Financial Statement Analysis : BMW Group

Financial Statement
Analysis

EXECUTIVE SUMMARY
Financial statement includes profit and loss account, cash flow statement and balance
sheet which helps organization in analyzing their financial performance through ratio analysis.
By making analysis of financial statement, company is able to make effectual business decisions
which help them in achieving success. In the present report, profitability, liquidity and solvency
aspect of the Daimler and BMW will be analyzed. In addition to this, the present research will
also provide information about the future growth of firm. From this research, it has found that
financial performance and position of Daimler are sound as compared to BMW. Besides this,
future of Daimler is very bright as business entity mainly focuses on contributing towards the
growth and development.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION ..........................................................................................................................2
1. Daimler financial performance...............................................................................................3
2. Assessment of the financial position.......................................................................................4
3. Discussion of scandal and its impact......................................................................................6
4. Innovation and growth............................................................................................................7
5. Future prospectus of Daimler automotive group....................................................................8
CONCLUSION................................................................................................................................8
RECOMMENDATIONS................................................................................................................9
REFERENCES..............................................................................................................................10
APPENDICES...............................................................................................................................12

INTRODUCTION
Financial statement analysis may be served as a tool in which manager or director of the
firm makes evaluation of the accounting reports of business. By reviewing and studying profit
and loss account, cash flow statement and balance sheet through ratio analysis, business
organization is able to make effectual decisions (Uechi and et.al, 2015). With the help of such
analysis, commercial entity is able to make suitable changes in their existing policies and
strategies. The present report will examine the financial performance of Daimler and its
competitor namely BMW. Daimler is the largest German manufacturer of automobiles. In 2014,
Daimler sold 2.4 million vehicles which entails the story of growth and success of the brand.
Ultra luxury edition of Mercedes Benz S-class is one of the strengths of this firm. Besides this,
Daimler offers employment to 279972 people and thereby, makes contribution in the
development of economy. The study will shed light on the financial performance of Daimler,
BMW and the overall global automotive market. This report will provide information about the
future growth and development aspect of Daimler.
1. Daimler financial performance
Financial performance of Daimler and its competitor BMW can be evaluated by the
management and different stakeholders of the firm through profitability ratios. Gross and net
profit ratios are the main indicators which help management and different stakeholders in
decision making aspects (Bay, Chan and Walczyk, 2015).
Financial performance analysis of Daimler: According to the ratio analysis, it has been
identified that gross profitability aspect of the firm decreased in 2013 and 2014 as compared to
previous years. In 2012, gross profitability of the business organization was 22.29%. Whereas, it
was 21.30% in 2013 and 21.70% in 2014 (Daimler Annual Report, 2014). This aspect clearly
reflects the slowdown in the growth and performance of Daimler. On the basis of this aspect, it
can be stated that company fails to generate high level of sales as compared to the expenditures
made by them (Parsons and et.al., 2015).
In addition to this, net profitability of the firm also shows declining trend and thereby,
negatively affects their corporate image. In 2013, there was significant increase in the net income
of business entity. Net profit ratio of Daimler was 5.98% in 2012 whereas, it increased by 2.39%
in 2013. Such increment in the ratio helped organization in attracting large number of investors.
Moreover, dividend decision of the corporation is highly dependent upon the net income
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