Horizontal and Vertical Analysis of SAMSUNG Enterprise for the Years 2015-2016 and 2017-2018

The paper reflects our study about the horizontal and vertical analysis of financial statements. In this small volume we have tried to give meaningful, close and clear explanations. We have tried to methodologically elaborate the task in a gradual way. The paper is worked in several parts for the purpose of easier understanding. The paper presents the original data of the financial statements, which elaborates the horizontal and vertical analysis of the balance sheet and the SAP for the years 2015-2015 and 2017-2018, in the next part is presented our commentary on the findings of the analysis for the above years. For this paper, SPSS software was used as a tool to interpret the results obtained from the questionnaire that was formulated for this paper.

Horizontal analysis analyzes the relationship between revenue and expense growth, meaning the increase in profits in a year, and possibly the increase in assets, liabilities and capital of companies (Joy Elly, 2017). The balance sheet and profit and loss account are diligently analyzed. Balance sheet analysis is particularly interested in the source that enhances the assets of the enterprise.
When investing in company ownership, the structure investor is particularly interested in the condition of its assets, capital and liabilities, and that there is a logical link between the increase in its assets, liabilities or equity (Joy Elly, 2017). The investor is particularly interested in whether the company's management uses horizontal financing policies. The most popular financing rule is the golden rule of banking 8 "Problems between assets and resources are expensive in small enterprises" (Atrill and McLaney, 2002).

Vertical Analysis
Vertical analysis is a tool that consists of studying a single financial statement in which each item is expressed as a percentage of a significant total. The use of vertical analysis is particularly useful in analyzing income statement data, such as the percentage of the cost of goods sold in sales (Hermanson, Edwards, & Salmonson 1989,781).
Comparison of current assets with current liabilities or comparisons of debt to equity for a period of time are examples of vertical analysis (Kieso, 2013).
Thus, vertical analysis can be done in the following ways: • By preparing joint size statements of two similar units • Preparing the joint size statement of different years of the same business unit (Kieso, 2013).
Vertical analysis describes each amount of the financial statements as a percentage of another item. Vertical balance sheet valuation means that any amount belonging to the statement resists to be a percentage of the total valuation, while vertical analysis of liabilities in the balance sheet means that any amount belonging to the liability resists to be the percentage of total liabilities. Vertical analysis of an income statement shows that each amount of the income statement is represented as a percentage of sales (Patel, 2009).
In the cash flow statement, total cash inflow is set as a parameter for each post that forms cash flow, and total cash outflow is set as a parameter for each post that forms cash outflow, then cash and cash equivalents specified as a parameter of each post that the cash form and its equivalents in the cash flow statement (Brigham, 2004).

Population and Samples
The population of this research consists of a number of microfinance institutions that operate in the Republic of Kosovo. According to the information provided by the Central Bank of the Republic of Kosovo, there are fourteen (14) microfinance institutions operating in our country. Which have 118 branches and sub-branches distributed throughout the country, with approximately 1021 employees (referring to the data of February 10, 2020, from the official website of the Association of Microfinance Institutions in RKS -"www.amik.org"). The sample of this research consists of four microfinance institutions, respectively KEP Trust, Finca, AFK and KRK. This choice of sample is not completely random, because in order to have a more detailed overview of the problem we are dealing with, the sample should have been taken by organizations with the largest number of employees and the widest range. organizations have similar characteristics (in terms of, services, employees, geographical location), which helps to conduct a more detailed analysis, more likely to notice any changes, but also more likely to understand more essentially the full picture of this issue in our country.

Instrument and Procedure
The instrument used in this research is the questionnaire as the easiest tool to reach the respondents. Anonymity was promised and kept and the willingness to attend was very high. The questionnaire contains 10 closed questions where the evaluation is done based on the Liqueur scale with 1-5 options to choose from.
Data collection was completed during July 2020. The questions were understandable and the distribution was done mainly through e-mail and media networks.Pyetjet hulumtuese dhe hipotezat.
Through this paper we will try to clarify the inevitable connection of Horizontal and Vertical Analysis in discovering the current state of enterprises and the appropriate actions to be taken before financial decisions are made.

Research Questions
1. How would the increase in foreign investment, as Samsung did during the 2015-2016 period, affect the enterprise? 2. How would the increase in accounts receivable and the decrease in accounts payable affect the enterprise?

Hypotheses
From the research questions the hypotheses are derived: 1. The increase of foreign investments as Samsung did during the period 2015-2018, will have a positive impact on the growth of the enterprise 2. Increasing accounts receivable and reducing accounts payable in the enterprise, would positively affect the enterprise

