Economic and Financial Management - Jaguar Land Rover

Charles W.

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Economic and Financial Management - Jaguar Land Rover

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Themes

Economic management, financial management, Jaguar Land Rover, financial statement, debt-to-asset ratio, debt-to-equity ratio, assets, TQM Total Quality Management, profit, report, net profit margin, gross profit margin, operating profit margin, financial performance, macroeconomic environment, profitability, financial leverage, financial health, financial analysis, United Kingdom, shareholder

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Abstract

This report entails an analysis of Jaguar Land Rover's financial statement. This report explores the firm's financial performance regarding the different financial ratios, including liquidity, profitability, leverage and net profit margin. A comparative analysis of the firm's financial ratios for three years shows the firm has experienced a decline in its financial performance. The decline can be associated with changes in the macroeconomic environment. Despite the decline in its financial performance, Jaguar Land Rover can enhance its performance by employing different strategic decisions. The report proposes three main strategic decisions: capacity planning, location strategy, and quality management. By employing these strategies, Jaguar Land Rover will enhance its capacity to respond to the changing macroeconomic environment.

Introduction
1. Purpose
2. Scope
Comparative Financial Ratios
1. Liquidity Analysis
2. Profitability Ratios
3. Financial Leverage
Key Strategic Decisions
1. Capacity Planning
2. Location Strategy
3. Quality Management
Conclusion

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[...] Table 2 and graph 2 below illustrates Jaguar Land Rover's quick ratio. Table Amount in million Pound Year Current assets less Inventory Current liabilities Table 2 and graph 2 indicate a decline in the value of the firm's quick ratio from 0.74:1 to 0.56:1. Even though a firm can have a quick ratio that is less than the ideal ratio of Jaguar Land Rover needs to consider maintaining an ideal quick ratio. Coyle (2000) suggests that if a firm's quick ratio is greater than it means that the firm has sufficient quick assets that it can use in covering its current liabilities. [...]

[...] The industry challenges have had adverse effects on Jaguar Land Rover's financial performance. The report shows that the Jaguar Land Rover's level of profitability has declined while its degree of risk has increased, as evidenced by the decline in its debt-to-asset ratio and an increase in financial leverage. Even though the industry challenges have arisen from changes in the macro-environment, the firm's management team has the capability of strengthening its future financial performance. In respect to this, Jaguar Land Rover has formulated several strategic decisions that it intends to pursue. [...]

[...] Pursuing these issues will ensure that the firm meets the implemented regulatory requirement in addition to increasing the customers' level of satisfaction. The firm will further consider enhancing its effectiveness in regard to implementing the location strategy. To do so, Jaguar Land Rover needs to identify other low-cost countries that it can locate its production facilities. Through this strategy, Jaguar Land Rover will succeed in reducing the cost of production, hence increasing the likelihood of maximizing its profit. References Coyle, B. (2000). Corporate credit analysis. Chicago: Glenlake Publishing Company. Dransfied, R., & Needham, D. (2005) Applied business; AS level for Edexcel. [...]

[...] Oxford: Heinemann. Goel, S. (2014) Financial statements analysis; cases from corporate India. New York: Routledge. Jaguar Land Rover. (2020) Annual report. [Online]. Retrieved from file:///C:/Users/HP/Desktop/THE%20LAST%20MOMENTS . Mathee/jlr-ara-2018-19.pdf [HYPERLINK: file:///Users/anaelle/Desktop/pim-work/Downloads/THE%20LAST%20MOMENTS . Mathee/jlr-ara-2018-19.pdf] [Accessed 30 January 2020] Kachru, U. (2007) Production and operations management; text and cases. New Delhi: Excel Books. Khan, M., & Jain, P. [...]

[...] The sector has also been subject to increased regulatory requirements, government policies, and taxation (Jaguar Land Rover, 2020). Jaguar Land Rover's financial performance has been negatively affected owing to the prevailing market conditions. The comparative analysis of different financial ratios concerning the three years under consideration illustrates the trend in the firm's financial performance. Liquidity Analysis Current Ratio The liquidity of a firm relates to the ability of a firm to meet its short-term financial obligations using assets are easily converted into cash (Peterson & Fabozzi 2016). [...]

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