Hardly Davidson Case

Karim El korchi

Nour Laraki

Malak El Ouazani

Question 1 :  Calculate the business operating and cash cycle

• Operating Cycle: DIO + DSO

DIO = Inventory / (COGS/365) = 207,726,000/(2,958,708,000/365) = 25.62

DSO = A/R / (Sales Revenue/ 365) = 112,406,000 / (4,624,274,000/365) = 8.62 

25.62 + 8.62 = 34.26 days

• Cash Cycle :Operating cycle – DPO

DPO = A/P / (COGS/365) = 223,902,000/(2,958,708,000/365) = 27.62

34.26 – 27.62 = 6.63 days

Question 2 : What is the goal of securitization? How does it change the economics of an asset and the related firm?

The main goal of securitization is to increase the liquidity of a firm.

Doing this a company can remove its assets from the balance sheet.

This process helps create opportunities for more loans.

Question 3 : How important to Harley is the ability to internally finance customer purchases? Is it a crucial portion of the value creation cycle?

We assume that inside customer financing is a basic bit of Harley Davidson's arrangement of activity. Likewise, it expands the estimation of association's things and pulls in new customers. Budgetary organizations of the association are extremely sweeping: they offer remarkable credit terms for winter buyers. Beside that, customers may request Harley card, which is a kind of Visa for customers. Other from that, Harley got Eagle Credit Corporation, which later changed name to Harley Davidson Financial Services. This association later got the opportunity to be most noteworthy general cruiser security, boosting Harley's driving positions.

As we see, budgetary organizations exchange off a huge bit of Harley's business and we believe it is a fundamental segment of their quality chain, so it should be bolstered as could be normal considering the present situation.

Question 4 : How does securitization change the economics of Harley Davidson? How is it reflected in the financial statement?

From our perspective, securitizing their receivables is a consistent stride for an organization, such a great amount of included with money related exchanges. Giving out so much credit can bring about expanded danger, which can be restricted by the procedure of securitization.