VESTEL ANALYSIS

FINANCIAL ANALYSIS OF

VESTEL BEYAZ EŞYA A.Ş2014 MBA FALL TERM

TERM PROJECT

Prepared By: Seda ÇELEBİ

Submitted To: Prof. Dr. E. Abdulgaffar AĞAOĞLU

05.01.2015

Table of Contents1. PREFACE ...................................................................................................................................... 4

2. INTRODUCTION .......................................................................................................................... 4

2.1. Company Highlights ...................................................................................... 4

2.2. Financial and operational highlights .............................................................. 4

2.3. R&D Strategies.............................................................................................. 5

2.4. Vestel Technology Academy ......................................................................... 6

3. FUNCTIONING & IMPORTANCE OF BIST ............................................................................. 6

3.1. GENERAL INTRODUCTION......................................................................... 6

3.2. STAKEHOLDERS ......................................................................................... 6

3.3. FUNCTION.................................................................................................... 7

3.4. MARKETS UNDER BORSA ISTANBUL ....................................................... 7

3.4.1. Equity Market: ............................................................................................................... 8

3.4.2. Emerging Companies Market: .................................................................................... 9

3.4.3. Debt Securities Market:................................................................................................ 9

4. VESBE PERFORMANCE IN BIST ............................................................................................ 9

4.1. Share Price Summary ................................................................................. 10

4.1.1. 2013 .............................................................................................................................. 10

4.1.2. 2014 .............................................................................................................................. 10

4.2. Change Rate Momentum based on terms................................................... 10

4.3. Share Price Change Indicators [5]............................................................... 10

5. STRATEGIC PLANNING & MARKET ANALYSIS................................................................. 11

5.1. White Goods Industry SWOT Analysis [6] ................................................... 11

5.2. Vestel Beyaz Eşya SWOT Analysis............................................................. 13

6. FINANCIAL & COMPERATIVE ANALYSIS............................................................................ 15

6.1. VESBE Vertical Analysis ............................................................................. 15

6.2. VESBE Horizontal Analysis ......................................................................... 18

6.3. VESBE FINANCIAL RATIOS ...................................................................... 22

6.3.1. VESBE FINANCIAL RATIOS – 2011 ...................................................................... 22



6.3.4. VESBE FINANCIAL RATIOS 2011 – 2012 – 2013 ............................................... 25

6.4. ARCELIK FINANCIAL RATIOS ................................................................... 26

6.4.1. ARCLK FINANCIAL RATIOS – 2011 ...................................................................... 26



6.4.4. ARCLK FINANCIAL RATIOS 2011 – 2012 – 2013 ............................................... 29

6.5. COMPERATIVE ANALYSIS........................................................................ 30

6.5.1. LIQUIDITY ................................................................................................................... 30

6.5.2. ASSET MANAGEMENT ............................................................................................ 31

6.5.3. PROFITABILITY MANAGEMENT ............................................................................ 32

6.5.4. DEBT MANAGEMENT............................................................................................... 32

6.5.5. MARKET VALUE ........................................................................................................ 33

6.6. DUPONT ANALYSIS................................................................................... 35

6.6.1. DUPONT ANALYSIS OF VESBE ............................................................................ 35

6.6.2. DUPONT ANALYSIS OF ARCLK ............................................................................ 35

6.6.3. DUPONT ANALYSIS COMPARISON IN REFERENCE TO ARCLK ................. 36

7. CONCLUSIONS.......................................................................................................................... 37

8. REFERENCES............................................................................................................................ 38

9. APPENDICE ................................................................................................................................ 39

9.1. VESBE Balance Sheet [8] ........................................................................... 39

9.2. VESBE Income Statement [8] ..................................................................... 40

9.3. VESBE Graphics ......................................................................................... 41

9.4. ARCLK Balance Sheet [8] ........................................................................... 44

9.5. ARCLK Income Statement [8] ..................................................................... 46

1. PREFACE

2. INTRODUCTIONVestel Beyaz Eşya Sanayi ve Ticaret A.Ş is engaged in the manufacture and sale of electronic equipment and white goods. Its products include refrigerators, washing machines, cookers, dishwashers, air-conditioners and water heaters. The company was founded on November 13, 1997 and is headquartered in Istanbul, Turkey. Vestel City, located in Manisa, is the largest industrial complex in Europe to undertake production activities under a single roof. Huge facilities equipped with the latesttechnology and high production capacity, Vestel undertakes manufacturing in Manisa, Turkey and Alexandrov, Russia. The Company's marketing and sales activities are carried out by two other group companies, Vestel Dayanikli Tuketim Mallari Pazarlama AS and Vestel Dis Ticaret AS. Vestel Beyaz Esya is a subsidiary of Vestel Group. The Company carries out its marketing-sales activities in France, Germany, Spain, Finland, Kazakhstan, Romania, the UK and the Netherlands through Vestel’s international offices and local sales-distribution channels; and in Russia and in the Middle East. [1]

2.1. Company HighlightsSeveral important highlights about the company are presented below [1]:

∑ One of Turkey’s top three and Europe’s top ten manufacturers of white goods∑ One of Europe’s largest original design manufacturers (ODM)∑ Vestel Beyaz Eşya is the first Turkish company in the sector to obtain the ISO

50001 Energy Management System Certification∑ With its environmental awareness, Vestel Beyaz Eşya was the first white

goods manufacturer to receive the “Environment Certificate”∑ Vestel Beyaz Eşya manufactured the first 8 kg Washing Machine with a class

A energy efficiency rating, breaking a world record by consuming 80% less energy and water

∑ Vestel Beyaz Eşya has created the market of its own in the 9 kg washer and 6Kg. drier segment with Automatic washer-drier, a washing machine that offers the fastest performance in Turkey

∑ The company started mass production of Turkey’s first 100% domestically produced Induction ovens.

Vestel Beyaz Eşya conducts its activities within the framework of the “TS-EN-ISO 14001 / Environmental Management System Certificate” and “ISO 50001 / Energy Management System Certificate” granted by the Turkish Standards Institute (TSE) [1]

Figure 1

2.2. Financial and operational highlights∑ Vestel Beyaz Eşya improved its gross profit margin from 2.8% to 8.8% and its

EBITDA margin from 1.9% to 9.9% in 2013.

∑ The market capitalization of Vestel Beyaz Eşya stood at TL 577.6 million as of December 31st, 2013.

∑ EBITDA, which was 15M EUR in 2012 with 1.9% margin has risen to 80M EUR with a margin of 9.9%.

∑ Vestel Electronics’ stake in the Company increased from 75.28% to 87.65% during the fiscal year 2013.

