ZMR INSTITUTE OF TECHNOLOGY

FACULTY OF ENGINEERING DEPARTMENT

SPRING 2015
EM 507 Financial Analysis and Engineering Economics
COMPANY REPORT

Mehmet KIRGZOLU
Faik KKL

1. INTRUDUCTION
It is obviously seen that the firm in the white goods sector has established new networks
and innovative works with emphasis on R&D and technology. Vestel is one of the biggest

company which has huge production facility and significant market share both in Turkey
and abroad with its own brand. Other firms in the same sector has become really
important innovative firms as well, like Arelik, Arnica Senur, etc.

2. ECONOMIC ANALYSIS
a. GDP (Gross Domestic Produce)
Annual Gross Domestic Product was 1 416 817 Million TL. at current prices. Annual gross
domestic product in 2012 increased by 9.2% and reached to 1 416 817 Million Turkish
Liras current prices, increased by 2.2% and reached to 117 754 Million Turkish Liras at
constant prices.
GDP by production approach increased by 4.0% compared to previous year in 2013 and
reached to 122 388 Million TL at constant prices and increased by 10.2% and reached to
1 561 510 Million TL at current prices.
The nine months growth rate of gross domestic product increased by 2.8% in the third
quarter of 2014 and reached to 93 billion 733 million Turkish Liras at constant prices. The
nine months growth rate of gross domestic product increased by 11.9% in the third
quarter of 2014 and reached to 1 trillion 296 billion 774 million Turkish Liras at current
prices. [1]
b.

Trade Deficit

In November 2012; exports increased by 24,8% and reached to 13 829 Million Dollars
and imports increased by 12,5% and reached to 20 986 Million Dollars compared with
November 2011. At the same month, foreign trade deficit decreased from 7 571 Million
Dollar to 7 158 Million Dollars.
In November 2013; exports were 14 252 Million Dollars with a 3.6% increase and
imports were 21 403 Million Dollars with a 2.2% increase compared with November
2012.
In November 2014; exports were 13 billion 132 million dollars with a 7.5% decrease
and imports were 21 billion 448 million dollars with a 0.2% increase compared with
November 2013. [1]
c.

Budget Deficit

In December 2013, budget was 18,5 billion TL deficit while budget deficit 29,4 billion
TL in December 2012. The budget deficit was 22.7 billion TL in January-December 2014,
while it was 18.5 billion TL in January-December 2013. [2]

d.

Interest Rate

The interest rate in Turkey between the years 2012-2014 is shown in the graph below.
[3]

e.

Unemployment Rate

Unemployment rates between the years 2012 - 2014 are in the table (with the
values of beginning and end of the year) and shown in the graph.[3]

Unemployment
Rate

2012

2013

2014

9,2

9,7 - 9,1

9,2 - 10,7

SECTOR ANALYSIS
a. About The White Goods Industry

3.

White Goods Industry, included in the scope of electricity appliances as well as

durable goods, possesses a wide range of products due to the varying technologies it
incorporates. Refrigerator, deep freezer, washing machine, dryer, dishwasher and oven
are regarded as the six main products whereas durable goods such as cookers, vacuum
cleaners, toasters, food processors, fruit presses, blenders, and mixers are included in
the small home appliances category. Products such as air-conditioners, water heaters
and water purifiers are also counted among the electricity home appliances.
With its production capacity of 25 million units and actual production of 21 million
units, the white goods industry has become a significant focus of production in the last
10 years and Turkey has become the LEADING country in Europe in the white goods
sector.
The industry, having achieved 14 million units in exports, is exporting 70% of its
manufacture to more than 100 countries in such markets as European countries,
neighbouring countries and Africa.
The Turkish market used to sell 2 million units in domestic sales in the 1990s;
however, in the last 5 years, domestic sales have gone up to 5 million units and
achieved another record by rising up to 6.5 million units by the end of 2011.
The white goods companies operating in Turkey are making significant investments in
the R&D (Research and Development) area and they are able to achieve success in the
world as a result of the competitive power they gain through these investments. In the
last 10 years, improvements in the energy efficiency of the products have reached up to
65%.
The white goods sector also strikes out with the number of its patent applications.
Having assumed a leading position in many white goods categories, Turkey is making a
significant impact in the world with the washing machine that consumes the least water,
the dishwasher that washes fastest and consumes the least water, the refrigerator and
tumble dryer that consumes the least energy, the most silent washing machine,
dishwasher and oven.

