Which Is the Stronger Partner in the Merger?
In May 1998, Daimler-Benz and Chrysler announced their intention to merge. DaimlerBenz was the largest industrial company in Europe, and Chrysler was Number 3 of the Big Three automakers in the United States. The merger resulted in DaimlerChrysler becoming (at the time) the second largest automobile company in the world with 2000 sales exceeding $150 billion (General Motors reported sales in 2000 of $160 billion).
An interesting question is, “At the time of the merger, which of the two companies was the stronger?” Below are summary data for the two companies, both overall and for their respective automotive divisions.
The amounts are in millions of Deutsche marks for Daimler-Benz and millions of U.S. dollars for Chrysler.
For the automotive segment information, net income is the operating income for the segment and total assets are the assets that are identifiable with the segment.
1. Compute the following for both companies for overall results and automotive division results:
a. Return on sales
b. Asset turnover
2. In comparing the ratios calculated in (1), why don’t you have to make adjustments for currency differences?
3. Which company had more worldwide automotive sales in 1997? Note: Don’t forget the currency difference.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more