BMW Essay -- essays research papers

BMW and Audi, two German automobile manufacturers, have a reputation for making some of the best cars in the industry. Not only are both companies superior in their mathematical production, but their financial statements also indicate stability and efficiency. Looking at financial ratios, we allow for compare both companies on a basis of management efficiency and debt status. As a bank analyst, we will make a recommendation as to which family would be go against to approve a loan for. A recommendation will also be made regarding management effectiveness and which company would make a better investment.BMW has captured the attention of automobile drivers from all around the world with their Ultimate Driving Machine. The BMW Company was originally established in Germany and has protracted nationally reaching over 12 countries. With Germany and the United States being the top two target countries, BMW has established their products as a combination of luxury, safety, and comfort w ith product lines to suit all styles of living. Revenues have been increasing each year since before 1996 with profits coming from product line of automobiles and motorcycles. In 2001, BMW came out with a untested product group, the Mini. The Mini also contributed to the revenue increase in 2001. BMW has current developments in their sports cars, the Z8. BMW has created a trustworthy name for the automobiles they produce and has all the potential to cross their success in the future.Audi, one of Germanys first automobile producers, has been designing and building cars since August Horch, its founder, completed his first car in 1901. Over the eld following, a series of innovations and mergers have led Audi to the position it is in today. Audis subsidiaries include companies to facilitate international operations, part manufacturers, a vehicle customization company, a engineering research company, and Lamborghini Corp, a successful sports car manufacturer. Audis current development s include its holding the EU Seal of Environmental Protection, and a number of technological advancements, including tonic car designs and a seeing car technology that has been nominated for the German Future award for Technology and Innovation. BMWAudiProfitability RatiosReturn on Equity... ...reflects this. This again shows BMWs less efficient cost management than Audi. Through Dupont analysis, we have been able to see the specific strengths and weaknesses of BMW and Audis management. BMWs lower profit allowance account and asset turnover indicate less efficient cost management and asset management. Their debt multiplier indicates that theyre taking advantage of debt, but the benefit of this isnt realized because of their problems with cost and asset management. Due to Audis more efficient use of their assets, and better cost efficiency, it can be said that their management has performed better than BMWs over the past year. BMW and Audi both build cars that have a reputation f or security, reliability and quality. These traits transcend into their financial statements, making both of them a peachy investment due to their debt status, and management effectiveness. Our recommendation as a bank loan analyst would be for BMW due to its superior liquidity and low risk. When evaluating management performance for equity investment, Audi is clearly a better investment. This is primarily due to its superior asset management, debt allocation, and inventory management.