Discussion 1 Prior To Beginning Work On This Discussion ✓ Solved
Discussion 1prior To Beginning Work On This Discussion Go Toamerican
Discussion 1 prior to beginning work on this discussion, go to American Airlines and Samsung Electronics’ most recent annual reports by clicking on the “Investor Relations” link found at each company’s website. The companies and their Internet addresses are listed below.
Company Name | Website | Product
--- | --- | ---
American Airlines Group Inc. (AAL) | [https://aa.com](https://aa.com) | Airline tickets
Samsung Electronics Co., Ltd. (SSNLF) | [https://samsung.com](https://samsung.com) | Electronics
American Airlines and Samsung are offering their products and services like many other companies over the internet. In an initial post of at least 200 words, use the most recent annual filings for American Airlines and Samsung Electronics in Form 10-K to answer the questions below:
- Determine the following for each company:
- A product description
- A product price
- A list of costs that are required to produce and sell the product selected in the product description as listed in the annual report on SEC Form 10-K
- Whether the costs identified above are fixed costs or variable costs.
- Which of the products do you believe has the largest markup on variable cost?
- While Samsung is a hugely popular brand, holding its shares has never been easy for U.S. investors. How can an investor buy Samsung stock in the US?
Sample Paper For Above instruction
Analyzing Corporate Financials: American Airlines and Samsung Electronics
In today’s global economy, understanding the financial structure and performance of multinational corporations is crucial for investors, analysts, and stakeholders. This paper compares two prominent companies—American Airlines Group Inc. and Samsung Electronics—by examining their recent annual reports filed on SEC Form 10-K. The analysis includes product descriptions, pricing strategies, cost structures, and the degree of cost variability, providing insights into their profit margins and investment opportunities.
Product Descriptions and Pricing Strategies
American Airlines operates within the airline industry, providing air travel services across domestic and international routes. The primary product, airline tickets, varies in price depending on the class (economy, business, first-class), route distance, seasonality, and booking time. As per their latest 10-K report, a typical domestic economy ticket ranges from $200 to $500, depending on these factors. Samsung Electronics, on the other hand, specializes in consumer electronics, including smartphones, televisions, and home appliances. Their flagship product, smartphones, retail at prices generally between $700 and $1,200, reflecting high-end technology and brand positioning.
Cost Structures and Variability
The costs to produce airline tickets mainly encompass fuel, aircraft maintenance, labor, and airport fees. Fuel costs are highly variable, fluctuating with oil prices, while maintenance and labor tend to be semi-variable, with some fixed expenses such as salaries. The costs associated with Samsung’s smartphones include component costs (screens, chips), manufacturing labor, research and development, and marketing. Component costs are largely variable, driven by economies of scale and supplier negotiations, whereas R&D expenses are mostly fixed. Both companies face a mix of fixed and variable costs, which influence their profitability margins.
Markup and Investment Considerations
The product with the largest markup on variable cost is Samsung’s smartphones, which often sell at a significant premium over the raw component and manufacturing costs, driven by brand value and technology innovation. Regarding international investments, U.S. investors can purchase Samsung stock through international brokerage accounts that provide access to foreign markets, or indirectly through American depositary receipts (ADRs). These financial instruments allow U.S. investors to buy shares in Samsung on U.S. stock exchanges, facilitating exposure to Korean market equities.
Conclusion
Analyzing these companies reveals differences in product offerings, pricing strategies, and cost structures, reflecting their respective industry dynamics. Samsung’s high markup on smartphones underscores the importance of brand and technology in achieving profitability. Meanwhile, American Airlines’ price sensitivity highlights the volatility inherent in the airline sector. Understanding these financial details enables better investment decisions and strategic analysis.
References
- American Airlines Group Inc. (2023). Annual Report 10-K. SEC Filings. Retrieved from https://aa.com
- Samsung Electronics Co., Ltd. (2023). Annual Report 10-K. SEC Filings. Retrieved from https://samsung.com
- Corporate Finance Institute. (n.d.). Economic Value Added (EVA) and Balanced Scorecard. Retrieved from https://corporatefinanceinstitute.com
- Balanced Scorecard Institute. (n.d.). Introduction to the Balanced Scorecard. Retrieved from https://balancedscorecard.org
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