Caso chrysler

Case Studies in Finance
Case 5: Chrysler: Ratio Analysis
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Before Chrysler merged to become DaimlerChrysler AG, they were presented with a takeover bid of $55 per share by MGM billionaire Kirk Kerkorian and former Chrysler chairman Lee Iacocca. Kirk Kerkorian was a stockholder in Chrysler and an experienced takeover financier who apparently found Chrysler to be a good buy. Chryslerrejected the offer, however, stating that the firm was not for sale. Further, many Wall Street experts felt that Kerkorian could not come up with the $20 billion necessary to complete the deal.
After Chrysler rejected Kirk Kerkorian's bid of $55 per share, Kerkorian decided to have his people repeat the analysis of the firm's financial performance over the two most recent years to determine if heshould increase his bid in this friendly takeover attempt. To measure the financial performance of Chrysler over the past two years, key financial ratios will have to be computed and compared with industry averages. To help in this endeavor, Chrysler's financial statements are found on the following pages.
Chrysler Corporation's Balance Sheet
for the year ending December 31 (in millions)This Last
year year
Assets
Current Assets
Cash and cash equivalents $ 5,543 $ 5,145
Marketable securities $ 2,582 $ 3,226
Accounts receivable $ 2,003 $ 1,695
Inventories $ 4,448 $ 3,356
Prepaid taxes $985 $ 1,330
Finance receivables $13,623 $12,433
Total Current Assets $29,184 $27,185
Property & equipment $20,468 $18,281
Less: Accumulated Depreciation $ 7,873 $ 7,208
Net Plant & Equipment $12,595 $11,073
Other Assets
Special tools $ 3,566 $ 3,643
Intangible assets$ 2,082 $ 2,162
Deferred tax assets $ 490 $ 395
Other assets $ 5,839 $ 5,081
Total Assets $53,756 $49,539

Liabilities
Current Liabilities
Accounts payable $ 8,290 $ 7,826
Short-term debt $ 2,674 $ 4,645
Accrued liabilities $ 7,032 $5,582
Other payments $ 1,661 $ 811
Total Current Liabilities $19,657 $18,864
Long-term Liabilities
Long-term debt $ 9,858 $ 7,650
Accrued employee benefits $ 9,217 $ 8,595
Other non-current liabilities $ 4,065 $ 3,736
Total Long-term Liabilities $23,140 $19,981
Total Liabilities$42,797 $38,845

Stockholder's Equity
Preferred stock $ 0 $ 2
Common stock (at $1 par) $ 408 $ 364
Additional paid-in capital $ 5,506 $ 5,536
Retained earnings $ 6,280 $ 5,006
Treasury stock ($1,235) ($ 214)
Total Shareholder's Equity $10,959 $10,694Total Liabilities and Share. Equity $53,756 $49,539

Chrysler Corporation's Income Statement
for the year ending December 31, (in millions)
This Last
year year
Sales revenue $53,195 $52,235
Less: Cost of goods sold $41,304 $38,032
Gross profits$11,891 $14,203
Less: Operating expenses
Selling & admin. $4,064 $3,933
Pension $ 405 $ 714
Nonpension post ret. $ 758 $ 834
Depreciation $1,100 $ 994
Amort. of tools $1,120 $ 961
Total operating expenses $ 7,447 $ 7,436
Operating profits $ 4,444 $ 6,767
Less: Interest expenses...