Skip to content
FeatherEssaysFeatherEssays
FeatherEssays
Expert Essay and Academic Writing Services
1-343-433-433-444support@featheressays.com

our-guarantee

  • HOME
  • ABOUT US
  • OUR SERVICES
  • HOW IT WORKS
  • FAQ
  • TESTIMONIALS
  • ORDER A CUSTOM PAPER NOW
  • CONTACT US
  • HOME
  • ABOUT US
  • OUR SERVICES
  • HOW IT WORKS
  • FAQ
  • TESTIMONIALS
  • ORDER A CUSTOM PAPER NOW
  • CONTACT US
July 21, 2017UncategorizedBy classhelp24@gmail.com [email if you need fresh paper done]

Ratio Analysis

Before Chysler merged to become DaimlerChrysler AG, they were presented with a takeover bid of $55 per share by MGM billionaire Kirk Kerkorian and former Chrysler chairman Lee Iacocca. Kirk Kerkorian was a stockholder in Chrysler and an experienced takeover financier who apparently found Chrysler to be a good buy. Chrysler rejected the offer, however, stating that the firm was not for sale. Further, many Wall Street experts felt that Kerkorian could not come up with the $20 billion necessary to complete the deal.

After Chrysler rejected Kirk Kerkorian’s bid of $55 per share, Kerkorian decided to have his people repeat the analysis of the firm’s financial performance over the two most recent years to determine if he should increase his bid in this friendly takeover attempt. To measure the financial performance of Chrysler over the past two years, key financial ratios will have to be computed and compared with industry averages. To help in this endeavour, Chrysler’s financial statements are found on the following pages.

Chrysler Corporation’s Balance Sheet
for the year ending December 31 (in millions)

????????????????????????????????????????? ?????????????????? This? ?????? ?????????????? Last

??? ???????????????????????????????????????????????????????? year??? ??????????????????? year

Assets

Current Assets

?Cash and cash equivalents?????????? ???????? $ 5,543??? ?????????????? $ 5,145

?Marketable securities???????????????? ??????????? $ 2,582? ?? ?????????????? $ 3,226

?Accounts receivable?????????????????? ?????????? $ 2,003?? ? ?????????????? $1,695

?Inventories?????????????????????????? ???????????????? $ 4,448?? ? ?????????????? $3,356

?Prepaid taxes???????????????????????? ????????????????????????????? $?? 985?? ? ?????????????? $1,330

?Finance receivables?????????????????? ????????????$13,623??? ?????????????? $12,433

? Total Current Assets???????????????? ??????????? $29,184??????? ?????????? $ 27,185

Property & equipment?????????????????? ????????? $20,468??????? ?????????? $ 18,281

Less: Accumulated Depreciation??????? ???? $ 7,873??? ?????????????? $? 7,208

? Net Plant & Equipment??????????????? ?????????$12,595?????? ??????????? $?11,073

Other Assets

?Special tools???????????????????????? ?????????????????????????????? $ 3,566? ?? ?????????????? $ 3,643

?Intangible assets???????????????????? ???????????????????????????? $ 2,082? ?? ?????????????? $ 2,162

?Deferred tax assets?????????????????? ??????????? $?? 490? ?????????????????? $?? 395

?Other assets????????????????????????? ???????????????????????????????$ 5,839? ?? ???????????????$ 5,081

Total Assets?????????????????????????? ???????????????????????????????$53,756? ? ???????????????$49,539

Liabilities

Current Liabilities

?Accounts payable????????????????????? ?????????? $ 8,290? ?? ?????????????? $ 7,826

?Short-term debt?????????????????????? ???????????????????????????? $ 2,674? ?? ?????????????? $ 4,645

?Accrued liabilities?????????????????? ????????????????????????????? $ 7,032? ?? ?????????????? $ 5,582

?Other payments??????????????????????? ???????????? $ 1,661? ?? ?????????????? $?? 811

? Total Current Liabilities??????????? ??????????????$19,657? ? ???????????????$18,864

Long-term Liabilities

?Long-term debt??????????????????????? ???????????????????????????? $ 9,858? ?? ?????????????? $ 7,650

?Accrued employee benefits???????????? ????? $ 9,217? ?? ?????????????? $ 8,595

?Other non-current liabilities???????? ??????????? $ 4,065? ?? ?????????????? $ 3,736

? Total Long-term Liabilities????????? ???????????$23,140? ? ???????????????$19,981

Total Liabilities????????????????????? ?????????????????$42,797? ? ???????????????$38,845

