Financial Follow Up
OUR MISSION
WE FULFILL DREAMS THROUGH
The EXPERIENCES of MOTORCYCLING by PROVIDING
To MOTORCYCLISTS and to the GENERAL PUBLIC
An EXPANDING LINE of MOTORCYCLES,
BRANDED PRODUCTS and SERVICES in SELECTED
MARKET SEGMENTS.
Prepared For:
Dr. Hanin Abdallah
American University of Beirut
Prepared By:
Abdul Aziz Al Hariri
Jamal Haidar
Hazem Taha
March 22, 2004
1
Harley Davidson Foundation
The mission of the Harley-Davidson Foundation is to support the
communities in which we have facilities with funding and employee
volunteerism. The Foundation reaches out to build healthy, thriving
communities by placing an emphasis on Education, Community
Revitalization, Arts & Culture, Health and the Environment. The
Harley-Davidson Foundation targets areas of greatest need among
under-served populations to enhance the quality of life in our
communities. The Foundation also supports selected national causes,
including Veterans initiatives.
Brief History (1903)
It’s a history no one on earth could have made up. Four young men
experiments with internal combustion in a tiny wooden shed. Not
only does the shed not burn down, but the motorcycle they build
goes on to serve for over 100,000 miles, under five owners. And that
is just the beginning.
Financials
Harley-Davidson has delivered 18 consecutive years or record
revenues and earnings. In 2003, shareholders realized a five-year total
return of 101%. While there are impressive results, we remain
focused on sustainable growth, and our principle objectives are to
grow value and further strengthen the brand.
2
Financial Statements
Harley-Davidson’s financial statement for the past 5 years is shown
as follows:
a- Balance Sheet
Harley-Davidson, Inc.
Comparative Consolidated Balance Sheets
Unaudited
December 31
(In thousands)
ASSETS
2003
2002
2001
2000
1999
$812,449
$280,928
$439,438
$419,736
$183,415
Marketable Securities
510,211
514,800
196,011
Accounts receivable, net
112,406
108,694
118,843
98,311
101,708
Finance receivables, net
1,001,990
855,771
656,421
530,859
440,951
207,726
218,156
181,115
191,931
168,616
Deferred income taxes
51,156
41,430
38,993
28,280
29,434
Prepaid expenses
33,189
46,807
34,443
28,147
24,870
—
—
—
—
—
Total current assets
2,729,127
2,066,586
1,665,264
1,297,264
948,994
Finance receivables, net
735,859
589,809
379,335
234,091
354,888
1,046,310
1,032,596
891,820
754,115
681,741
—
—
—
—
—
53,678
49,930
49,711
54,331
55,408
358,114
122,296
132,365
96,603
71,046
—
—
—
—
—
Current assets:
Cash and cash equivalents
Inventories
Net assets from discontinued op's
Property, plant and equip, net
Deferred income taxes
Goodwill
Other assets
Net assets from discontinued op's
Total assets
$4,923,088 $3,861,217 $3,118,495 $2,436,404 $2,112,077
3
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable, including current
maturities of long-term debt
$—
$—
$—
$—
$—
Accounts payable
223,902
226,977
194,683
169,844
137,660
Accrued & other liabilities
407,566
380,496
304,376
238,390
199,331
Current portion of finance debt
324,305
382,579
217,051
89,509
181,163
955,773
990,052
716,110
497,743
518,154
Finance debt
670,000
380,000
380,000
355,000
280,000
Other long-term liabilities
212,179
152,831
176,190
97,340
77,124
Postretirement health care benefits
127,444
105,419
89,912
80,666
75,719
3,266
3,254
3,242
3,210
1,592
419,455
386,284
359,165
285,390
236,540
3,074,037
2,372,095
1,833,335
1,431,017
1,113,376
47,174
(46,266)
(13,728)
308
(2,067)
(586,240)
(482,360)
(425,546)
(313,994)
(187,992)
—
(92)
(185)
(276)
(369)
2,957,692
2,232,915
1,756,283
1,405,655
1,161,080
Total current liabilities
Shareholders' equity:
Common stock
Additional paid in capital
Retained earnings
Accumulated other
comprehensive income (loss)
Treasury stock
Unearned compensation
Total shareholders' equity
Total liabilities and shareholders' equity
$4,923,088 $3,861,217 $3,118,495 $2,436,404 $2,112,077
4
b- Income statement
HARLEY-DAVIDSON, INC.
