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Stock Analysis: Sony vs. Canon vs. Nikon

The document analyzes the financial performance of Sony, Canon, and Nikon based on their 2020 financial statements, focusing on solvency, liquidity, and profitability ratios. Canon is recommended for investment due to its superior working capital, lower debt to asset ratio, and higher gross profit rate compared to its competitors. Sony and Nikon show weaker financial metrics in these areas.

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4 views3 pages

Stock Analysis: Sony vs. Canon vs. Nikon

The document analyzes the financial performance of Sony, Canon, and Nikon based on their 2020 financial statements, focusing on solvency, liquidity, and profitability ratios. Canon is recommended for investment due to its superior working capital, lower debt to asset ratio, and higher gross profit rate compared to its competitors. Sony and Nikon show weaker financial metrics in these areas.

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technohaircut
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Stuart Boatwright

Professor Knight
Principles of Accounting
May 10, 2021

STOCK FINANCIAL ANALYSIS AND PURCHASING RECOMMENDATION

Comparing Sony, Canon, and Nikon’s publicly traded shares.

These three companies share common market demographics in imaging and camera
technologies. Canon operates specifically under four divisions: the Office Business Unit,
Imaging System Business Unit, Medical System Business Unit, and Industry and Others
Business Unit. Nikon operates under three segments: Imaging Products Business, Precision
Equipment Business, and Healthcare Business. Sony, however, is a more diversified electronic
and software company. In addition to imaging technology, Sony has business in music,
animation, theater, television, and other digital entertainment. They also sell consumer
electronics and cameras.

All ratios are based on 2020 financial statements.

Sony Group Corporation (SONY):

Solvency Ratios:

Debt to assets ratio = total liabilities / total assets : .792

Liquidity Ratios:

Working capital = current assets – current liabilities : - $4,617,271,135 USD

Current Ratio = current assets / current liabilities : .919

Profitability Ratios:

Gross profit rate = gross profit / net sales : .286

Profit margin = net income / net sales : .0713


Canon Inc. (CAJ):

Solvency Ratios:

Debt to assets ratio = total liabilities / total assets : .398

Liquidity Ratios:

Working capital = current assets – current liabilities : $4,230,343,562 USD

Current Ratio = current assets / current liabilities : 1.349

Profitability Ratios:

Gross profit rate = gross profit / net sales : .435

Profit margin = net income / net sales : .0263

Nikon Corporation (NINOY):

Solvency Ratios:

Debt to assets ratio = total liabilities / total assets : .461

Liquidity Ratios:

Working capital = current assets – current liabilities : $3,171,236,241 USD

Current Ratio = current assets / current liabilities : 2.051

Profitability Ratios:

Gross profit rate = gross profit / net sales : .3756

Profit margin = net income / net sales : .013


SONY CANON NIKON
Debt to Asset Ratio .792 .398 .461
Working Capital ($4,617,271,135) $4,230,343,562 $3,171,236,241
Current Ratio .919 1.349 2.051
Gross Profit Rate .286 .435 .3756
Profit Margin .0713 .0263 .013

In conclusion, based on 2020 financial statements and notes, I recommend investing in shares
of Canon stock. Their working capital, debt to asset ratio, and gross profit rate outperforms
competing companies.

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