Conclusions for Horizontal Analysis
From the analysis made for the business of "Samsung" we notice that 2016 was more successful than 2015, through these analyzes we conclude that wealth in 2016 increased by € 23,593,789 or 13.96% compared to 2015, respectively current assets increased by € 14,720,338 or 22.05% and non-current assets € 8,873,451 or 11.27% similarly occurred with liabilities, it increased by € 23,593,789 or 16.22%, liabilities increased by € 4,765,878 or 9.37% including short-term liabilities in the amount of € 2,440,517 or 5.90% and long-term ones by € 2,325,361 or 24.50%, even equity has increased in the amount of € 18,827,911 or 19.91%.
We note that financial assets available for sale is the item that has experienced the most increase, specifically 91.91%, followed by other fixed assets by 64.49%, short-term financial instruments by 50.89% and so on, so we can conclude that "Samsung" has invested in different forms the profit of last year but also that a part of these investments are financed from external sources since we have increased liabilities, during 2016 they have increased by € 4,765,878 or 9.37%, namely short-term liabilities are increased by € 2,440,517 or 5.90% and long-term liabilities by € 2,325,361 or 24.50%, withholding tax is the item that has decreased the most by 43.65% but we have an enormous increase of profit tax payable by 155.22%, ie the company despite the fact that it does not endanger liquidity has not fulfilled its obligations. Within equity, we have an increase of 19.91% or € 18,827,9911, during this year "Samsung" has not issued any regular or ordinary shares, while the increase of the retained profit by 22.91% is noticea Revenues from sales in 2016 were higher than in 2015 by € 33,705,388 or 21.88%, generally all expenses were higher, KMSH increased by 12.94%, operating expenses by 22.01% while financial revenues decreased by 44.06 %. The net profit in 2016 is higher compared to 2015 by € 9,416,716 or 73.31%.
From the analysis of the years 2017-2018 we notice that assets in 2018 increased by € 16,030,560 or 7.90%, within it current assets increased by € 4,425,423 or 4.22% and non-current assets by € 11,605,137 or 11.85%. Liabilities this year decreased by € 1,478,992 or 2.45%, respectively short-term liabilities increased by only € 783,639 or 1.61% while equity increased by € 17,518,552 or 12.32%. Within the structure of assets, financial assets available for sale (short-term and long-term) are the items with the highest increase, and intangible assets have increased in 2018 compared to 2017 by 20.52%, it is important to note that the inventory of goods is decreased by 9.27%, maybe even "Samsung" is applying the method "Just In Time" or has controlled more production by selling from last year's stocks. In terms of liabilities, long-term loans have decreased the most by 89.65%, short-term accounts have decreased by 55.01%, generally during this year the company has significantly fulfilled liabilities to partners, financing is mainly done from internal sources, during this year "Samsung" has issued regular and preferred shares at the same percentage of 0.25%, retained earnings for this period increased by 14.37%.
Revenues from sales for the accounting period 2018 are lower by € 20,825,722 or 9.61% compared to 2017, the cost of goods sold together with operating expenses have decreased by 6.61% and 2.17% respectively, financial revenues have increased for 84.23%, while the net profit is lower for 6,654,6277 or 23.04%.

Conclusions for Vertical Analysis
Based From the vertical analysis of 2017-2018 we see that the share of current and non-current assets in total assets is almost proportional, in 2017 the share of current assets is 51.74% and non-current assets 48.26%, while in 2018 current assets participate 49.97% and non-circulating 50.03%. Within this category, the largest share is occupied by land, factories and equipment with 35% in both periods, from this result we can conclude that the company has made investments in this item since it has not been reduced by depreciation but has increased compared to 2017. Other items with higher participation are short-term financial instruments with participation 17.15% (2017) and 18.09% (2018), and accounts receivable with participation 13.02% (2017) and 12.25% (2018) which carry the risk of turning into bad debt due to the possibility of non-collection. In the balance sheet liabilities participate with 29.92% in 2017 and 27.25% in 2018, concretely short-term liabilities participate with 23.97% in 2017 and 22.57% in 2018, while long-term liabilities participate with 5.95% in 2017 and 4.48 % in 2018. None of the liabilities items have a significant share, however what can be noticed is that "Samsung" has proved to be a trusted partner as it has largely paid the liabilities to accounts payable, this is evidenced by the percentage of participation, in 2017 accounts payablehad a share of 8.24% while in 2018 the share was 3.43%. The equity share in the balance sheet liability for 2017 is 70.08% while in 2018 it is 72.95%, the largest share within the equity is occupied by the retained profit with 69.42% in 2017 and 73.57% in 2018.
From the analysis of the financial statement it results that the share of costs of goods sold is 60.21% in 2017 and 62.21% in 2018, gross profit participates with 39.79% (2017) and 37.79% (2018), the share of operating expenses in it total revenue is 23.70% (2017) and 25.65% (2018). As it is noticed the difference of the percentage of items between the two periods varies by 2%, the same happens with the net profit, in 2017 the share of net profit in sales revenue is 13.33% while in 2018 it is 11.35%.

Testing the First Hypothesis
Understanding investment growth as a potential growth of the overall enterprise represents the purpose of achieving this paper. The first hypothesis was that the increase in foreign investment, as Samsung did during the 2015-2018 period, will have a positive impact on the growth of the enterprise.
Thus from hypothesis testing we derive the null hypothesis and the alternative hypothesis. They are as follows: H1o The growth of foreign investment as Samsung did during the period 2015-2018, will have a positive impact on the growth of entrepreneurship H1a: The increase in foreign investment, as Samsung did during the 2015-2018 period, will negatively affect the growth of the enterprise.
To test this hypothesis, Regression analysis was used, which results in: .000 a. Predictors: (Constant), Availability of resources for specific departments of the enterprise, Achievement of the enterprise to arouse investment interest, Foreign investments and their distribution in the enterprise, Distribution of planned resources of potential investment b. Dependent Variable: Increased foreign investment and its impact on entrepreneurship Increased foreign investment and its impact on entrepreneurship b. Predictors: (Constant), Availability of resources for specific departments of the enterprise, Achievement of the enterprise to arouse investment interest, Foreign investments and their distribution in the enterprise, Distribution of planned resources of potential investment Chart 23. Regression analysis first hypothesis-Histogram Published by IDEAS SPREAD

Testing of the Second Hypothesis The Second Hypothesis
Identifying how the increase in accounts receivable and the decrease in accounts payableby employees would affect the next goal of this paper. The second hypothesis was: Increasing accounts receivable and reducing accounts payablein the enterprise, would positively affect the enterprise Thus from hypothesis testing we derive the null hypothesis and the alternative hypothesis. They are as follows: H2o: Increasing accounts receivable and reducing accounts payablein the enterprise, would have a positive impact.
H2a: Increasing accounts receivable and reducing accounts payablein the enterprise would have a negative impact.
To test this hypothesis, Regression analysis was used, which results in: