FINANCIAL ANALYSIS

Financial Analysis of the Nokia Corporation



Financial Analysis of the Nokia Corporation

Company Background

Nokia started in 1865, when a mining engineer built a wood-pulp mill in southern Finland to manufacture paper. Over the next century, the company diversified into industries ranging from paper to chemicals and rubber. In the 1960s, Nokia ventured into telecommunications by developing a digital telephone exchange switch. In the 1980s, Nokia developed the first "transportable" car mobile phone and the first "hand portable" one. During the early 1990s, Nokia divested all of its non-telecommunications operations to focus on its telecommunications and mobile handset businesses. Today, Nokia is the world leader in mobile communications. The company generates sales of more than $27 billion in a total of 130 countries and employs more than 60,000 people. Its simple mission: to "connect people."

The company has 15 manufacturing facilities in 9 countries and research and development in 12 countries. At the end of 2004, Nokia employees approximately 55,500 people. With a leading brand, strong product offering, advanced technology, and unique corporate culture. Nokia is well placed to usher in a new era of mobile communications. Nokia is a broadly held company with listings on the Helsinki, Stockholm, Frankfurt and New York stock exchanges (Nokia Corporation Annual Report, 2010).

Headquartered in Finland, Nokia's business is divided into four divisions:* Nokia Mobile Phones* Nokia Networks* Nokia Ventures Organizations* Nokia Research Center

Overview of the Telecommunication Industry

These are telecommunications companies that range of products that involves electronic and non wireless systems for transmitting messages through television telephone cables or radio (Mintel, 2007). Telecom Industry Trends

The control of telecom industry in most cases lies in the hands of private individuals instead of the government. Telecom industry have witness a lot of changes and innovation in recent times from the Traditional telecom technologies to modern wireless technologies, especially mobile services. Improving and enhance the quality and speed of Internet technology is their watch word and that is their core objective (Mintel, 2007). Comparative Financial Statement Analysis between Nokia and Sony Ericsson

In this report there will be critical comparative evaluation and analysis of Nokia and Sony Ericsson; major competitors in the Telecommunication Industry. Information was collected from the company's annual report. These companies are expected to have currency and translation exposure which may result in gain or loss because they are multinational companies that have subsidiaries in different part of the world, and the account of foreign subsidiary should be provided when preparing consolidated financial statements. However, both Nokia and Ericsson have a condensed consolidated accounts published by international accounting standard boards (IASB) which is in line with the international accounting report standard (IARS).

Nokia Corporation Background Information

Nokia which is the world's largest manufacturer of mobile telephones has it's headquartered in Helsinki, Finland. They are into communications and manufacturing of mobile devices and Internet services. They have about 123,000 employees located in 120 countries. Their annual revenue is 41 billion Euros with sales target exceeding 150 countries and operating profit of ...