∑ In 2012, net profit indicated as -8M EUR with a margin of -0.9% has risen to 21M in 2013 with a margin of 2.6%. [1]

In January 2014, Vestel Elektronik Sanayi ve Ticaret A.Ş, increased its stake in the Company to 92.6%.Vestel Beyaz Eşya is currently active throughout Turkey with the Group’s:

Vestel reaches different consumer groups in 145 countries through its global marketing and sales network. [1]

Figure 2

2.3. R&D StrategiesVestel Beyaz Eşya carries out its production activities within Vestel City, the largest industrial complex in Europe in a single location of 1.1 million m². The company gives strategic importance to R&D in development and competition by giving priority to eco-

Vestel Stores1160

Vs Outlets14

Dealers 726

Authorized service centers331

Central Serivces15

emagaza.vestel.com.tr, vsoutlet.com.trE-Stores

friendly technologies”, “functionality” and “affordability” in its products. With a team of approximately 300 people in R&D, Vestel Beyaz Eşya carries out activities in the areas of the development or application of new technologies, new product designs, development of environmentally friendly products, and improvements in productivity and cost-efficiency. [1]

Several products are introduced below:

∑ Ready Cook Built-in Oven: First built-in oven in Turkey that can be controlled remotely. It can be remotely managed from a mobile phone or tablet application. Oven allows users to save their personal cooking preferences.

∑ A+++ Combi Refrigerator: The Vestel A+++ Combi Refrigerator consumes 60% less energy than products of energy class A.

∑ Washer-drier: The fastest of its segment with its 29-minute washer-drier program, the Vestel washer-drier has a 9 kg washing capacity and 6 kg drying capacity along with an anti-allergy and hygienic laundry washing feature.

2.4. Vestel Technology AcademyVestel Technology Academy was developed by a partnership of Vestel Group and Özyeğin University. The program aims to enhance the technical knowledge of Vestel engineers and to raise their awareness and knowledge about global developments in technical fields. In addition to the technical training programs, the Company launched the Business Administration Academy in 2013 in order to provide a graduate program in business administration without a thesis to its employees. [1]

3. FUNCTIONING & IMPORTANCE OF BIST

3.1. GENERAL INTRODUCTIONThe Borsa Istanbul (BIST) is the exchange entity of Turkey. It is the combination of the former Istanbul Stock Exchange (ISE), the Istanbul Gold Exchange and the Derivatives Exchange. It was established with a founding capital of approx. US$240 million on April 3rd, 2013 for the purpose of serving as a securities exchange. It began to operate on April 5th, 2013. Borsa Istanbul became the only exchange in Turkey where securities, derivatives and commodities are being traded. It is a self-regulatory entity, which means that it has the authority to regulate its own markets, listed companies and member firms. [2]

3.2. STAKEHOLDERSStakeholders of Borsa Istanbul as of May 2014 are [2]:

Stakeholder Share %

Turkish Government, Treasury 49

BIST (Former ISE) 41

OMX Technology AB 5

99 Brokerage Firms 3,7

TCMA (Turkish Capital Markets Association) 1,3

3.3. FUNCTIONThe main functions of Borsa Istanbul are as follows [3]:

∑ Ensure that capital market instruments, foreign currencies, precious metals and other instruments approved by CMB are traded in a transparent, efficient, competitive, fair and stable environment;

∑ Create and develop markets, sub-markets, platforms or systems for trading; ∑ Examine listing application of capital market instruments, request additional

information and documents if necessary; ∑ Suspend trading and delist capital market instruments if necessary; ∑ Execute regulations about the disclosure of traded instruments; ∑ Determine trading days and hours for the markets; ∑ Sanction the Borsa Istanbul members violating regulations; ∑ Take necessary precautions to prevent insider trading, manipulation etc.

Financial instruments currently traded on Borsa Istanbul markets are: ∑ Equities, ∑ Exchange traded funds, ∑ Government bonds and bills, ∑ Corporate bonds and bills, ∑ Islamic bonds (sukuk), ∑ Covered warrants, ∑ Turbo certificates, ∑ Money market instruments (repo/reverse repo), ∑ Asset backed securities, ∑ Turkish sovereign Eurobonds, ∑ FX dominated Treasury Sukuk ∑ Futures and options

3.4. MARKETS UNDER BORSA ISTANBULThere are five main markets at the Borsa Istanbul and several submarkets within these main markets [4]:

Figure 3

3.4.1. Equity Market:Equities, warrants, certificates, rights coupons and exchange-traded funds are traded on the stock market. Only brokerage firms are allowed to trade equities. The size of markets is given in the table below [4]:

Figure 4

3.4.1.1. National Market:

National Market is the main market where companies that fulfil the listing and liquidity criteria, determined by the Exchange are traded. Liquidity criteria are the daily average trading volume and number of traded shares. In case a company fails to meet the minimum criteria, it is transferred to the Second National Market. The main indicator of the Exchange, the BIST-100 Index, is composed of 100 companies listed on the National Market. As of the end of May 2014, there were 223 companies traded on the National Market. [4]

3.4.1.2. Second National Market:The Second National Market was established for small and medium sized companies. The Second National Market consists of companies transferred from the National Market that can no longer meet the listing requirements on the National Market. 85 companies were listed on the Second National Market as of May 2014. [4]

3.4.1.3. Watch List Companies Market:The Watch List Companies Market is for companies under special surveillance and investigation due to extraordinary events. Extraordinary events cover unusual trades, incomplete, inconsistent and/or late disclosure of information to the public. As of the end of May 2014, 27 companies were in the Watch List Market. [4]

3.4.1.4. Collective Products Market:Collective Products Market was introduced in November 2009. As of May 2014, 12 investment trusts, 31 real estate investment trusts and 6 venture capital investment trusts were traded on this market. There were 17 exchange traded funds as of May 2014. [4]

3.4.2. Emerging Companies Market:The ECM is designed for companies with high growth potential but which fail to meet the listing criteria of the Stock Market. There are no quantitative admission criteria, such as profitability, paid-in capital, market capitalization or offering size, etc. However, there are certain conditions that the company is expected to fulfil. [4]

3.4.3. Debt Securities Market:There are five sub-markets within the Debt Securities Market;

∑ Purchases & Sales,∑ Repo/Reverse Repo,∑ Repo Market for Specified Securities,∑ Interbank Repo/Reverse Repo,∑ Offering Market for Qualified Investors∑ Equity Repo Market

Government bonds, Treasury bills, corporate bonds, revenue-sharing certificates and liquidity bonds of the CBRT are traded in these markets. Banks and brokerage firms are allowed to operate in the Debt Securities Market. [4]

4. VESBE PERFORMANCE IN BISTThe shares of Vestel Beyaz Eşya A.Ş., a subsidiary of Vestel Elektronik Sanayi ve Ticaret A.Ş., have been trading on the Borsa Istanbul (BIST) under the VESBE ticker since 2006. As of the end of 2013, Vestel Beyaz Eşya shares were included in the BIST All Shares, BIST All Shares-100, BIST National, BIST Industrials and BIST Metal Products indices.

