Harley Davidson

Only available on StudyMode
  • Download(s) : 677
  • Published : April 2, 2012
Open Document
Text Preview
Introduction:
Harley Davidson Inc is the leading motorcycle company in the United States, with an approximate 46% market share. It derives its revenue from the sale of motorcycles to dealers, the sales of parts and Harley Davidson accessories, and the financing of approximately 53% of its U. S. Consumer motorcycle purchases. Harley Davidson stock sold for P12.70 per share in late March 2009, down from a high of $70 in October 2007. Harley Davidson like manufacturers of big-ticket items has been hurt by the U.S. recession and the securitization liquidity crisis. Harley Davidson’s 2008 Annual Report refers to two major lawsuits, the claims of which Harley Davidson vigorously contests and which Harley Davidson has asked the courts to dismiss. These lawsuits deal with the year 2004 through April 2005, and the complaints are based on interviews with more than twenty confidential witnesses who worked for Harley Davidson. The lawsuit allege that Harley Davidson engaged in channel stuffing to inflate the sales of its motorcycles to its dealers and Harley Davidson Financial Services lowered its consumer underwriting standards to make loans to people who ordinarily would not qualify, artificially boosting its sales to meet Wall Street expectations. In effect, the lawsuits accuse Harley Davidson of making sub-prime motorcycle loans and increasing substantially the percentage of such loans in order to meet earnings estimates. Harley Davidson denies all allegations. The lawsuits further allege that there was substantial insider selling of stock while these activities were going on.

Harley Davidson founded in 1903, but it was not an overnight sensation they got their name marked in the industry until the 1980s where they got an iconic status. They now offered a range of reliable heavy weight motorcycles. The company found it profitable to tap the growing demand for nostalgia influenced styling. Throughout its styling, the company was careful to stick certain basic elements that would remain true to traditional Harley look and not offend longtime devotees. By the end of 1980s, Harley-Davidson’s comeback was complete, although its prosperity was just beginning. In 1989, the company held 63 percent in 1983. The company now offered a line of factory approved custom parts and accessories, created an expanding line of motor clothes apparel and procured licensing and manufacturing arrangements for a dizzying array of merchandise. Success also extended overseas, where sales climbed from 13% of Harley-Davidson’s total revenue in 1983 to 31 percent in 1991. In proviso that Harley Davidson has had a considerably diverse PE ratio in the precedent that is more representative of its probable potential prospects, then of course use of this PE ratio would answer in a dissimilar Po. You will desire to check with the document that you have been supplied to guarantee that you are not to use a different PE ratio for this estimation, such as the industry one. It is essential to make a note of that since there is no consistent connection between a stock's price-earnings ratio and the capitalization rate (Rs). This work involved calculating an original to determine how the rate of deserve varies with time and stock price. The result of this calculation held an outstanding differentiation to a distinguished equation. The ratio of EPS to Po measures (Ks) only if the present value of growth opportunities is equal to zero and only if reported EPS is the normal future income the firm could produce under a no-growth guiding principle. The consolidated budget, also referred to as the amalgamated budget, consists of the two main types of funds: states funds and trust funds. Core Competencies:

In the year 1993 they acquired Buell Motorcycle Company founded by former engineer of Harley Davidson. Harley Davidson set production targets of 31,000 bikes for 2004 and at least 400,000 bikes by 2007. Recall that the company produced 36,735 bikes in 1986, their total...
tracking img