Apple Inc. Revenues & Profit for Q3 2012

Apple seeks US ban on Samsung Galaxy S3 - Telegraph

Apple trying to ban Samsung Galaxy SIII sales in US? According to Telegraph they are doing so. Why they would be doing so? Because Samsung did copied their patents or its because Samsung became the world's largest Smartphone manufacturer last quarter? The lawsuits and counter lawsuits have been filled in the past and they still are contingent. Samsung has changed its 10.1 tablet design because of Apple claims but the battle is still going on and according to Apple, Samsung has copied its two patents and that is why they are trying legally to ban Samsung Galaxy SIII sales in US.

Read the news: http://www.telegraph.co.uk/technology/apple/9317118/Apple-seeks-US-ban-on-Samsung-Galaxy-S3.html

Integrating Financial Statement Analysis

If I compare the exam with the chapter end questions and also with the detailed examples, I think the exam was much more balanced. The technicalities in the examples and chapter end questions are way deeper. Perhaps the purpose is to equip candidates with the desired level of knowledge and skills. Reading curriculum was a tedious job especially for the purpose of passing the exam but going through it like something vital and valuable in terms of knowledge and skills development certainly changes the perspective and makes it a very helpful guide equipped with latest happenings in the financial world and methods of dealing with them. Reading 27 is one such example which has some amazing application of integrating financial statement analysis. Going through this reading after the exam solely for the purpose of learning helps in several ways. 1) There is no time restriction to complete it and 2) The mind is having a converged focus but a broad spectrum to view it. The adjustments, treatments related to several financial issues, altering numbers to reflect true economic position etc. have been explained in that reading. For me it is a must which I should be doing in 2,3 days by going through that reading from a broader spectrum and apply that knowledge on several financial statements to learn & develop myself up. There are other readings as well which serve this purpose but particularly Study Session 7 is remarkable in this regard.

Samsung Income Statement 1Q 2012 - Comparison

Trillion Won	1Q 2012	1Q 2011	4Q 2011	Change 1Q'11 to 1Q'12	Change 4Q'11 to 1Q'12
Sales	45.27	36.99	47.30	22%	-4%
COS	30.14	26.05	31.51	16%	-4%
GP	15.13	10.93	15.79	38%	-4%
R&D Exp	2.73	2.34	2.74	17%	0%
SG&A	6.77	5.79	8.46	17%	-20%
Other Operating P/L	0.21	0.15	0.70	40%	-70%
Operating Profit	5.84	2.95	5.30	98%	10%
Equity Method G/L	0.37	0.38	0.32	-3%	16%
Finance I/E	0.13	0.06	-0.14	117%	-193%
EBT	6.34	3.39	5.47	87%	16%
Tax	1.30	0.60	1.47	117%	-12%
NP	5.04	2.78	4.00	81%	26%

Knowledge Application - SPE

I just completed reading 22 (Revision) SPE are discussed in last section of this topic. I found this related news item to it.

Read the news item: http://www.independent.ie/business/irish/government-fights-to-keep-nama-debt-off-its-books-3078860.html

Real Options in Projects (Corporate Finance)

My family is in the business of production. They have installed computerized embroidery machines. The business model is such that buyers, who are whole sellers of female embroidery suits, contact the factory and place order. They purchase the dyed base cloth from the market and along with the design send those to the factory. My family charge them according to no. of stitches and once the embroidery is done the lot is returned back and the buyer is charged off with the amount of work (embroidery) done on the cloth sent.

My Uncle also deals in selling the machines. One typical machine costs around 2.5 million PKR. The origin is China and he has developed significant credentials in this field. I was observing him while dealing with a potential customer. He was informing him that a 42 head stitch sequin machine is worth 2.9 million because it gives the option of being operated only on thread (without sequin - a start like element placed on clothes) through sequin and also act as a 21 head machine. Since the market trends keep on changing, the sequin is not in fashion through out the year but in some months, installing this machine provides the option of managing both the seasons and with high volumes of production and less. While listening to what he was saying, my mind immediately went to the topic of Real Options in Corporate Finance. I was wondering about the flexibility option of the machine which apparently worth 4 hundred thousand. While calculating the NPV of the project incorporating the effect and value of this real option will generate a more realistic result and can aid in analysis. The beauty is the connection which developed immediately in my mind regarding the topic and I was able to recall and connect what I had learnt with something happening in front of my eyes. Believe me my uncle and the buyer would have no idea of the analytical aspects connected with this option. For them it would have been something which must happen like this but at that time, my mind had started processing about calculating the NPV of that project and incorporating the value and cost of this option. I was wondering that is how this course develops skills and knowledge. Its not necessary that we need to be at the right place to apply this knowledge but in business transactions happening in front of use, this knowledge is pretty helpful!

Bloomberg News Item - Top Junk Pummels Treasuries for Safest Profits: Riskless Return

A lot of key terms related to Fixed Income of Level II, credit ratings, junk bonds, option adjusted spread etc. are required to be understood before reading this news pick. The curriculum has enabled me to read and understand these news items just because of the relevance and matching of the concepts with what that has been written there in the text with what that is happening 24/7 in the amazing world of finance.

