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Harley-Davidson Inc.

Powerful Essays
Harley-Davidson Inc.

Celebrating their 100th anniversary next year, Harley-Davidson is a true American success story. From their modest beginnings in Milwaukee, Wisconsin to one of the most recognized company names worldwide, they have been passionate about motorcycles. Harley offers an experience like none other with the one of a kind look, feel, and sound only available on a Harley. Besides their main business of building and selling motorcycles, they have began to offer financing and insurance through Harley-Davidson Financial Services, and they also offer a full line of accessories and apparel to make the Harley experience complete.

Harley-Davidson, the corporation, has many things to brag about. On top of their financial success over the years, they have built a solid reputation as a fair, honest, and caring company. In January 2002, Forbes magazine named Harley-Davidson its “Company of the Year for 2001and in February, Fortune magazine selected them as one of the nation’s “Most Admired Companies.” Every employee at the company can be proud of these achievements because the corporate culture stresses the importance of all employees. While maintaining a level of success in these areas, they have managed to increase their revenues for the last sixteen years straight. Even in the economic downturn of the last year, Harley-Davidson posted record revenue and earnings.

Harley-Davidson states their mission as “We fulfill dreams through the experiences of motorcycling by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments.” They have performed wonderfully over the past hundred years, and have not forgotten their mission or where they came from. Over the years they have stuck with the things they know, and also expanded into related services and products. Out of the 151 motorcycle manufacturers, Harley-Davidson and Indian were the only two companies to survive the Great Depression. Harley-Davidson was the only one in America after Indian dropped out in 1953, but face Indian again now since they re-entered the market in 1999.

Harley-Davidson owns a twenty percent market share followed closely by Honda, Yamaha, and Kawasaki. One thing they have had to overcome in the marketplace is the stereotypical image associated with motorcycle owners. It seems the publ...

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...Tot. Debt to Equity .27 .46 Amount Borrowed/ Equity

Activity:

Inventory Turnover 12.98 7.87 Move inventory quickly

Asset Turnover 1.20 1.26 Effective utilization of assets

Receivables Turnover 4.91 6.71 Collection of receivables / year

Net Inc. / Employee 57,157 28,241 Utilization of people

Breakeven Analysis:

Assumptions:

1) Total Variable Costs are 60% of Total Costs; While the other 40% are from fixed costs.

2) All units cost the same to produce and sell for the same price.

Breakeven Point:

Total Revenue (TR) = $3,363414000

Total Variable Cost (TVC) = $1,310,045,400

Total Fixed Costs (TFC) = $873,363,600

Total Cost (TC) = $2,183,409,000

Average Variable Cost (AVC) = $5,587.48 per unit

Quantity Produced (Q) = 234,461

Profit () = 1,180,005,000

Price (P) = $14,345.30 per unit

99,723.83 =

99,724 units

Required Profit Analysis:

Assume required profit is equal to selling, general and administrative expenses so after expenses they will breakeven.

Required profit = $578,777,000

165,810.74 = 165,811 units
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