Report: Financial and Strategic Analysis of Porsche, Audi, and Peugeot

This report presents a comprehensive business analysis comparing Porsche, Audi, and Peugeot. It begins with an introduction outlining the report's objectives and providing context on the automotive industry. The financial analysis section examines profitability, liquidity, and leverage ratios for each company, highlighting key performance indicators and investor information. A strategic analysis is conducted using PESTLE and Porter's Five Forces models to assess the macro and micro environments. The report proposes strategic recommendations based on the Ansoff Matrix, including market penetration and development strategies. The limitations of the financial and strategic analyses are also discussed, followed by scenario forecasting and recommendations for improving performance and addressing identified issues. The report concludes with a summary of findings and recommendations for each company.

Porsche comparing with Audi
and Peugeot

Table of Contents
INTRODUCTION...........................................................................................................................3
1.0 Report objectives...................................................................................................................3
1.1 Case context of the analysis..................................................................................................3
1.2 Overview of the organization................................................................................................3
1.3 Current key issues and rationale for choosing the organization...........................................3
2.0 FINANCIAL ANALYSIS ........................................................................................................4
2.1 Profitability...........................................................................................................................4
2.2 Liquidity and 2.3 Leverage ..................................................................................................6
2.4 Investors ...............................................................................................................................8
3.0 STRATEGIC ANALYSIS.......................................................................................................10
3.1 Macro environmental analysis............................................................................................10
3.2 Micro environmental analysis.............................................................................................11
3.3 Key Performance Indicator.................................................................................................13
4.0 PROPOSED STRATEGY- ANSOFF MATRIX.....................................................................13
4.1 Market penetration..............................................................................................................13
4.2 Market Development...........................................................................................................14
5.0 LIMITATIONS OF FINANCIAL ANALYSIS......................................................................14
5.1 Limitations of PESTLE model............................................................................................14
5.2 Limitations of Porter's Five Forces.....................................................................................15
CONCLUSIONS............................................................................................................................15
6.1 SAF analysis........................................................................................................................15
7.0 RECOMMENDATIONS MODELLING................................................................................16
7.1 Scenario forecasting- Best case scenario............................................................................16
7.2 Scenario forecasting- Worst case scenario..........................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business analysis is a technique of identifying the needs of business and determining
solutions to them. Solutions may include change in the process, change in organization policy,
change in the strategies and other changes that could be best for the organizational
business(Williams and Dobelman, 2017). It can be also said the scanning of business
environment in order to identify the problems and framing suitable solutions to them for
betterment and growth of business.
1.0 Report objectives
 To identify key issues through financial analysis in a selected business organization.
 To determine the strategic analysis by scanning the business environment and current
performance of the organization.
 To propose different strategies for the improvement of the organizational issues.
 To determine the drawbacks of the financial analysis.
 To recommend the strategies and effective measures for improving the performance and
overcome the issues by organization.
1.1 Case context of the analysis
In order to analyse the business issues three organizations namely- Porsche, Audi and
Peaugeot. All of them are car manufacturing companies and consist in the same industry.
1.2 Overview of the organization
This report is based on the study of Porsche company which is a German automobile
manufacturing company that deals in manufacturing of sports cars, SUVs and Sedans. The
company was founded in 1931 in Stuttgart, Germany and currently serves its automobile
products world wide and consists of revenues of €21.533 billion and has 24,481 employees
working for it.
1.3 Current key issues and rationale for choosing the organization.
The major issue is regarding the low profitability of Porsche company in the market as
compared to its competitors that is posing threat for the company in survival and deal the
competitors. The reason behind choosing this organization is to understand the issues faced by an
organization while competing with other firms in the same industry and what alternative

solutions or plan of action can be implemented to overcome this issues and attain a better growth
rate and market share in the industry.
2.0 FINANCIAL ANALYSIS
2.1 Profitability
Profitability ratios
Net income of Porsche Company- (Numbers in Euros €)
From the above figure it can be observed that the net income of Porsche has number of
fluctuations in every 6 months. It can be noted that during June 2017 income was €1866 millions
which had a drastic fall in December up to €1412 million. Again it rose up to €1904 million in
June 2018 and went down in December 2018 up to €1570 million. This was due to changes in
the market demand by the customers and other environmental factors(Financial ratios of
Porsche, 2019).
Net income for Audi Company-

It can be observed from the above income statement of AUDI The net income has been
declined in December 2018 with a big amount difference between €218,781 to €148813. Again it
can be observed that there is a rise in the net income of AUDI in march 2019 to €183172. This
shows that the company has the better income capacity and higher profitability among its
competitors in the industry.
Net Income for Peugeot-

