Question

Samsung (Samsung.com), a leading manufacturer of consumer electronic products, along with Apple and Google, are competitors in the global marketplace. Key figures for Samsung follow (in KRW millions).

Cash and equivalents	W22,636,744	Cost of sales	W123,482,118
Accounts receivables, net	28,520,689	Revenue	200,653,482
Inventories	18,811,794	Total assets	242,179,521
Retained earnings	185,132,014

Required

1. Compute common-size percents for Samsung using the data provided. (Round percents to one decimal.)

2. Compare the results with Apple and Google from BTN 13-2.

Short answer

1. Percent trends:

Particular	Percent trend
Cash and equivalents	9.35%
Accounts receivables, net	11.78%
Inventories	7.77%
Retained earnings	76.44%
Cost of sales	50.99%
Revenue	82.85%
Total assets	100%

2. Samsung is performing well among the three companies because it reports the highest percentage of cash and equivalents, retained earnings, and revenue.

Step-by-step solution

Definition of Common Size Statement

A common size statement refers to a tool used in which all the line items of financial statements are shown and reflected as a percentage of the selected base item.

Computation of percent trend

Particular	Amount	Percent trend
Cash and equivalents	W22,636,744	9.35%
Accounts receivables, net	28,520,689	11.78%
Inventories	18,811,794	7.77%
Retained earnings	185,132,014	76.44%
Cost of sales	123,482,118	50.99%
Revenue	200,653,482	82.85%
Total assets	W242,179,521	100%

Working note: Formula for calculating percent trend

$\mathit{P}\mathit{e}\mathit{r}\mathit{c}\mathit{e}\mathit{n}\mathit{t}\mathit{t}\mathit{r}\mathit{e}\mathit{n}\mathit{d}\mathbf{=}\frac{\mathbf{L}\mathbf{i}\mathbf{n}\mathbf{e}\mathbf{i}\mathbf{t}\mathbf{e}\mathbf{m}}{\mathbf{T}\mathbf{o}\mathbf{t}\mathbf{a}\mathbf{l}\mathbf{a}\mathbf{s}\mathbf{s}\mathbf{e}\mathbf{t}}$

Comparing results with Apple and Google

1. Apple maintains the lowest percentage of cash and equivalent, and Google maintains the highest.
2. Apple maintains the lowest percentage of receivables, and Samsung maintains the highest.
3. The lowest percentage of inventory is maintained by google, and Samsung maintains the highest.
4. Apple maintains the lowest percentage of retained earnings, and Samsung maintains the highest.
5. Google maintains the lowest percent of the cost of sales, and Samsung maintains the highest.
6. Samsung maintains the highest percentage of revenue, and Google maintains Lowest.

Working note: Results of Apple and Google

$ million	Apple	Google	Samsung
Cash and equivalents	7.27%	11.22%	9.35%
Accounts receivable, net	5.80%	7.84%	11.78%
Inventories	0.809%	0%	7.77%
Retained earnings	31.77%	61.64%	76.44%
Cost of sales	48.23%	19.10%	50.99%
Revenue	80.46%	50.85%	82.85%
Total assets	100%	100%	100%