For the analysis, I selected Motorola and Nokia. The two companies control a dominant share of the cellular handset market. Successful competition in the cellular equipment industry requires companies that can plan for change, identify their worldwide position, and recognize trends in their financial results and in the tastes of their customers.
Motorola Cash Flow, Revenue and Income Analysis
Over the past three years, Motorola struggled mightily. In 2001 and 2002, the company saw significant declines in revenues and net income, ultimately resulting in the resignation of the company's CEO and a restructuring in the second half of 2003. The failures lead to declines in revenues and net profits year-over-year from 2000 to 2001 and 2002 as summarized below (EDGAROnline, 2004):
Motorola Revenue and Net Profit Summary
Year Revenue ($ million) Net Profit ($ million)
2000 37,580 1,318
2001 30,004 (3,937)
2002 26,679 (2,485)
2003 27,058 893
Motorola's cash flow statements for 2001 through 2003 are summarized below (EDGAROnline, 2004):
Cash Flow All numbers in thousands
PERIOD ENDING 31-Dec-03 31-Dec-02 31-Dec-01
Net Income 893,000 (2,485,000) (3,937,000)
Operating Activities, Cash Flows Provided By or Used In
Depreciation 1,667,000 2,108,000 2,552,000
Adjustments To Net Income (487,000) 2,352,000 1,834,000
Changes In Accounts Receivables (54,000) 155,000 2,445,000
Changes In Liabilities 374,000 (980,000) (3,030,000)
Changes In Inventories 77,000 (102,000) 1,838,000
Changes In Other Operating Activities 301,000 291,000 274,000
Total Cash Flow From Operating Activities 2,771,000 1,339,000 1,976,000
Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures (655,000) (607,000) (1,321,000)
Investments 734,000 119,000 4,296,000
Other Cashflows from Investing Activities (102,000) 49,000 (498,000)
Total Cash Flows From Investing Activities (23,000) (439,000) 2,477,000
Financing Activities, Cash Flows Provided By or Used In
Dividends Paid (372,000) (364,000) (356,000)
Sale Purchase of Stock 159,000 401,000 362,000
Net Borrowings (1,253,000) (521,000) (1,826,000)
Other Cash Flows...
English: Pāhoehoe Lava flow at The Big Island of ...
nokia 6210 7250i 1110 6300
SYJ: Nokia