¶ … auto industry is generally characterized by immense fixed costs, strong labor unions, strict regulation, tough competition, and volatile demand. There are times when even extremely strong car manufacturers find it difficult to overcome these forces. Investors looking for an easy profit should definitely look somewhere else. Even prudent investors should worry about the fundamentals of the auto industry.
Ford led the U.S. manufacturers in the 1980s in the commercial war against the Japanese by selling truck-based products to car owners. The fact that Americans prefer large vehicles and that large vehicles are what U.S. automakers do best is no surprise to anyone. Helped by favorable fuel-economy and emission legislation for trucks, Ford dominated the trucks and SUVs market for years. The most profitable segments of the market were occupied by Ford for more than a decade.
However, one recent financial trend Ford experienced is the loss of 7 percentage points of market share, due to the fact that its products are aging and that the truck segment became more and more competitive. The management couldn't face the new circumstances, and now the company suffers as a result.
Another noteworthy financial trend is the constant rise of the company's debt, especially toward its retirees. The pension and benefit plans were underfunded by almost $45 billion. Although the debt has various maturities, its evolution is unpredictable on the long-term and analysts consider that it represents a huge problem.
One financial trend affecting the company's operations is the loss of profits due to the loss of market...
Indeed, the retailer's current ratio has not exceeded 1.0 in recent times. It is however important to note that given its profitability, it is likely that Wal-Mart converts its inventory into cash at a rate that is much faster than that of its peers in the same industry. For this reason, it is highly unlikely that in the normal course of doing business, the retailer could encounter challenges paying
Financial Analysis Threats and vulnerability: A case study of Shoe Carnival, Inc. Shoe carnival overview Shoe Carnival Inc. is a publicly traded company that offers a range of footwear products for all categories of customers, men, women, children and sportswear. It also offers casual wear products and other assorted products such as handbags. Its headquarters are situated in Evansville, Indiana and it runs over 300 stores across several states mostly concentrated in South,
Financial Statement Analysis The following is an equity research report on Starbucks. The company competes primarily in the quick service food industry, where it holds the #5 market share in the United States, and #1 in its segment of coffee (QSR Magazine, 2011). The company had revenues last fiscal year (ended 10/2/11) of $11.7 billion and net income of $1.245 billion. The current stock price is $43.91, which gives the company
While all of this is well and good, the reality is that most businesses are not founded by accountants and most find a financial system that is beneficial for them. For instance, it may have been acceptable in school to take large risks on certain costs; however, if a business is struggling and incoming capital is lower, then no risks may be considered acceptable. The final financial factor that businesses
financial analysis of Chevron from the perspective of a potential creditor. The issue surrounds primarily the creditworthiness of Chevron rather than the type of credit that would be issued. Specifically, the issue is whether "we" would lend Chevron 10% of its net assets. The net assets for Chevron are $209.474 billion, so the amount in question is $20.9 billion in new debt. The report will first analyze the financial
This will attract more customers leading to more profits in the organization. In addition, this will create customer loyalty and the company will have a competitive advantage over its rival. Conclusion In conclusion, it is true that Brocade is a successful company. This is due to its increased realization of profits over the last few years. This is evidence from its financial statements including income statements, balance sheet as well as
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