Nokia Corporation is the world's top producer of cell phones. The following information was reported in recent annual reports.

\section*{Required:}
1. Compute the ratios discussed in this chapter for the last two years. If there is not sufficient information, describe what is missing and explain what you would do.
2. Assume the role of an investment adviser. A client of yours has the opportunity to invest \(\$ 1\) million in shares of international companies. Prepare a written evaluation of relevant ratios and indicate whether you would recommend to your client that the \(\$ 1\) million be invested in the shares of Nokia Corporation.

Transcribed Image Text:

NOKIA CORPORATION AND SUBSIDIARIES Consolidated income statements, IFRS Financial year ended December 31 Net sales Cost of sales Gross profit Research and development expenses Selling and marketing expenses Notes 2009 2008 2007 EURM EURM EURM 40,984 50,710 51,058 -27,720 -33,337 -33,781 13,264 17,3/31 17,277 -5,909 -5,968 -5,636 3,933 -4,380 -4,379 Administrative and general expenses Impairment of goodwill 1,145 -1,284 - 1,165 Other income 91 7 -908 - 6 338 420 2,312 Other expenses 6,7 510 -1,195 424 Operating profit 2-9, 23 1,197 4,966 7,985 Share of results of associated companies 14,30 30 6 = Financial income and expenses 10 265 -2 239 Profil before tax 962 4,970 8,268. Tax 11 -702 -1,081 -1,522 Profit 260 3,889 6,746 Profit attributable to equity holders of the parent 891 3,988 7,205 Loss attributable to minority interests -631 -99 -459 260 3,889 6,746 Earnings per share (for profit attributable to the equity holders of the parent) 27 Basic 0.24 1.07 1.85 Diluted 0.24 1.05 1.83 Average number of shares (1,000's shares) 27 Basic 3,705,116 3.743 622 3,885,408 Diluted 3,721,072 3.780,363 3,932,008