A variety of phones and tablets are designed and sold under the BlackBerry brand
by a Canadian firm. Burberry is regarded as one of the most well-known manufacturers of smartphones in the world. The firm uses forward-looking statements in accordance with its business structure and the expect, estimate, anticipate, will, may, could, should, believe, intend, and planning principles. These serve as the BlackBerry's primary guiding principles when dealing with historical trends, present circumstances, future developments, and other variables it deems strategic in relation to business opportunities. Through cutting-edge technology that competes with industry titans like Apple and Samsung, the business has increased its market penetration over time. It has also invested extensively in improving its market share within Canada and all over the world. This paper seeks to analyze the company's financial statements in regards to its asset and liability structure and therefore arrive at its current situations.
Assets
In 2016, the company's main asset was the outstanding public float. On May 6, 2015, the board authorized a repurchase program that was aimed at purchasing over 12 million common shares that had been canceled before. This repurchase was meant to offset the dilution from the company's employee share purchase plan. Another purpose was for the amendment of the equity incentive plan that would have then led to an increase in the number of shares that could be purchased by shareholders by June 23rd the same year. Through the program, the company managed to purchase 13 million common shares that were worth about 93 million dollars. The final result of this effort was the retained earnings of approximately 34 million dollars and a reduction of capital stock by over 59 million dollars.
In 2016, the company also took a major stride when it received approval to trade in Toronto Stock Exchange. Through it, BlackBerry announced that it was increasing the maximum number of common shares that could be bought from the market to 27 million common shares from 12 million. This increase accounted for a 5.8 increase of the public float of June 22, 2015. By the end of February 19, 2016, the company had improved its cash flow meant for investment activities. It had budgeted 439 million dollars for business acquisitions and $698 million for intangible asset additions. The budgets saw the investment in property and plant and equipment each costing $70 million and $32 million respectively. It was seen that the budget was offset mainly through maturity and sale of long-term and short-term investment that has yielded over $357 million. During the same fiscal year, investment activities from the cash flows provided $1.2 billion inclusive of cash flows utilized for transactions that involved the proceeds from the sale and maturity of the long-term and short-term investments. Acquisitions in that year had amounted to $894 million inclusive of $119 million in business acquisitions, $421 in intangible asset additions, and $87,000 in property, plant and equipment expenses. This expenditure was also offset by the $344 million arrived at through the sale of property, plant, and equipment (Nagle et al., 3-7).
Liabilities
On August 31, 2017, BlackBerry announced a debenture of $739 million that contributed to a fair value of 3.75%. Along with this, the company announced that it had an unpaid principal balance of $605 million. The difference between the debenture and the unpaid principal amounted to $134 million: the value of the debenture had been arrived at using the Level 2 fair value inputs. The company also recorded non \u2013cash income that was associated with the change that had been brought about by the change in the $70 million debenture and the 3.75% fair value inputs. The change had contributed to a $62 million non-cash charge for six month period that ended on August 31, 2017, which was attributed with the 6% debenture. The adjustments were consolidated through the company's statements of operations.
For the six months mentioned above, BlackBerry managed a net income tax expanse of an estimated one percent as compared to the net effective income tax rate during the same period. According to Teece and Greg (2017), the Company was registering a significant valuation allowance against its deferred tax assets. This inferred from the change in the fair value of the debentures and what was referred to as the Qualcomm arbitration award. There are other factors that could have contributed to the change but these were the two main ones. Moreover, in the same regard, the net effective income tax rate had made an indication of the geographic mix of earnings whereby the company was earning from jurisdictions with dissimilar income tax rates. This can be seen from its total unrecognized income tax benefits that were reported on August 31, 2017, and February 28, 2017, which were $69 million and $65 million respectively. According to the company's consolidated balance sheets, the unrecognized income tax benefits were netting against the deferred and current income tax assets.
Equity
All the trends through 2015-2017 had brought the Company to its current rich market share. According to the statistics of 26, 2017, BlackBerry had acquired 530 million common shares, 19 million RSU, 1 million options to common shares, and 0.6 million deferred share units. In addition, the company also indicated that had achieved 60.5 million common shares that amount to 3.75% debentures that can be issued upon conversion. As mentioned above, the acceptance to the Toronto Stock Market marked a lucrative future for the company. This is mainly because it was able to improve its stock exchange and therefore its equity. This also saw the company take on the opportunity to repurchase its common shares worth over 27 million which by May 31, 2017, had reached 31 million shares (Jaswal et al., 20-24).
Conclusion
From the financial reports, BlackBerry has maintained a steady rise in performance through the three years. The information technology sector is a quite competitive market. Nonetheless, the company through its investments as mentioned above has managed to remain competitive. For instance, in 2016 the company announced that it had achieved total revenue of $548 million which was a 12% percent rise from the previous quarter. The CEO attributed the performance to the Waterloo software the company had introduced. It contributed to revenue that amounted $154 million of the total revenue which was also an increase from the previous quarter. The repurchase of the shares since 2015 has also contributed significantly to the maintained performance by BlackBerry.
Works Cited
Jaswal, Rahul, et al. "Section D200 Strategic Analysis for: BlackBerry Ltd." (2016): 20-24
Nagle, Thomas T., John Hogan, and Joseph Zale. The Strategy and Tactics of Pricing: New International Edition. Routledge, (2016): 3-7
Teece, David J., and Greg Linden. "Business models, value capture, and the digital enterprise." Journal of Organization Design 6.1 (2017): 8.
