Examining Auto Companies Performance using Ratios ( Excel)

Introduction

• I will be performing a time series analysis of BMW's financial performance against Volksgswagen's using performance ratios.

• I acquired my data from https://www.investing.com/equities/volkswagen-ag-financial-summary and https://www.investing.com/equities/bay-mot-werke-financial-summary .

Key Insights

• The average return on capital employed by BMW from 2016 to 2019 is 2% higher than for Volkswagen.

• The average return on sales by BMW is also ~4% higher than Volkswagen.

• Interestingly, the Gross Margin, ROS, and ROCE of BMW are on a downward trajectory from 2016 to 2019.

• The Gross Margin, Return on Sales, and Return on Capital Employed is on an upward trajectory for Volkswagen from 2016 to 2019.

Summary of data

Calculating Performance Ratios

• I calculated the profitability and solvency of BMW and Volkswagen.

• The average return on capital employed by BMW from 2016 to 2019 is 2% higher than for Volkswagen.

• The average return on sales by BMW is also ~4% higher than Volkswagen.

• The average gross margin is quite similar for both companies.

• The debt-to-equity ratio is higher for Volkswagen than it is for BMW.

Visualizations

• Interestingly, the Gross Margin, ROS, and ROCE of BMW are on a downward trajectory from 2016 to 2019.

• The Gross Margin, Return on Sales, and Return on Capital Employed is on an upward trajectory for Volkswagen from 2016 to 2019.