Volkswagen Group Financial Analysis 2015
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[pic 1][pic 2][pic 3][pic 4][pic 5]Table of ContentsExecutive summary Introduction Rationale behind choosing this company Financial analysis Financial statements analysis Vertical analysis Horizontal analysis Ratios analysis – competitor’s analysis Liquidity ratios Profitability ratios Efficiency Ratios Leverage Ratios Investments Ratios CSR The scandal The Consequences Volkswagen A.G. Corporate responsibility Actions Conclusions References Table of figuresAssets Income Statement Balance sheet Income statement Current Ratio Quick Ratio Gross Profit Margin Operating Profit Margin Net Profit Margin Return on Assets (ROA) Return on Equity (ROE) Return on Capital Employed (ROCE) Earnings per share Receivables Turnover Inventory Turnover Payables’ Turnover Asset Turnover Sales Revenue to Capital Employed Gearing ratio Debt to Assets Debt to Equity Interest Coverage Ratio Dividend Payout Dividends Cover Executive summaryThis report provides an analysis on the performance of Volkswagen Group, a major EU based car manufacturing company which designs, manufactures and distributes passenger and commercial vehicles, motorcycles, engines, and turbomachinery and offers related services including financing, leasing and fleet management. Based on the company’s Annual Report and external information sources, we used methods such as study, analyze and conclude on the financial statements, identifying and discussing the key accounts, and the major sources of optimism and risks.
Our overall analysis shows that Volkswagen Group is a healthy business with a positive outlook. Financial year 2014 has been successful for Volkswagen group. Despite the political and economic uncertainties, they successfully kept the company on a strong and stable trajectory. They manage to succeed over 10 million deliveries that produced record sales revenues of € 202,5 billion and operating profit of €12,7 billion.IntroductionThis report aspires to analyze and conclude on the financial data provided by the 2014 annual report of Volkswagen Group, a major car manufacturing company, located in the EU. Motivated by recent ‘’dieselgate’’ scandal we collected information either directly from Volkswagen Group or from external resources and structured them in order to identify the key strong points of the company and the corresponding weaknesses. We performed a similar, but less in-depth, analysis on data collected for two main competitors at the global setting, namely Toyota and FordOur tools in this analysis are primarily the financial statements provided by the companies. Exploiting these statements we identify key important accounts, we extract useful information from the notes associated with the annual report, perform an horizontal, vertical and ratio analysis with the data at hand (i.e. for two consecutive financial years, 2013 & 2014). To the best of our knowledge the data used for the analyses are correct and robust, as backed up by the auditor’s report. There is however, as always in financial accounting, room for misinterpretations and company manipulations of the financial data that we are not able to detect from reading just the annual report. Therefore our conclusions are reserved, and on the grounds the data we processed are indeed a fair and reliable view of reality.Rationale behind choosing this companyOur rationale behind choosing Volkswagen Group to analyze is threefold: At first and most important, our team is extremely environmental sensitive so we were triggered by the huge scandal of ‘’dieselgate’’, Volkswagen became the target of regulatory investigations in multiple countries, and Volkswagens stock price fell in value by a third in the days immediately after the news. According to EU commission, cars are responsible for around 12% of total EU emissions of carbon dioxide. Secondly, Volkswagen Group produced the second-largest number of motor vehicles of any company in the world, behind Toyota and ahead of General Motors. It has maintained the largest market share in Europe for over two decades. As of 2013, it ranked ninth in the Fortune Global 500 list of the worlds largest companies. Last but not least, Volkswagen Group has a long history from 1937, when it manufactured the car which would become known as the famous Beetle!