The primary line of obligation of Nissan Motor Corporation is the assembling of vehicles (cars) motors and planning assemblages of various vehicles. The organization offers in excess of 60 different sorts of vehicles on the lookout. The primary contenders that are a danger to this organization incorporate Toyota Company, Volkswagen, Hyundai, General Motors and significantly more.
The organization’s financial year runs from first April to 31st March every year.
The organization utilizes a straight-line strategy to deteriorate its operational resources dependent on the helpful existence of such property and the lingering esteem assessed by the partnership.
The strategy used in the valuation of stock by the organization is first in, first out technique.
The biggest wellspring of accounts, from financing activities, is the proceeds from long-term borrowings.
The most extensive use of cash from investing activities is the purchase of leased vehicles.
Footnote number 3) Inventories held for the common sales purposes are principally stated at cost, which is determined by the First-in, first-out method. (The balance sheet amounts are found by writing the book value down by profitability decrease).
Footnote no 2 Companies that do not account for equity method 166. Subsidiaries that are not consolidated include 120 Nissan Shatai Manufacturing Co., Ltd., and others. Affiliates 46 Tonox Co., Ltd. and others. Equity method does not account for these companies due to their insignificant impact on the income or loss.
Profit markup is 25%.
The current price of the company’s stock is $134 per unit share.
LAST YEAR (P)
CURRENT YEAR (C)
% CHANGE (C-P)P * 100
Earnings per share
Gross margin percentage
Total stockholders’ equity
4) Calculating ratios
a. Liquidity analysis ratio
i) Current ratio = Current assets/current liabilities
= 5,279,382 / 3,988,694 = 1.32
ii) Quick ratio = Quick assets/current liabilities
= (5,279,382 – 760,070) / 3,988,694 = 1.51
Quick assets = Current assets – inventories
iii) Net working capital ratio = Networking capital/Total assets
= (5,279,382 – 3,988,694) / 10,239,540 = 0.126
b. Profitability ratios
i) Return on Assets (ROA) =Net income/Total assets
= (233,709) / 10,239,540 = -0.0228
ii) Return on Equity (ROE) = Net income/stockholders equity
= (233,709) / 605,814 = -0.386
iii) Profit Margin = Net income/sales
= (233,709) / 8,436,974 = -0.028
iv) Earnings per Share = net income/number of shares
= (233,709)/4,520,715 = -0.052
c. Activity Analysis Ratio
i) Assets turnover ratio = Sales / Total assets
= 8,436,974 / 10,239,540 = 0.8240
ii) Inventory turnover = Cost of goods sold / average inventories
= 7,118,862 / 553997.04 = 12.85
iii) Accounts receivable turnover = Sales / average accounts receivable
= 8,436,974 / 554,189 = 15.22
d. Capital Structure analysis ratio
i) Debt Equity ratio = Total liabilities / Total stockholders’ Equity
= 7,313,487 / 605,814 = 12.07
ii) Interest coverage ratio = income before interest and tax / interest expense
= -218,771/18,348 = -11.92
e. Capital market analysis ratio
Dividend payout ratio = Cash dividends/net income
= 4574 / (233,709) = -0.0196
5) It is not worthy to invest in this company, this is because considering the companies activity and profitability ratios, the ratios are not that appealing, based on the above calculated ratios, I can conclude that at long run, this company is not going to be profitable. Again, its main source of financing is through the use long term borrowing, most likely, the company will have gearing problems. I cannot invest in such a company.
Ghosn, Carlos. (January 6, 2017). Nissan CEO Carlos Ghosn announces breakthrough technologies at CES 2017. Nissan Motor Corporation, Vol. 2. Retrieved from http://www.nissan-global.com/EN/