The Company received financial ratings from Fitch, Standard and Poors (S&P) and Moody’s again for the fiscal year end 2012, whereby Fitch attributed a “B stable“, S&P a “B-stable” and Moody’s a “B2 stable” respectively. In 2013; however, the company requested Moody’s and Fitch to stop their ratings on Vestel due to redemption of its Eurobond. [5]

4.1. Share Price Summary

4.1.1. 20132013

Number of Shares 190,000,000Free-float 59,800,000High 3.14Low 2.57Year-end 3.04Market Capitalization* 577,600,000

The market capitalization of Vestel Beyaz Eşya stood at TL 577.6 million as of December 31st, 2013.* [5]

4.1.2. 2014(Approx. yearly change rate 250%) [5]

Figure 5

4.2. Change Rate Momentum based on termsMomentumRS – Relative Strength**1M +11.1%3M +41.8%1YR +253.3%

** RS: 1 year Relative Strength measures a stock's price change over the last year relative to the price change of a market index. [5]

4.3. Share Price Change Indicators [5]

Indicator Definition Price vs.52w High The Price vs. 52 Week High indicator compares the

current price to the highest price at which the stock has traded at in the last 52 weeks (12 months), ie. the formula is : (Current Price - 52 week High) / 52 Week High.

-3% Red

Academic Research has shown that stocks close to their 52 week highs tend to outperform. This is apparently because investors use the 52- week high as an "anchor" against which they value stocks, thus they tend to be reluctant to buy a stock as it nears this point regardless of new positive information. As a result, investors underreact when stock prices approach the 52-week high, and consequently, contrary to most investors' expectations, stocks near their 52-week highs tend to be systematically undervalued.

50d MA This measures price vs. the 50 Day Moving Average. The 50 Day Moving Average is a stock price average over the last 50 days which often acts as a support or resistance level for trading.

+10,1% Green

200d MA This measure the share price vs. the 200 Day Moving Average (200d MA) expressed as a percentage difference. A negative number indicates a share price trading below the 200d MA. The 200d MA is a long term moving average calculated by dividing the sum of the security's average closing price over the last 200 days by 200.

The 200-day moving average is a popular technical indicator which investors use to analyse price trends. A stock that is trading above its 200 Day Moving Average is considered to be in a long term uptrend.

+70,7% Green

5. STRATEGIC PLANNING & MARKET ANALYSIS

5.1. White Goods Industry SWOT Analysis [6]The household appliances industry is one of the well-established and dynamic sectors in Turkey. The industry is mainly composed of two subsectors; namely, the white goods (durables) which dominates he sector and the small household appliances. Production of Four Major Household Items (1,000 units) is as follows:

PRODUCTS 2011 2012 2013Refrigerators 6.790.078 7.588.751 7.225.799Washing Machines

5.357.269 5.467.625 5.754.905

Dishwashers 2.900.211 3.204.325 3.248.152Ovens 3.504.720 3.636.945 3.853.600

According to the recent statistics available, Turkey ranked the 5th in refrigerators, the 4th in dishwashers and the 7th in washing machines exports worldwide. Turkey's imports of the four major household appliances increased in number by 24% last year

while imports of household appliances increased 22,3% in 2010 and 29,4% in 2011, compared to the figures of the previous year.

In 2013, export of household appliances industry reached to 2,9M USD with an increase of %5.7 when compared to 2012. The growth trend in exports that belong to recent years is the consequence of the following industrial achievements:

Strengths

∑ Turkish manufacturers give high priority to innovation and new product development

∑ Research and development activities are carried out consistently∑ Turkey is one of the largest white goods producers in Europe∑ Quality based procedures yielded success in foreign markets∑ High competition environment due to applied innovation ∑ Skillful and experienced human resources in the sector∑ Existence of strong and agile production mechanisms∑ Consistent growth of the sector∑ High technology is more used in the production process∑ More Research and development activities are conducted∑ Application of existing ISO standards to raise the product quality∑ More companies have acquired ISO certificates

∑ Customer has been involved in the production design phase

∑ Significant contribution to workforce

Weaknesses

∑ Economic welfare is still not reached by population wide∑ Competition based on low pricing due to low profit margin in Asia Pacific

markets

Opportunities

∑ The white goods is a relatively calm, low innovation market∑ Embedding smart Technologies to create novel/ smart products and features

(e.g. energy efficient products, connected products)∑ Further improvement of B2B and B2C web based sales to ease procurement

process∑ Aiming markets that have low penetration of White goods such as Africa, India

and Asia Pacific∑ Foreign merging possibilities to increase production capacity and to penetrate

brand new markets∑ Geographical advantage to become regional production center, Turkey is a

hub between continents

Threats ∑ Undergoing economic recession in Europe∑ Restrictive regulations and policies ∑ Fluctuant raw material prices

∑ China taking over lead in production of small household appliances

Rapid, low cost and high quality production capabilities of foreign competitions

5.2. Vestel Beyaz Eşya SWOT AnalysisThe Vestel brand is also one of the top ten well-known brands in Turkey. Vesbe generates just under two thirds of its revenues from export sales. Vestel has a strong presence at home and in abroad. Benefiting from Vestel Group’s sales network, Vesbe enjoys an extensive reach in the Europe and MENA region. Vestel Foreign Trade distributes Vesbe products to the European market through its eight subsidiaries in France, Germany, Spain, the UK, the Netherlands, Finland, Russia and Romania. Vesbe also benefits from significant cost advantages over its peers thanks to economies of scale, high tech production facilities, localization in component procurement and proximity to key export markets. The company has continuously invested in R&D to develop energy and water-efficient and quieter products at lower costs – the company currently boasts with 800 R&D personnel, with 1.4% of revenues being allocated to R&D activities. [1]

Strengths [1]

∑ Being one of Turkey’s top three and Europe’s top ten manufacturers of white goods

∑ Being one of Europe’s largest original design manufacturers (ODM)∑ Receipt of a license to use the Japanese electronics maker Sharp’s brand to

make and sell appliances in Europe (Binding agreement has been signed on September 2014)

∑ The Company’s R&D activities present its high-tech products combined with original designs and environmentally friendly approach

∑ Current position of being number one supplier of white goods in Europe and the neighboring region.

∑ Sustainability is one of the key strategies as the company sets the goal of creating the world’s most economic dishwasher which consumes only 5.5 liters of water and consumes %20 less energy in A+++ dishwasher class.

∑ Vestel City, the largest industrial complex in Europe in a single location∑ Developed Vestel Technology Academy Program with partnership of Özyeğin

University where the company launched graduate studies in major engineering fields as well as MBA for its employees.

