Sauer-Danfoss Sauer-Danfoss Inc. (the Company), a U.S.

Delaware corporation, and its predecessor organizations have been active in the mobile hydraulics industry since the 1960s. Sauer-Danfoss is a global leader in the development, manufacture, and marketing of advanced systems for the distribution and control of power in mobile equipment. The Company designs, manufactures, and markets hydraulic, electronic, and mechanical components, as well as software and integrated systems that generate, transmit, and control power in mobile equipment. Principal products are hydrostatic transmissions, open circuit piston pumps, open circuit gear pumps and motors, low speed high torque motors, steering units, microprocessor controls, electro hydraulics, and control valves. The Company sells its products to original equipment manufacturers (OEMs) of highly engineered, off-road vehicles who use Sauer-Danfoss products to provide the hydraulic and electronic power for the propel, work, and control functions of their vehicles. The Company's products are sold primarily to the agriculture, construction, road building, turf care, material handling, and specialty vehicle markets. The Company conducts its business globally under the Sauer-Danfoss name. The Sauer-Danfoss family today consist of 19 engineering and manufacturing facilities, approximately 280 distributors and Authorized Service Centers, and 20 sales companies. Around the world, mobile equipment manufacturers rely on Sauer-Danfoss expertise for the most innovative work, propel, control and steering solutions. Working in partnership with our customers, we provide high-value, high-performance components for a broad range of mobile equipment applications. As one of the largest companies in the mobile hydraulics industry, Sauer-Danfoss designs, manufactures and sells a complete range of engineered hydraulic and electronic components including:

Hydrostatic transmissions Mobile electronics Orbital motors Steering components PVG spool valves

The business structure also includes five businesses under separate brands:

Turolla OpenCircuitGear - Open circuit gear pumps and motors Comatrol - Cartridge valves and HICs Schwarzmller-Inverter - Electric inverter products Valmova - Directional control valves Hydro-Gear - Hydrostatic drive systems

The Sauer-Danfoss team is dedicated to delivering the highest quality products for our customers. The company has 19 engineering and manufacturing facilities in Europe, the Americas and Asia-Pacific regions. Publicly traded on the New York Stock Exchange (NYSE), Sauer-Danfoss' 2011 revenues were approximately $2.1 billion.

Financial Review for the Year 2009. A) Income Statement.

In 2009 the companys revenue were $1.1Billion which was far low as compared to the revenues of 2008 which was $2.1Billion (approx). Due to lower top line as compared to previous year Sauer-Danfoss Inc. bottom line was negative. Sauer-Danfoss Inc. operating revenue as well as Earning before tax was on the negative side. B) Cash Flow. In 2009 Sauer-Danfoss Inc. cash from operating activities stood at $ 86,844, which was majority due to Accounts Receivable ($91,434) and Inventories ($ 1,53,386), cash from investing activities were ($42,221) whereas the cash from Financing activities stood at ($24680), the net increase during the year was $15645. C) Balance Sheet. In spite of negative earnings in 2009 the Cash and Cash Equivalents stood at $38,790. Sauer-Danfoss Inc. Accounts Receivable is always high i.e. In current assets the major contribution is of Accounts Receivable which reflects that the revenue collection of Sauer-Danfoss Inc. is not efficient. Inventories are also on the same wave length. Both Inventories and Accounts Receivable needs to be assessed and measures need to be taken so that there is an even flow of funds. Reduction in the value of Goodwill can be seen for the year end 2009. Sauer-Danfoss Inc. Debts rised during 2009 as they had negative revenues. Sauer-Danfoss Inc. had to borrow funds so as to keep continuing their business cycle. Financial Review for the Year 2010. A) Income Statement. In 2010 Sauer-Danfoss Inc. revenues increased by 41.54%, the revenues stood at $ 1.6Billion the operating revenues were $2,43,427 the research and development expenses were reduced for the year 2010 and the impairment charges were NIL. The operating expense were also low whereas the earnings after tax ( EAT ) was $2,13,399. The revenues were positive for the year 2010. B) Cash Flow. Compared to previous year 2009 the Sauer-Danfoss Inc. revenues stood at $2,46,268 for year 2010. The cash from operating activities was $2,69,329 , cash from Investing activities was (18,036) whereas Cash from Financing activities was (2,49,240) as there was repayment of Long Term Debt in the amount of $3,26,394. C) Balance Sheet. There is an reduction in Debt due to its repayment during the year. Though Sauer-Danfoss Inc. has not enough liquid assets i.e. current assets include Accounts Receivables and Inventory the revenue earned during the year are the one on which Sauer-Danfoss Inc. rely on. But for Sauer-Danfoss Inc. need to perform in terms of their Top Line. Financial Review for the Year 2011.

A) Income Statement. Sale is on an increasing trend, the sales for the year end 2011 were $2,057,487. The Interest expenses were lowered due to repayment of debts which resulted in increase in the revenues. Also Non-Operating expenses were lowered to $25420 in 2011 as compared to $48342 and $60865 in 2010 and 2009 respectively. SauerDanfoss Inc. net income was $229870. B) Cash Flow. The depreciation for year 2011 was $ 88,094 which was less compared to 2009 and 2010. The Cash from operating activities stood at $ 3,74,162, Cash from Investing activities stood at $ (2,27,986) and Cash from Financing activities was (112,584) which resulted in net increase in Cash of $ 28,521.

C) Balance Sheet. Accounts Receivables and Inventories hold the major composition of Current Assets, also there was notable increase in Cash deposited with related persons from $ 986 in 2010 to $ 1,78,727 in 2011. Due to these items there was an increase in Current Assets. Notes payable and bank overdrafts were paid off. Movement In Interest Expenses. The Interest expenses was quite uniform during the period of 2009 and 2010. But due to repayment of debts in 2010 itself, the interest expenses reduced to greater extent in 2011. Risks Associated. Sauer-Danfoss Inc. has large amounts of Accounts Receivables pending and also it is not able to manage its Inventories efficiently. Since Sauer-Danfoss Inc. has its operations global it gets affected by the economic conditions and the fiscal policies. Eg. Recession in 2008 affected their revenue to a greater extent as there net income was negative. Apart from the global conditions the currency fluctuations hampers the revenue of Sauer-Danfoss Inc. as it almost trades in every major currency. Sauer-Danfoss Inc. is over dependent on Danfoss A/S for borrowings, which is an economic threat in itself as the credit markets are getting tighter. Ways to Mitigate Risk. Sauer-Danfoss Inc. should make itself efficient in terms of payments collections which can increase their cash balances i.e. liquidity. Fiscal policy of foreign countries is an uncontrollable factor however it can keep a check on the economy through the tools and indicators of the economic breakdown. For currency fluctuations Sauer-Danfoss Inc. must process there forward contracts efficiently and tactfully so as to avoid currency risks. Sauer-Danfoss Inc. needs to be less dependent on Danfoss A/C and try to manage their cost of production and various expenses so as to minimize there cost and increase there revenue.