ANNUAL INCOME STATEMENTS
Unaudited
YEAR ENDED DECEMBER 31
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2003
2002
2001
2000
1999
NET REVENUE:
H-D Motorcycle
$3,621,488 $3,161,046 $2,671,314 $2,246,403 $1,890,932
Parts & Accessories
712,829
629,202
509,624
447,846
362,598
General Merchandise
211,388
231,503
163,909
151,438
132,705
76,064
66,949
61,672
58,053
63,474
2,505
2,270
267
2,625
3,230
4,624,274
4,090,970
3,406,786
2,906,365
2,452,939
3,814,651
3,422,204
2,818,492
2,320,991
1,915,631
809,623
668,766
588,294
585,374
537,308
4,624,274
4,090,970
3,406,786
2,906,365
2,452,939
1,665,566
1,417,841
1,152,970
963,774
835,686
668,677
626,720
539,660
476,289
438,085
15,498
12,646
12,083
9,691
9,427
167,873
104,227
(61,273)
(37,178)
(27,685)
1,149,264
882,702
662,501
514,972
415,859
(6,317)
(13,416)
(6,524)
16,001
(3,081)
1,142,947
869,286
655,977
530,973
412,778
23,088
16,541
17,478
17,583
8,014
1,166,035
885,827
673,455
548,556
420,792
760,928
580,217
437,746
347,713
267,200
—
—
—
—
—
760,928
580,217
437,746
347,713
267,200
—
—
—
—
—
$760,928
$580,217
$437,746
$347,713
$267,200
Buell Motorcycle
Defense and Other
Domestic
International
Gross Profit
Operating Exp—Motorcycle
Operating Exp—Corporate
H-D Financial Services
Operating Profit
Other
EBIT
Interest
PreTax Income
Net Income from Continuing Ops
Extraordinary Items
Net Income Before Disc Ops
Net Income (Loss) from Disc Ops
Net Income
5
Basic/Primary Earnings per Common Share:
Income from continuing operations
$2.52
$1.90
$1.45
$1.15
$0.88
Extraordinary items
—
—
—
—
—
Income from discontinued operations
—
—
—
—
—
$2.52
$1.92
$1.45
$1.15
$0.88
$2.50
$1.89
$1.43
$1.13
$0.86
Extraordinary items
—
—
—
—
—
Income from discontinued operations
—
—
—
—
—
$2.50
$1.89
$1.43
$1.13
$0.86
—
—
—
—
—
Basic
302,271
302,297
302,506
302,691
304,748
Diluted
304,470
305,158
306,248
307,470
309,714
$0.195
$0.14
$0.115
$0.098
$0.088
Net income
Diluted Earnings per Common Share:
Income from continuing operations
Net income
Weighted Ave Shares:
Primary
Dividends Paid
2 for 1 stock splits: 6/90, 6/92, 9/94, 9/97, and 4/00.
Note: Per FASB's Emerging Issues Task Force on "Accounting for Shipping and Handling Fees and Costs"
and "Accounting for Certain Sales Incentives", certain 2000 and 2001 year balances have been
reclassified.
6
c- Stock Price
HDI – NYSE
4:00 PM ET - Mar 22 2004
$ 51.35
$ -0.87
1,467,300
2,860
$ 51.10
$ 52.22
$ 37.25
$ 54.42
7
Financial Analysis
Liquidity Ratios and analysis
Year
CR
QR
Current Ratio
Quick Ratio
2003
2.85541337
2.63807515
2002
2.08735097
1.86700295
2001
2.32543045
2.0725154
2000
2.60629281
2.2206902
Therefore, we conclude that in year 2000 H.D. liquidity represented
by its current ratio has slightly improved from the previous year
(1999). However, the company approximately follows a constant
trend across the years of 2000 till 2003 fluctuating from 2 to 2.8 in
2003 which proves that the company is raising or making enough
cash to satisfy any of its liabilities. Looking in the cash sector on the
balance sheet, we see the accumulation of cash from year to year the
fact that strengthens H.D. position to meet its accrual expenses and
thus showing its investors how much the company is gaining.
