Financial Health Hyundai Company Analysis Finance Is Essay

Download this Essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Essay:

Financial Health

Hyundai company analysis

Finance is a critical function in any business. It acts as an indicator for the health of a company, as well as determining its growth. When a company realizes new investment opportunities and other future aspirations, finance enables such ventures. Thus, finance reflects the performance of an organization (Gruen & Howarth, 2005). Measurement of performance takes place over a period of time. Organizations practically present their financial performance on a quarterly and yearly basis while others carry out a monthly exercise of tracking their performance. The government requires that all companies present an annual assessment of their performance. The information is featured in the form of financial transactions of sales, investments, savings and others. The information is part of a document called the Annul Report. Investors are informed by the annual report of companies before deciding on whether to invest in the company (Mclean, 2003). The annual report shows the performance of the company every 12 months. The paper looks into the annual reports of Hyundai Motor Finance Company, and how the annual reports inform the judgement of the investors.

Company overview

The Hyundai Motor Finance is a complete service auto finance company offering leasing and financial choices to Hyundai dealers nationwide. The company's website presents tips on auto financing and other generalized information. The company started in 1989 and is based in Korea. Collaborating with its subsidiaries, the organization operates in financial division, and several other divisions. The financial division provides credit card and financial services to its clients. The other divisions are concerned with manufacturing and sales, for instance, the vehicle division manufactures saloon cars under the brand names of Veloster, Azera, Elantra, Centennial, and others. The other business divisions deal with the construction of railways.

The company collaborates with its sister company in America (Hyundai Motor America) to assist clients in their purchase of Hyundai automobiles. The company is part of the Hyundai Capital United Kingdom Limited, and focuses on meeting the competitive financial services and products to its dealers. The company also offers warranty care. The administration function of the company is in the United Kingdom representing the main finance house of the Hyundai Motor United Kingdom. Other sub-locations include Peking, Tokyo, Detroit, and Frankfurt. The business strategy of the company is effective in ensuring customer satisfaction. Humanism, top quality, and reliability have made the company stand out from its competitors. The qualities have helped compensate for the impact of external competition for sales. One of its major rivals is Tata Motors.

Horizontal analysis

Horizontal analysis is a financial assessment method that reveals changes in the amounts of related financial statement items in a given time (Mclean, 2003). It is useful in evaluating the nature of trends. Over the years, Hyundai Motor Finance Company has grown its revenues and reduced selling, administrative, and general costs from 13.6% to 12.2%. The aim of this analysis is to access the financial health of the company in relation to its financial documents. The horizontal analysis of Hyundai Motor Finance's financial documents featured the income statement and balance sheets of three periods where the earliest period was the base period. All the entries were compared. The changes in the entries were presented in percentage and dollar terms.

The horizontal analysis of some financial documents involves a two-year format, for instance the income statement and the balance sheet. A variance also features, representing the difference between the years for every line item. An optional format normally entails adding as many years as possible, without presenting a variance. This facilitates noting the accounting changes over multiple years (Zelman & McCue, 2009). The third option entails presenting a vertical analysis of each year in the report. This ensures that each year presents expenses as a percentage of the entire revenue in that year.

The horizontal analysis is for both the income statements and the balance sheets. This is because both apply the same idea. The figures under the "difference" sections are indicated side-by-side. This enables the analyst to compare the two and understand the progress of the company. The horizontal analysis also comprises of two more columns. These are the column for actual numerical change in the two periods and the column for percentage change over the two periods. The initial column shows the difference in the past period and the current one, whereas the other column reflects changes in percentages (Mclean, 2003). The percentage column presents the proportion of the past figure is the figure showing the change.

The horizontal analysis of Hyundai Motor Finance was crucial for informing the judgement of investors. It made the task of improvements and analyzing simple for all the stakeholders. The investors had an opportunity to compare the difference in the percentage changes. The horizontal analysis also enhanced the capacity of the board to forward remedies and recommendations for improvements. The horizontal analysis of the balance sheet for the Hyundai Motor Finance Company was for the financial years 2012, 2011, 2010. There was a negative trend in the total current assets in the three years. The short-term financial instruments also declined significantly for the three years. The decline in the short-term financial instruments exposed the company to limited credit risk and slated maturities (Zelman & McCue, 2009). The financial securities include commercial paper, repurchase agreements, cash and cash equivalents, federal funds, and borrowings.

There was also a significant decline in inventories. Inventories is the difference in the units produced and those sold. This undermined the company's ability to acquire complete visibility into demand, costs, supply, and fulfillment trends and measures. Thus, the company's potential to manage prices is weak because of decreased production revealed in the decreased inventory. There was a positive trend in the accounts (trade) receivables. This represented money that clients owed the business. The objective of setting up Hyundai Motor Finance Company was to handle the payment of cash by its clients. The payment process lasted as per the paying ability of a customer. The trend in the balance sheet insinuated that there has been a rise in both demand and supply of Hyundai products. More clients owed the company money as the years progressed. The trend also presented the effectiveness of sales and marketing department in their campaign (Zelman & McCue, 2009). The company also invested in maintaining their long-term financial instruments, for there was a positive trend. This provided more security for the company in the face of economic challenges. It also offered enough source of security for the firm in case it needed to access loans from financial institutions.

