Financial Analysis BMW - Essay Example

For example the 2011 and 2012 financial reports shows that the company had a toatl of €27,038 million and €30,295 million respectively for the equity attributed to shareholders of BMW. In the year 2011, 28.9% of the shareholders equity contributede to the company toatal capiatl while in the year 2012 , 30.4% of the shareholders equity contributed to the company total capital contribution. The debt of the company is managed through a fixed debt ratio of capital . Therefore, the company debt ratios for the year 2011 and 2012 are maintaind at a fixed rate of a bout 70% or 0.

70 The BMW debt ratios are effective since they are bellow 100% which is the maximum limit the ratio , the company debt ratio further fall bellow 80% that is set by many companies hence this is a positive figure for the BMW company. the debt ratio is relative lower compared to TVS motors company that has debt –equity ratios of 0.79 for the year 2011. This is shows that the BMW company ismore competive in the market and cannot under go recervership or liquadation. BMW company uses both operating and financial lease.

the lease arrangement policy enables the customers of the company to iether have an option of buying the vehicle or lease it for a fixed pertiod of time as stated in the company leasing policy. Customers are given the oportunities under lease programe to drive a BMW vehicle of his or her choice for a fixed period of time in return for a pre-determined lease rental where the customers have the oportunities to iether retain the vehicle at a pre-determine price or return it to the BMW company. Under finance lease; the customer has a flexible chance of choosing a new BMW that best suits their driving interest and lifestyle needs.

The contract tenure can range from 12 months to 48 months with an option to buy at the end of the lease or return thec vehicle. During the finance leasing period, the payment can be