As the leading Motor Cycle Co. in the US and other regions of the
world, Harley Davidson still face a growing number of rivals in the
global Market like Honda and BMW to name a few. But its
differentiated and luxurious products puts H.D. at the top were its
predictable manufactures limited number of vehicles consistent with
the market demand the fact that insures it sales and easily forecasts it
future profitability.
H.D. quick ratio shows how increasing inventories affect its liquidity.
Moreover, its high level of inventories explains how much it is
effecting the company’s assets compared to it liabilities.
From 2002 to 2003, we say that the company did really well by
decreasing its accumulated level of inventory.
8
1999
1.83149025
1.50607348
ASSET MANAGEMENT RATIOS:
Inventory Turnover Ratio :( Sales/Inventory)
2003
2002
2001
2000
1999
4624274/207726 4090970/218156 3406786/181115 2906365/191931 2452939/168616
=22.16times
18.75times
18.81times
15.14times
14.54times
Days of Sales Outstanding-DSO: (Receivables/ Sales/365)
2003
2002
2001
2000
1999
112406/12669.24 108694/11208.13 118843/9333.66 98311/7962.64 101708/6720.3
8.87times
9.69times
12.73times
12.34times
15.13times
Fixed Assets Turnover Ratio FATO: (Sales/Fixed Assets)
2003
2002
2001
2000
1999
4624274/1046310 4090970/1032596 3406786/891820 2906365/754115 2452939/681741
4.41times
3.96times
3.82times
3.85times
3.59times
Total Assets Turnover Ratio TATO (Sales/Total Assets)
2003
2002
2001
2000
1999
4624274/4923088 4090970/3861217 3406786/3118495 2906365/2436404 2452939/2112077
0.93times
1.06times
1.09times
1.19times
1.16times
Inventory turnover which is the sales over the inventory, appears to be
progressing in the last 5 years, which means that the management in HarleyDavidson, Inc. are doing well and taking good decisions about the timing of
buying inventory which allows them not to keep inventory high when sales
are going down and such managerial approach help in maintaining a good
inventory turnover ratio.
From the Accounts receivable, we notice that Harley-Davidson, Inc sell on
account in its daily operating activities, but it is not a problem because the
receivables section, as shown in the balance sheet and the income statement,
are using a good policy for collecting their accounts receivables and that is
shown by the decrease in the DSO ratio from 1999 to 2003.
The Harley-Davidson, Inc. is a very efficient company. Its employees are
using the available fixed assets in a proper way and by adapting to them we
see that during the previous five years their fixed assets turnover ratio
increased by around0.82 times and that is something good. On the other
hand, we can easily see that the company is not using or benefiting well
9
from all of their assets (total assets), that is noticed by looking to the TATO
ratio which is decreasing. Maybe that is because of the expired or the old
assets. One solution to such a problem is that managers at Harley-Davidson,
Inc. sell the assets that are not beneficial anymore so that to total assets will
decrease and TATO increase again.
DEBT RATIOS:
Debt Ratio: Total Debt/ Total Assets
2003
2002
2001
2000
1999
1837952/4923088 152833.6/3861217 1272300/3118495 950083/2436404 875278/211077
0.3
0.39
0.4
0.38
0.41
Times Interest Ratio: EBIT/ Interest
2003
1142947/23088
49.5%
2002
869286/16541
52.55%
2001
655977/17478
37.53%
2000
530973/17583
30.19%
1999
412778/8014
51.5%
According to Harley-Davidson, Inc. the company’s interest is recovered 51
times during 1999 and then decreased in the following two years before it
come again the same as 1999 and we can refer that to the decrease in sales
during 2000 and 2001. And as shown in the above tables, the company
didn’t add its debt or remove any of the assets which lead the debt ratio be
relatively the same.
Profitability:
Profit margin of sales =NI /SALES
2003
760,928
/4,624,274
2002
580217
/4,090,970
2001
437746
/3,406,786
2000
347713
/2,906,365
1999
267200
/2,452,939
0.16
0.14
0.12
0.12
0.10
BEP = EBIT /total assets
2003
2002
2001
2000
1999
10
1,142,947/4923088 869,286/3861217 655,977/3118495 530,973/2436404 412,778/2112077
0.23
0.22
0.21
0.21
0.19
ROA = NI /total assets
2003
$760,928/4923088
2002
$580,217/3861217
2001
$437,746/3118495
2000
$347,713/2436404
1999
$267,200/2112077
0.15
0.15
0.14
0.14
0.12
ROE =NI /common equity
2003
2002
$760,928/
$580,217/
3266
3254
232
178
2001
2000
$437,746/
3242
135
1999
$347,713/
3210
108
$267,200/
1592
167
We can see that the first three ratios of profitability are increasing in
increasing rate from 1999 to 2003 and the vise versa for the last one.
