Jaguar Plc. 1989 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Jaguar Plc. 1989 Case Solution

Advantage of the acquisition with Ford

Jaguar was one of the most successful companies in the field of the automobile while it had decreased the profitability size in the recent years due to lack of resources to invest in the area of marketing, research, and capitalization. Ford was very much aware of the situation and thus proposed to acquire all the stacks of Jaguar in order to rebuild the entity through investments in the related areas of Jaguar.

However, the current situation was not favorable to the Jaguar because the Ford wanted to control all the operations due to 100% of acquiring in the shares. Excluding the case, however, there was the opportunity for both the companies to combined into a dominated company and also create value for their shareholders.

The benefits of the combination would increase the customer's portfolio size and to overcome all the losses incurred in the past for both the companies. The other benefit was to connect with the British government in order to diversify the business activities as well as in U.S. As Jaguar needed sources of funds to introduce the new business model through the investment in marketing and research of the product. So the offer of Ford could manage all the resources associated with the development of the firm.

After post-acquisition, the Jaguar would able to overcome all the losses as well as to fund the operations given by the Ford. Whereas the advantage for the Ford was to diversify the business activities in the U.S market and could stand in a competitive position as compared to other big giants. Therefore, both companies had some advantage for post-acquisition and which could allow them to manage all the funds and resources in order to increase the desired level of profits in the coming years.

Financial Analysis

To (or “intending to”) identifying the financial position of the company detailed financial analysis is performed such as evaluation of income statement, balance sheet, and other related financial transactions. Analysis of the projected economic declaration of the company is given below.

Analysis of Income Statement

It is expected that financial position of the company is improving continuously as revenue margin of the company increased significantly from last few years, and it is also anticipated that it will also increase in projected years. Grown in revenue also result in grown in profit margin but by evaluating the profit margin ratio, it is noticed that the profit margin ratio will remain same in projected years that is 9%. However, the management of the company is performing well and maintained the profit margin ratio to 9% which is considered as a good profit rate as compared to the industry norms.

The company is generating positive returns; however the profit margin ratio remained same from last few years which show that the business is not performing well with this respect. As the company is generating significant returns, therefore, it is considered that the financial position of the company is satisfactory in this global economic crisis.

Analysis of Balance Sheet

It is expected that increase in sales ratio also increases the working capital requirement, hence increased in sales ratio also increased the total assets of the company, especially current assets as the enterprise requires the greater level of inventory in order to satisfy rising demand in future. Therefore, the total worth of the property of the enterprise is growing gradually, and it is expected that in future, this value will increase further. In addition to this, total liabilities of the company are also increasing as the increase in demand for the products of the company need greater finance in order to support its sales operations or with a view to flow its transactions with continuity..................

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