HARLEY-DAVIDSON INTERNAL AND EXTERNAL ANALYSIS

Secondary information is collected for this case. This case study limited only one techniques of financial analysis that is Ratio Analysis and also taken a single company. Thus the conclusion of the analysis carried out in a professional manner will be able to correctly describe the evaluation of the company and to substantiate the user’s decisions.

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.

Ratio analysis is a very useful tool when it comes to understanding the performance of the company. It highlights the strengths and the weaknesses of the company and pinpoints to the mangers and their subordinates as to which area of the company requires their attention be it prompt or gradual. The return on shareholder’s fund gives an estimate of the amount of profit available to be shared amongst the ordinary shareholders; where as the return on capital employed measures an organization 's profitability and the productivity with which its capital is utilized. Return on total assets is a profitability ratio that measures the net income created by total assets amid a period.

1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms?

Ratio analysis: Perform trend and ratio analysis on current and fixed assets, current and long term liabilities, owner’s equity, sales revenues, EBIT, net income, and earnings per share. Project these trends

Harley-Davidson is well known for its unique motorcycles. Its subsidiary, Harley-Davidson Motor Company (HDMC), manufactures five families of motorcycles, namely, Touring, Dyna, Softail, Sportster and V-Rod. These models are distinguished by their frame, engine, suspension, and other characteristics. The company shipped 233,117 motorcycles in the fiscal year ended December 2011, comprising 39.5% Touring motorcycle units, 39.2% Custom motorcycle units, and 21.3% Sportster motorcycle units.

5. A complete analysis of the company’s financial statements for a minimum of the most recent three years of available data including a comparison of the company's ratios to most recent year’s peer company average ratios. Complete the ratio calculations yourself. Do not copy them from another source.

There are many ways to analyze the performance of a company, some more popular than others. According to the Barney text the accounting method is the most popular way of measuring a firm's performance (Barney, 2002). Some of the reasons for the popularity could include the fact that accounting measures of performance are publicly available on many firms and they communicate a great deal of information about a firm's operations. Other methods of performance analysis include firm survival and the multiple stakeholder approach.

Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.

One weakness they have is the high prices of their models when compared to their Japanese counterparts. It seems that they could increase their market share if they could produce a less expensive model without compromising the quality of the model. A major strength they have is their name recognition and the activities available for Harley owners to interact with each other. Groups such as the Harley Owner’s Group (HOG), and the Buell Riders Adventures Group (BRAG) often sponsor rallies for their members.

Harley Davidson has 1,460 dealership networks to service its customers, with the majority of those dealerships located in the United States. Harley believes the quality and effectiveness of their dealerships are instrumental in the strong demand for its products; therefore, placement of dealerships is a critical element. Recently the market share for Harley Davidson heavyweight motorcycles has fallen to 47.5% this year from 50.3% a year earlier. In fact, their peak was quarter 4 in 2013 at 58% market share (Hagerty, 2015). Because Harley prides themselves on their loyal following, price slashing is not an option for improving market share as that method only devalues Harley’s products. Instead, to further progress Harley’s placement they should focus efforts towards helping dealerships expand business skills to ensure dealers have the appropriate knowledge to sell more effectively. One way in which Harley is accomplishing this is with the Harley-Davidson University program they’ve established as a training program for dealers.

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

The calculation of ratios is the calculation technique for analyzing a company’s financial performance that divides or standardize one accounting measure by another economically relevant measure. Financial ratios can be used as a tool to demonstrate financial statement users for making valid comparisons of firm operating performance, over time for the same firm and between comparable companies. External investors are mostly interested in gaining insights about a firm’s profitability, asset management, liquidity, and solvency.

The success of Harley Davidson (HD) is due to the American motorcycle icon’s effective Strategic Management. HD’s vision, mission, goals and objectives strive to exceed the requirements of its main stakeholders. Although these needs are not always met, the company has unique relationships with is stakeholders. The company stays on course with its strategic plan, despite the economy and the decline of American manufacturing and what might be considered its dwindling U.S. consumer base.

Milwaukee is where it all started for Harley Davidson. In 1903, William Harley Walter and Arthur Davidson created the first of millions Harley Davidson. It was one of the two major motorcycles that were able to survive the great depression. Since 1977, the only motorcycles sold to the public under the Harley-Davidson brand have been heavyweight motorcycles, with engine displacements greater than 700 cc, designed for cruising on highways. It is one of the most well known brands in the world of motorcycles and otherwise as well. Harley-Davidson maintains an enormous brand community, which keeps active through clubs, events, and a museum. The worth of Harley Davidson brand and its logo was somewhere around $40 million which was 0.8% of the