According to the profit margin of sales, we see that it is increasing during
the last 5 years because both the income and number of sales were
increasing due to the decrease in cost. And that gradual increase in profit
margin, affect directly if we want to say the BEP in the company which
show that the earnings before any taxes or paying for any interest divided by
the total assets, also increase. All of the previous facts, helped the ROA to
increase accordingly and we should say that if the managers sell or donate
the unbeneficial assets, this ratio will increase and show again that the
company is better and better. When the PM, ROA, BEP, are increasing, then
it is very difficult that the equity holders are not gaining or that their ROE
will not increase.
Market value
Price/earning (P/E) = price per share /earning per share
2003
2002
2001
2000
1999
$ 51.35/2.50
$ 51.35/1.89
$ 51.35/1.43
$ 51.35/1.13
$ 51.35/0.86
20.54
27.1
35.9
45.44
59.7
Price / cash flow = price per share / cash flow per share
11
2003
2002
2001
2000
1999
$ 51.35/2.50
$ 51.35/1.89
$ 51.35/1.43
$ 51.35/1.13
$ 51.35/0.86
20.54
27.1
35.9
45.44
59.7
12
In 2003, the Company's net revenue and net income grew 13.0
percent and 31.1 percent, respectively, making 2003 the 18th
consecutive year of record net revenue and net income. Net revenue
of over $4.6 billion was $533 million higher than in 2002, while 2003
net income of $761 million was $181 million higher than last year.
Revenue from sales of Harley-Davidson® motorcycles grew to over
$3.6 billion in 2003, an increase of 14.6 percent over 2002. Buell
motorcycle revenue of $76 million was up 13.6 percent. Revenue of
Genuine Parts and Accessories in 2003 totaled $713 million, a 13.3
percent increase over the previous year, and General Merchandise
revenue was $211 million or 8.7 percent lower than in 2002.
Harley-Davidson continues to effectively allocate its capital
investments and realized a return on invested capital (ROIC) of nearly
21 percent in 2003, which compares favorably with an estimated 6-8
percent ROIC for the S&P 500.
The Company's share price increased 2.9 percent during 2003 and
underperformed the S&P 500, which was up 26.4 percent. The
Company increased its dividend for the 11th consecutive year in 2003
and doubled its quarterly payout in the fourth quarter. Since HarleyDavidson, Inc. became a public company in 1986, shareholders have
enjoyed a compound annual growth rate of over 31 percent, along
with five 2-for-1 stock splits.
Harley-Davidson Motorcycles
Worldwide retail registrations of Harley-Davidson motorcycles grew
8.7 percent and exceeded the worldwide market growth rate for
heavyweight motorcycles for the sixth year in a row.
In North America, 2003 retail registrations of Harley-Davidson
motorcycles increased 8.2 percent over 2002. In Europe, registrations
of Harley-Davidson motorcycles increased 11.8 percent, and in the
Asia/Pacific region, where the major markets are Japan and Australia,
retail registrations of Harley-Davidson motorcycles increased 11.7
percent over 2002.
13
Last year, Harley-Davidson motorcycle shipments were a record
291,147 units, up 10.4 percent over 2002. This shipment increase and
growing worldwide demand allowed Harley-Davidson motorcycles to
achieve a greater than 30 percent share of the worldwide
heavyweight market.
Looking ahead to 2004, the Company expects demand for its products
to continue. As a result, the Company set a production target of
317,000 Harley-Davidson motorcycles. To ensure leadership in this
attractive market, Harley-Davidson will continue to increase
production capacity and to introduce exciting new products and
services that appeal to a diverse and growing motorcycle enthusiast
population.
Harley-Davidson Financial Services
Harley-Davidson Financial Services, Inc. (HDFS) continued a 10 year
run of strong earnings growth. Operating income increased from $104
million in 2002 to $168 million in 2003 as HDFS benefited from strong
motorcycle retail lending and a low interest rate market.
