help me with this case study

Learning Goal: I’m working on a accounting case study and need the explanation and answer to help me learn.

here is a company case study report (QUALCOMM INC)

I only need you to do my part which has my name on it please add it to this document

(Marcee)

My parts are:

(Executive summary)

Section IV: Recommendations to Management Pg.25

AppendixPg.26-27

BibliographyPg.28-29

Executive leadership Team (Marcee)

Recent earnings conference call (Marcee).

I WILL ATTACH THE DOCUMENT please just add to it and send it back to me

1
Qualcomm, INC: Company Report
Company Objectives, Financial Performance, and Recommendations
Prepared for
Professor Jim Vogt
San Diego State University
Prepared By
Elaina Haisha
Tara Farhang
Hunter Hoffman
Suleman Mahabat
Marcee Shaba
December 5, 2023
Table of Contents(THESE ARE SUBJECT TO CHANGE)
List of Figures —————————————————————————————Pg.
Executive Summary ——————————————————————————–Pg.
2
Section I: Company Objectives and Strategy —————————————————Pg.
Introduction———————————————————————————Pg.
Corporate Objectives and Strategies—————————————————–Pg.
Significant Strategic Risks—————————————————————-Pg.
Significant Accounting Policy————————————————————Pg.
Section II: Financial Performance—————————————————————–Pg.16-21
Introduction———————————————————————————-Pg.16
Effect of Legal Battle with Apple, Inc.————————————————–Pg.16
Financial Statements————————————————————————Pg.17
Return on Assets, Equity, and Investments———————————————-Pg.17
Current Ratio——————————————————————————–Pg.18
Turnover————————————————————————————–Pg.19-20
Section III: Investor Analysis and Recommendations——————————————Pg.21-24
Introduction———————————————————————————-Pg.21
Earnings Per Share————————————————————————–Pg.21
Growth —————————————————————————————Pg.22
Competitors———————————————————————————-Pg.23
Stock——————————————————————————————Pg.24
Investor Recommendations—————————————————————-Pg.24
Section IV: Recommendations to Management————————————————–Pg.25
Appendix———————————————————————————————-Pg.26-27
Bibliography——————————————————————————————Pg.28-29
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List of Figures
Net Income, Chart and Graph ————————————————————————-Pg.17
ROA, ROE, and ROI, Chart and Graph————————————————————–Pg.17
Current Ratio, Chart and Graph———————————————————————–Pg.18
Receivables, Inventory, and Asset Turnover, Chart and Graph———————————–Pg.19
Earnings Per Share – Basic, Chart and Graph——————————————————–Pg.21
Financial Growth Percent Change Over Prior Year, Chart and Graph—————————Pg.22
Industry Competitors Comparison, Chart and Graph ———————————————-Pg.23
Stock Performance Graph——————————————————————————Pg.24
Dividends Paid Graph ———————————————————————————-Pg.24
Appendix 1: Five Year Balance Sheet—————————————————————-Pg.26
Appendix 2: Five Year Income Statement ———————————————————–Pg.27
Group Roles
This assignment is comprised of multiple components:
1.
Company Report and Analysis, including Excel-based financial information tables/charts
(Hunter) (together)
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2.
Team Company Presentation and Executive Summary
Reference Instructions for an explanation of what you need to do!!!!
● Company Strategy (Elaina)
○ Identify overall corporate objectives of your company and strategies implemented
to achieve those objectives.
● Executive leadership Team (Marcee)
● Recent earnings conference call (Marcee)
● Risk assessment (Elaina)
○ Identify the significant strategic risks
○ Select at least one of the significant accounting policies and:
● Review of SEC documents (Suleman)
○ You will examine the types of forms used by public companies to disclose
information under SEC disclosure rules.
○ You will discover any SEC comment letters for your company and how firms
respond to those letters.
Financial Performance and Objectives (Tara )
Investor Analysis and Recommendation- (hunter and tara)
○ Recommendations to management to improve financial performance- conclusion
that includes a buy/hold/sell recommendation and summary analysis Prepare and
present recommendations to management designed to improve financial
performance. Use your imagination here!
Section II: Financial Performance (Tara)
Introduction
Which Financials to focus on…..
Financial Statements
Net Income, Chart and Graph ————————————————————————-Pg.17
Return on Assets, Equity, and Investments
Start with Profit ratios (e.g., ROIC, ROA, ROE)
Roic-return on invested capital measures how well a company generates cash flow relative to the
capital it has invested in its business.
a ROIC of 10% or higher is generally considered strong.
Roa- return on assetsA ROA of over 5% is generally considered good and over 20% excellent.
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However, ROAs should always be compared amongst firms in the same sector.
Roe- return on equity
Low ROE means that the company earns relatively little compared to its shareholder’s
equity.Good roe A return of between 15-20% because it indicates that a company generates more
profits per unit of shareholder equity. ROE values above 15% are generally considered good,
while those above 20% are frequently regarded as excellent.However, an extremely high ROE is
often due to a small equity account compared to a large net income, which indicates risk.
ROA, ROE, and ROI, Chart and Graph————————————————————–Pg.17
Net Income, Chart and Graph ————————————————————————-Pg.17
Leverage ratios (times covered ratio, debt to equity )
