Nintendo Financial Statements and Corporate Social Responsibility

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Table of Contents

Introduction
Basic theories
Conclusion
References

Introduction

Nintendo financial statements are lacking corporate social responsibility, which is important in the modern corporate world. This information is vital for the current corporate world Social responsibility. Take two interactive software as a section of social responsibility. Corporate social responsibility is described below.

Social responsibility concerning the management of corporate is defined as duties and moral obligations of corporate to other stakeholders. Corporate social responsibility is moral rights, wrongs, and obligations for business managers for any business transaction or decision. The moral responsibility of corporate depends on the nature of business and the individuals involved

Business organizations have adopted various ethical policies because they believe in showing the neighborhood their moral responsibility and in the process they have increased their sales.

Corporate social responsibility like any other concept is to be discussed in broad terms. The idea of corporate social responsibility was introduced in 1973 when it was introduced in American corporations. Its basic premises of ethical obligation have made managers and shareholders own self-interest in business transactions. Every business manager who incurs business transactions will put society goals and aspirations in the front.

Basic theories

Corporate social responsibility revolves around four basic theories which will include social contract theory (contractual relation), social justice theory (equitable distribution of resources), rights theory rights of community where the company is operating) and deontological theory.

Social contract theory: This theory assumes that there are many contracts both explicit and implicit between individuals, organizations, and institutions. Social contracts evolve around whims of trust and are made in harmony. Corporations are assumed to the business world by entering into contracts with the society in exchange for resources and acceptance to operate without interruption.
Social Justice Theory: This examines the fairness in the distribution of societal goods and services. The theory puts forward arguments that societies are considered, by way of distributing social goods. Corporate managers have a responsibility in ensuring these goods have been appropriately being shared in society.
Rights theory: This theory deals concentrate on the rights of various members of the society like human rights and other rights. Corporate managers should not interfere with the property rights and human rights of members of society. The corporation will have property rights that should not be used to affect the rights of employees and the local community.
Deontological theory: This theory assumes that everybody is equal and should be treated with respect and everybody has a moral duty to that effect. This belief is for everyone, including corporate managers, shareholders, and other stakeholders. Corporate social responsibility gives reasons why managers

This is shown from statements of taking two interactive software about the employee section Directors and Executive Officers of the Registrant, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. however, this information is lacking Nintendo financial statement

In analyzing the financial statement, the following ratios have been calculated for comparison purposes

Table 1. Financial Performance

Ratio	Formulae	Nintendo	Take two interactive s/w inc
Return on Assets	Net Profitx100% Total Assets	160759 x100 1160703 13%	21832 x100 908361 2.4%
Return on Equity	Net Profitx100% Total Equity	98378 x100 974091 10%	18861 x100 637225 3%
Asset turn over	Turn over Total Assets	509249 1160703 0.4 times	306779 908361 0.34 times
Current Ratio	Current Assets Current liabilities	1018730 182274 5.6times	572404 270733 2.1 times
Quick ratio	Current Assets-stockCurrent liabilities	1018730-30835 182274 5.4times	572404-91820 270733 1.7 times
Debt to Equity	Total Debts Equity	186435 974091 0.19times	271136 637225 0.4 times

From the table above analyzing the performance of the two companies, we realize that Nintendo was performing poorly in terms of working capital management. As they have huge working reserves in hand without investing them. They also have a better credit ratio as they can pay their creditors, and meet short-term obligations. This shows that they are not exploiting credit facilities well.

On the other hand, Take two interactive software to have good ratios in terms of working capital management. When it comes to solvency, they are doing excellent because the ratio stands at 0.4 times, which is not too much. it shows that the company is utilizing credit facilities well unlike the other one.

Conclusion

Based on the debt ratio, and if Nintendo is to finance the venture through external borrowings (debt), then it would be advisable to do so. This is because they have not utilized debt capital well which not a good debt management policy is. However, the management of the company is not efficiently utilizing the current equity as shown by a decline in the return to equity over two years. The management seems not to be aware of the excess funds lying idle. The directors should think of injecting new blood into the company.

References

Sanzo R, (2005) Ratio Analysis for small Business, Yale University Publishers, USA.
Vandyck C, (2006) Financial ratio analysis, Wiley books, USA

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