MemorandumTo:Christopher ThackerFrom:Jane DoeDate:10/10/13Re:Sony Corporation Financial AnalysisProspect: Sony Entertainment Division SeparationThis communication will address the interests of our client, Sony Corporation. The company is interested in separating its entertainment division into its own publicly traded company. Herein, the findings of the financial analysis that was completed to determine the fitness of this undertaking will be discussed. Competition Narrowed to One CompanySony Corporation has many competitors in the industries in which they operate including Panasonic, Corp., LG Electronics, Apple, Inc., Dell and Samsung Group, to name a few. The comparative financial analysis that was completed was with another major competitor; Philips Electronics. This company was chosen because of the competitors; Philips has more similar product and service offerings and has a similar revenue and sales base. Both companies are publicly traded and have international operations. Financial AnalysisWhen comparing the financial statements of both companies, I found that while there are some similarities, there are also major differences between the two. I first examined the income statements of both companies to determine the net income, which tells us what the revenue is after expenses are deducted. Second to be reviewed were the stock price information for the past fiscal year. The stock price history gives us a snapshot of how the public shares were doing a year ago, six months ago and on theday that the analysis was completed. Earnings per share are some of the most important variables used to determine a company’s share price. The next financial index that was reviewed is the price-earnings ratio. The price-earnings ratio, whencompared to competitors with lower P/E ratios, lets us know that investors are expecting higher futureearnings growth than their competitors. This figure also shows how much investors are willing to pay per dollar of
