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Financial analysis of BMW and Kraft Foods - Essay Example
Finance & Accounting
Pages 11 (2761 words)
The report is aims to analyze two major corporations from two different industries which are BMW and Kraft Foods. BMW is renowned as one of the biggest vehicle and motorbike producing organizations internationally and Kraft Foods is one of the biggest food corporations globally. …
The researcher states that the profitability ratios of both the companies depict that Kraft Foods has higher profitability in terms of high operating margin, net profit margin and return on equity. Besides, both the firms had maintained their current ratio above 1. With respect to interest coverage ratio, BMW had higher rank than Kraft Foods which indicates that it has strong financial strength in the industry. The current economic crisis of 2008 had impacted on the financial performance of BMW Group. Due to bad financial condition, the spending of customers had reduced considerably which impacted on the expenditure on vehicles. As a result, the automobile industry had faced drop in sales volume. BMW Group was also unable to evade the impact of financial crisis and therefore the group income had reduced by 5% in the year 2008 to 53,197 million Euros. As the international economy was recovering from the clutches of economic crisis by the end of the year 2010, BMW Group was able to recover its financial position in the automobile market. The global automobile industry has also become stabilised to certain degree. In 2010, BMW Group had experienced severe increase in sales revenue by 19.3% than 2009 to 60,477 million Euros. Kraft Foods is a financially stable company with revenues of 40.4 billion USD in the year 2009. In the year 2009, the total value of net assets of the company was 25.9 billion USD. Despite bad economic conditions, the revenue of Kraft Foods was slightly affected. ...
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