...end of Mitsubishi?
Evolving Member
Joined: Oct 2006
Posts: 246
Likes: 0
From: The Last Sorta Free State in the US
5) Gross profit margin is actually pretty high for the automotive sector, around 17.7% ($3,393,730K gross profit / $21,989,214K revenue). For comparison, Toyota Motor Corporation's gross profit margin is only 15.92%.
6) Operating margin is only around 3.5% ($3,893,730K / $21,989,214K) but this is still better than Toyota's operating margin (2.03%).
7) Sales, general, and administrative costs are around 14.2% ($3,119,002 / $21,989,214K). Here, MMC loses big to Toyota, which only has SG&A costs around 10.5%. Notably, the MMC's SG&A reporting includes a $107,848K inclusion of depreciation, which doesn't seem customary under US Generally Accepted Accounting Principles (GAAP).
Pulling out this $107,848K from MMC's SG&A would make their SG&A costs around 13.7%, which is still appreciably more than Toyota's 10.5% SG&A.
6) Operating margin is only around 3.5% ($3,893,730K / $21,989,214K) but this is still better than Toyota's operating margin (2.03%).
7) Sales, general, and administrative costs are around 14.2% ($3,119,002 / $21,989,214K). Here, MMC loses big to Toyota, which only has SG&A costs around 10.5%. Notably, the MMC's SG&A reporting includes a $107,848K inclusion of depreciation, which doesn't seem customary under US Generally Accepted Accounting Principles (GAAP).
Pulling out this $107,848K from MMC's SG&A would make their SG&A costs around 13.7%, which is still appreciably more than Toyota's 10.5% SG&A.
Evolving Member
Joined: Oct 2006
Posts: 246
Likes: 0
From: The Last Sorta Free State in the US
So what?
The company's not in great shape financially and there seems to be significant inefficiency in translating gross revenue to net profit and subsequently, net cash flow.
Are they going to be around in North American in the coming years? Without seeing MMNA's specific financials, it's impossible to say. Strategically, I'd be hard-pressed to make an argument that they can continue to pursue a low cost strategy. Unfortunately, MMC's ability to differentiate their cars, as others have pointed out, has been weakening since 1989.
Tough road ahead, for sure.
The company's not in great shape financially and there seems to be significant inefficiency in translating gross revenue to net profit and subsequently, net cash flow.
Are they going to be around in North American in the coming years? Without seeing MMNA's specific financials, it's impossible to say. Strategically, I'd be hard-pressed to make an argument that they can continue to pursue a low cost strategy. Unfortunately, MMC's ability to differentiate their cars, as others have pointed out, has been weakening since 1989.
Tough road ahead, for sure.
Account Disabled
Joined: Dec 2012
Posts: 25
Likes: 0
From: North America
So what?
The company's not in great shape financially and there seems to be significant inefficiency in translating gross revenue to net profit and subsequently, net cash flow.
Are they going to be around in North American in the coming years? Without seeing MMNA's specific financials, it's impossible to say. Strategically, I'd be hard-pressed to make an argument that they can continue to pursue a low cost strategy. Unfortunately, MMC's ability to differentiate their cars, as others have pointed out, has been weakening since 1989.
Tough road ahead, for sure.
The company's not in great shape financially and there seems to be significant inefficiency in translating gross revenue to net profit and subsequently, net cash flow.
Are they going to be around in North American in the coming years? Without seeing MMNA's specific financials, it's impossible to say. Strategically, I'd be hard-pressed to make an argument that they can continue to pursue a low cost strategy. Unfortunately, MMC's ability to differentiate their cars, as others have pointed out, has been weakening since 1989.
Tough road ahead, for sure.
Evolving Member
Joined: Jun 2012
Posts: 186
Likes: 2
From: Europa
I'm an Evo fanboy. That being said, I don't think things look good at MMC.
http://www.mitsubishi-motors.com/con...ual2012-13.pdf
To be clear, Mitsubishi Motors North America, Inc. (MMNA) is a privately held company and therefore does *NOT* file Securities and Exchange Commission (SEC) filings in the EDGAR database. I was really surprised to figure out that the company's private.
Fortunately, Mitsubishi Motors Corporation (MMC) *IS* publicly traded on the Tokyo stock exchange and therefore must make public filings about their financial conditions.
Here are points from a quick financial review of the annual report:
1) In FY2012, MMC could not sustain its investing or financing activities w/ cash flow from operations. CFO = $1,452,565K, CFI = ($840,362K), CFF = ($639,733K); CFO + CFI + CFF = ($66,571K). This means MMC burned through $66.571 MILLION dollars of CASH from Mar 31 2011 through Mar 31, 2012.