∑ VESVE is a part of the Zorlu Group which is present in the electronics, textile, IT, consumer durables, energy, mining and real estate sectors therefore it can benefit group’s marketing network and know-how as well as its brand recognition in Turkey.

Weaknesses [1]

∑ Economic welfare is still not reached by population wide∑ Raw materials constitute bulk portion of production costs and steel and

plastics have significant share in raw material costs. Operating margins depend on high material costs.

Opportunities

∑ Foreign merging possibilities to increase production capacity and to penetrate brand new markets

∑ New research and innovation programs such as H2020 to benefit international R&D collaboration and to raise competitiveness in energy-efficient and eco-friendly product innovation. [7]

∑ Energy Label has a higher impact on innovation than Eco-design because it offers a clearer opportunity to differentiate products and can be used as a marketing tool [7]

Threats [1]∑ Declining global liquidity, a complex and non-fully-independent monetary

policy, low growth in the EU and the middle-income trap are major economic risks

∑ Ongoing recession in the Eurozone and contraction in the European white goods market

∑ China taking over lead in production of small household appliances

∑ Rapid, low cost and high quality production capabilities of foreign competitions

6. FINANCIAL & COMPERATIVE ANALYSIS

6.1. VESBE Vertical Analysis

BALANCE SHEET - VERTICLE ANALYSISCurrency in As

of:DEC 31 DEC 31 DEC 31

Millions of Turkish New Liras

2011 PERCENTAGE 2012 PERCENTAGE 2013 PERCENTAGE

TRY TRY

AssetsCash And Equivalents 7,3 0,60% 27,2 2,07% 18,6 1,37

Trading Asset Securities 12,6 1,03% -- --TOTAL CASH AND SHORT TERM INVESTMENTS

19,9 1,63% 27,2 2,07% 18,6 1,37

Accounts Receivable 605,6 49,68% 635,6 48,33% 539,9 39,9

Other Receivables 33,4 2,73% 50,9 3,87% 61,2 4,52

TOTAL RECEIVABLES 639 52,42% 686,5 52,20% 601,2 44,43

Inventory 229,8 18,85% 221,3 16,83% 324,1 23,95Prepaid Expenses 4,4 0,36% 3,4 0,25% 4,2 0,31

Other Current Assets 0,6 0,05% 16,4 1,25% 15,1 1,11

TOTAL CURRENT ASSETS 893,7 73,31% 954,8 72,60% 963,2 71,19

Gross Property Plant And Equipment

636,5 52,21% 712,8 54,19% 797 58,91

Accumulated Depreciation -345,4 -28,33% -404,2 -30,73% -467,5 -34,55NET PROPERTY PLANT AND EQUIPMENT

291 23,87% 308,6 23,46% 329,5 24,35

Deferred Tax Assets, Long Term

-- -- --

Deferred Charges, Long Term

32,8 2,70% 45,5 3,45% 54,2 4

Other Intangibles 1,5 0,12% 3 0,23% 4,1 0,3

Other Long-Term Assets -- 3,4 0,25% 1,9 0,14TOTAL ASSETS 1.219,00 100/% 1.315,20 1,00 1.352,90 100%

LIABILITIES & EQUITY

Accounts Payable 442,2 36,27% 413 31,40% 452,1 33,41

Accrued Expenses 9,4 0,77% 6,3 0,48% 13 0,96

Short-Term Borrowings -- 264,8 20,13% --Current Portion Of Long-Term Debt/Capital Lease

187,9 15,41% 23 1,75% 79,9 5,9

Current Income Taxes Payable

-- 3,4 0,26% 3,9 0,29

Other Current Liabilities, Total

20,2 1,65% 9,6 0,73% 7,3 0,54

TOTAL CURRENT LIABILITIES

659,7 54,11% 720,1 54,75% 556,3 41,11

Long-Term Debt 36,4 2,98% 87,7 6,67% 212,1 15,67

Pension & Other Post-Retirement Benefits

9,5 0,77% 12,6 0,95% 12,4 0,92

Deferred Tax Liability Non- 3,7 0,30% 3,5 0,27% 1,8 0,13

CurrentOther Non-Current Liabilities -- -- 29,4 2,17

TOTAL LIABILITIES 709,3 58,19% 824 62,65% 812,1 60,02

Common Stock 190 15,58% 190 14,44% 190 14,04

Additional Paid In Capital 109 8,94% 109 8,28% 109 8,056

Retained Earnings 201 16,48% 183,4 13,94% 236,1 17,45

Comprehensive Income And Other

9,7 0,79% 8,8 0,66% 5,6 0,41

TOTAL COMMON EQUITY 509,7 41,81% 491,3 37,35% 540,8 39,97

TOTAL EQUITY 509,7 41,81% 491,3 37,35% 540,8 39,97

TOTAL LIABILITIES AND EQUITY

1.219,00 1,00 1.315,20 1,00 1.352,90 100

INCOME STATEMENT - VERTICLE ANALYSIS

Currency in

As of:

31.Ara 31.Ara 31.Ara

Millions of Turkish New Liras

2011

PERCENTAGE

2012

PERCENTAGE

2013

PERCENTAGERestated Restated TRY

TRY TRY

Revenues 1.973,20100%

1.883,40 100% 2.028,70 100%

TOTAL REVENUES 1.973,20 100% 1.883,40 100% 2.028,70 100%

Cost Of Goods Sold 1.788,40 90,63% 1.831,00 97,21% 1.850,20 91,20%

GROSS PROFIT 184,7 9,36% 52,4 2,78% 178,5 8,79%Selling General & Admin

Expenses, Total 100,85,10%

58 3,08% 69,4 3,42%

R&D Expenses 25,9 1,31% 20,7 1,09% 25 1,23%Other Operating

Expenses -2,30,12%

-21,1 -1,12% -7,8 -0,38%OTHER OPERATING EXPENSES, TOTAL 124,4 6,30% 57,6 3,06% 86,5 4,26%

OPERATING INCOME 60,4 3,06% -5,2 -0,27% 92 4,53%

Interest Expense -16,8 -0,85% -23,6 -1,25% -24,3 -1,19%Interest And Investment

Income 0,40,02%

0,7 0,04% 0,2 0,96%

NET INTEREST EXPENSE -16,3 -0,82% -22,9 -1,22% -24,2 -1,19%Currency Exchange

Gains (Loss) -21,4-1,08%

10,7 0,57% -11,9 -0,58%Other Non-Operating

Income (Expenses) -0,4-0,02%

-0,2 -0,01% -2,5 -0,12%EBT, EXCLUDING UNUSUAL ITEMS 22,2 1,13% -17,5 -0,93% 53,5 2,64%

Gain (Loss) On Sale Of Investments -- -- --

Gain (Loss) On Sale Of Assets -0,6

-0,03%-- --

Other Unusual Items, Total 0 -- --

Insurance Settlements 0 -- --

Other Unusual Items -- -- --

EBT, INCLUDING UNUSUAL ITEMS 21,7 1,10% -17,5 -0,93% 53,5 2,64%

Income Tax Expense 1,5 0,08% 0 0,8 0,04%Earnings From

Continuing Operations 20,11,02%

-17,5 -0,93% 52,7 2,59%

NET INCOME 20,1 1,02% -17,5 -0,93% 52,7 2,59%NET INCOME TO

COMMON INCLUDING EXTRA ITEMS 20,1

1,02%-17,5 -0,93% 52,7 2,59%

NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 20,1

1,02%-17,5 -0,93% 52,7 2,59%

In VESTEL’s balance sheet for 2013, 2012, 2011 it is firstly observed that company’s current assets proportion slightly decreased in 2013. This decrease could be a signal for company’s future liquidity problems. The company might face with difficulties when meeting its short-term obligations. It is seen that trade receivables proportion decreased significantly whereas inventories had increased. VESTEL might have some issues about selling its produced goods. This insight would be analyzed in income statement part:

Trade receivables and inventories items were major parts of current assets whereas cash and cash equivalents remained minor. It might cause also solvency problems.

Fortunately, company’s current liabilities proportion decreased from 54,11 to 41,11%, which lessened the risk of meeting short term obligations for the company. Moreover, total liabilities proportion decreased from 62,65% to 60,02%. Main reason behind this situation is that, company decreased short term financial liabilities.

On the total equity side, company had net loss proportion for the period of 2012;however in 2013 it converted to net income. Therefore, total equity proportion increased from 37,35% to 39,97%.However ,it has a decreasing percentage from 41,81 to 37,35 between 2011 and 2012

Gross profit proportion of company increased in 2013, from 2,78% to 8,79% as cost of sales decreased from 97,21% to 91,20%.However ,Gross profit proportion of company decreases from 9,36 to 2,78 and Cost of goods sold of VESBE in 2011 is 90,63 which is the lowest percentage during 3 years.

However, financial income and expenses negatively affected company’s profit before tax from continued operations proportion and made a smaller increase of 3,56%. Nevertheless, when compared to previous years, in 2013 the company converted the sign of its net loss proportion and made it net income proportion of 2,60%.

6.2. VESBE Horizontal Analysis

BALANCE SHEEET - HORIZONTAL ANALYSISCurrency in

As of:

DEC 31 DEC 31

Millions of Turkish New Liras2011

PERCENTAGE2012

PERCENTAGE

Restated Restated

TRY TRY

Assets

Cash And Equivalents 7,3 100% 27,2 372,6

Trading Asset Securities 12,6 --TOTAL CASH AND SHORT TERM INVESTMENTS 19,9 100% 27,2 372,6

Accounts Receivable 605,6 100% 635,6 1,0495

Other Receivables 33,4 100% 50,9 1,5239

TOTAL RECEIVABLES 639 100% 686,5 1,0743

Inventory 229,8 100% 221,3 0,963

Prepaid Expenses 4,4 100% 3,4 0,7727

Other Current Assets 0,6 100% 16,4 27,33

TOTAL CURRENT ASSETS 893,7 100% 954,8 106,83

Gross Property Plant And Equipment 636,5 100% 712,8 111,98

Accumulated Depreciation -345,4 100% -404,2 -117,02NET PROPERTY PLANT AND EQUIPMENT 291 100% 308,6 106,04

Deferred Tax Assets, Long Term -- --

Deferred Charges, Long Term 32,8 100% 45,5 138,71

Other Intangibles 1,5 100% 3 200

Other Long-Term Assets -- 3,4

TOTAL ASSETS 1.219,00 100% 1.315,20 107,89

100%


Accounts Payable 442,2 100% 413 93,39

Accrued Expenses 9,4 100% 6,3 67,02

Short-Term Borrowings -- 264,8Current Portion Of Long-Term

Debt/Capital Lease 187,9 100% 23

Current Income Taxes Payable -- 3,4

Other Current Liabilities, Total 20,2 100% 9,6 47,52

TOTAL CURRENT LIABILITIES 659,7 100% 720,1 109,15

Long-Term Debt 36,4 100% 87,7 240,93Pension & Other Post-Retirement

Benefits 9,5 100% 12,6 132,63

Deferred Tax Liability Non-Current 3,7 100% 3,5 94,59

Other Non-Current Liabilities -- --

TOTAL LIABILITIES 709,3 100% 824 116,17

Common Stock 190 100% 190 100

Additional Paid In Capital 109 100% 109 100

Retained Earnings 201 100% 183,4 91,24

Comprehensive Income And Other 9,7 100% 8,8 90,72

TOTAL COMMON EQUITY 509,7 100% 491,3 96,39

TOTAL EQUITY 509,7 100% 491,3 96,39

TOTAL LIABILITIES AND EQUITY 1.219,00 100% 1.315,20 107,89

Currency in

As of:

DEC 31 DEC 31

Millions of Turkish New Liras2012 2013

PERCENTAGERestated TRY

TRY

Assets

Cash And Equivalents 27,2 100% 18,6 68,38

Trading Asset Securities -- --TOTAL CASH AND SHORT TERM INVESTMENTS 27,2 100% 18,6 68,38

Accounts Receivable 635,6 100% 539,9 84,94

Other Receivables 50,9 100% 61,2 120,23

TOTAL RECEIVABLES 686,5 100% 601,2 87,57

Inventory 221,3 100% 324,1 146,45

Prepaid Expenses 3,4 100% 4,2 123,52

Other Current Assets 16,4 100% 15,1 92,07

TOTAL CURRENT ASSETS 954,8 100% 963,2 100,87

Gross Property Plant And Equipment 712,8 100% 797 111,81

Accumulated Depreciation -404,2 100% -467,5 -115,66NET PROPERTY PLANT AND EQUIPMENT 308,6 100% 329,5 106,77