b.The Use of White Goods & Energy Conservation

Home appliances can be used with less energy without affecting the desired level of
service and comfort. It is possible to ensure a reduction in electricity bills by using
efficient home appliances. Efficient appliances might be more expensive than similar
models but the difference paid when buying efficient appliances returns through the
reduction in electricity bills.
When buying white goods, it is important to compare the products not only on a pricebasis but also on the basis of their energy efficiency. Even though the investment cost of
a more energy efficient device is higher, the energy savings it will provide during its 10
to 15 years of service life will return the difference. When buying home appliances, keep
in mind that the ones bearing A and higher marks are the most efficient. It should be
remembered that there is more than 60% difference between the consumptions of
highly efficient and very low efficiency devices.

c.Energy Label
Energy label is designed to provide consumers with accurate, recognisable and
comparable information on domestic household products regarding energy
consumption, performance and other essential characteristics.
It allows consumers to identify how energy efficient a product actually is and to assess
a products potential to reduce energy costs.
The label is uniform for all products in a given category. Consumers can compare
easily the characteristics of appliances in a given category such as energy or water
consumption, or capacity.
The label initially classified products from A to G, A being the most efficient energy
class and G the least efficient.
Turkish legislation introduces three additional classes, A+, A++ and A+++, can be
added to the current A to G classification scale to adapt to technological developments
and to allow further product differentiation in terms of energy efficiency.
Coloured arrows differentiate energy efficient from lower energy efficient products:
dark green indicates a highly efficient product and red a low efficient product.
Refrigerator
- 7 classes maximum from A+++ to D
- Coloured arrows are used to differentiate energy efficient from lower energy
efficient products: dark green indicates a highly efficient product and red a low efficient
product
- Pictograms highlight selected performances and characteristics:
- Annual energy consumption in kW
- Capacity of all storage compartments in litres
- Capacity of frozen food storage compartments in litres
- Noise emissions in decibels
- The energy class is based on the energy efficiency index which takes into
account:
- The annual energy consumption
- The volume
- The lowest temperature of different compartments
Other factors affecting this index are the type of construction (built in or free
standing) and the availability of frost free feature.

Washing Machine
- 7 classes maximum: from A+++ to D
- Coloured arrows are used to differentiate energy efficient from lower energy
efficient products: dark green indicates a highly efficient product and red a low efficient
product
- Pictograms highlight selected performances and characteristics:
- Annual energy consumption in kWh
- Noise emissions in decibels
- Spin-drying efficiency class
- Capacity in kilograms
- Annual water consumption in litres
- The annual energy & water consumptions, and the spin-drying efficiency class
indicated on the label, are calculated on the basis of:
- 60C cotton programme at full and partial load
- 40C cotton programme at partial load
- Left-on mode and in off-mode
- Values for the annual water consumption and the spin-drying efficiency class are
based on the same set of washing cycles as the energy consumption data
- All washing machines with a rated capacity greater than 3 kg, must have an A
class washing performance. Washing performance is then no longer indicated on the
label.
Dishwasher
- 7 classes: A+++ to D
- Coloured arrows are used to differentiate energy efficient from lower energy
efficient products: dark green indicates a highly efficient product and red a low efficient
product
- Pictograms highlight selected performances and characteristics:
- Annual energy consumption in kWh
- Noise emissions in decibels
- Capacity in place settings
- Drying efficiency class
- Annual water consumption in litres (no longer per cycle)
- The energy class is measured from:

