The debt to equity ratio is also a measurement of the company’s rate of risk and in this case, the company is said to be very risky since about 73. 3% of the equity would be used to cover up the financial obligations if ever that the company would not be able to cover it up. This is a very bad rate to project and the company should rethink their strategies in the coming year for them to achieve a lower rate. A rate, at which, investors would not be able to think that the company is a bad place to put their money in.
Taking its cue from the partly great performance of the company from the previous year, Harley-Davidson clawed back slowly in its weak performance by certain percentages and receiving good reviews from the financial markets. This year also marked the year that marked its fourth year of dominance and increase in share in the British Market. (“Four Record Years in a Row for Harley-Davidson “) This year proved to be a real success for the company as it tried to strengthen its defined weaknesses of the previous year.
The gross profit margin of 19. 6% was a percent higher than that of the previous year, indicating a slight improvement, but this improvement cannot be clearly attributed to the fact that the company took measures of improvement since 1% is barely enough to unravel a change in the level of management of the company in practice. It may be attributed to other factors such as demand and preference of consumers. The decrease in the operating margin was seen as a bad sign of the change in the values of the data.
This is because the decrease may be seen as more financial offerings were undertaken in the market yet fewer collections were achieved. Improvement should be the key for the development of this field in important data. Net profit margin also had a little difference for the company to be happy about. It cannot be said for sure whether the change is due to the change in demand and preference or even rise of the global demand for all motorcycles. The company should therefore ultimately prepare the measures that they have been planning to achieve the needed change.
The drop in the return of assets may be used as an indicator that the company is not utilizing its assets well. In the coming year, the company should find ways to prevent the recession of the value of the return of assets if they want investors to perceive that they are indeed doing a good job in its development of the company profile further. If the company would overlook this recession, it would look like the company is not efficient in its use of assets, which is a sign of bad management.
Investors would not be on the Brightside of things if they would still see this recession in the coming years. Unlike the increases in the profit margins that we have viewed as not so significant, every percent of development in the return on equity is valued so much since investors may look at this as a sign of how well the company is efficiently managing the money that they invested in the company. A rise in this would mean that the company has decided to look at the results of their investment procedures more closely.
This is a good sign of management of the investors’ money, and ultimately, their trust towards the company itself. Unlike the other fields wherein the company focused on, this data does not reflect any significant change in it. If the company continues to ignore this, any significant negative outcome would reflect badly in the management since they may be viewed as people that do not have the foresight and the right methods in managing their debts and assets.
This may be a bad sign for investors since they may see that the finances of the company are not handled too well. In addition to this, the investors may also see a moment in which they could withdraw future plans of investing in the company’s undertakings. Companies that do not pay close attention to this factor may be in for a bad surprise in the future. To avoid this, Harley-Davidson should not stop in their undertakings of decreasing their debts or more importantly, putting their assets to good use.
Like the Debt-to-Asset ratio, it seemed that the company is not paying much attention to the company’s reflective financial ratios that they do not realize to be the indices at which the investors would look at in investing in the company’s activities. If Harley-Davidson would want to attract more investors, they should also focus in lowering the ratios in order for them to make the company appear as less risky. The level of risk in a company is important to an investor’s point of view since this would also be a measure of how much of a gamble is in investing in a company, provided that the risk is great.