Harley Davidson Financial Ratios

According to me, the motorcycle industry is very attractive. The main reason to back my claim is the level of competition in the industry. There is a very high level of completion between all the companies present in this particular segment. The main factors that drive this rivalry are different positions of different players within the industry, differences in technical know-how, different marketing campaigns, differences in core nature of the products and differences in strategies. The players in this particular industry don’t fight over price of their products, they rather compete with each other in terms quality of their products and the nature of their services to different segments of customers. Each player had its own unique strategy and nature of the product for a particular segment of customers, this tends to intensify the competition amongst companies in the industry.

Through Harley-Davidson Financial Services (HDFS), the company offers a package of wholesale and retail financial services for its products, providing it a competitive edge in the motorcycles business in the US and Canada regions. HDFS financed 51% and 30.4% of the new Harley-Davidson motorcycles retailed by independent dealers in the US and Canada respectively in 2011. HDFS provides wholesale financial services to Harley-Davidson motorcycle dealers, including floor plan and open account financing of motorcycles and motorcycle parts and accessories. These specific services provide a competitive edge to the company in capturing a higher market share and enhancing its bottom line.

Harley-Davidson treats the dealers not only as partners, but also as customers. Harley has developed a very effective marketing strategy, but it is the responsibility of manufacturing to produce high quality and reliable motorcycles.

Harley-Davidson’s Annual Report (2009) indicates sales from motorcycles and related products on a continuing basis decreased 23.1 percent to $4.29 billion compared to 2008 and income from continuing operations decreased 89.7 percent from the prior year to $70.6 million (Harley-Davidson, 2010a). These losses can be attributed to HDFS and the impact of restructuring (Harley-Davidson, 2010a). However, by eliminating excess capacity, reducing administrative costs and non-core business operations, Harley-Davidson believes these steps of restructuring will reflect between $240 million and $260 million in annual ongoing savings (HD1, 2010). Nonetheless, excusing the decline in numbers, Harley-Davidson’s Annual Report (2009) states, since 1993, the company has paid a dividend every year (Harley-Davidson, 2010a).

Good relationships, continuous improvement, employee and management involvement, team building or employee training and empowerment are not just words out of a management book for Harley-Davidson. Only by adopting those management techniques and building a solid base between the management and the Unions/employees made it possible for Harley-Davidson to improve its management processes. While management 's responsibility is to build

Harley-Davidson has managed to dominate the U.S. market by investing in research and development, experimenting with its designs and

In this paper we will perform a complete analysis of the Harley-Davidson Corporation including their corporate and business strategies, strengths and weaknesses, environmental opportunities, the five industry forces, and financial situation. Harley-Davidson has many attributes, which will be apparent in the following analysis. The paper will attempt to define the different components of the analysis and put them all together in a way that seeks to explain the way that they contribute to the overall success of the company and its stakeholders.

Furthermore, analyzing the company’s profitability ratios, Cartwright Lumber’s profitability is decreasing year to year although net income has increased. From 2001 to 2004, the profit margin decreased from 1.83X to 1.25X while the operating margin decreased from 2.18X to 1.53X. Therefore, the firm’s practicing of continually taken on more debts has not improved their profitability. In calculating the firm’s ROE, we could say that by leveraging the firm, the company has been able to increase the ROE and therefore is more profitable. The firm’s ROE is 11.48%, 12.64%, 12.64% in 2001, 2002 & 2003. However, when we calculate the firm’s ROE for the first quarter of 2004, it has decrease to

However in the markets they do serve they desire a relationship that evident in Harley riders. This is most evidenced by the participation in the Harley-Davidson Owners Group (H.O.G.). “The HOG worldwide membership had grown to 900,000 at the end of 2004 . . . in contrast Honda’s Gold Wing Road rides had 75,000 members” (Nolan & Kotha, 2007). The final part of the statement is just a reassurance to investors that profitability is a key concern.

Since Harley Davison Motor Company started in 1903, they have been successfully “taking the work out of bicycling” better than any other motorcycle manufacturing company. They have experienced great success recently with growing numbers in their percentage of motorcycles shipped, up 14 percent from 1997, and their target market size, up 13.8 percent from 1997. Their brand has also grown so strong over the years that customers are willing to wait up to two years for a motorcycle. The problems that Harley Davison is faced with are how to improve their existing purchasing process, how to integrate their existing procurement methods together, and how to develop longer term

The three statics of Harley-Davidson’s is; revenue, growth rate, and number of units that are sold. The manufacturer of the United States heavyweight motorcycle division has obtained, arrested, and achieved approximately fifty-four percent of the broad United States motorcycle exchange. Harley-Davidson has fifty-two percent share of the broad motorcycle exchange in which IBISWorld INC. has estimated that it will generate six point nine billion dollars in revenue this year, (Forbes, (2014).

After an investigation by the US International Trade Commission, in 1983 President Reagan imposed a 45% tariff on imported bikes and bikes over 700 cc engine capacity. The new management deliberately exploited the past appeal of their big machines, building motorcycles that purposely adopted the look and feel of their earlier models. Quality increased, technical improvements were made, and buyers returned. Harley-Davidson once again became the sales leader in the heavyweight (over 750 cc) market.

When companies have an interest in partnering, it is prudent for each to conduct a financial analysis–ensuring that both parties are making a sound investment. The purpose of the financial analysis is to scrutinize the profitability and financial stability of a company, while addressing any concerns (Jiambalvo, 2014, p. 535). In the case study, Bob Sherman founder of Mandrake Motorcycle manufacturing made a proposal to Marty “Monk” Fisher, a motorcycle dealer. Fisher proposed that Monk be the sole dealer for his motorcycles in the state of Ohio. Before investing, Mr. Sherman must do a financial analysis on Mandrake Motorcycle to insure that there are no financial concerns. This paper will analyze Mandrakes Motorcycle 's balance sheet, and income statement–calculating the ratios for 2015 and 2014. The calculated ratios will include, return on assets, gross margin percentage, receivables turnover, days’ sales in receivables, inventory turnover, days’ sales in inventory, debt to equity, and times interest earned. In addition, the paper will highlight areas of concern, and discuss what is the best decision for Monk based on the analysis. Finally, the paper will ascertain whether the financial analysis was indicative of future financial issues for Mandrake Motorcycles.

Harley Davidson Company has a long history of building motorcycles that have worked to actually shape a part of the American culture. Its product positioning and marketing strategies have served as a prime example for any company to imitate. Harley Davidson has developed immense levels of brand loyalty over the years. However, the company has also been burdened by the recent economic downturn and now is going through something of a rebuilding phase as it tries to determine its best course forward. This analysis will conduct a SWOT assessment of Harley Davidson's current position and make recommendations on how Harley can continue to develop the next phase of its iconic American brand.

Harley Davidson been in business for over a hundred years. The company operates in several related markets. They sell motorcycles, motorcycle parts and operate a financial component. Additionally the company operates in Europe, North Africa, the Middle East and Asia. All Harley-Davidson business segments operate internationally.