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Reporting analysis: Daimler-Chrysler (1998-2006)

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  1. Activity.
    1. Working capital.
    2. Receivables turnover.
    3. Payables turnover.
  2. Investment.
    1. Fixed assets analyse.
    2. Capital Expenditure analyse.
    3. The reason of year by year evolution of the capex.
  3. Liquidity.
    1. Operating cash flows.
    2. Ratios.
  4. Solvency.
    1. Debt.
    2. Equity.
  5. Margin.
    1. Gross margin.
    2. Operating & net income margin.
  6. Profitability.
    1. ROA.
    2. ROE.
  7. Strategy.
  8. Bibliography.

We assume for the analysis of the group that the impact of IFRS in year 2004 is insignificant given that IFRS and US GAAP are closed. Moreover a complete analysis was impossible given that we didn't have all the figures before 2004. From 1998 to 2006 we can see that inventories increased from $11,796 to $17,750. At the same time Sales increased, slightly, from $131,782 to $151,589 thus the inventory turnover in terms of the number of days increased from 37 to 43 days with a top in 2005 at 47 days. In 2000, the increase in inventories was mainly due to higher stocks of used vehicles at Commercial Vehicles, especially in North America. Mercedes-Benz Passenger Cars also contributed to the increase in inventories due to the growth in business and upcoming new product launches. In 2001 the increase in inventories was primarily caused by the market launch of new products in the Mercedes-Benz Passenger Cars & smart segment (€0.9 billion). The de-consolidation of the Adtranz Group had an offsetting effect of €0.5 billion. In 2002 inventories increased by 10.3 billion, in particular as a result of pending market launches for new products in the Mercedes Car Group and higher levels of used vehicles in the Services Division. On the other hand, the inventory in the Chrysler Group Division decreased.

[...] in 2001). - After these strong mutations, we can note that the ratio has been stabilised. This is in accordance with the following graph. In fact we can note a stabilization of net income and total assets from 2004 and 2006 (total assets: and net income: during this period of time) / ROCE: - Concerning the evolution of ROCE we can note the same periods of time as above. In fact the first period, from 1998 to 2002 reveals strong difficulties for the DaimlerChrysler Group with strong variations between the years and a negative ROCE at the end of FY2001. [...]

[...] The general and administrative expenses, including the turnaround plan expenses, are controlled; the effort in R&D is constant of the sales). The average R&D expenses amount to an annual investment of 5.5 bn, in order to guarantee the key factors of success in the industry, namely price, quality, reliability, safety, consumption and services. The investment in research and development is indeed a competitive advantage and a primordial factor of competitiveness and future growth. The share of the Mercedes Group booms from 30% to 45% to guarantee the technology and the comfort of its products. [...]

[...] Margin 4.1 / Gross margin 4.1 .1/ Revenue: / Cyclicality: The average sales of Daimler-Chrysler amount to 150 bn. We can notice three different periods during the ten last years. Between 1998 and 2000, the expansion is reflected by the increase in the sales from 130 bn to 160 bn thanks to a two-figure growth rate. From 2001 to 2003, there is a recession because the sales fall back to their initial level due to a negative growth. Between 2004 and 2006, the sales start another growth period, but at a slow rate. [...]

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