- The annual energy consumption of standard cleaning cycles, when

loaded with the declared place settings
- The power and the time duration in the left-on mode
- The power and the time duration in the off-mode
- The cycle information on the label is based on the standard programme which is:
- suitable to clean normally soiled tableware
- is the most efficient in terms of combined energy and water
consumptions
- All dishwashers must now have an A class cleaning performance. Cleaning
performance is then no longer indicated on the label.
Electric ovens
- 7 classes: A to G
- Coloured arrows are used to differentiate energy efficient from lower energy
efficient products: dark green indicates a highly efficient product and red a low efficient
product
- Electric oven performances and characteristics are shown on the label:
- Energy consumption in kWh for the heating function(s)
(conventional and/or the forced air convention) (of appliances) based on standard load
- Usable volume of the cavity in litres
- The size of appliance determined as follows:
Small: 12 l < volume < 35 l
Medium: 35 l < volume < 65 l
Large: 65 l < volume
- Noise emissions in decibels

Air conditioner
- 7 classes: A to G
- Coloured arrows are used to differentiate energy efficient from lower energy
efficient products: dark green indicates a highly efficient product and red a low efficient
product
- Air conditioner performances and characteristics are shown on the label:
- Annual energy consumption, kWh in cooling mode
- The Energy Efficiency Ratio of the appliance in cooling / heating
mode at full load

- Cooling / Heating capacity in kW

- Noise emissions in decibels

4. ABOUT THE COMPANY

Vestel White Goods
Demonstrating a strong growth trend since its foundation in 1997, Vestel Beyaz Eya
is today positioned as one of the major white goods manufacturers in both the Turkish
and the European markets. Vestel Beyaz Eyas manufacturing facilities are located in
Manisa, Turkey. The Company undertakes its manufacturing activities at Vestel City, the
largest industrial complex in Europe in a single location, by deploying state-of-the art
technologies. Manufacturing refrigerators, washing machines, cookers, dishwashers, air
conditioners and water heaters in an enclosed area of more than 311,000 m, Vestel
Beyaz Eya has become a major player in all of the markets where it operates thanks to
its high production capacity and its capability to develop new technologies. Ranking
among the top manufacturers in Europe to employ the latest technology, Vestel Beyaz
Eya is one of Turkeys top three and Europes top ten white goods manufacturers.
Vestel Beyaz Eya is one of Europes largest original design manufacturers (ODM).
Selling its products in EU countries on an ODM basis, Vestel Beyaz Eya also pursues a
strategy of expansion under the Vestel brand in Turkey, the MENA region and CIS
countries, especially Russia. With a strong R&D organization, Vestel Beyaz Eya goes to
great lengths to bring more comfort to millions of homes with its continuously
expanding portfolio of environmentally friendly products which globally address a wide
consumer mass. Flexible production capability, high production capacity, product
differentiation competence, proximity to Europe, and low unit labour costs are Vestel
Beyaz Eyas key competitive advantages which reinforce its position in the market.
Vestel Beyaz Eyas marketing-sales services are undertaken by Vestel Ticaret. Vestel
Ticarets
logistics-distribution
capabilities,
widespread
dealer
network
and
technologically well-equipped service network reinforce our strong brand image in the
domestic market. After-sales services are provided by the authorized service centres
and the Vestel General Directorate of Customer Services. Flexible production capability,
high production capacity, competence in product differentiation, the logistical
advantages of its proximity to Europe and low labour costs are Vestel Beyaz Eyas key
competitive advantages which reinforce its position in the market. 14 Vestel Beyaz Eya
2013 Faaliyet Raporu Vestel Beyaz Eya is currently active throughout Turkey with the
Groups:
1,160 Vestel stores
14 Vs Outlets
726 dealers with Regal signboards
E-store
Vsoutlet.com.tr

 331 authorized service centres

15 central services
In Europe and other regions:
The Company carries out its marketing-sales activities in France, Germany, Spain,
Finland, Kazakhstan, Romania, the UK and the Netherlands through Vestels international
offices and local sales-distribution channels; and in Russia and in the Middle East and
the CIS through a total of 2,750 stores and sales points.[4]

Shareholders
Vestel Elektronik*
Other
Public Shares
Total

Stock Value (TL)

130.199.992
8
59.800.000
190.000.000

(%)
68,53
0,00
31,47
100,00

5.SWOT ANALYSIS OF WHITE GOODS SECTOR IN TURKEY

The strengths of the leading brands who engaged in production of White goods
sector like Arelik, Vestel, Bosch and Indesit, can be listed as follows.

