Honda Financial Ratios Analysis
A Financial Ratio Quarterly Trend Analysis of
Honda Motor Co Ltd
Stock Symbol: HMC
Listed on the New York Stock Exchange
Prepared for:
Deanne Butchey
Department of Finance and Real Estate
Florida International University
Course: FIN 4606
By: xxxxxxxxxx Recommendations for Investors and Lenders
Would you place a personal deposit of one million dollars or more in the publicly traded stock of this company?
Honda is considered to be one of the best auto makers in the world; its customer base continues to grow throughout the years. Honda also has profit margins constantly higher than its closest competitor Toyota Motors.
Honda is making an effort to satisfy the necessities of its customers and the dominant market conditions by updating its models and ramping up supply. Renovating the production system, building new plants for increasing production, such as the one in Brazil; and adopting innovative techniques for upgrading might help Honda to improve capacity and sales during fiscal 2014. Honda expects revenues and net income to increase 22.5% and 58%, respectively, in fiscal 2014.
The company's strengths can be seen in several areas, such as its growth in earnings per share, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. Earnings per share trended upward after a decrease from Q1 to Q2 posting annual earnings of $202.68 per share. Honda’s cash flow in the first half of fiscal 2014 improved to ¥671.5 billion from ¥323.3 billion in the first half of fiscal 2013. Honda expects higher revenues, favorable model mix, effective cost reduction measures, favorable currency effect and favorable impact of raw material cost fluctuations to contribute to the increase in profits during the year.
For all of the abovementioned reasons, I would confidently place a million dollars in stocks from Honda. If the company keeps making money the way it has been, we could be looking at a
Honda Motor Co Ltd
Stock Symbol: HMC
Listed on the New York Stock Exchange
Prepared for:
Deanne Butchey
Department of Finance and Real Estate
Florida International University
Course: FIN 4606
By: xxxxxxxxxx Recommendations for Investors and Lenders
Would you place a personal deposit of one million dollars or more in the publicly traded stock of this company?
Honda is considered to be one of the best auto makers in the world; its customer base continues to grow throughout the years. Honda also has profit margins constantly higher than its closest competitor Toyota Motors.
Honda is making an effort to satisfy the necessities of its customers and the dominant market conditions by updating its models and ramping up supply. Renovating the production system, building new plants for increasing production, such as the one in Brazil; and adopting innovative techniques for upgrading might help Honda to improve capacity and sales during fiscal 2014. Honda expects revenues and net income to increase 22.5% and 58%, respectively, in fiscal 2014.
The company's strengths can be seen in several areas, such as its growth in earnings per share, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. Earnings per share trended upward after a decrease from Q1 to Q2 posting annual earnings of $202.68 per share. Honda’s cash flow in the first half of fiscal 2014 improved to ¥671.5 billion from ¥323.3 billion in the first half of fiscal 2013. Honda expects higher revenues, favorable model mix, effective cost reduction measures, favorable currency effect and favorable impact of raw material cost fluctuations to contribute to the increase in profits during the year.
For all of the abovementioned reasons, I would confidently place a million dollars in stocks from Honda. If the company keeps making money the way it has been, we could be looking at a