Deferred Tax Assets, Long Term -- --

Deferred Charges, Long Term 45,5 100% 54,2 119,12

Other Intangibles 3 100% 4,1 136,66

Other Long-Term Assets 3,4 100% 1,9 55,88

TOTAL ASSETS 1.315,20 100% 1.352,90 102,866


Accounts Payable 413 100% 452,1 109,46

Accrued Expenses 6,3 100% 13 206,34

Short-Term Borrowings 264,8 --Current Portion Of Long-Term

Debt/Capital Lease 23 100% 79,9 347,39

Current Income Taxes Payable 3,4 100% 3,9 114,7

Other Current Liabilities, Total 9,6 100% 7,3 76,04

TOTAL CURRENT LIABILITIES 720,1 100% 556,3 77,25

Long-Term Debt 87,7 100% 212,1 241,84Pension & Other Post-Retirement

Benefits 12,6 100% 12,4 98,41

Deferred Tax Liability Non-Current 3,5 100% 1,8 51,42

Other Non-Current Liabilities -- 29,4

TOTAL LIABILITIES 824 100% 812,1 98,555

Common Stock 190 100% 190 100

Additional Paid In Capital 109 100% 109 100

Retained Earnings 183,4 100% 236,1 128,73

Comprehensive Income And Other 8,8 100% 5,6 63,63

TOTAL COMMON EQUITY 491,3 100% 540,8 110,07

TOTAL EQUITY 491,3 100% 540,8 110,07

TOTAL LIABILITIES AND EQUITY 1.315,20 100% 1.352,90 102,866

INCOME STATEMENT - HORİZONTAL ANALYSISCurrency in

As of:

31.Ara 31.Ara


PERCENTAGE

2012

PERCENTAGERestated Restate

dTRY TRY

Revenues 1.424,30 100% 1.883,40 132,233

TOTAL REVENUES 1.424,30 100% 1.883,40 132,233

Cost Of Goods Sold 1.317,60 100% 1.831,00 138,96

GROSS PROFIT 106,7 100% 52,4 49,109

Selling General & Admin Expenses, Total 62,4 100% 58 92,94

R&D Expenses 13,7 100% 20,7 151,09

Other Operating Expenses -0,7 100% -21,1 -3014

OTHER OPERATING EXPENSES, TOTAL 75,5 100% 57,6 76,29

OPERATING INCOME 31,2 100% -5,2 -16,66

Interest Expense -8,3 100% -23,6 -284,33

Interest And Investment Income 1,5 100% 0,7 46,66

NET INTEREST EXPENSE -6,7 100% -22,9 -341,79

Currency Exchange Gains (Loss) 4,3 100% 10,7 248,83

Other Non-Operating Income (Expenses) -0,3 100% -0,2 -66,66

EBT, EXCLUDING UNUSUAL ITEMS 28,4 100% -17,5 61,61

Gain (Loss) On Sale Of Investments 0,5 --

Gain (Loss) On Sale Of Assets 0,1 --

Other Unusual Items, Total 0,1 --

Insurance Settlements 0,1 --

Other Unusual Items 0 --

EBT, INCLUDING UNUSUAL ITEMS 29,1 100% -17,5 -60,13

Income Tax Expense 3,8 100% 0

Earnings From Continuing Operations 25,3 100% -17,5 -60,13

NET INCOME 25,3 100% -17,5 -60,13NET INCOME TO COMMON INCLUDING

EXTRA ITEMS 25,3 100% -17,5 -60,13

NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 25,3 100% -17,5 -60,13

Currency in

As of:

31.Ara 31.Ara


PERCENTAGE

2013

PERCENTAGERestated TRY

Revenues 1.883,40 100% 2.028,70 107,71

TOTAL REVENUES 1.883,40 100% 2.028,70 107,71

Cost Of Goods Sold 1.831,00 100% 1.850,20 101,05

GROSS PROFIT 52,4 100% 178,5 340,64

Selling General & Admin Expenses, Total 58 100% 69,4 119,65

R&D Expenses 20,7 100% 25 120,77

Other Operating Expenses -21,1 100% -7,8 -36,96

OTHER OPERATING EXPENSES, TOTAL 57,6 100% 86,5 150,173

OPERATING INCOME -5,2 100% 92 1769

Interest Expense -23,6 100% -24,3 102,96

Interest And Investment Income 0,7 100% 0,2 28,57

NET INTEREST EXPENSE -22,9 100% -24,2 105,67

Currency Exchange Gains (Loss) 10,7 100% -11,9 -111,21

Other Non-Operating Income (Expenses) -0,2 100% -2,5 -1250

EBT, EXCLUDING UNUSUAL ITEMS -17,5 100% 53,5 305,71

Gain (Loss) On Sale Of Investments -- --

Gain (Loss) On Sale Of Assets -- --

Other Unusual Items, Total -- --

Insurance Settlements -- --

Other Unusual Items -- --

EBT, INCLUDING UNUSUAL ITEMS -17,5 100% 53,5 305,71

Income Tax Expense 0 100% 0,8

Earnings From Continuing Operations -17,5 100% 52,7 301,14

NET INCOME -17,5 100% 52,7 301,14NET INCOME TO COMMON INCLUDING

EXTRA ITEMS -17,5 100% 52,7 301,14NET INCOME TO COMMON EXCLUDING

EXTRA ITEMS -17,5 100% 52,7 301,14

Evaluating 2012 in reference to 2011, as can be seen from the balance sheet the amount of current assets have been increasing slightly, from 100% to 106,83 and from 2012 to 2013 it has decreased as well (100% in 2012 ,100,87% in 2013) . When we take 2011 as a reference again, inventories have declined from 2011 to 2012.However it increases from 100% to 146,45% between 2012 and 2013 which is bad.When inventories increase we need to look at the liabilities, because company may not be good at converting its inventories to generate cash. The amount of liabilities has increased from 2011 to 2012 (respectively 100%, 116,17) but it has decreased in 2013 so this is a good sign but this analysis is not enough to evaluate companies performance efficiently . We need to make further analysis which is the ratio analysis.

6.3. VESBE FINANCIAL RATIOS

6.3.1. VESBE FINANCIAL RATIOS – 2011RATIO FORMULA RATIO UNIT

Liquidity

Current Current Asset / Current Liabilities

1,35 times

Quick (Current Assets -Inventories)/Current Liabilities

1,01 times

Asset Management

Inventory Turnover Sales/ Inventories 8,59 times

Days sales Outstanding (DSO)

Receivables/ (Annual Sales/365)

118,20 days

Fixed assets turnover Sales/ Net fixed assets

6,78 times

Total assets turnover Dupont 3

Sales/ Total assets 1,62 times

Debt Management

Total debt to total assets

Total debt/ Total assets

0,58 percentage

Times-interest-earned (TIE)

Earning before interest and taxes (EBIT)/Interest Charges

2,31 times

EBITDA Coverage (EBITDA + Lease Payments)/(Interest +Principal Payments +Lease Payments)

0,22 times

Equity Multiplier Dupont 5

Total assets / (Total) Common Equity

2,39 times

Profitability

Profit Margin on sales Dupont 2

Net Income / Sales 0,01 percentage

Return on total assets (ROA) Dupont 4

Net Income/ Total Assets

0,02 percentage

Basic earning power (BEP)