The decrease in the company's real estate venture showed a slight decrease over the three years. The value decreased from 282,832 million dollars in the initial year, to 267,116 million dollars in the third year. The company's ability to invest in property was constant. This may be attributed to the negative pattern shown in the production and inventory over the three years. The company made major improvements in decreasing its total current liabilities. The difference presented in the balance sheet showed that the company reduced its total current liabilities by 1 million dollars per year. The decrease in long-term borrowing seems to reveal the superior financial management strategies of the company. Long-term borrowing decreased by almost 1 million dollars between the base year and the next, and 2 million dollars between the middle and end year. The company showed steadfastness in honoring its tax obligations to the government. This took precedence over other liabilities of the Hyundai Motor Finance Company.

Hyundai Motor finance Company's total assets summed to 21,537,814 million dollars for the base years, 109,479,975 million dollars for the middle year, and 94,714,131 million dollars for the third year. The total liabilities for the base year was 73,620,239 million dollars, 89,152,273 million dollars for the…[continue]

Cite This Essay:

"Financial Health Hyundai Company Analysis Finance Is" (2013, July 04) Retrieved October 28, 2016, from

"Financial Health Hyundai Company Analysis Finance Is" 04 July 2013. Web.28 October. 2016. <>

"Financial Health Hyundai Company Analysis Finance Is", 04 July 2013, Accessed.28 October. 2016,

Other Documents Pertaining To This Topic

  • Ford Mustang Financials as a Company Ford

    Ford Mustang Financials As a company, Ford has improved its sales in the past two years, after struggling during the recession. Ford's revenues in the last fiscal year (2011) were $136 billion, compared with $116 billion in FY2009 and $168 billion in FY2007. The company's profits have also fluctuated over that time period. FY2011 saw a profit of $20.2 billion, compared with $2.7 billion in FY2009 and a loss of $2.8 billion

  • LG Electronic Company All Leading Companies in

    LG Electronic Company All leading companies in the world have started small but capitalized on their strengths to become world leaders. Let us look t the strengths of LG. Today LG is one of the leading names among the Korean companies in the world. It is known to be a major player in the consumer durables industry, but little of it is known besides that. This is an attempt to

  • Ford Motor Company Background and

    The economic environment is difficult. The United States may finally be showing signs of emerging from recession, but the recent economic difficulty has taken its toll of Ford. Following the short-lived spike provided by the 'cash for clunkers' program, auto sales have slumped again. Many competitors saw sales fall dramatically in the wake of that program. Ford, however, did not suffer as much. While two of its most popular models,

  • Hyundaicard s Marketing Strategy

    Hyundaicard's Marketing Strategy: Case Study Write a full case analysis: HyundaiCard's Marketing Strategy Hyundaicard's marketing strategy General overview of Hyundaicard Current marketing strategy assessment Financial analysis Strategic alternatives Assessment of the strategic alternatives Implementation plan Exhibits Segmentation criteria Qualitative ranking of alternatives Market share of credit card companies Preference of payment Hyundaicard financial statements This essay is a case study for Hyundaicard marketing strategy. Hyundaicard is a company situated in Korea's credit card industry. It forms the basis of the case study because of its'

  • U S Automotive Industry Chosen Industry Automotive Industry

    U.S. Automotive Industry Chosen industry: automotive industry is the focus of this analysis. More emphasizes are made on the large -- scale automobile manufacturers. This is because of the inherently interesting industry as a result it being competitive and projected to go through a major restructuring due to globalization in the near days to come. The issue of decreasing oil reserves is the other reason that is going to trigger this

  • Influence of 2007 Economic Crisis on American Car Market

    2007 Economic Crisis on American Car market Effect of the 2008 global economic crisis on automotive industries Crisis in the United States Crisis in Canada Crisis in Russia Crisis in European markets Crisis in Asian markets Effects by other related crisis events In this paper, we will review the effects of 2008 global automotive crisis. Our main focus will be on the American car manufacturers and the negative impact they suffered due to the crisis. We will

  • Negotiation Between North Korea Dprk

    M. To 6 a.m.), the overtime premium is 100% of the hourly wage rate. In some cases, North Korean workers have asked for additional night shift or weekend work in order to qualify for additional pay. Companies also may pay cash rewards as a special incentive. KIC employees receive 14 days per year in vacation time. At first, North Korean workers were reluctant to ask for leave time, but now

Read Full Essay
Copyright 2016 . All Rights Reserved