Arelik : (Arelik, Beko ,Altus)

The highest share in domestic sales
Be a part of one of the biggest groups in Turkey (KO) and having two more
brands. These are Beko and Altus.
Having adequate infrastructure for a much better performance
Making some of the major important brand purchasing in abroad.
Having competitive structure both domestic and foreign firms and the success in
White goods.
Having a happy customer base who are more effective advertising than TV and
newspapers.
Vestel : (Vestel, Regal)
Having aggressive, enterprising and strong management.
The presence of significant projects such as Europe's largest TV facilities passed to
Life
The new and reliable image for consumer dissatisfaction or unhappiness of
customers across the market and being a good alternative to its competitors
Begin to exceed their competitors in the export amount.
Having many known firms purchase license on Europe.
Bosch : (Bosch,Siemens,Profilo)
Consisting of a very high customer satisfaction in the products sold as original
German made before the start of production in Turkey in the 1980s,

Being known as a high tech firm.

Reliable image with its advertisements.
Ariston : (Ariston,Indesit)
Being a new alternative to customers
The different designs in the products.
The weaknesses of the white goods brands in Turkey are as follows.

Arelik : (Arelik, Beko ,Altus)

Inability to produce quality goods and high customer dissatisfaction in small house
appliances comparing with only the competitors operating in this group like Tefal and
Arzum.
Although having many dealers most of them have problems with not having
enough attention and support.
Vestel : (Vestel, Regal)
On the contrary Its electronic products, the firm does not provide the same quality
in white goods
Lack of common and successful services such as Arelik or Bosch

Bosch : (Bosch,Siemens,Profilo)
There are some shortages in sales points and the amount of necessary products
cannot be provided.
The absence in electronics group, not producing TVs or cell phones.

Ariston : (Ariston,Indesit)
Lack of home appliances and electronics group
It is less than the competitors' advertising and promotional activities

The opportunities in white goods sector are listed on the below.

On the contraction of the domestic market, producers have an opportunity to
engage in producing products for export.
Selling cheaper and quality products in Europe in comparing with European white
goods producers.
The high exchange rate made import products more expensive than domestic
products and domestic producers gained advantage in domestic market.
Labour costs are lower compared with the European average.
New generation of quality products keep alive the customer demand
The Threats to the making production in white goods sector are these,
The purchase of most of the white goods depends on the persons income and that
poses risk in white goods sector.
The governments support to industry is low rate for productions, sales and exports
of white goods.
Direct and indirect taxes are high
Very high risk at sales by reducing prices and long term.
Sending more goods than necessary to the dealers to melt the stock of companies
and because of that reason compressing liquidity the dealers.

10

Selling goods with incorrect competition or transferring goods to spot market by

lowering prices by the dealers for just save the day.

6.RATIO ANALYSIS
Financial ratios are the most common and widespread tools used to analyse a
business' financial standing. Ratios are easy to understand and simple to compute. They
can also be used to compare different companies in different industries. Since a ratio is
simply a mathematically comparison based on proportions, big and small companies can
be use ratios to compare their financial information. In a sense, financial ratios don't take
into consideration the size of a company or the industry. Ratios are just a raw
computation of financial position and performance. In the below we see tables of Vestel
(VESBE) for the last 3 years balance sheet and Arcelik (ARCLK) balance sheet for 2014.

2012

2013

2014

ARCEL
K
2014

221.283

324.125

229.782

2.124.946

27.218

18.576

163.711

1.621.221

Current Assets

954.766

963.168

1.145.537

8.471.757

Fixed Assets

360.461

389.755

403.900

3.923.248

VESTEL

Assets
Inventories
Cash

Total Assets

1.315.227 1.352.923 1.549.437

12.395.
005

Liabilities
Total Short Term Lia.

720.139

556.330

649.202

4.430.803

Total Long Term Lia.

