Forecasting Analysis for Samsung Company

        In this project there is forecasting analysis of the Samsung Company of the next 5 years. Samsung is one of the best brands in the field of electronics. This company is a south Korean multinational company and it was founded in the 1938 by Lee Byung-chul. This company is involved in number of affiliated business around the world. Now this multinational company is famous for his new technologies in the field of smart phone and many other technological appliances like TV, smart watches etc. the Samsung Company in the past was involved in making food processing securities, retail and insurance.

        Afterwards this company enters in the field of electronic industry in the ending of 1960. Then after the death of the founder lee this company was divided into four more groups in 1987 and then after this in 1990 their mobile phone and semiconductors electronic devices have become the main source of their company income. This company is one of the most powerful companies in the history of South Korea. In the field of electronics there are many competitors of Samsung Company that includes Apple, Sony and Nokia. In this project all the work has been done on calculating the forecasting analysis of the Samsung Company. There are some steps that must have to be followed during the calculation of the forecasting analysis.

        In the first step we will collect the sale data of the Samsung Company over the 5 years period. Then after this in the second step we need to collect the economic data from different leading economic indicators. You must have to perform the analysis on the basis of these 10 indicators that are listed below. The first indicator is average weekly hours for manufacturing. The next indicator is for the average weekly initial claims for unemployment. After this the next indicator is for manufacturing the new orders and materials for the consumers. In the fourth indicator we will the ISM index for the new goods. The next indicator is for manufacturing the new orders for the company and excludes the aircrafts orders. Next indicator is for making the building permits. The Samsung Company stock prices and also the leading credit index are included for the next indictor.

        The next indicator is the 10 years treasury bonds minus the federal funds. Last indictor is the expectation for business conditions for an average consumer. Afterwards in the next step we will perform regression against each indicator that has been mentioned above and then we will take the forecasted EPS and then insert this into P/E ratio for getting the predicted stock price. In the last step of the project we have to use this predicted price and then it is compared with the real market price for deciding whether if the price of stock is fairly priced, underpriced or overpriced.

Different indicators for this project of Samsung Company

    Average weekly hours, manufacturing

    This indicator shows that the Samsung Company manufacturing different semiconductor appliances and smart phone in the average weekly hours.

        From the above regression the dependent variable is the sales of the Samsung Company that are as the total revenue of this company and the independent variable is the average weekly hours for the manufacturing. The R squared value of his regression analysis is only 0.85. The P and T values of this regression analysis are significantly fitted and also the P value is significant.

Average weekly initial claims for unemployment insurance of Samsung Company

    In this part of the indicator we need to find out the starting claims for the unemployment insurance according to the average weekly for five years.

Manufacture new orders, consumer goods and materials of Samsung Company

    In this part of the indicator manufacturing of new orders for the company and how much goods that has been prepared in the last five years (Pandey 2015).

ISM index of new orders of Samsung Company

    ISM stands for Institute for supply management. This index is used for the manufacturing of products for the company and it is based on surveys (Financials.morningstar 2018).

Manufactures new orders, nondefense capital goods excluding aircraft orders of Samsung Company

Regression analysis of Samsung Company

Stock prices 500 common stocks of Samsung Company

Forecasted Stock Prices of Samsung Company

    The above calculation is done on the historical data and it can be seen that the stock prices are overpriced.

Conclusion on Samsung Company

        Summing up all the discussion from the above it is concluded that we have done the forecasting analysis of the Samsung Company in detail. In the first step we will collect the sale data of the Samsung Company over the 5 years period. Then after this in the second step we need to collect the economic data from different leading economic indicators. The first indicator is average weekly hours for manufacturing. The next indicator is for the average weekly initial claims for unemployment. After this the next indicator is for manufacturing the new orders and materials for the consumers. In the fourth indicator we will the ISM index for the new goods. Afterwards in the next step we will perform regression against each indicator that has been mentioned above and then we will take the forecasted EPS and then insert this into P/E ratio for getting the predicted stock price.

References of Samsung Company

Chandra, Prasanna, and Prasanna. 2011. Financial Management. Tata McGraw-Hill Education,.

Financials.morningstar. 2018. Samsung electronics . http://financials.morningstar.com/income-statement/is.html?t=SSNLF&region=usa&culture=en-US.

Pandey, I.M. 2015. Financial Management, 11th Edition. Vikas Publishing House.

Uk.finance.yahoo. 2018. Samsung electronics. https://uk.finance.yahoo.com/quote/BC94.L?p=BC94.L&.tsrc=fin-srch-v1.