Business Analysis

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Date Submitted: 10/02/2011 07:49 PM

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Business Analysis II

Reviewing a company’s financial health and conducting a benchmark analysis are two key components for any investor when considering a potential company to invest in. We will be comparing Motorola Mobility, Apple Inc., and Nokia Corporation to specifically find where Motorola Mobility falls in line with its competition in the cellular manufacturing industry. In addition to comparing the income statements, balance sheets, and cash flow of each company we will also be looking at how Motorola Mobility compares to the competition in the realm of technology and how globalization has impacted the company. Finally, we will take a look at conducting a benchmark analysis regarding Motorola Mobility’s best practices, its operational processes and procedures, and its products in comparison to Apple Inc. and Nokia. It is important to note while reviewing the financial health of Motorola Mobility and Nokia that these two companies focus primarily on cellular phone manufacturing while Apple Inc. also includes the sales of its computers. However because of the Apple iPhone and iPad, Apple is a major competitor and leader in the cellular phone industry, and should be included.

In the context of corporate financial reporting, the income statement summarizes a company's revenues and expenses quarterly and annually for its fiscal year. The final net figures, as well as various others in this statement, are of major interest to the investment community. Investors must remind themselves that the income statement recognizes revenues when they are realized. With accrual accounting, the flow of accounting events through the income statement doesn't necessarily coincide with the actual receipt and disbursement of cash. The income statement measures profitability, not cash flow (Roth, 2011).

Net sales refer to the value of a company's sales of goods and services to its customers. Even though a company's "bottom line" gets most of the attention from investors, the...