2) The decrease of $66.571M in cash was a significant reversal when compared to FY2011, where MMC generated 52.875M Yen (~$609K USD) in cash. Note that $609K positive cash generation for a year, while at least above zero, is basically zero compared to revenues of $22B USD.
3) To be fair, the big change in FY2012 was the repayment of $1.152B USD of long term debt (LTD); this number was only 194,443M Yen (~$2.24M USD) in FY2011.
<continued next post>
http://www.mitsubishi-motors.com/con...ual2012-13.pdf
To be clear, Mitsubishi Motors North America, Inc. (MMNA) is a privately held company and therefore does *NOT* file Securities and Exchange Commission (SEC) filings in the EDGAR database. I was really surprised to figure out that the company's private.
Fortunately, Mitsubishi Motors Corporation (MMC) *IS* publicly traded on the Tokyo stock exchange and therefore must make public filings about their financial conditions.
Here are points from a quick financial review of the annual report:
1) In FY2012, MMC could not sustain its investing or financing activities w/ cash flow from operations. CFO = $1,452,565K, CFI = ($840,362K), CFF = ($639,733K); CFO + CFI + CFF = ($66,571K). This means MMC burned through $66.571 MILLION dollars of CASH from Mar 31 2011 through Mar 31, 2012.
2) The decrease of $66.571M in cash was a significant reversal when compared to FY2011, where MMC generated 52.875M Yen (~$609K USD) in cash. Note that $609K positive cash generation for a year, while at least above zero, is basically zero compared to revenues of $22B USD.
3) To be fair, the big change in FY2012 was the repayment of $1.152B USD of long term debt (LTD); this number was only 194,443M Yen (~$2.24M USD) in FY2011.
<continued next post>
I really wouldn't mind if mitsubishi folded in America. In my opinion the Evo X along with the cars they sell besides that now are pretty sad in the first place. Since I have a CT9A I have the superior of the cars. Other cars that would classify as superior in my mind would be the GSX eclipse and the 3000GT turbo. Parts will still be available aftermarket, as it is a cult tuner car. Take a look at all of the classic parts you can buy for older cars that have a solid following.
I really wouldn't mind if mitsubishi folded in America. In my opinion the Evo X along with the cars they sell besides that now are pretty sad in the first place. Since I have a CT9A I have the superior of the cars. Other cars that would classify as superior in my mind would be the GSX eclipse and the 3000GT turbo. Parts will still be available aftermarket, as it is a cult tuner car. Take a look at all of the classic parts you can buy for older cars that have a solid following.
So mitsu coming or going, I dont care either. General maintenance and finding parts easiliy-- a complelety different story-- none of it will be easy or nice let alone cheap or inexpensive. ( not that you said any of that!) Just my point.
Evolving Member
Joined: Oct 2006
Posts: 246
Likes: 0
From: The Last Sorta Free State in the US
Implicitly, yes. If the Netherlands factory impacted the cash flow statement, it should have been accounted for in this analysis.
That being said, it IS possible and acceptable under US GAAP to use off balance sheet entities (i.e., entities between 20% and 50% owned by MMC) and the equity method of accounting to hide a bunch of debt. This is how Enron worked its magic.
Without knowing how title was held to the Netherlands factory and seeing the financials (income, balance, cash flow statements) ALL entities, I wouldn't feel comfortable commenting definitively.
I did see a number of equity method investments (off balance sheet) on MMC's balance sheets but their annual report did not include the financials of those investments.
I think everybody doesnt realize that mitsubishi north america is a small part of mitsubishi parent company IHI. This company is huge making ships, aero engines, industrial manufacturing, electronics and turbos for a lot of manufacturers. I think that they will stick around as long as they want.
I have been wondering the same myself. I have been a Mitsubishi owner/ fanatic for years. Had my fair share of 3000gt VR4's, all of which spun bearings -__- , always wanted a gsx and now I have my Evo. I am a tech for Toyota and a huge fan of them. Unfortunately I see more advancement from Toyota compared to Mitsubishi, but I hope to see them last and continue to improve in the future.
I think everybody doesnt realize that mitsubishi north america is a small part of mitsubishi parent company IHI. This company is huge making ships, aero engines, industrial manufacturing, electronics and turbos for a lot of manufacturers. I think that they will stick around as long as they want.
