Geely Auto Financial Report Analysis
Geely Auto Financial Report Analysis
1.0 Executive Summary
This report discusses the details of the Geely Automobile Company and an analysis of its financial statements in the past 5 years. The purpose of the report is an application of the knowledge learnt from the Financial Statement Analysis course, and tries to give recommendations. Rather than giving simple suggestions like buy, sell or hold the stocks, it is hoped that by analyzing the financial statements, the data can provide support for the recommendations such as the future profit and loss of Geely.
As one of the four largest independent private automobile manufacturers in China, Geely Auto has been expanding rapidly. The sale of Geely has increased from 200 units in 1998 to 329.100 units in 2009. In addition, in 2010, the purchase of Volvo greatly increases the reputation of Geely. Although the acquisition just happened few months ago, it is believed that it will beneficial to increase the market share.
Further SWOT analysis shows that, the well-established sales network and the emphasis on R&D capabilities will have a positive effect on the future growth of Geely. Moreover, the external environment such as the continuous growth in Chinese market and government policy support shows a promising future for Geely. However, there are also threats exist outside the market and weaknesses inside Geely. It is really hard to give any suggestions by simply analyzing the industry and outside environment. Therefore, the report mainly focuses on the analysis of the financial statements. Analysis includes the capital structure and solvency, liquidity, operating performance and profitability, and cash flow statements. By using common-size analysis, ratio analysis and trend analysis, taking the rapid expansion in recent 5 years into consideration. Though some results turn out to be either not satisfactory or below industry average, the overall performance of Geely is quite good. Geely was using its money
1.0 Executive Summary
This report discusses the details of the Geely Automobile Company and an analysis of its financial statements in the past 5 years. The purpose of the report is an application of the knowledge learnt from the Financial Statement Analysis course, and tries to give recommendations. Rather than giving simple suggestions like buy, sell or hold the stocks, it is hoped that by analyzing the financial statements, the data can provide support for the recommendations such as the future profit and loss of Geely.
As one of the four largest independent private automobile manufacturers in China, Geely Auto has been expanding rapidly. The sale of Geely has increased from 200 units in 1998 to 329.100 units in 2009. In addition, in 2010, the purchase of Volvo greatly increases the reputation of Geely. Although the acquisition just happened few months ago, it is believed that it will beneficial to increase the market share.
Further SWOT analysis shows that, the well-established sales network and the emphasis on R&D capabilities will have a positive effect on the future growth of Geely. Moreover, the external environment such as the continuous growth in Chinese market and government policy support shows a promising future for Geely. However, there are also threats exist outside the market and weaknesses inside Geely. It is really hard to give any suggestions by simply analyzing the industry and outside environment. Therefore, the report mainly focuses on the analysis of the financial statements. Analysis includes the capital structure and solvency, liquidity, operating performance and profitability, and cash flow statements. By using common-size analysis, ratio analysis and trend analysis, taking the rapid expansion in recent 5 years into consideration. Though some results turn out to be either not satisfactory or below industry average, the overall performance of Geely is quite good. Geely was using its money
Bibliography: DBS (8. June2010) Hong Kong/ China Company Focus; Geely Automobiles Holding; DBS Vickers Securities; Analyst: Miu, Rachel Credit Suisse (12 CIMB (28. Sep. 2010) Geely Automiles Holding LTD; CIMB Reasearch; Analyst: Cheam, The Shen JP Morgan (26 Deutche Bank (26. Aug. 2010) Geely Automiles Holding LTD; Deutche Securities Asia LTD; Analyst: Ha, Vincent Yuanta (26