14
15
16
The 13.0% increase in net revenue for the Motorcycles
segment during 2003 was led by a
$460.5 million, or 14.6%, increase in Harley-Davidson
motorcycle net revenue. Harley-Davidson motorcycle
revenue was driven by the 10.4% increase in HarleyDavidson motorcycle unit shipments, but also benefited
from wholesale price increases, a slightly favorable
product mix and favorable foreign currency exchange
rates during 2003.
Wholesale price increases for the 100th Anniversary
models provided for higher average selling prices on
units sold during the first half of 2003 when compared to
the same period in 2002. As a result of the extended
100th Anniversary model year, wholesale shipments of
100th Anniversary models, carrying the same pricing,
occurred in the third quarters of both 2003 and 2002.
Finally, revenue in the fourth quarter of 2003 was only
slightly impacted by the lower wholesale prices
associated with the 2004 model year motorcycles.
Wholesale prices on the 2004 models reflect the
elimination of 100th Anniversary special edition features
and as a result are slightly lower than the wholesale
prices for the 100th Anniversary models.
During 2003 the Company experienced product mix
changes both within and between its motorcycle families.
Changes in product mix within the Company's motorcycle
families generally resulted in higher revenue during 2003
17
when compared to 2002. The net result of mix changes
between motorcycle families did not have a significant
net impact on Harley-Davidson motorcycle revenue in
2003.
Finally, foreign currency exchange rates had a favorable
effect on revenue of approximately $60 million in 2003,
primarily as a result of stronger foreign currencies in
Europe and Japan, when compared to 2002.
During 2003, Buell® motorcycle net revenue was up $9.2
million, compared to 2002, on 969 fewer unit shipments.
The average selling price per unit was higher in 2003
than in the prior year due to a change in the mix of units
sold. Buell shipments in 2003 included a higher
percentage of the more expensive XB models when
compared to 2002. Buell shipments in 2003 consisted of
8,784 XB models and 1,190 Blast models compared to
6,887 XB models and 4,056 Blast models in 2002.
During 2003, net revenue from Parts and Accessories
(P&A) totaled $712.8 million, a 13.3% increase over
2002. The 2003 increase in P&A revenue was driven
primarily by higher motorcycle shipments. P&A revenue
was positively impacted in 2003 and 2002 by sales of
100th Anniversary P&A products. Total P&A revenue for
2003 included $32.1 million from sales of 100th
Anniversary P&A products compared to $34.0 million last
year. Excluding the impact of 100th Anniversary revenue
from both 2003 and 2002 the P&A revenue growth rate
for 2003 is 14.4%. On a longer-term basis the Company
expects that the growth rate for P&A revenue will be
slightly higher than the growth rate for HarleyDavidson® motorcycle units (1).
General Merchandise revenue during 2003 was $211.4
million, down 8.7% from the same period last year. Sales
from 100th Anniversary General Merchandise products
accounted for $9.3 million of total General Merchandise
revenue during 2003 compared to $52.2 million during
2002. Sales of 100th Anniversary General Merchandise
were more heavily concentrated in 2002 in order to
prepare the Company's independent dealers for the
fourteen-month-long 100th Anniversary celebration.
18
Excluding the revenue from the sale of 100th
Anniversary products from both 2003 and 2002 the
General Merchandise revenue growth rate for 2003 is
12.7%. The Company expects that the long-term growth
rate for General Merchandise will be lower than the
growth rate for Harley-Davidson motorcycle units(1).
Gross Profit
Gross profit in 2003 of $1.7 billion was $247.7 million or
17.5% higher than gross profit in 2002. The increase in
gross profit is primarily related to the increase in net
revenue. The gross profit margin was 36.0% in 2003
compared to 34.7% in 2002. The increase in gross
margin in 2003 was driven by wholesale price increases
on 2003 models, favorable motorcycle product mix and
foreign currency exchange rates. Gross profit was higher
in 2003 when compared to 2002 by approximately $38
million from foreign currency exchange rate changes to
both revenue and costs.
Financial services income in 2003 was $279.5 million, an
increase of $68.0 million over 2002. Operating income
from financial services in 2003 was $167.9 million, an
increase of $63.7 million over 2002. The increase in
operating income in 2003 was driven by continued strong
marketplace acceptance of HDFS' finance and insurance
products as well as increased securitization related
income.