From the above table it can be observed that there has been rise of income for Peugeot
Company since December 2017 from €669 million to €1481 million in June 2018 which is
almost more than double. There has been slight decline in the income growth in December 2018
but again it rose up to €1832 million in June 2019. Thus it can be observed that the growth rate
of the company is on the tremendous rise in one year of its operations.
From the above analysis of the profitability and the net income of all three organizations
it can be concluded that AUDI company is the market leader and is giving tough competition to
both Porsche and Peugeot company in terms of profitability and the income. This is due to the
variety of Car products served by AUDI that has created a brand name and preference in the
minds of customers across the world. Also, the growth rate in terms of income and profitability is
higher of Peugeot as it as made its profitability three times higher in one year of its operations
with steady growth rate of profits.
2.2 Liquidity and 2.3 Leverage
Liquidity and Leverage Ratio of Porsche-

From the above figure it can be observed that the quick ratio is 6.86% and the current
ratio comprises of 6.89 % which is quite better for the company. Current ratio is also called as
liquidity ratio for the company. The total leverage ratio that includes debt to equity ratio is 0.4%.
Liquidity and leverage ratio of Audi-

From the above figure it can be observed that the liquidity ratio of AUDI comprises of
the current ratio of 1.58 and the quick ratio of 1.16. Further it can be observed that of the
leverage ratio for the company is 2.85 and the total debt to equity ratio is 3.45(Financial ratios of
AUDI, 2019).

Liquidity and Leverage Ratio of Peugeot-
From the above figure it can be observed that the liquidity ratio for Peugeot company
comprises the Quick ratio of 0.76 and the current ratio of 0.97. Further it can be observed for the
leverage ratio by debt to equity of 43.1% and the total debt to equity of 56.26%.
2.4 Investors
Investors in Porsche company-
From the above table it can be observed that the about 30.8% of the company is being
owned by shareholders and there are 345 shareholders for Porsche company. There are overall
47,221,342 shares being held by these shareholders.

Investors in AUDI company-
From the above table it can be observed that only 0.11% of the company's total capital is
being held by shares. The company consists of only 11 share holders with the holding of 48,748
shares by them.
Investors in Peugeot company-
From the above table it can be observed that 37.29% of the company's overall capital; is
in the form of shares held by the company. There are total of 469 share holders who holds
337,438,021 of shares for the company.
The above analysis of the investors states that the Peugeot company comprises more of
share capital than AUDI and Porsche with a large number of shares held by the company by the
investors.

3.0 STRATEGIC ANALYSIS
3.1 Macro environmental analysis
PESTEL
Macro
Environmental
factors
Overview and impact on business
Political Factors Political factors include the political instability among different
countries and the regulations being framed by the government for the
business operations and policies. Porsche serve its products worldwide
and the have its dealings in different countries. The regulations by
government for the car manufacturers may be different in all countries.
The ease of doing business as well as political tensions between the
countries will affect the business of the company. For Example the
tensions between US and China in relation to trade affects the business
of automobile industry as due to its products servings in both the
countries.
Economic Factors The economic factors directly affects the business of automobile
industry as the demand for luxury and expensive vehicles falls due to
economic crises globally. However the taxes on high priced vehicles are
usually high in several countries which affects the selling of those cars
in the market. The developed countries with higher purchasing power
results in higher sales as well as profitability for automobile industry
and the countries with lower purchasing power results in low sales and
profits for the company. Hence it can be observed that the economic
conditions and factors mainly affects the business of automobile
industry(Kumar and Maqbool, 2018).
Social Factors The market of automobile industry is also affected by the social factors
and trends. Every year new models of cars are been released after

keeping the trends and preferences of people in mind by the automobile
manufacturing companies. The various models like SUV will be
preferred in some cultures or countries like middle-east and models like
Sedan will be preferred in crowded countries like India and China and
hence these factors must be considered by automobile companies before
launching their products ion the market.
Technological
Factors
Technological factors are the most important components for
automobile industry and their products. The market leaders in the
industry spend a huge investment in research and development to invent
latest technological advancement in car manufacturing that could
influence the people to buy them(Chereau and Meschi, 2018). The idea
of low fuel emissions and higher mileage is being mainly considered in
the list of technological advancement of automobile companies and
hence they affect the business of the different companies through these
components.
Environmental
Factors
These are the trending factors in the current markets. They are related
components to environmental; protection and the elements such as
carbon emission from the cars, fuel efficiency etc. The companies in
automobile industry have to highly focus on the production of low
carbon emission vehicles in order to meet the environmental needs and
sustainability.
Legal factors Law is the vital element affecting the profitability for automobile
industry. Vehicles are sold in the international market and are subject to
quality and safety products according to the laws. The pollution laws are
been strictly implemented by different governments that to be followed
by vehicle manufacturing companies. Another law includes regarding
the safety of vehicles for the passengers after accidents etc. are been
risen that affects several manufacturers of automobile industry.