103.832

255.789

237.672

3.565.504

Total Liabilities

823.971

812.119

886.874

7.996.30
7

Total Equity

491.256

540.804

662.563

4.398.698

Total Lia. And Shareholders'

Equity
Total Debt

376.000

292.000

119.000

12.395.
005
4.768

Depreciation

63.790

74.367

84.070

346.293

Interest Expenses

23.555

24.338

17.245

314.010

52.412

178.459

300.337

3.978.832

Gross Profit

1.315.227 1.352.923 1.549.437

11

Operating Profit/Loss

-28.875

127.424

149.666

968.789

-3.580

127.000

150.000

731.622

Pre-tax profit from continuing

operations

-17.505

53.451

152.159

1.001.832

Net Income

-17.544

52.689

131.177

637.978

Cost of Goods Sold (COGS)

1.830.965

1.850.236

2.036.804

8.535.201

Sales

2.143.000

2.028.695

2.337.141

12.514.03
3

Accounts Receivable (A/R)

685.525

603.408

708.307

4.433.898

Accounts Payable (A/P)

413.000

452.000

556.000

1.781.442

Shares Outstanding

190.000

190.000

190.000

676.000

Dividend per Share

0.10

0.13

0.15

722.799

EBIT

*All the values are in bin TL and taken from www.isteyatirim.com [5].

2012

2013

ARCELI
K
2014
2014

VESTEL

RATIOS
1. Liquidity Ratios

Formulas

Current Ratio

Current Asset / Current

Liabilities

1,33

1,73

1,76

1,91

Quick Ratio

(Current Asset - Inv.) /

Current Liabilities

1,02

1,15

1,41

1,43

Cash Ratio

Cash / Current Liabilities

0,04

0,03

0,25

0,37

Net Working Capital

Current Asset - Current

Liabilities

234.6
27

406.8
38

Total Debt Ratio

Total Debt / Total Asset

0,29

0,22

0,08

0,00

Debt/Equity Ratio

Total Debt / Total Equity

0,77

0,54

0,18

0,00

Equity multiplier

1 + (Total Debt / Total

Equity)

1,77

1,54

1,18

1,00

Times Interest Earned

EBIT / Interest Expenses

-0,15

5,22

8,70

2,33

Cash coverage Ratio

(EBIT + Dep.) / Interest

Expenses

2,56

8,27

13,57

3,43

Cost of Goods Sold / Inv.

8,27

5,71

8,86

4,02

496.3 4.040.9
35
54

2. Debt Ratios

3. Asset Management
Ratios
Inventory Turnover

12

Days Sales in Inv.

365 / Inv. Turnover

44,11

63,94

41,18

90,87

Accounts Receivable
Turnover

Sales / Account
Receivable

3,13

3,36

3,30

2,82

Days Sales in A/R

365 / Account Receivable

Turnover

116,7
6

108,5
6

110,6
2

129,32

Total Asset Ratio

Sales / Total Asset

1,63

1,50

1,51

1,01

Profit Margin

Net Income / Sales

-0,01

0,03

0,06

0,05

Return on Asset

Net Income / Total Asset

-0,01

0,04

0,08

0,05

Return of Equity

Net Income / Total Equity

-0,04

0,10

0,20

0,15

22,5

19,70

11,10

12,10

-0,09

0,28

0,69

0,94

2,2

2,6

3,55

4,55

2,59

2,85

3,49

6,51

4. Profitability Ratios

5. Market Value
Ratios
Price / Earnings Ratio
Earnings Per Share (EPS)
Market to Book Ratio
Book Value Per Share

Market Price Per Share /

Earnings Per Share
Net Income / Share
Outstanding
Market Price Per Share /
Book Value Per Share
Total Equity / Shares
outstanding

a. Liquidity Ratios
Current Ratio
The current ratio is the most basic liquidity test. It signifies a company's ability to
meet its short-term liabilities with its short-term assets. A current ratio greater than or
equal to one indicates that current assets should be able to satisfy near-term obligations.
A current ratio of less than one may mean the firm has liquidity issues. It should be at
least 2 for the companies. As we see from the table the current ratio of Vestel is
improving year by year and Arceliks liquidity is higher than Vestel.

