HYUNDAI

Contemporary Business



Table of Contents

Financial Analysis of the Firm1

Analysis of Income Statement1

Analysis of Balance Sheet2

Conclusion2

Firms Green Credentials4

Major Developments4

Office Environment5

Green Energy5

Firms Corporate Social Responsibility7

Going Green7

Leadership Programs8

Pro Bono Programs8

Diversity Programs8

Conclusion9

One Aspect of the Firm's Activities in the Field of Globalization10

Globalization10

International Hiring10

Outsourcing11

Conclusion11

Firms Customer Group12

Financial Health12

Customer Base13

Expanding Customer Market13

Military Customers14

Ship Orders14

Offshore Engineering Unit14

Going Green15

Policies15

Market of Operations16

Conclusion16

References17

Contemporary Business

Financial Analysis of the Firm

Hyundai started building ships in 1974 and since then has delivered a huge variety and number of high quality ships to companies all over the world. The shipping industry was separated from the primary business in order to increase the efficiency of the business. The quality of its engineering works and offerings have eventually made it the world largest shipbuilder in the world. Although it has reached a point where it is the clear market leader, it has still not stopped growing and is continuously expanding its shipyards in order to accommodate bigger and more ships (2 b 1st consulting).

Analysis of Income Statement

An increase in world trade has led to the demand of ships especially of higher tonnage. Subsequently, its revenues have been increasing at a high rate from $25,826.3 million in 2008 to $50,472.9 million in 2011 (Bloomberg Businessweek). This shows that the revenues have almost doubled in the past two years. The increase in revenue has led to a directly proportional increase in costs of goods sold since the company maintains a certain percentage of operating income.

Since the company does not have to make a great effort to market its products, advertisements costs are saved. This is one of the reasons its administrative costs have risen slightly unlike other costs.

An increase in revenue has led to an increase in operating income which has risen to $4,262.2 million in 2011 from $2,978.9 million in 2008 (Bloomberg Businessweek).

Among its expenses, the interest expense has witness a growing trend and is now around double then what it was four years ago. All this has led to an increase in net income which is now $2,405.4 compared to 2008 when it was &2,119.1 million. Although the company recorded higher revenues, the increase in expenses has wiped out a major portion of its profit (Bloomberg Businessweek).

Analysis of Balance Sheet

Due to the decrease in cash and short term investments, the financial standing of the company fell. Although it was still financially strong, its balance sheet showed that its liquidity is decreasing due to a decrease in current assets. Its statement of cash flows also shows that the flows are decreasing mainly due to credit sales. Although this could pose some issues in the future, currently, the company is strong enough to maintain its position as the leading ship builder in the world.

Although it is continuously investing in equipment and expansion projects, it is maintaining its liability by balancing its capital structure and using its earnings to form the largest share of the investments.

Conclusion

The company has maintained a good record of not only building ships but also oil rigs and other offshore platforms (Park, ...