Harley Davidson Financial Statements and Financial Ratios Analyzed from 2015 to 2019
Expert Harley Davidson Financial Report & Analysis by Paul Borosky, MBA.
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Hey All,
Thanks for visiting my Harley Davidson Financial Report page. On this page, you will be able to find preliminary information about Harley Davidson’s current financial performance as well as some historical track records and trends.
For a more detailed examination of Harley Davidson’s financial performance, please check out the “Financial Report”. In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:
- Summarized income statement for the last 5 years.
- Summarized balance sheet for the last 5 years.
- Summary analysis by myself of the important income statement, balance sheet, and financial ratio trends and other happenings.
- Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
- Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
- Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
- Each section includes an “in other words” segment. This is where I use plain English to explain concepts.
Enjoy the preliminary information and for a more detailed analysis, buy the financial report!
Sincerely,
Paul, MBA.
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Sample Financial Report
Harley-Davidson: Brief Summary
Harley-Davidson Inc. has their headquarters in Milwaukee, Wisconsin. The organization competes in the recreational vehicle industry, specifically the consumer cyclical section. At present, the company has approximately 5,600 employees. Their main revenue generators are the sales of custom motorcycles and related products. The company competes in the United States, throughout Latin America, Europe, the Middle East, and has a footprint in Asia.
From a financial perspective, Harley-Davidson has a market Currently of approximately $4.5 billion. The beta is 1.46 which indicates that the company’s stock is moderately more risky as compared to the overall market. Harley-Davidson’s 52-week stock price range has fluctuated between $14.31 to $40.89. Unfortunately, the company’s stock price is trending down.
Harley Davidson Financial Report Sources
“Harley Davidson 2019 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan. In this report, I used Harley Davidson 2018 10k, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and 2019 10k annual report as the basis for information gathering.
Section 1: Harley Davidson Income Statement Analyzed 2015 to 2019
In this section, I walk through a broad definition as to what an income statement is and why it is important. From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I finally offer a summary analysis of Harley Davidson important income statement line item trends from 2015 to 2019, in most cases.
Harley-Davidson Revenue Growth.
In 2015, Harley-Davidson had revenues of approximately $5.99 billion. In the next four years, the organization’s revenues would fall moderately to $5.3 billion in 2019. The continuous falling revenues may be a significant factor in the correlated stock price movement. In other words, as Harley-Davidson’s revenues continue to fall, so should their stock price. From this, investors need to closely monitor total revenues for the company.
Harley Davidson 2019 Income Statement Summary | |||||
| Column1 | 2019 | 2018 | 2017 | 2016 | 2015 |
| Revenues | 5,361,789 | 5,716,875 | 5,647,224 | 5,996,458 | 5,995,402 |
| COGS | 3,229,798 | 3,351,796 | 3,272,330 | 3,419,710 | 3,356,284 |
| Gross Profit | 2,131,991 | 2,365,079 | 2,374,894 | 2,576,748 | 2,639,118 |
| SG&A | 1,199,056 | 1,258,098 | 1,180,176 | 1,217,439 | 1,220,095 |
| Depreciation | 2,244,959 | 2,332,229 | 2,317,541 | 2,279,932 | 198,074 |
| R & D | |||||
| Other | |||||
| Operating Expenses | 4,806,181 | 5,003,352 | 4,765,143 | 4,947,522 | 4,839,707 |
| EBIT | 555,608 | 713,523 | 882,081 | 1,048,936 | 1,155,695 |
| Other Income | |||||
| Interest Expense | 31,078 | 30,884 | 31,004 | 29,670 | 12,117 |
| EBT | 557,415 | 686,629 | 863,839 | 1,023,911 | 1,150,163 |
| Taxes | 133,780 | 155,178 | 342,080 | 331,747 | 397,956 |
| Net Income | 423,635 | 531,451 | 521,759 | 692,164 | 752,207 |
Section 2: Harley Davidson Balance Sheet Analyzed from 2015 to 2019
For Harley Davidson balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define their balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019. Next, I then offer a summary analysis of their important balance sheet line items.
Short-Term Investments.
Harley-Davidson short-term investments ended 2015 at 45.1 million dollars. In the next year, there short-term investments would fall to 5.5 million. The following three years were fluctuated between 10 million to nothing at all. This indicates that the organization has continually relied upon their short-term investments for supporting operational needs. From this hypothesis, the company may face short to moderate term liquidity struggles if revenues do not pick up.