Quick Ratio
The quick ratio is a tougher test of liquidity than the current ratio. It eliminates
certain current assets such as inventory and prepaid expenses that may be more difficult
to convert to cash. Like the current ratio, having a quick ratio above one means a
company should have little problem with liquidity. The higher the ratio, the more liquid it
is, and the better able the company will be to ride out any downturn in its business. As
Vestels quick ratio is improving it is good for the company and Arcelik quick ratio are
higher than Vestels which shows us Arceliks situation is better than Vestels.

Cash Ratio
The ratio of a company's total cash and cash equivalents to its current liabilities. It
should be at least 0.5 however Vestels and Arceliks cash ratio is less than 0.5 which are
not good.

Net Working Capital

13

As it is higher it is better for the company. As bigger it is, the liquidity of the firm is
bigger. As Vestels net working capital is increasing it is good for the company. In
comparison with Arcelik net working capital Vestels is very low.

Vestel Liquidity Ratios

2.00
1.80
1.60
1.40

Current Ratio

1.20
Ratios

Quick Ratio
Cash Ratio

1.00
0.80
0.60
0.40
0.20
0.00
2012

2013

2014

b. Debt Ratios
Total Debt Ratio
Debt Ratio is a financial ratio that indicates the percentage of a company's assets
that are provided via debt. It needs to be a low value for the companies. As we see from
the tables Vestels Debt Ratios are deteriorating and Arceliks debt ratio is zero which is
very good for it.

Debt/Equity Ratio
A measure of a company's financial leverage calculated by dividing its total
liabilities by stockholders' equity. It indicates what proportion of equity and debt the
company is using to finance its assets. It needs to be a low value for the company. As
Vestels debt equity ratio is deteriorating, it is good for the company. However in
comparison with Arcelik we see that Arceliks Debt Equity ratio is zero which is better
than Vestel.

Equity multiplier
The ratio of a companys total assets to its stockholders equity. The equity
multiplier is a measurement of a companys financial leverage. Companies finance the
purchase of assets either through equity or debt, so a high equity multiplier indicates that
a larger portion of asset financing is being done through debt. The multiplier is a variation
of the debt ratio. We can say the same things with the debt equity ratios above.

14

Times Interest Earned

A metric used to measure a company's ability to meet its debt obligations. It is
calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it
by the total interest payable on bonds and other contractual debt. It is usually quoted as
a ratio and indicates how many times a company can cover its interest charges on a pretax basis. Failing to meet these obligations could force a company into bankruptcy. When
we look at the tables Vestels times interests earned values is improving and this is good
for the company. Vestel times interest earned value is higher in comparison with Arcelik.

Cash coverage Ratio

The cash coverage ratio is useful for determining the amount of cash available to
pay for a borrower's interest expense, and is expressed as a ratio of the cash available to
the amount of interest to be paid. This ratio is improving in last 3 years. It is also higher
than Arcelik.

Vestel Debt Ratios

16.00
14.00

Ratios

12.00

Total Debt Ratio

10.00

Debt/Equity Ratio
Times Interest Earned

8.00

Cash coverage Ratio

6.00
4.00
2.00
0.00
2012
-2.00

2013

2014

c. Asset Management Ratios

Inventory Turnover
A ratio showing how many times a company's inventory is sold and replaced over
a period. This ratio needs to be as possible as high. As we see Vestels ratios are
fluctuating however the trend is high and about 8,7. When Vestels inventory turnover is
better than we compare it to Arcelik.

Days Sales in Inv.

A financial measure of a company's performance that gives investors an idea of
how long it takes a company to turn its inventory (including goods that are work in
progress, if applicable) into sales. Generally, the lower (shorter) the DSI the better, but it
is important to note that the average DSI varies from one industry to another. Vestels
days sales in inventory ratios is improving and it is better than Arcelik.

