Effects of Rover Sell Off on the Financial Performance of BMW Case Study

Effects of Rover Sell Off on the Financial Performance of BMW - Case Study ExampleThis is amidst the rising gross profit margin (16.04 to 16.28) from 1998 to 199 indicating that the companion is trying to make high profit by charging a higher mark-up. Asset turnover aim also significantly declined from 1997 to 1999 reflecting the companys inability to manage assets as efficient as the previous years. In 1999, a dollar of the companys asset yields only $0.91 in total sales compared to the $1.11 in 1997. In terms of leverage, the collar year span under consideration also sees the increasing dependence on debt as a major source of financing. Total debt as a percentage of total assets is 40.92% in 1999 which is significantly higher than the 34.34% and 36.75% reported in 1997 and 1998, respectively. BMW appeared satisfactory in terms of liquidity as its current assets can more than than pay-off its immediate obligations. It current ratios are 1.33 in 1999, 1.09 in 1998, and 1.27 in 1 997. However, the ballooning of accounts receivable is evidenced by the increasing percentage of receivables to current assets which peaked to 57.36% in 1999.Three years after the sell-off of Rover, BMW seem to bolt in improving its financial position except its profitability. In fact, its computed financial ratios indicate further damage in terms of leverage, asset utilization, and liquidity.