Journal Entries:

Flexible Budget for 2007 fiscal Year

Beginning with a 240 million budget, (reflected by historical capital expenditures) the company should divide the budget based upon existing liabilities and historical expenditures, while bolstering expenditures in the general merchandise areas and apparel productions to offset any reduction in sales due to an overall reduction in the purchases of luxury items in the economy. The company should also reallocate funds in production of less expansive bikes and the Buell line of lighter weight vehicles to match consumer desire. Marketing should pay careful attention to history of the company as a large employer in the U.S. As well as earth friendly options for more efficient engines that offer equivalent power and with the emphasis on quality growth in this area. (Harley-Davidson "Annual Report 2006")

The increase of sales, which has been nominally improving over the years will likely increase in the immediate future, and especially in overall sales of general merchandise and apparel, as a result of possible nominal decreases in sales of larger items. Many individuals seek out smaller items to reflect their love of the brand, prior to their ability to purchase larger items, and existing H-D owners also frequently add accessories and purchase general merchandise and apparel to compliment earlier purchases. Pricing may need to be adjusted, within reason for larger items as production and acquisition of materials continue to improve. (Moore, Baldwin, Camm & Cook, 2002, p. 32) the market potential of the company, regardless of recent fluctuations, such as the market dives occurring in 2002, 2003 and 2005 will continue to have long-term investment positives, with increasing revenue based on brand recognition and development additionally, regardless of fluctuation the recovery seen in 2006, and early 2007 will likely leave those who stayed in the market, rather than selling with a good overall outcome. ("Wall Street Wrong Again," 2005, p. D6)

20-year comparison of year-end...

31, 1986. Assumes for both Harley-Davidson and S&P that all dividends are http://investor.harley-davidson.com/images/spacer.gif http://investor.harley-davidson.com/images/rule.gif
(H-D Investor Relations "20-year Comparison")

The value of the H-D stock as well as the overall growth of the company in its long history make it a strong industry leader, especially with regard to long-term stock investment. The company must address issues of potential ethical concern, hopefully this will be balanced with the overall resurgence of the need to continue to focus attention on American manufacturing, and the emphasis H-D has always had, even in its infancy. Brand recognition gives H-D a leading role in American manufacturing and sales. International sales have increased over the entire time as well and bolster international sales and growth. (Harley-Davidson "Annual Report 2006") the company will likely receive continued support from the market and will also continue to grow as a recognized leader in the industry, offering a niche product that has been embraced over the years as the best of the best.

Some general recommendations for the company include bolstering general merchandise sales, through increased availability as well as the apparel lines. Building quantity in small sales is a good tactic for economic downturns that cause durable luxury sales reductions. The foundations of the company are strong and not likely to take an extreme downturn, given the regional and international proliferation that currently exists. The overall reorganization of acquisition of materials will also help streamline the company and adding eco friendly marketing is also something that needs to be implemented soon. Viable considerations are to ensure stockholders of the need to think of the investment as long-term and not short-term. Special emphasis must also be placed on the financial division as any market downturns can affect individual and franchise financing and flexibility and change must ensure the development of debt return.