Earning before interest and taxes (EBIT)/Total Assets

0,02 percentage

Return on common equity (ROE) Dupont1

Net Income/ Common Equity

0,04 percentage

Market Value

Price/ Earnings (P/E) Price Per Share/ Earnings per share

14,82 times

Price/ Cash Flow Price per share/ Cash flow per share

4,08 times

Market/book (M/B) Market price per share/ Book value per share

0,61 times

Networking Capital Current Assets -Current Liabilities

234,00

VARIABLE INPUT

Current Asset

893,70

Current Liabilities

659,70

Inventories 229,80

Sales 1.973,20

Receivables 639,00

Annual Sales 1.973,20

Net fixed assets

291,00

Total Assets 1.219,00

Total debt 709,30

EBIT 21,70

Interest Charges

9,39

EBITDA 86,67

Lease Payments

6,76

Interest 9,39

Principal Payments

405,88

Net Income 20,10

Common Equity

509,70

Price Per Share

1,63

Earnings per share

0,11

Cash flow per share

0,40

Market price per share

1,63

Book value per share

2,68


LiquidityCurrent Current Asset /

Current Liabilities1,33 times


1,02 times

Asset ManagementInventory Turnover Sales/ Inventories 8,51 timesDays sales Outstanding (DSO)


133,04 days


6,10 times

Total assets turnover Sales/ Total assets 1,43 times

Debt ManagementTotal debt to total assets Total debt/ Total

assets0,63 percentage


Earnings before interest and taxes (EBIT)/Interest Charges

-0,77 times

EBITDA Coverage (EBITDA + Lease Payments)/(Interest +Principal Payments + Lease Payments)

0,27 times


Total assets / Total Common Equity

2,68 times

ProfitabilityProfit Margin on sales Net Income / Sales -0,01 percentageReturn on total assets (ROA)


-0,01 percentage


Earnings before interest and taxes (EBIT)/Total Assets

-0,01 percentage

Return on common equity (ROE)


-0,04 percentage

Market ValuePrice/ Earnings (P/E) Price Per Share/

Earnings per share-28,56 times


10,71 times


0,99 times


234,70

VARIABLE INPUT

Current Asset 954,80

Current Liabilities 720,10

Inventories 221,30

Sales 1.883,40

Receivables 686,50


Net fixed assets 308,60


Total debt 824,00

EBIT -17,50

Interest Charges 22,67

EBITDA 67,77

Lease Payments 14,52

Interest 22,67

Principal Payments 272,75

Net Income -17,50

Common Equity 491,30

Price Per Share 2,57

Earnings per share -0,09

Cash flow per share 0,24

Market price per share 2,57

Book value per share 2,59


Liquidity


1,73 times


1,15 times

Asset Management

Inventory Turnover Sales/ Inventories 6,26 timesDays sales Outstanding (DSO)


108,17 days


6,16 times

Total assets turnover Sales/ Total assets 2,11 times

Debt Management


Total debt/ Total assets

0,84 percentage



2,20 times

EBITDA Coverage (EBITDA + Lease Payments)/(Interest +Principal Payments + Lease Payments)

0,37 times



1,78 times

Profitability

Profit Margin on sales Net Income / Sales 0,03 percentage

Return on total assets (ROA)


0,05 percentage



0,06 percentage



0,10 percentage

Market Value


10,00 times


4,18 times


0,99 times


406,90

VARIABLE INPUT

Current Asset 963,20

Current Liabilities 556,30Inventories 324,10Sales 2.028,70

Receivables 601,20


Net fixed assets 329,50

Total Assets 963,20

Total debt 812,10EBIT 53,50

Interest Charges 24,34

EBITDA 151,39Lease Payments 0,00

Interest 24,34

Principal Payments

387,96

Net Income 52,70

Common Equity 540,80


Earnings per share

0,28

Cash flow per share

0,67


2,80


2,84

6.3.4. VESBE FINANCIAL RATIOS 2011 – 2012 – 2013RATIO 2011 2012 2013 UNIT

LiquidityCurrent 1,35 1,33 1,73 timesQuick 1,01 1,02 1,15 times

Asset ManagementInventory Turnover 8,59 8,51 6,26 timesDays sales Outstanding (DSO) 118,20 133,04 108,17 daysFixed assets turnover 6,78 6,10 6,16 timesTotal assets turnover 1,62 1,43 2,11 times

Debt ManagementTotal debt to total assets 0,58 0,63 0,84 percentageTimes-interest-earned (TIE) 2,31 -0,77 2,20 timesEBITDA Coverage 0,22 0,27 0,37 timesEquity Multiplier Dupont 5 2,39 2,68 1,78 timesProfitabilityProfit Margin on sales 0,01 -0,01 0,03 percentageReturn on total assets (ROA) 0,02 -0,01 0,05 percentageBasic earning power (BEP) 0,02 -0,01 0,06 percentageReturn on common equity (ROE) 0,04 -0,04 0,10 percentage

Market ValuePrice/ Earnings (P/E) 14,82 -28,56 10,00 timesPrice/ Cash Flow 4,08 10,71 4,18 timesMarket/book (M/B) 0,61 0,99 0,99 times

Networking Capital 234,00 234,70 406,90

6.4. ARCELIK FINANCIAL RATIOS

6.4.1. ARCLK FINANCIAL RATIOS – 2011RATIO FORMULA RATIO UNIT

Liquidity


1,71 times


1,28 times

Asset Management

Inventory Turnover

Sales/ Inventories 5,51 times



138,73 days

Fixed assets turnover

Sales/ Net fixed assets 5,83 times

Total assets turnover


Debt Management


Total debt/ Total assets 0,60 percentage



5,94 times

EBITDA Coverage

(EBITDA + Lease Payments)/(Interest +Principal Payments + Lease Payments)

