Harley-Davidson Financial Analysis Factors Resulting Thesis

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The work of Anderson, Thakur and Wochos entitled: "A Real Options Analysis: Statistical Process Control at Harley-Davidson" states that traditional analysis of the Harley-Davidson Company renders the following:

NPV of the expansion = $217,941 (discount rate = 13%)

Payback Time = just under 2 years

ARR of the expansion = 41%

IRR of the expansion = 52.8% (nd)

III. DECREASE in NET INCOME

Harley Davidson made an announcement in October 2007 that included results for the third quarter, which ended September 30 with a stated revenue at $1.54 billion as compared to last year's same quarter of $1.64 billion, which is a 5.8% decrease. Overall income decreased by 15.3%.

IV. EPS, RETURN on ASSETS, and RETURN on EQUITY

Harley Davidson's 'Earning Per Share' (EPS) has grown at a strong rate for over ten years and from 2004 to 2005 "EPS grew from $3.00 to $3.41, an increase of 13.7%." (Melief, Bundgaard, and Hathaway, 2006) Harley Davidson is stated to have a "much better return on assets than any of its competitors." (Melief, Bundgaard, and Hathaway, 2006) the return on assets has been increased by Harley through use of "excess cash in stock buy-back program.

Return on Assets Harley Davidson Honda Suzuki Yamaha

15.50% 5.60% 2% 3.50%

16.40% 5.60% 2.80% 8.50%

18.20% 5.20% 3.60% 3.90%

Source: Melief, Bundgaard, and Hathaway, 2006

Harley Davidson further has the "highest return on equity of the group" of the four major manufacturers of heavyweight motorcycles.

Stuck Writing Your "Harley-Davidson Financial Analysis Factors Resulting" Thesis?

" (Melief, Bundgaard, and Hathaway, 2006)

Return on Equity Harley Davidson Honda Suzuki Yamaha

2003 25.70% 16.20% 4.80% 8.6%

2004 27.60% 16.20% 6.30% 18.4%

2005 31.10% 14.80% 8.10% 7.40% Source: Melief, Bundgaard, and Hathaway (2006)

V. RATIO ANALYSIS

Valuation Ratios

Company

Industry

Sector

S&P 500

P/E Ratio (TTM)

P/E High - Last 5 Yrs

P/E Low - Last 5 Yrs

Price to Sales (TTM)

Price to Book (MRQ)

Price to Tangible Book (MRQ)

Price to Cash Flow (TTM)

Price to Free Cash Flow (TTM)

Owned Institutions

Dividends

Dividend Yield

Dividend Yield - 5 Yr Avg

Dividend 5 Yr Growth Rate

Payout Ratio (TTM)

Growth Rates %

Company

Industry

Sector

S&P 500

Sales (MRQ) vs. Qtr 1 Yr Ago Sales (TTM) vs. TTM 1 Yr Ago Sales - 5 Yr Growth Rate

EPS (MRQ) vs. Qtr 1 Yr Ago EPS (TTM) vs. TTM 1 Yr Ago EPS - 5 Yr Growth Rate

Capital Spending - 5 Yr Growth Rate

Financial Strength

Quick Ratio (MRQ)

Current Ratio (MRQ)

LT Debt to Equity (MRQ)

Total Debt to Equity (MRQ)

Interest Coverage (TTM)

NM

Profitability Ratios %

Company

Industry

Sector

S&P 500

Gross Margin (TTM)

Gross Margin - 5 Yr Avg

EBITD Margin (TTM)

EBITD - 5 Yr Avg

Operating Margin (TTM)

Operating Margin - 5 Yr Avg

Pre-Tax Margin (TTM)

Pre-Tax Margin - 5 Yr Avg

Net Profit Margin (TTM)

Net Profit Margin - 5 Yr Avg

Effective Tax Rate (TTM).....

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Harley-Davidson Financial Analysis Factors Resulting Thesis

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