%), research &Development expenses (15%) and cost of goods sold (13%) are other major expenses. Operating expenses are crucial to identify a company's primary cost drivers and gauge management's efficiency. Hence, an operating expense that do not sufficiency generate adequate sales need further analysis. Is the product losing its appeal? Is there inadequate marketing? Is the operational estimation gone wrong? All these questions need to be analyzed further. In other words, supplies, admin expense, marketing expense, utility costs, rent, wages and others need further scrutiny.

c. Assets Distribution:

Year-end FY 2020

Assets: (Millions of US $)

Cash: $12,221 (26%)

Accounts receivable: $7,930 (17%)

Inventory: $8,046 (17%)

Fixed Assets: $13,900 (30%)

Other Assets: $4,569 (10%)

Total: $46,666 (100%)

COMMENTS:

In the total asset distribution, the current asset - Cash, Accounts Receivable, Inventory, accounts for 60% of the total. This indicates that the company has a sizeable liquid asset. Whether this is adequate or not, depends on its comparison with current liabilities. Fixed assets account for 30% of total assets. Fixed asset turnover ratio equals Sales dividend by Fixed asset. Fixed asset turnover for 2020 is 3(approx.). This indicates that the fixed assets are being utilized effectively to generate sales

c. Capital Structure:

Year-end FY 2020

Capital Structure: (Millions of US $)

Current Liabilities $25,920 (17%)

Long-term & Other Liabilities $64,836 (42%)

Preferred Stock (if any) N/A

Common Equity $63,473 (41%)

Total: $154,229 (100%)