In this assignment, the author finds herself in the role of a consultant, whose client intends to acquire VW. The objective of this paper is to provide an assessment of VW's financial performance and financial position to prepare a proposal to the client, that assists in deciding whether acquiring VW is financially beneficial.
For a comprehensive insight into VW's financial performance and position, the approach was as follows.
Hereafter, in chapter two, the theoretical background provides the reader with knowledge about VW and describes the meaning of DD in M&A processes.
Chapter three, the financial statement analysis, is subdivided into FDD and CDD. In the FDD profitability ratios, asset and capital structure KPIs, and liquidity ratios are described and reviewed. The ratios are based in each case on the corresponding statement, the income statement, the balance sheet, and the CFS. The annual reports of VW from the years 2017-2019 serve as a reference for the financial KPIs. The CDD is based on Porter’s Five Forces framework, which considers future trends, and in addition, includes a brief benchmarking to identify competition between global car manufacturers within this framework. To conclude chapter three, the results of FDD and CDD are summed up.
In chapter four, a proposal to the client is provided, which speaks for the fact that VW is worth buying in terms of the numbers considered.
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Theoretical background
- 2.1 About the Volkswagen Group
- 2.2 The relevance of the Due Diligence
- 3 Financial statement analysis of the Volkswagen Group
- 3.1 Financial Due Diligence
- 3.1.1 Profitability ratios based on the income statement
- 3.1.2 Asset and capital structure based on the balance sheet
- 3.1.3 Liquidity ratios based on the cash flow statement
- 3.2 Commercial Due Diligence
- 3.3 Summary of FDD and CDD
- 3.1 Financial Due Diligence
- 4 Proposal to the client
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
The objective of this paper is to assess Volkswagen's financial performance and position to advise a client on the financial viability of acquiring the company. This assessment uses a multifaceted approach, combining theoretical background with detailed financial statement analysis.
- Financial Due Diligence (FDD) of Volkswagen Group
- Commercial Due Diligence (CDD) of Volkswagen Group
- Analysis of Volkswagen's profitability, asset structure, capital structure, and liquidity
- Application of Porter's Five Forces framework to assess the competitive landscape
- Formulation of a proposal regarding the acquisition of Volkswagen
Zusammenfassung der Kapitel (Chapter Summaries)
1 Introduction: This chapter introduces the assignment's context, presenting the author's role as a consultant advising a client considering the acquisition of Volkswagen. It outlines the paper's objective: to provide a financial assessment of Volkswagen to inform the client's decision-making process. The chapter details the approach taken for a comprehensive analysis, previewing the structure of the subsequent chapters—a theoretical background, a financial statement analysis, and a final proposal.
2 Theoretical background: This chapter lays the groundwork for the subsequent financial analysis. It provides essential background information on the Volkswagen Group, familiarizing the reader with the company's structure and operations. Crucially, it defines and explains the importance of Due Diligence (DD) within the context of mergers and acquisitions (M&A) processes. This sets the stage for the detailed financial and commercial due diligence analyses presented in the following chapter. Understanding the theoretical framework of DD is essential for interpreting the findings and conclusions reached in the financial statement analysis.
3 Financial statement analysis of the Volkswagen Group: This chapter forms the core of the analysis, dividing the assessment into Financial Due Diligence (FDD) and Commercial Due Diligence (CDD). The FDD section meticulously examines Volkswagen's financial statements (income statement, balance sheet, and cash flow statement) using key performance indicators (KPIs) to assess profitability, asset and capital structure, and liquidity. The KPIs are drawn from Volkswagen's annual reports from 2017-2019. The CDD section shifts to a broader perspective, employing Porter's Five Forces framework to analyze the competitive environment of the global automotive industry, incorporating future trends and benchmarking against competitors. The chapter concludes with a summary of both FDD and CDD findings, providing a consolidated overview of Volkswagen’s financial health and market position.
Schlüsselwörter (Keywords)
Volkswagen Group, Financial Performance, Financial Position, Due Diligence, Mergers & Acquisitions, Financial Statement Analysis, Profitability Ratios, Asset Structure, Capital Structure, Liquidity Ratios, Commercial Due Diligence, Porter's Five Forces, Competitive Analysis, Acquisition Proposal, Key Performance Indicators (KPIs).
Volkswagen Group Financial Assessment: Frequently Asked Questions
What is the purpose of this document?
This document provides a comprehensive preview of a financial assessment of the Volkswagen Group, intended to advise a client on the financial viability of acquiring the company. It includes a table of contents, objectives and key themes, chapter summaries, and keywords.
What are the key themes explored in this assessment?
The key themes include a thorough Financial Due Diligence (FDD) and Commercial Due Diligence (CDD) of the Volkswagen Group. This involves analyzing Volkswagen's profitability, asset structure, capital structure, and liquidity using key performance indicators (KPIs). The assessment also utilizes Porter's Five Forces framework to analyze the competitive landscape of the global automotive industry.
What type of analysis is conducted in this assessment?
The analysis is multifaceted, combining theoretical background information on the Volkswagen Group and the importance of due diligence in mergers and acquisitions with a detailed financial statement analysis. This analysis draws on Volkswagen's annual reports from 2017-2019.
What specific financial ratios and analyses are used?
The financial analysis utilizes profitability ratios, asset structure analysis, capital structure analysis, and liquidity ratios based on the income statement, balance sheet, and cash flow statement respectively. The Commercial Due Diligence employs Porter's Five Forces framework for competitive analysis.
What is the structure of the full assessment?
The full assessment is structured into four chapters: an introduction outlining the purpose and methodology; a theoretical background explaining due diligence and the Volkswagen Group; a core chapter detailing the financial and commercial due diligence findings; and finally, a proposal to the client based on the analysis.
What is the final outcome or deliverable of this assessment?
The ultimate deliverable is a proposal to the client regarding the acquisition of Volkswagen, informed by the comprehensive financial and commercial due diligence conducted.
What are the key financial statements used in the analysis?
The analysis utilizes Volkswagen's income statement, balance sheet, and cash flow statement.
Which years' data are included in the analysis?
The analysis incorporates data from Volkswagen's annual reports spanning the years 2017-2019.
What is the role of Porter's Five Forces in this assessment?
Porter's Five Forces framework is used within the Commercial Due Diligence section to analyze the competitive landscape of the global automotive industry, providing context for the financial analysis.
What are the key words associated with this assessment?
Key words include: Volkswagen Group, Financial Performance, Financial Position, Due Diligence, Mergers & Acquisitions, Financial Statement Analysis, Profitability Ratios, Asset Structure, Capital Structure, Liquidity Ratios, Commercial Due Diligence, Porter's Five Forces, Competitive Analysis, Acquisition Proposal, Key Performance Indicators (KPIs).
- Quote paper
- Anonym (Author), 2021, Volkswagen (VW). Financial Performance and Financial Position, Munich, GRIN Verlag, https://www.grin.com/document/1150129