Harley Davidson 2019 Summary Balance Sheet | |||||
| Column1 | 2019 | 2018 | 2017 | 2016 | 2015 |
| Cash | 833,868 | 1,203,766 | 687,521 | 759,984 | 722,209 |
| Short Term Investment | – | 10,007 | – | 5,519 | 45,192 |
| Account Receivable | 259,334 | 306,474 | 329,986 | 285,106 | 247,405 |
| Inventory | 603,571 | 556,128 | 538,202 | 499,917 | 585,907 |
| Other | |||||
| Current Assets | 4,202,823 | 4,484,442 | 175,853 | 174,491 | 3,983,154 |
| Net PPE | 847,382 | 904,132 | 967,781 | 981,593 | 942,418 |
| Goodwill | 64,160 | 55,048 | 55,947 | 53,391 | 54,182 |
| Other | |||||
| Total Assets | 10,528,159 | 10,665,664 | 9,972,672 | 9,890,240 | 9,991,167 |
| Accounts Payable | 294,380 | 284,861 | 227,597 | 235,318 | 235,614 |
| Accrued Expense | 582,288 | 601,130 | 529,822 | 486,652 | 471,964 |
| Accrued Taxes | |||||
| Notes Payable | 571,995 | 1,135,810 | 1,273,482 | 1,055,708 | 1,201,380 |
| LT Debt – Current | 1,748,109 | 1,575,799 | 1,127,269 | 1,084,884 | 843,620 |
| Other | – | – | – | – | – |
| Total Current Liabilities | 3,196,772 | 3,597,600 | 3,158,170 | 2,862,562 | 2,752,578 |
| LT Debt | 5,124,826 | 4,887,667 | 4,587,258 | 4,666,975 | 4,845,388 |
| Other | – | – | – | – | – |
| Total Liabilities | 8,724,160 | 8,891,715 | 8,128,395 | 7,970,082 | 8,151,513 |
| Common Stock | 1,828 | 1,819 | 1,813 | 1,806 | 3,449 |
| Treasury | 1,345,881 | 1,065,389 | 687,865 | 235,802 | 7,839,136 |
| Retained Earnings | 2,193,997 | 2,007,583 | 1,607,570 | 1,337,673 | 8,961,985 |
| Other | – | – | – | – | – |
| Total Equity | 1,803,999 | 1,773,949 | 1,844,277 | 1,920,158 | 1,839,654 |
| Total Equity & Liability | 10,528,159 | 10,665,664 | 9,972,672 | 9,890,240 | 9,991,167 |
Section 3: Harley Davidson Financial Ratios Analyzed from 2015 to 2019
For this section, I have chosen several different financial ratios to review for Harley Davidson from 2015 to 2019. In reviewing each of their financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of their important Financial ratios.
Harley-Davidson Current Ratio.
Harley-Davidson’s current ratio ended 2015 at 1.45. In the next two years, the organization’s current ratio would continue to fall ending 2017 at 1.23. Granted, because Harley-Davidson’s current ratio is above 1.0, the organization may not be suffering, or have suffered, a liquidity crunch. However, in the next two years, the company’s current ratio would rebound continuously and in 2019 at 1.31. In most instances, this rebound would be a comforting thought for investors. However, because the organization has tapped into their short-term investments, this ratio may be more of a red herring as compared to a lifesaver.
Harley-Davidson Total Asset Turnover.
Harley-Davidson ended 2015 with a total asset turnover of .6. The firm would moderately improve its efficiency for total asset usage in 2016 which resulted in a .61 total asset turnover. Unfortunately though in the next three years, the company’s total asset turnover would continually fall ending 2019 at .51. This trend may indicate that the organization should liquidate some fixed assets that are not performing as expected.
Harley-Davidson Return on Assets.
In the last five years, Harley-Davidson’s return on assets would continually fall, which marks a significant trend in the organization’s operations. In 2019, the company’s return on assets was 4.02%. However, in 2015, the organization ended the year at 7.53%. This shows that the company is continually underutilizing its assets and in turn generating less returns per dollar of assets. To mitigate this issue, either the organization needs to increase its revenues, which seems unlikely due to its five-year revenue reduction trend. A more realistic approach would be for the company to again sell off underperforming assets.
Harley-Davidson Debt ratio.
In 2015, Harley-Davidson had a debt ratio of 48.5%. From an investor’s perspective, this should be a chilling thought. In my most humble of opinion, if an organization’s revenues are falling, they should be doing everything they could to reduce their debt load. In Harley-Davidson’s position, the organization didn’t slightly reduce its debt ratio in the next two years ending 2017 at a 46% debt ratio. However, in the next two years, the company would gradually increase its debt ratio to a five-year high of 48.6%. In other words, as the organizations revenues fell, their debt load continued to climb.
Harley Davidson 2019 Liquidity Ratios | |||||
| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Current Ratio | 1.31 | 1.25 | |||
| Cash Ratio | 0.26 | 0.33 | |||
| Quick Ratio | 1.13 | 1.09 | |||
| Net Working Capital | 820,105 | 1,180,377 | |||
Harley Davidson 2019 Asset Utilization | |||||
| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Total Asset Turnover | 0.51 | 0.54 | |||
| Fixed Asset Turnover | 6.33 | 6.32 | |||
| Days Sales Outstanding | 17.65 | 19.57 | |||
| Inventory Turnover | 8.88 | 10.28 | |||
| Accounts Receivable Turnover | 20.68 | 18.65 | |||
| Working Capital Turnover | 6.54 | 4.84 | |||
| AP Turnover | 18.21 | 20.07 | |||
| Average Days Inventory | 68.21 | 60.56 | |||
| Average Days Payable | 33.27 | 31.02 | |||
| Cash Conversion Cycle | 52.60 | 49.11 | |||
Harley Davidson 2019 Profitability Ratios | |||||
| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Return on Assets | 4.02% | 4.98% | |||
| Return on Equity | 23.48% | 29.96% | |||
| Net Profit Margin | 7.90% | 9.30% | |||
| Gross Profit Margin | 39.76% | 41.37% | |||
| Operating Profit Margin | 10.36% | 12.48% | |||
| Basic Earning Power | 5.28% | 6.69% | |||
| ROCE | 7.58% | 10.10% | |||
| Capital Employed | 7,331,387 | 7,068,064 | |||
| ROIC | 25.32% | 26.49% | |||
Harley Davidson 2019 Long-term Debt | |||||
| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Debt Ratio | 48.68% | 45.83% | |||
| Debt/Equity | 284.08% | 275.52% | |||
| Times Interest Earned | 17.88 | 23.10 | |||