Stockholder’s Equity

?Preferred stock?????????????????????? ???????????????????????????? $???? 0? ??????????????????? $???? 2

?Common stock (at $1 par)????????????? ?????? $?? 408? ?????????????????? $?? 364

?Additional paid-in capital??????????? ?????????? $ 5,506? ?? ?????????????? $ 5,536

?Retained earnings???????????????????? ???????????? $ 6,280? ?? ?????????????? $ 5,006

?Treasury stock??????????????????????? ??????????????????????????????($1,235)??? ???????????????($ 214)

? Total Shareholder’s Equity?????????? ?????????$10,959? ? ???????????????$10,694

Total Liabilities and Share. Equity??? ????????$53,756? ? ???????????????$49,539

Chrysler Corporation’s Income Statement?
for the year ending December 31, (in millions)

???????????????????????????????????????? ??????????????????? This???? ?????????????????? Last

????????????????????????????????????????? ??? ?????????????? year???? ??? ?????????????? year

Sales revenue????????????????????????? ????????????????????????????? $53,195? ? ?????????????? $52,235

Less: Cost of goods sold?????????????? ????????$41,304? ? ???????????????$38,032

Gross profits????????????????????????? ?????????????????????????????? $11,891? ? ?????????????? $14,203

Less: Operating expenses???????????

?Selling & admin.?????? ???????????????????????????? $4,064? ?????????????????? $3,933

?Pension??????????????? ??????????????????????????????? $? 405? ??????????????????? $? 714

?Nonpension post ret.?? ????????????????????????? $? 758? ??????????????????? $? 834

?Depreciation?????????? ????????????????????????????????????????????? $1,100? ?????????????????? $? 994

?Amort. of tools??????? ?????????????????????????????????????????????$1,120? ???????????????????$? 961

Total operating expenses?????????????? ?????????$ 7,447? ?? ???????????????$ 7,436

Operating profits?????? ??????????????????????????????????????????? $ 4,444? ?? ?????????????? $ 6,767

Less: Interest expenses??????????????? ??????????$?? 995? ???????????????????$?? 937

Net profit before taxes??????????????? ?????????? $ 3,449? ?? ?????????????? $ 5,830

Less: Taxes (40%)????????????????????? ????????????$ 1,380??????????????????? ?$ 2,332

Net profit after taxes???????????????? ?????????????????????????????$ 2,069? ?? ???????????????$ 3,498

Industry Average Financial ratios this year and last year

??????????????????????????????? ??????????????????????????????????????????? This???? ?????????????????? Last

???????????????????????????????? ??????????????????????????? year???? ?????????????????? year

Liquidity

Current Ratio??????????????????? ????????????????????? 1.78????? ????????????????? 1.69

Quick Ratio (Acid Test)????????? ???????????????? 1.55????? ????????????????? 1.51

Activity

Inventory Turnover????????????? ??????????????????? ?7.41????? ? ?????????????? 7.58

Average Collection Period??????? ????????????? 22.8????? ????????????????? 23.4

Fixed Asset Turnover?????????? ?????????????????? ??1.54????? ?????????????? 1.62

Total Asset Turnover??????????? ?????????????????? ??.89???? ?????????????????? ??.91

Debt

Debt?????????????????????????? ?????????????????????????? ?75%??????? ?????????????? ?????????????? 77%

Times Interest Earned??????????? ???????????????? ?6.4?????? ????????????????? 7.0

Profitability

Gross Profit Margin???????????? ?????????????????? ??24%?????? ?????????????? ?????????????? 28%

Net Profit Margin?????????????? ???????????????????? ?4.7%?????? ?????????????? ?????????????? 4.9%

Return on Total Assets????? ???????????????????? ?4.6%????? ?????????????? 4.7%

Return on Equity??????????????? ??????????????????? 20.7%????? ?????????????? ?????????????? 33.8%

Questions

  1. Compute Chrysler’s financial ratios for the past two years.
  2. Compare these ratios to the industry’s average.
  3. Comment on Chrysler’s strengths and weaknesses by ratio category.
  4. Should Kerkorian have pursued the purchase of Chrysler? [please support your answer with any 2 reasons].
Request A Fresh Paper Done For You!You are guaranteed plagiarism free paper within 3-8 hrs
About the author

classhelp24@gmail.com [email if you need fresh paper done]

What are you looking for?
Visit
  • HOME
  • ABOUT US
  • OUR SERVICES
  • HOW IT WORKS
  • FAQ
  • TESTIMONIALS
  • ORDER A CUSTOM PAPER NOW
  • CONTACT US
Happy Client Quotes
  • When I made the decision to seek help from you guys, I didn’t know I was making a choice that would positively change my life forever. I am so much more confident with my ability to go to work and still be able to finish my research paper on time. The research you guys did for me was great and I was highly awarded for it. I mean, all along I was having difficulty managing my time. It was so hard to decide what I ought to give priority, work or research? Thanks to you guys I can now go to work without worrying too much about how great my research should be. I am still the same person, just to be sure, but with lot of skills and ability, courtesy of feather essay. I wish you guys were around 30 years ago when I started doing research while still in school. Great research paper, thanks feather essays.