Accounts Receivable Turnover

An accounting measure used to quantify a firm's effectiveness in extending
credit as well as collecting debts. The receivables turnover ratio is an activity ratio,
measuring how efficiently a firm uses its assets. This ratio is stable for Vestel and better
than Arcelik.

Days Sales in A/R

15

The days' sales in accounts receivable ratio, also known as the number of
days of receivables, tells you the average number of days it takes to collect an account
receivable. Since the days' sales in accounts receivable is an average, you need to be
careful when using it.The calculation for determining the days' sales in accounts
receivable is the number of days in the year (usually 360 or 365 days is used) divided by
the accounts receivable turnover ratio for a specific year. This ratio is about 110 days for
Vestel and we see it is stable. Moreover this ratio of Vestel better than Arcelik which is
129,3.

Total Asset Ratio

The total asset turnover ratio measures the ability of a company to use its
assets to efficiently generate sales. This ratio considers all assets, current and fixed.
Those assets include fixed assets, like plant and equipment, as well as inventory,
accounts receivable, as well as any other current assets. This ratio needs to be higher
than 1.
Vestels total asset ratios seem stable for the last three years. Vestels total asset ratio is
better than Arcelik, when we compare the total asset ratios of Vestel and Arcelik.

Asset Management Ratios

10.00
9.00
8.00

Ratios

7.00

Inventory Turnover

6.00

Accounts Receivable
Turnover

5.00

Total Asset Ratio

4.00
3.00
2.00
1.00
0.00
2012

2013

2014

d. Profitability Ratios
Profit Margin
A ratio of profitability calculated as net income divided by revenues, or net profits
divided by sales. It measures how much out of every dollar of sales a company actually
keeps in earnings. Vestels profit margin is improving for last three years. Vestels and
Arceliks profit margin is almost same for the 2014.

Return on Asset
An indicator of how profitable a company is relative to its total assets. ROA gives
an idea as to how efficient management is at using its assets to generate earnings.
Calculated by dividing a company's annual earnings by its total assets, ROA is displayed
as a percentage. Sometimes this is referred to as "return on investment". When we look
at the ratios Vestels values are improving as the time passes. Vestels ratio is better
than Arceliks for 2014.

16

Return of Equity
The amount of net income returned as a percentage of shareholders equity. Return
on equity measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested. Vestels return of equity ratios are
improving as the time passes. Vestels ratio is better than Arceliks for 2014.

Profibility Ratios
0.25

0.20

0.15

Profit Margin
Return on Asset

Ratios

Return of Equity

0.10

0.05

0.00
2012

2013

2014

-0.05

e. Market Value Ratios

Price / Earnings Ratio
A valuation ratio of a companys current share price compared to its per-share
earnings. This ratio needs to be low value. Vestels price/earnings ratios are improving
and better than Arceliks.

Earnings Per Share (EPS)

The portion of a companys profit allocated to each outstanding share of common
stock. Earnings per share serve as an indicator of a companys profitability. This ratio
needs to be high value. Vestels ratio are improving. However Arcelik is greater than
Vestels earnings per share ratio.

Market to Book Ratio

A ratio used to find the value of a company by comparing the book value of a firm
to its market value. Book value is calculated by looking at the firm's historical cost, or
accounting value. Market value is determined in the stock market through its market
capitalization. Vestels market to book ratio is improving. When we compare Arcelik and
Vestel, Arcelik market to book ratio is greater than Vestel.

Book Value Per Share

A measure used by owners of common shares in a firm to determine the level of
safety associated with each individual share after all debts are paid accordingly. [6]When

17

we look at book values per shares Vestels ratios are improving, but Arcelik 2014 ratio is
greater than Vestels 2014 book value per share ratio.

Vestel Market Value Ratios

24

19
Price / Earnings Ratio
Earnings Per Share (EPS)

14

Market to Book Ratio

Ratios

Book Value Per Share

9

-1
2012

2013

2014

7.REFERENCES
[1]
[2]
[3]
[4]
[5]
[6]

www.turkstat.gov.tr
www.bumko.gov.tr
www.tradingeconomics.com
www.vestel.com.tr
www.isteyatirim.com
www.investopedia.com/terms

18