Financial Portfolio for Bosch

A Project in Partial Fulfillment

Of the Requirements for

ECBA: Business Finance for Managers

Instructor – Dianne Dinkel

May 11, 2014

This paper will provide a general company description and summarize a financial analysis of The Bosch Group. This paper will specifically analyze three years of financial statements, and discuss compound interest, Bonds and rate of return, Capital budgeting and dividend policies specifically for The Bosch Group. The Bosch Group is a leading global supplier of technology and services. Bosch services include training and design in pharma, food and confectionary, after sales, packaging design, and seminars. In 2013 The Bosch Group employed approximately 281,000 associates and generated sales of 63.37 million dollars. The Bosch Group has more than 360 subsidiaries and regional companies in 50 countries which includes a facility located in Charleston SC. The process I used to select Bosch as the company to analyze was through a business relationship. I met Sandeep Abrol, the Vice President of Material Acquisitions, North America for Bosch more than two years ago while managing a local business.

The Company Bosch was set-up in Stuttgart Germany in 1886 by Robert Bosch (1861 -1942), as a “workshop for precision mechanics and electrical engineering.” Since then, Bosch has invested 6.16 billion dollars in research and development and applied for over 5,000 patents, which is an average of 20 patents a day. The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group. Making up-front investments and planning long term, helps safeguard the company’s future. 92 percent of the share capital of Robert Bosch is held by a charitable foundation, which solidifies the company’s philanthropic goals. Bosch’s operations are divided into four business sectors: Automotive Technology, Industrial Technology, Consumer Goods, and Energy and Building Technology. The company offers technology worldwide that is “Invented for life”, which is the company motto. Bosch is the world’s largest independent parts supplier to the automotive industry, which is the sector the facility located in Charleston SC specializes. The 63.37 million in sales for 2013 was a 3 percent increase from 2012. I chose Bosch after meeting Sandeep Abrol, the Vice President of Material Acquisitions for Bosch. I am the sales manager at a local service business and he is a client. After several conversations with Mr. Abrol over a period of two years I inquired about his profession. After discussing details about his position at the Bosch facility in Charleston, I asked if he would like to form a business to business (B2B) relationship that would not only benefit himself, but the local employees at Bosch as well. He agreed and we have continued the B2B relationship, which has been very successful for both companies. My business relationship with Mr. Abrol has grown over the past year because he requested I send him my resume. We have discussed the possibility of employment with Bosch once I complete my degree. He has been the guiding force and the reason I am a student at CSU. In fact, he is waiting to read this analysis when it is complete, which will give me incredible insight and an ideal educational opportunity.

Analysis of a statement The growth rate of the firm has been positive but has slowed more recently. The average growth rate from 2011-2013 has been 3.2%. I determined the past growth rate of Bosch by dividing the retained earnings shown in the Income statement by the total assets shown in the balance sheet, then compared the results over three years. All of the information provided in the documents is in euro’s so I used a conversion factor of 1.37 to convert the euro’s to dollars. In 2011 the growth rate was 3.33%. In