21 meanwhile the value of tesla at us33 billion 47

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Meanwhile the value of Tesla, at $US33 billion ($47 billion), is already more than half that of VW and it only sells 1 per cent of the cars. Why bother retooling for diesel to arrive at the same time the electric car has gone mainstream, either by government degree (because of emissions) or consumer taste.Significant liabilityAnd now we get to the second issue. Buried in the VW accounts is a finance book with €135 billion in liabilities. The assets backing these liabilities will be pretty much entirely vehicles, the value of which has just fallen very significantly. (If you bought a VW diesel yesterday, you are already looking at a much larger drop to resale value than you bargained for. Multiply that out and it's a hefty class action).So as well as a car maker, VW is also virtually a bank, requiring a portion of its book to be written off too. There may be questions about bail-outs. It is a dead certainty that Angela Merkel will soon be addressing the board in her official capacity. This just keeps getting worse.This story was found at: -than-it-looks-for-vw-20150928-gjwn46.htmlRequired:Identify and explain the implications of the scandal for the Statement of Financial Position and Statement of Financial Performance at the end of 2015.22
(Total for Question Ten: 10 marks)23
Appendix: Ratio formulaeReturn on equity:Net profit after taxShareholders equity*Return on assets:Earnings before interest and taxTotal assets*Profit margin:Earnings before interest and taxSales or Total revenueAsset turnover:Sales or Total revenueTotal assets*Gross profit margin:Gross profitSalesMark-up:Gross profitCost of goods soldExpense ratios:Expense itemSalesInventory turnover (number of days):Inventory* x 365Cost of goods soldReceivables turnover (number of days):Receivables* x 365Credit salesAverage collection period:Receivables* x 365(number of days)SalesWorking capital or Current ratio:Current assetsCurrent liabilitiesQuick asset orCurrent assets – inventory – prepaymentsAcid test ratio:Current liabilities – overdraftDebt ratio:Total liabilitiesTotal assetsTimes interest earnedEarnings before interest and taxor Interest coverage:Borrowing costs* Average or year-end figures may be used for these elements unless question specifies.24
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