Internal Audit

Presented By:
Umar Azam
Strengths Weight Ratings Weighted Average
Score
Great Customer loyalty 0.05 3 0.15

Diversity in products range 0.05 4 0.20

Totals sales have been above 0.08 4 0.32

$150 million constantly over past
4 years
Dominate constant market share 0.06 3 0.18
in European market from last 5
years
Operates in 6 continents, 108 0.07 4 0.28
plants globally

Catering all income classes 0.04 4 0.16

Various product lines 0.05 4 0.20

Patriotic brand image 0.05 4 0.20

Ranked 7th on global fortune 0.03 2 0.06

Weaknesses Weight Ratings Weighted Average
Score
Inefficient marketing, declining 0.1 1 0.1
market share in US markets

Closing down 14 manufacturing 0.1 1 0.1

facilities in North America

Recognized as a Racial 0.02 1 0.02

brand(white dominated)

Reported loss of $14 billion at 0.1 1 0.1

end of year 2007

Offering less warranty as 0.03 1 0.03

compared to its competitors

Operating with large debt as 0.1 1 0.1

compare to its competitor’s

Cut 30,000 jobs and more 0.08 1 0.08

expecting at cost of low
performance

Poor operation declaration 0.04 2 0.08

Total 1 2.32
Financial Ratio Analysis
 Liquidity Ratios

2006 2005 2004 Industry

Average
Current Ratio 0.93 1.17 0.94 1.5

Quick Ratio 0.717 0.98 0.733 1.1

 Leverage Ratios
2006 2005 2004 Industry Average

Debt to total asset 1.01 0.95 0.94 N/A

Debt to Equity 81.4 19.53 17.23 N/A

LTD to Equity 49.65 11.33 10.78 N/A

TIE ratio -0.71 1.128 1.686 N/A

 Activity Ratios
2006 2005 2004 Industry Average

Inventory 13.83 17.22 16 8.7

turnover
Fixed assets 4.16 4.38 3.85 N/A
turnover
Total assets 0.574 0.64 0.586 0.7
turnover
A/C receivable 18.25 30.8 11.34 1.9
turnover
Average 20 11.85 32.2 N/A
Collection Period
 Profitability ratios
2006 2005 2004 Industry Average

Gross Profit 0.07 0.18 0.208 29.1

Margin

Operating Profit -0.04 0.053 0.07 3.2

Margin

Net Profit Margin -0.078 0.008 0.02 2

 Key Financial Ratios
2006 2005 2004 Industry
Average
ROA -0.045 0.005 0.012 1.2

ROE 3.64 0.11 0.217 8.4

EPS -3.723 N/A N/A 1.14

Price-Earning N/A N/A N/A 16.35

 Growth ratios
2006 2005 2004

Sales -0.09% 0.03% N/A

N.I -9.76% -0.587% N/A

EPS N/A N/A N/A