Investment in the company
The Harley-Davidson company is doing fine in managing not only the product but also the brand. The market has been clamoring for more of the developments in the line of their motorcycles; and the company has done more than enough to satisfy the consumers in this part of the preferences. The motorcycles of Harley-Davidson are coming up with more developments on the side of appearance and performance. According to the company, they will achieve again and again the record-braking performances in terms of sales and profit every year and at the same time, giving the market their dreams of market-defining products released year after year.
This is despite of the fact that the United States is under the problems involving economics, especially that of uncertainty. (“Harley-Davidson Reports Record Fourth Quarter and 18th Consecutive Record Year “) As we have pointed out earlier, the key to a company’s strength lies on many things, and one of them is their financial strength and net income. Key figures of the Harley-Davidson, Inc. are seen below: These figures are very important to the analysis of the company since these are the financial figures that measure a company’s rate of change, whether positive or negative.
Expressed in percentages, these figures would clearly show the rate at which the company is being developed in accordance to the past data that was provided. The year 2000 was a fruitful year for the company as it had its 15th consecutive record year. This was stated in the press releases of the company of Harley-Davidson. For a company to achieve that gain would be a tremendous success for the management since they have maximized their efforts to sustain the fire that burns: their desire to continually rise and be the best corporation.
The 18. 69% profit margin indicates that the company is not doing very well in its sales since the profit has increased by 18. 69. This goes to show that whatever strategy the company is undertaking, it seems to be not on the working side of things. They should just keep it up and if possible, do better the next year. An operating margin of 28. 6% is fairly well, although the company should do better if they want their investors to be happy about it. Investors as much as possible do not want their income to be in the market as a receivable.
As much as possible, they want every income to be accounted for inside the company and realized as already received, not receivable. A net profit margin of 30. 1% is good enough to be presented to the investors since this indicates that the company has earned 30. 1% well over from last year’s earning. This is good news since the investor’s would understand that the company is undergoing good management, especially in those steps of profit generation. However, this is not the true measure of a company’s good management skills. A 14.
3% return on assets is essentially a good thing, but not good enough. Although the company is generating 14. 3% profit in the use of its assets, this rate should be higher for people to realize that the management makes efficient use of the resources that the company owns. A lower rate in this field indicates that the company should think of better ways in investing its assets or putting the assets into good use. The investor’s would not be that happy to know that the asset management of the company is not given much concern.
However, in the field of return in equity, the investors would have been happy to realize that the operations that the company went through on the previous year has just earned them a 27. 3% pay-off on their investment. It means that they have gained 27. 3% of the amount that they have investment in the company, indicating excellent investing skills of the company through the use of investor’s investments. The company should maintain this level of return on equity just to maintain the level of satisfaction of the investors.
The debt to asset ratio should be higher than that of the debt to equity ratio since this is an indicator of company’s liquidity. A 42. 3% ratio is a good thing since it would only take 42. 3% of the total of the assets to cover up the financial obligations that the company has. It also shows that the company can still manage to borrow money from financial markets if ever they need to since they would still have enough of their assets to cover up any additional debts that the company may incur to engage in expansions, marketing strategies and investment decisions. This ratio affects the rate at which a company may be viewed as risky or not.