What are the Sales (also called Net Sales, Net Revenue, or Operating Revenue) for the most recent three years? This is normally the largest number.
Looking at the current world today, the industry of video games making has grown to its best level. Japanese has been on the list of top countries when it comes to video game making. For instance, Nintendo Co., Ltd is a Japanese company that is located in Kyoto which is an area that acts as its headquarters. In accordance to the 2018 Annual Report of Nintendo Co., Ltd, indicates that the sales stood at the following in the respective years for 2016- ¥504,459, 000, For 2017 - ¥489,095,000 and For 2018- ¥1,055,682,000 all in JPY currency and numbers in thousands ( Yahoo Finance, n.d). This is a clear indication that the company is doing well and if the trend continues like that then it will be in a good position even in the future.
Delegate your assignment to our experts and they will do the rest.
What are the Net Incomes (also called Net Earnings) for the most recent three years?
On the other hand, the company has been doing well in regards to its Net Incomes which have been respectively recorded as shown below for each year.
For 2016- ¥16,518,000
For 2017 - ¥102,574,000
For 2018- ¥139, 590,000 ( Yahoo Finance, n.d).
This serves as a clear indication that the company has been doing well especially in the last three years hence recording such a significant margin in the respective years.
What are the average total assets?
The average total assets formula is (Aggregate assets at end of current year + Aggregate assets at end of preceding year) ÷ 2
For 2016-
For 2017 – (1,468,978,000+1,296,902,000)/2= 1,382,940,000
For 2018- (1,633,748,000+1,468,978,000)/2= 1,551,363,000
For 2019- (1,690,304,000+1,633,748,000)/2= 1,662,026,000
Calculate the return on assets. Show your calculations.
Formula for ROA= (Net Income)/Average Total Assets
For 2016= 16,518,000/ (Base year)
For 2017= 102,574,000/1,382,940,000= 0.074170969094827*100= 7.4170969094827%
For 2018= 139, 590,000/1,551,363,000= 0.08997894109889178*100= 8.99789410988917%
For 2019= 194,009,000/1,662,026,000= 0.1167304241931233*100= 11.67304241931233%. This indicates that the company's ROA % is high and therefore showing that the company is in a good state which means that it is earning more money on fewer investments ( GuruFucus, n.d).
How does the company's return on assets compared to its competitors?
As indicated above, Nintendo Co. LTD has been has been recording an increasing ROA. It means that the company is in a healthy condition since it earns more on less investment. According to the data below, Nintendo Co. LTD has a competitive advantage over its rivals with a ROA of 11%.
Adapted from GuruFucus. (n.d). Nintendo Co ROA %: 5.77% (As of Mar. 2019). Retrieved from https://www.gurufocus.com/term/ROA/NTDOY/ROA/Nintendo%2BCo%2BLtd
How well do you think this company is operating? Explain your answer.
Having a clear look at the annual report, it is clearly evident that Nintendo is one of the biggest companies which is also operating as a multinational company in Kyoto, Japan. Since the time it was founded, the company in has been doing well and it is now recognized worldwide as one of the largest video games manufacturing a company that is equally making a lot of income on annual bases hence generating a significant amount in US dollars in net sales especially in this 2018 report ( Liu, 2019). The main reason as to why the company has been doing so well in this competitive industry is because of the fact that it has employed an in-house strategy for creating and developing their games, unlike their rivals who have been relying only on third-party software for their consoles.
References
GuruFucus. (n.d). Nintendo Co ROA %: 5.77% (As of Mar. 2019) . Retrieved on 11 August 2019, from https://www.gurufocus.com/term/ROA/NTDOY/ROA/Nintendo%2BCo%2BLtd
Liu, S. (2019). Nintendo- Statistics & Facts. Statista . Retrieved on 11 August 2019, from https://www.statista.com/topics/2284/nintendo/
Yahoo Finance. (n.d). Nintendo Co., Ltd. (NTDOY) . Retrieved on 11 August 2019, from https://finance.yahoo.com/quote/NTDOY/financials?p=NTDOY
