It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions

1. FINANCIAL ANALYSIS OF
SCANIA AND VOLVO
By :
Kaan Aydin Ataoglu - 14123053

2. Background of Scania & Volvo
Ratio Analysis with graph and data
Conclusion

3. •
•
•
•
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RENAULT TRUCKS . RENAULT

4. Current Ratio= Current Assets
Current Liabilities
2013 Scania = 150965 = 0.77
195616
1.4
0.92
0.67
0.77
1.27 1.23 1.24
1.13
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2010 2011 2012 2013
SCANIA VOLVO
SCANIA VOLVO
2010 1.40 1.27
2011 0.92 1.23
2012 0.67 1.24
2013 0.77 1.13
 The ratio is mainly used to give an idea of the company's
ability to pay back its short-term liabilities (debt and pay
ables) with its short-term assets (cash, inventory, receivables).
 Normally between 1.5 – 2
 If less than 1 (current liabilities > current assets)

5. 0.9
0.61
0.38
0.53
1.13
1.01
0.86
0.92
0
0.2
0.4
0.6
0.8
1
1.2
2010 2011 2012 2013
SCANIA VOLVO
SCANIA VOLVO
2010 0.90 1.13
2011 0.61 1.01
2012 0.38 0.86
2013 0.53 0.92
Quick Ratio= Current Assets – Stock
Current Liabilities
2013 Scania = 150965 – 47175 = 0.53
195616
 An indicator of a company’s short-term
liquidity. The quick ratio measures a
company’s ability to meet its short-term
obligations with its most liquid assets.
 Should be normally between 0.7-1 (to be
absolutely safe) which indicates that quick
assets exceed current liabilities
 The higher the quick ratio, the better the
company's liquidity position.

6. SCANIA VOLVO
2010 173.37 104.69
2011 597.50 359.08
2012 667.57 206.52
2013 661.09 129.32
173.37
597.5
667.57 661.09
104.69
359.08
206.52
129.32
0
100
200
300
400
500
600
700
800
2010 2011 2012 2013
SCANIA VOLVO
 A low gearing ratio represent a low proportion.
 Sell shares, Convert loans, Reduce working capital, Increase
profits. Use any methods available to increase profits, which
should generate more cash
Gearing = Short term loans& overdraft + Long term Liabilities x 100
Share Holders` funds
 Gearing shows a firms exposure to financial risk. A high
gearing percentage tells us that the firm has a high
level of loans compared to shareholder funds.
 High Gearing is over 50% & Low Gearing s between 0%
and 50%
 So the firm has to pay a higher interest charge

7. STOCK TURNOVER RATIO
SCANIA VOLVO
2010 11.92 44.59
2011 14.14 22.19
2012 13.16 15.28
2013 15.54 16.90
11.92
14.14 13.16
15.54
44.59
22.19
15.28
16.9
0
5
10
15
20
25
30
35
40
45
50
2010 2011 2012 2013
SCANIA VOLVO
Stock Turnover Ratio= Cost of Sales
Stock Level
 A ratio showing how many times a company's inventory
is sold and replaced over a period.
 A high ratio implies either strong sales or ineffective
buying.
 Higher the stock turnover ratio the quicker it is for the
stock to reach the customer.
 May need to approximate by using sales
competitor. (Might find how they doing
their business. So they can spurt against to
competitor)

8. SCANIA VOLVO
2010 20.77 7.50
2011 18.72 7.29
2012 18.85 6.08
2013 18.29 6.39
20.77
18.72 18.85 18.29
7.5 7.29 6.08 6.39
0
5
10
15
20
25
2010 2011 2012 2013
SCANIA VOLVO
Gross Profit Margin= Gross Profit
Sales( Turnover)
 A financial metric used to assess a firm's financial
health by revealing the proportion of money left
over from revenues after accounting for the cost of
goods sold.
 More efficient companies will usually see higher
profit margins.

9. SCANIA VOLVO
2010 5.73 0.67
2011 6.66 0.32
2012 5.63 -0.30
2013 6.36 0.45
5.73
6.66
5.63
6.36
0.67
0.32
-0.3
0.45
-1
0
1
2
3
4
5
6
7
8
2010 2011 2012 2013
SCANIA VOLVO
Net Profit Margin= PBIT x 100
SALE
 It measures how much out of every dollar of sales a company
actually keeps in earnings.
 A higher profit margin indicates a more profitable company
that has better control over its costs compared to its
competitors.
 A low profit margin can indicate pricing strategy and/or the
impact competition has on margins.

10. SCANIA VOLVO
2010 26.52 14.99
2011 13.51 6.50
2012 12.04 -6.48
2013 14.01 10.85
26.52
13.51
12.04
14.0114.99
6.5
-6.48
10.85
-10
-5
0
5
10
15
20
25
30
2010 2011 2012 2013
SCANIA VOLVO
ROCE= PBIT x 100
Total Cap. Employed
(Total Assets less. Cur. Liabilities)
 Measures a company's profitability and the
efficiency with which its capital is employed.
 A higher ROCE indicates more efficient use of
capital.
 Which means that Scania does a better job
of deploying its capital than Volvo.

11. Result of analysis: SCANIA VOLVO
Current Ratio - 
Quick Ratio - 
Gearing(%) - 
ST Ratio - 
Gross P Margin  -
Net P Margin  -
ROCE  -
Scania is a better company to invest in because, they retain more
profit than Volvo and the Return on capital employed ratio shows
better value.

12. REFERENCE LIST
 History of Scania:
(http://www.scania.co.uk/about-scania/history/)
 History of Volvo:
http://www.volvogroup.com/group/global/engb/volvo%20group/history/ourhistory/1920/Pages/1920.aspx#sthash.ONlb57Mi.dpuf
 Information on ratios:
(http://www.investopedia.com/)
 Data used for analysis and verification:
 Scania(http://fame.bvdinfo.com/version20141127/Report.serv?_CID=63&context=21MLAHV0JZYSBYK&SeqNr=1)
 Volvo(http://fame.bvdinfo.com/version20141127/Report.serv?_CID=233&context=21MLAHV0JZYSBYK&SeqNr=0)