During 2003, HDFS sold $1.7 billion of retail motorcycle
19
loans through securitization transactions resulting in
gains of $82.2 million. During 2002, HDFS sold
approximately $1.3 billion of retail motorcycle loans
resulting in gains of $56.1 million. The net gain as a
percentage of the amount of loans securitized increased
from 4.39% in 2002 to 4.70% in 2003 as HDFS continued
to benefit from a favorable interest rate environment.
Gains on securitization transactions are based on certain
assumptions (credit loss, prepayment speed, and
discount rate) which are outlined in Note 3 to the
Consolidated Financial Statements.
During 2003, income on investment in retained
securitization interests increased $13.4 million over 2002
as the portfolio continued to perform better than
anticipated.
Changes in HDFS' allowance for credit losses during 2003
and 2002 were as follows:
HDFS' periodic evaluation of the adequacy of the
allowance for credit losses is generally based on HDFS'
past loan loss experience, known and inherent risks in
the portfolio, and current economic conditions. HDFS
believes the allowance is adequate to cover the losses of
principal and accrued interest in the existing portfolio.
Total operating expenses during 2003 increased $44.9
million or 7.0% compared to last year. Operating
expenses as a percent of net revenue were 14.8% and
15.6% for 2003 and 2002, respectively. Operating
expenses, which include selling, administrative and
engineering expenses, increased in connection with the
20
Company's ongoing investment in initiatives designed to
support its current and future growth objectives.
However, the increase in 2003 was partially offset by
lower net expenditures related to the Company's 100th
Anniversary celebration as compared to 2002. The
Company began its fourteen-month-long 100th
Anniversary celebration during the third quarter of 2002
and net expenses associated with the celebration were
most heavily concentrated in 2002. Comparatively, costs
incurred during 2003 for the 100th Anniversary
celebration were mostly offset by event proceeds and
sponsorships.
21
22
23
24
Stocks
Harley Davidson is a brand name for a company specializing in motorcycle
industry. This company has started its business since 18, and until now it has
shown progress in its manufacturing of a special taste if motorcycles.
In the past few years, the company has witnessed up and downs in its stock
price, and that is related to several reasons. But with this analysis, we will
focus on the years 2002 and 2003.
In the beginning of year 2002, the company’s stock price exceeded 55$ and
it went down all the way below 35$ at the end that same year. At this latter
price, the company was selling in the first quarter of 2003, then it started to
increase gradually to set at a price of 50$ at the end of the year. And
nowadays, it has already crossed above 55$ and very close to the 60s.
Now we can shed light using some of the financial statements available for
the years 2002 and 2003.
As we said before, the company was suffering in 2002 which caused a
decrease in its stock price and which is evident in its revenue section. It was
about 4 million dollars in 2002 and while it grew up to 4.6 million dollars in
2003. This led to an increase in gross profit of 247,725 $ and net income
also increased by 180,711 $ in 2003.
This increase in the production and sale of motorcycles must have
contributed to an increase in the company’s cash which is also clear in its
cash section where there is an increase of 531,521 $.
A large portion of this increase in cash was used to buy new assets maybe to
enlarge and expand the company’s plant, and this is clear in the 1 million $
increase in total assets.
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Another portion of the cash was used to pay part of the company’s debt
(short term and long term liabilities).
This is true in the decrease of 34,279 $ of current liabilities, and the decrease
of 37,016 $ of long term liabilities. This shows that the company is
producing more, selling more, earning more and able to pay part of its debt.
All these factors increased its earning per share from 1.92$ to 2.52$ and they
increased their dividends per share from 0.135$ to 0.195$.
Finally, we will present some of the ratios computed between 2002 and
2003.
Year:
2002
Current ratio:
2.08X
(Current assets/ current liabilities)
2003
2.85X
This liquidity ratio shows how the borrower’s liquidity position reflects
his/her ability to raise cash on time at reasonable cost, including ability to
meet payments where they are due.
Year:
2002
Leverage ratio:
3.19%
(Total liabilities/ Total assets)
2003
1.75%
It shows how much debt a borrower has taken in addition to the loan being
applied for.
Year:
2002
2003
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Inventory Turnover ratio: 12.25X
(Total liabilities/ Total assets)
14.24X
This operating efficiency ratio measures the effective performance of a
business firm, i.e. how effectively are assets being utilized to generate sales
and cash flows for the firm.
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