Financial Situation Assessment of the Sony Corporation

Abstract

The objective of this thesis is to analyse the financial situation after Hirai Kazuo took charge of Sony, moreover based on the events happened throughout these recent years from 2011 to 2016, an explanation is going to be given to analyse how did Sony try to revive under the command of Hirai Kazuo and whether it have returned or will return first place in this field. Five main chapters with a sequence from theory to practice constitute the body of this thesis. In the first chapter, a background and simplified development history of Sony Corporation is introduced to show the objective of this thesis. In the second chapter, there are methodologies of financial analysis being used in the thesis. Firstly, three financial reports including balance sheet, income statement and cash flow statement are introduced. After that, a common-size analysis, an analysis converting each line of financial statement data into an easily comparable, or common-size, amount measured as a percentage, and its two branches which are horizontal analysis, an analysis comparing the historical financial information over a series of reporting periods and vertical analysis, an analysis comparing different item to identify its proportion taking up in one year, will be introduced. Finally, there are two methods, financial ratio analysis and pyramid decomposition analysis, which are used to assess its performance to compare with other competitors in the 9

same field and assess how the component ratios contribute to the change in basic ratio, respectively. In the third chapter, a description containing development history, products and services, recent tendency, recent financial performance and process status. In the fourth chapter, though researching the financial statements provided by official department and looking for relative news, an analysis of financial situation from 2012 to 2016 will be illustrated by methodologies mentioned in the second chapter. In the fifth chapter, a report summarised by the data and analysis in the fourth chapter shows what situation Sony Corporation is. In the last chapter, a conclusion is given to conclude the financial situations of Sony Corporation so that everyone care about this company can make their own choice whether they are going to hold the stock of Sony.

The objective of this thesis is to analyse the financial situation after Hirai Kazuo took charge of Sony, moreover based on the events happened throughout these recent years from 2011 to 2016, an explanation is going to be given to analyse how did Sony try to revive under the command of Hirai Kazuo and whether it have returned or will return first place in this field. Five main chapters with a sequence from theory to practice constitute the body of this thesis. In the first chapter, a background and simplified development history of Sony Corporation is introduced to show the objective of this thesis. In the second chapter, there are methodologies of financial analysis being used in the thesis. Firstly, three financial reports including balance sheet, income statement and cash flow statement are introduced. After that, a common-size analysis, an analysis converting each line of financial statement data into an easily comparable, or common-size, amount measured as a percentage, and its two branches which are horizontal analysis, an analysis comparing the historical financial information over a series of reporting periods and vertical analysis, an analysis comparing different item to identify its proportion taking up in one year, will be introduced. Finally, there are two methods, financial ratio analysis and pyramid decomposition analysis, which are used to assess its performance to compare with other competitors in the same field and assess how the component ratios contribute to the change in basic ratio, respectively. In the third chapter, a description containing development history, products and services, recent tendency, recent financial performance and process status. In the fourth chapter, though researching the financial statements provided by official department and looking for relative news, an analysis of financial situation from 2012 to 2016 will be illustrated by methodologies mentioned in the second chapter. In the fifth chapter, a report summarised by the data and analysis in the fourth chapter shows what situation Sony Corporation is. In the last chapter, a conclusion is given to conclude the financial situations of Sony Corporation so that everyone care about this company can make their own choice whether they are going to hold the stock of Sony.