FINANCIAL ANALYSIS Harley Davidson 1.

Company Highlights

Highlights
(in $millions, except per share amounts and other operating data) 2004 2003 Total revenue cost of revenue Gross Profit Operating Income Income Before tax Income After tax 5.015.190 3.115.655 1.899.535 1.361.491 1.379.486 889.766 4.624.274 2.958.708 1.665.566 1.149.264 1.166.035 760.928

Total Current Assets Total Assets

1.207.124 5.483.293

1.001.990 4.923.088

Working capital Total Current Liabilities Long term liabilities Total Liabilities Total Equity

2.093.576 495.441 800.000 1.295.441 3.218.471

1.773.354 324.305 670.000 994.305 2.957.692

2. Liquidity ratios a. Current Ratio Value 2003 : 3,09 Value 2004 : 2,44 (decrease) Definition : Harley Davidson has a great amount of assets, it makes their current ratio is above 1. Even though the amount is decreasing from 2003 to 2004, but their curret ratio is above 1 its mean company is able to pay their liability.

4 3 2 1 0 current ratio 2003 2004

2. Leverage Ratios a. Debt to Equity Value 2003 Value 2004 Definition to equity ratio 2004, but still 100%.

: 34% : 40% (increase 3%) : Harley Davidson has a great amount of assets, it makes their debt is below 100%. Even though the amount is increasing from 2003 to theyre a less-levered corporation, because the ratio is still below

40% 2003 35% 2004

30% debt to equity

3. Activity Ratios a. Total Assets Turnover Value 2003 : 0,94 Value 2004 : 0,91 (decrease) Definition : Harley Davidson shows the decreasing value of total asset turnover from 2003 to 2004, this shows indicates maybe the company not efficiency uses their assets to generate sales. 4. Debts Ratio a. Debt Ratio Value 2003 Value 2004

: 0,20 : 0,24 (increase)

Definition : Harley Davidson has a great amount of assets, it makes their debt ratio is below 1. Even though the amount is increasing from 2003 to 2004, but still they might not have a liquidity problem, because the ratio is still below 1. 5. Profitability Ratio a. Gross Profit Margins Value 2003 : 36% Value 2004 : 38% (increase) Definition : Harley Davidson shows the increasing value of gross profit margins. The gross profit margin show us that the company increasing of revenue from 2003 to 2004. b. Net Profit Margins Value 2003 : 45,7% Value 2004 : 46,8% (increase) Definition : Harley Davidson has a success sale, the net profit margin show us that the company have a great value of sales remaining after its all cost and expenses. The value is also increasing from 2003 to 2004. c. Operating Profit Margin Value 2003 : 25% Value 2004 : 27% (increase) Definition : Harley Davidson has a increasing value of operating profit. This shows us that the company have a great the operating income. d. Return On Equity Value 2003 : 26% Value 2004 : 28% (increase) Definition : Harley Davidson have an decreasing rate of return/book values of shareholder's investment from 2003 to 2004. The return on equity show us that the company increasing of profit margin from 2003 to 2004. e. Return On Investment Value 2003 : 15% Value 2004 : 16% (increase) Definition : Harley Davidson have an increasing Rate of return on assets used in the company from 2003 to 2004

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Gross Profit Margin Net profit margins Operating profit margin Return on equity Return on investment

2003 2004

CONCLUSION FROM FINANCIAL ANALYSIS

Current ratio at Harley Davidson is OK because it has a value above 1. This shows that the company is able to pay all its debts. And Harley Davidson also has a great amount of assets, it makes their debt to equity ratio is below 100%. Thats mean theyre a less-levered corporation, because the ratio is still below 100%. Total asset turnover at Harley Davidson is not good. Harley Davidson shows the decreasing value of total asset turnover. Maybe the company not efficiency uses their assets to generate sales. Debt Ratio at Harley Davidson increasing from 2005 to 2006, thats mean the company is unable to pay their debts. This shows indicates the company has a great amount of assets, it makes their debt ratio is below 1. But even though the company's debt ratio less than 1, the company will still had to raise it. Overall for profitability ratio increase from 2003 to 2004. This shows might the increase in profit margin from 2003 to 2004 resulting in a increase profit. In our opinion Harley Davidson has a great financial. If we look the financial statement of Harley Davidson, then the company should expand their business to preparing for the next century. And moreover that, Harley Davidson also should to retain their customer and focus on American market.