Evaluation of Economic Performance of a Corporation

Abstract

The goal of the thesis was to evaluate and compare financial performance of Daimler Group by using financial and economic indicators. Daimler Group is a company operating in automotive industry. The work contains three chapters. The first is devoted to the theoretical base of financial indicators, second introduces methodology and Daimler Group as a company, third and final part practically evaluates firm’s financial performance in the time period of 2006 – 2014. Theoretical part elaborates closely traditional financial statement analysis, and modern methods to the evaluation of the firm’s performance. Financial statement analysis contains liquidity, profitability, activity, and financial leverage measures together with two bankruptcy models Z-score and the credibility indicator index. Modern methods approach elaborates Economic value added (EVA) of entity, Market value added (MVA), market value ratios, decomposition of EVA equity, and comparative technique TOPSIS. Second chapter describes methodology of the thesis and introduces Daimler Group. Final part applies all the concepts mentioned in the theoretical part to Daimler Group between 2006 and 2014. Recommendations and final results of the work are concluded in the final assessment. It was found out that Daimler reported very healthy financial values even though some of the firm’s operations were slightly affected by the financial crisis (2008 – 2009) and debt crisis in Eurozone (2010) in time period of 2006 - 2014. Nevertheless, Daimler recovered fast from the crisis and performed the best in the industry regarding ROA, dividend yield, and liquidity measures. Regarding inventory days, return on sales, EBIT, EAT and total revenue Daimler was outmatched its competitors Volkswagen Group and Toyota Motors.