    Scott Williams, Chicago
  • Feather essays is awesome, really. I can’t just say enough about how well their services are custom-made to meet students’ needs. I mean have been using other services from different websites with erratic degree of satisfaction, but this is way too perfect. I’m thankful their team understand all about essays requirement. I had an essay assignment due in two days so I had to seek for their help, at first I thought they wouldn’t be able to do it perfectly since it was the first time I was using their service. Well, I guess I was wrong. Another thing I also liked about feather essays is how they communicate with clients, so simple, they made me feel at ease even though I was under pressure. From my standpoint, their platform is very intuitive, and it’s pretty much dummy-proof. Thanks to you guys I passed, it’s really hard to recommend anything but feather essays for quality service.

    Joseph Levoh, Phoenix University
  • I mostly do silly mistakes in term papers and essays, and while going through the instructions I used to get stuck after a few steps. I must say I always get annoyed whenever this happened and I had started doubting if I will make it through college. I had lost confidence in myself, I felt uncomfortable and unmotivated in doing assignments. One day I was just going through the internet looking for help with my essay, I found out about feather essay. I was not really sure if they could help me, but considering my situation I decided to give it a try. To say the least, I’ve never regretted making the decision. They are amazing, they offer instant help on assignment and term papers, and whenever I come across any assignment with doubts, all I do is talk to them. They instantly help me with my essays and explain to me everything about it. Thanks to you guys, you help me save a lot of time and concentrate on other class work.

    Eleona Miller, New York City
  • I’d never sought out for help with my essays before, so I was a bit uncertain how to go about it. All this doubts disappeared as soon as I talked to feather essays. You guys took your time to comprehend what my short term and long term needs were, and perfectly lined up different options for me. Considering the fact that I needed a quick response and solution, the options you guys offered were so organized. I thought the steps involved could take up several weeks or days, but I was surprised when all it took was less than four hours. I guess as soon as the agreement was made, the worked started immediately. The way you delivered that essay showed me how top class service professional you guys are. For quick essays help, I recommend you guys. The best thing is that you understand when a client needs more time to think. Thanks to you guys.

    Laurette, Ohio
  • Quick Essay Help

    I’d never sought out for help with my essays before, so I was a bit uncertain how to go about it. All this doubts disappeared as soon as I talked to feather essays. You guys took your time to comprehend what my short term and long term needs were, and perfectly lined up different options for me. Considering the fact that I needed a quick response and solution, the options you guys offered were so organized. I thought the steps involved could take up several weeks or days, but I was surprised when all it took was less than four hours. I guess as soon as the agreement was made, the worked started immediately. The way you delivered that essay showed me how top class service professional you guys are. For quick essays help, I recommend you guys. The best thing is that you understand when a client needs more time to think. Thanks to you guys.

    Diana Ross, California
  • Unique service and quality work!!!Feather essays not only offer wonderful essays but also helped me pass with flying colors!! I could not also believe it. And what makes me love them more is how work is done instantly after ordering!!i will never worry about school essays anymore. Absolutely the best!

    Sasha Kelly, Cleveland
Recent Posts
  • Week 7 – Assignment: Integrate Waste Elimination Techniques into Training Development (10 Points)
    June 5, 2019
  • (Let professional handle your assignment. Get an A) Cloud Architectures Application
    June 25, 2018
  • (Let professional handle your assignment. Get an A) Cloud Architectures Application
    June 25, 2018
  • (Let professional handle your assignment. Get an A) Cloud Architectures Application
    June 25, 2018
  • (Let professional handle your assignment. Get an A) Cloud Architectures Application
    June 25, 2018
  • (Let professional handle your assignment. Get an A) Cloud Architectures Application
    June 25, 2018
  • HOME
  • ABOUT US
  • ORDER A CUSTOM PAPER NOW
  • FAQ
  • CONTACT US
  • TERMS & CONDITIONS
  • CHEAP AND AFFORDABLE PRICES
footer

Copyright © 2015 FeatherEssays