Read the news: http://www.bloomberg.com/news/2012-03-21/top-junk-pummels-treasuries-for-safest-profits-riskless-return.html

GDP/Capita - List of Countries (Ascending Order 2010)

Country Name	2010	2009	2008
Luxembourg	$  105,437.67	$  104,353.69	$  118,218.78
Norway	$    84,538.24	$    76,763.74	$    93,366.81
Switzerland	$    67,463.71	$    63,568.24	$    65,799.80
Denmark	$    55,890.68	$    55,933.35	$    62,156.99
Macao SAR, China	$    51,429.89	$    40,105.21	$    39,924.25
Sweden	$    48,935.67	$    43,471.68	$    52,730.78
United States	$    47,198.50	$    45,758.10	$    46,971.33
Ireland	$    47,170.20	$    49,737.93	$    59,573.37
North America	$    47,111.43	$    45,160.91	$    46,796.80
Netherlands	$    46,914.66	$    47,998.27	$    52,951.03
Canada	$    46,235.64	$    39,643.79	$    45,110.04
Austria	$    45,209.40	$    45,638.09	$    49,679.42
Finland	$    44,512.01	$    45,084.64	$    51,181.25
Belgium	$    43,144.34	$    43,799.18	$    47,340.95
Japan	$    42,831.05	$    39,456.44	$    38,212.27
Singapore	$    41,122.19	$    37,789.61	$    36,738.45
Germany	$    40,152.22	$    40,275.25	$    44,132.04
United Arab Emirates	$    39,624.70	$    38,959.81	$    50,727.21
Iceland	$    39,616.84	$    38,032.66	$    53,087.53
High income: OECD	$    39,521.08	$    38,299.77	$    40,899.12
France	$    39,459.55	$    40,663.05	$    44,117.04
High income	$    38,208.22	$    36,963.49	$    39,661.98
Euro area	$    36,618.19	$    37,503.33	$    41,073.18
United Kingdom	$    36,143.94	$    35,163.41	$    43,286.04

Source: World Bank 

Edmonton Journal - Accounting Shenanigans (News Pick)

Accounting Shenanigans, Red flags, quality of reported earnings, earnings quality etc. and other terminologies related to manoeuvring earnings have been discussed in detail in CFA Level I and Level II curriculum under Financial Reporting & Analysis. The link to the news pick discusses one such event which is being heard in the court of law in which earnings were engineered by a company around a decade back.

Read the news: http://www.edmontonjournal.com/business/come+high+Nortel+controller+declared+after+surprise+profit+court+told/6361072/story.html

WSJ Blog - Why Carlyle’s Liquidity Promise May Be Difficult To Keep

Investment in Private Equity refers to purchasing shares or investing in companies which are not listed. A detailed reading is present in Alternative Methods in CFA Level II curriculum. Regarding the composition of private equity, the portfolio firms, the investors who have stake in the private equity, the steps taken by the general partner to keep intact the management of portfolio firms etc. have been discussed extensively in the reading. Candidates who have covered this reading will enjoy reading this news item on the WSJ Blog.

Read the news: http://blogs.wsj.com/privateequity/2012/03/15/why-carlyles-liquidity-promise-may-be-difficult-to-keep/?mod=google_news_blog

Linked In - Balance Sheet Vertical Analysis

	Dec-08	Dec-09	Dec-10	Dec-11
Cash And Short Term Investments	65.93%	60.57%	39.04%	66.10%
Receivables	12.29%	16.35%	24.48%	12.75%
Prepaid Expenses	2.21%	1.48%	2.06%	1.24%
Deferred Tax Assets, Current	0.57%	1.14%	0.00%	0.00%
Restricted Cash	0.16%	0.00%	0.00%	0.00%
Other Current Assets	0.00%	2.02%	6.76%	3.01%
Total Current Assets	81.24%	81.56%	72.29%	83.08%
Net Property Plant And Equipment	17.77%	17.29%	23.80%	13.15%
Goodwill	0.00%	0.00%	0.00%	1.40%
Deferred Charges, Long Term	0.00%	0.07%	0.71%	0.00%
Other Intangibles	0.41%	0.20%	2.18%	0.93%
Other Long-Term Assets	0.49%	0.87%	0.97%	1.44%
Total Assets	100.00%	100.00%	100.00%	100.00%
Accounts Payable	2.05%	3.30%	5.42%	3.23%
Accrued Expenses	8.35%	12.38%	11.59%	6.71%
Current Income Taxes Payable	0.08%	0.40%	0.00%	0.00%
Unearned Revenue, Current	12.20%	17.16%	27.29%	16.00%
Total Current Liabilities	22.69%	33.18%	44.29%	25.95%
Deferred Tax Liability Non-Current	0.57%	1.14%	2.77%	2.13%
Other Non-Current Liabilities	0.33%	0.34%	0.80%	0.40%
Total Liabilities	23.67%	34.66%	47.86%	28.47%
Total Preferred Equity	84.68%	69.58%	43.58%	0.00%
Common Stock	0.00%	0.00%	0.00%	0.00%
Additional Paid In Capital	4.75%	9.22%	10.54%	70.69%
Retained Earnings	-13.10%	-13.53%	-1.97%	0.82%
Comprehensive Income And Other	0.00%	0.00%	0.00%	0.01%
Total Common Equity	-8.35%	-4.24%	8.56%	71.53%
Total Equity	76.33%	65.34%	52.14%	71.53%
Total Liabilities And Equity	100.00%	100.00%	100.00%	100.00%