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, ...