debt to equity ratio
A high debt to equity ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the additional interest
expense.
However Sony Group’s debt to equity ratio is 0.66, this could be because the equity of the
company’s shareholders is larger than their liabilities.
Debt to asset ratio
Most investors look for a debt ratio of 0.3 to 0.6, ratio below 1.0 would be seen as relatively
safe, whereas ratios of 2.0 or higher would be considered risky.
Debt-to-EBITDA
A high Debt-to-EBITDA ratio generally means that a company may spend more time paying off
its debt. A ratio of exceeding four is usually considered scary unless tangible assets cover the
debt.
Current Ratio
Liquidity ratios (current ratio and the quick ratio)Current ratio
The current ratio measures a company’s ability to pay short-term obligations.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for
healthy businesses. The higher the current ratio, the more capable the company is of paying its
obligations. A ratio under , in this case 0.66, indicates that the company may have difficulty
meeting/paying its current obligations and may need financing.
Quick ratio
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The quick ratio measures a company’s ability to meet its short-term obligations with its most
liquid assets.
Current Ratio, Chart and Graph———————————————————————–Pg.18
Effect of Legal Battle with Apple, Inc.
Turnover
How to benchmark against others in the industry (Inventory turnover, DSO and DPO’s)
Inventory Turnovermeasures how fast the company turns over and manages its inventory within a year and the
percentage of Inventories the company currently has on hand to support the current amount of
Revenue.
A good range is between 5-10
Dso- days sales outstanding
Days sales outstanding (DSO) is the average number of days it takes a company to receive
payment for a sale. A high DSO number suggests that a company is experiencing delays in
receiving payments, which can result in a cash flow problem. A low DSO indicates that the
company is getting its payments quickly.
Dpo- days payable outstanding
Days Payable Outstanding (DPO) refers to the average number of days it takes a company to pay
back its accounts payable. Therefore, days payable outstanding measures how well a company is
managing its accounts payable.
Sony Group’s Days Payable was 100.75. So it takes 100.25 days for sony to pay back their
suppliers vs microsoft’s 104.68 it takes microsoft longer to pay which is better for the company
since they can pay at a later date .
Receivables, Inventory, and Asset Turnover, Chart and Graph——————————————
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1. Overall Corporate Objectives and Strategies
a. Qualcomm Inc. operates in the technology and telecommunications industry,
targeting mobile device manufacturers, network operators, and businesses in the
wireless technology environment. The company’s objectives include continuous
innovation, expanding product portfolios, and strategic partnerships. Qualcomm’s
business model involves semiconductor development, intellectual property
licensing, and a global market presence. Strategic risks include legal challenges
and competition, patent infringement, and antitrust issues. The business strategies
aim to navigate these challenges and capitalize on Qualcomm’s strengths in
technology and intellectual property.
2. Strategic Risks
a. One significant risk for Qualcomm is legal battles related to patent infringement
and antitrust violations, as noted in their 10-K filing. These risks have the
potential to impact the company’s revenue streams and market share. Effectively
managing legal challenges and maintaining a competitive edge are important
elements of Qualcomm’s risk mitigation strategies.
3.
Risk Assessment
a. At the financial statement level, a significant accounting policy for Qualcomm is
revenue recognition, specifically related to royalties and licensing. This policy
directly influences the company’s revenue and is complex due to the diverse
nature of licensing agreements. The guidance for revenue recognition follows the
FASB ASC 606.
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b. The revenue recognition policy is important for Qualcomm because it directly
impacts their financial statements. Given the importance of licensing agreements
to Qualcomm’s revenue streams, strictly adhering to ASC 606 is crucial for
transparent and accurate reporting.
c. The technical guidance for revenue recognition involves being in compliance with
ASC 606. This standard details the principles for recognizing revenue which
emphasizes the importance of identifying performance obligations and
determining transaction prices. The challenges lie in the complex nature of
licensing agreements, demanding careful examination of the contractual terms and
the criteria for revenue recognition.
d. Qualcomm’s choices in revenue recognition may differ from their competitors
based on their terms of licensing. Competitors may adopt a more conservative or
aggressive approach depending on their business models and legal agreements.
e. The revenue recognition policies can be viewed as conservative if they prioritize
caution; meaning they recognize revenue only when it is reasonably assured.
Alternatively, policies may be aggressive if they recognize revenue earlier in the
contractual process. Qualcomm’s choices in accounting policies should align with
its business strategy and risk assessment, creating a balance between transparency
and maximizing financial performance