1,13 times

Leverage Equity Dupont 5


2,59 times

Profitability



Net Income/ Total Assets 0,06 percentage



0,07 percentage



0,15 percentage

Market Value


6,99 times


4,89 times


1,00 times

Networking Capital Current Assets - Current Liabilities

2.503,20

VARIABLE INPUT

Current Asset 6.033,80

Current Liabilities

3.530,60

Inventories 1.530,10

Sales 8.437,20

Receivables 3.206,90


Net fixed assets

1.446,80


Total debt 5.546,10

EBIT 615,40

Interest Charges

103,53

EBITDA 862,45

Lease Payments

10,31

Interest 103,53

Principal Payments

656,88

Net Income 541,50

Common Equity

3.545,60

Price Per Share

5,24

Earnings per share

0,75

Cash flow per share

1,07


5,24


5,25


Liquidity


1,71 times


1,30 times

Asset Management

Inventory Turnover




113,48 days





Debt Management





3,35 times

EBITDA Coverage


0,71 times



2,66 times

Profitability






0,06 percentage



0,14 percentage

Market Value


13,45 times


9,08 times


1,84 times


2.795,70

VARIABLE INPUT


Current Liabilities

3.941,00


Sales 10.556,90



Net fixed assets 1.603,40


Total debt 6.300,90

EBIT 629,37

Interest Charges

187,75

EBITDA 1.000,22

Lease Payments

12,03

Interest 187,75

Principal Payments

1.216,44

Net Income 551,70

Common Equity 3.841,70


Earnings per share

0,78

Cash flow per share

1,16


10,49


5,69


Liquidity


1,87 times


1,39 times

Asset Management

Inventory Turnover




138,31 days





Debt Management





3,56 times

EBITDA Coverage


0,56 times



2,81 times

Profitability






0,07 percentage



0,15 percentage

Market Value


11,79 times


7,89 times


1,75 times


3.568,00

VARIABLE INPUT


Current Liabilities

4.091,10


Sales 11.097,70



Net fixed assets

1.836,80


Total debt 7.272,20

EBIT 744,80

Interest Charges

209,24

EBITDA 1.256,20

Lease Payments

15,18

Interest 209,24

Principal Payments

2.045,07

Net Income 597,80

Common Equity

4.062,90

Price Per Share

10,49

Earnings per share

0,89

Cash flow per share

1,33


10,49


6,01

6.4.4. ARCLK FINANCIAL RATIOS 2011 – 2012 – 2013RATIO 2011 2012 2013 UNIT

LiquidityCurrent 1,71 1,71 1,87 timesQuick 1,28 1,30 1,39 times

Asset ManagementInventory Turnover 5,51 6,60 5,58 timesDays sales Outstanding (DSO) 138,73 113,48 138,31 daysFixed assets turnover 5,83 6,58 6,04 timesTotal assets turnover 0,92 1,03 0,97 times

Debt ManagementTotal debt to total assets 0,60 0,62 0,64 percentageTimes-interest-earned (TIE) 5,94 3,35 3,56 timesEBITDA Coverage 1,13 0,71 0,56 timesEquity Multiplier Dupont 5 2,59 2,66 2,81 timesProfitabilityProfit Margin on sales 0,06 0,05 0,05 percentageReturn on total assets (ROA) 0,06 0,05 0,05 percentageBasic earning power (BEP) 0,07 0,06 0,07 percentageReturn on common equity (ROE) 0,15 0,14 0,15 percentage

Market ValuePrice/ Earnings (P/E) 6,99 13,45 11,79 timesPrice/ Cash Flow 4,89 9,08 7,89 timesMarket/book (M/B) 1,00 1,84 1,75 times

Networking Capital 2.503,20 2.795,70 3.568,00

6.5. COMPERATIVE ANALYSIS

2011 2012 2013UNIT

RATIO VESBE ARCLK VESBE ARCLK VESBE ARCLK

LiquidityCurrent 1,35 1,71 1,33 1,71 1,73 1,87 timesQuick 1,01 1,28 1,02 1,30 1,15 1,39 times

Asset ManagementInventory Turnover 8,59 5,51 8,51 6,60 6,26 5,58 timesDays sales Outstanding (DSO)

118,20 138,73 133,04 113,48 108,17 138,31 days

Fixed assets turnover 6,78 5,83 6,10 6,58 6,16 6,04 timesTotal assets turnover 1,62 0,92 1,43 1,03 2,11 0,97 times

Debt ManagementTotal debt to total assets 0,58 0,60 0,63 0,62 0,84 0,64 percentageTimes-interest-earned (TIE) 2,31 5,94 -0,77 3,35 2,20 3,56 timesEBITDA Coverage 0,22 1,13 0,27 0,71 0,37 0,56 timesEquity Multiplier Dupont 5 2,39 2,59 2,68 2,66 1,78 2,81 timesProfitabilityProfit Margin on sales 0,01 0,06 -0,01 0,05 0,03 0,05 percentageReturn on total assets (ROA) 0,02 0,06 -0,01 0,05 0,05 0,05 percentageBasic earning power (BEP) 0,02 0,07 -0,01 0,06 0,06 0,07 percentageReturn on common equity (ROE)

0,04 0,15 -0,04 0,14 0,10 0,15 percentage

Market ValuePrice/ Earnings (P/E) 14,82 6,99 -28,56 13,45 10,00 11,79 timesPrice/ Cash Flow 4,08 4,89 10,71 9,08 4,18 7,89 timesMarket/book (M/B) 0,61 1,00 0,99 1,84 0,99 1,75 times

Networking Capital 234,00 2.503,20 234,70 2.795,70 406,90 3.568,00

6.5.1. LIQUIDITYCURRENT RATIO

Arçelik looks like an easy winner in a liquidity contest in three years span. It has an ample margin of current assets over current liabilities, a seemingly good current ratio.However ,when we look at the balance sheet of Vesbe has a higher amount of current assets when compared to current liabilities and should easily be able to pay off its short-term debt as well and Vesbe's power of paying sort term liabilities is increasing each year.

QUICK RATIO

Thıs ratıo is more sensitive because current assets do not include inventories .When we want to compare Vesbe with Arçelik, Arçelik has more ability to satisfy short-term obligations than Vesbe during 3 years because Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. As a result, they are justifiably excluded from assets that are ready sources of immediate cash. The higher the quick ratio is, the better the company's liquidity position is.

6.5.2. ASSET MANAGEMENTINVENTORY TURNOVER

The larger ratio is should be better .Our ratios (Vesbe) are equal to 8,59-8,51-6,26 times. Arçelik's are 5.51-6,60-5,58 times. A decreasing inventory indicates that the company is not converting its inventory into cash as quickly as before. When this occurs, the company ends up having increased storage, insurance and maintenance costs. A low turnover implies poor sales and, therefore, excess inventory but a high ratio implies either strong sales or ineffective buying. High inventory levels are unhealthy as well because they represent an investment with a rate of return of zero. It also opens the company up to trouble should prices begin to fall.

DAYS SALES OUTSTANDING (DSO)

Account receivables of Vesbe are being collected in 118 days which are smaller than Arçelik's. That means: Asset management of vesbe is more efficient than Arçelik due to Arçelik's larger amounts of delays in collecting the account receivables in 2011.However, in 2012 Arçelik is better than Vesbe. There is a small fluctuation for two companies during 3 years

FIXED ASSETS TURNOVER

Larger the ratio is the better it is. Vesbe is more efficient except 2012 .Vesbe's result are equal to 6.78-6,10-6,16 times in years .Arçelik's result are 5.83-6,58-6,04 times.The result of vesbe ıs around Arçelik's. In fact, an increasing trend in fixed assets turnover ratio is desirable because it means that the company has less money tied up in fixed assets for each unit of sales or ıts fixed assets are older and thus have been depreciated more or Vesbe's cost of fixed assets were lower than Arçelik's. A declining trend in fixed asset turnover may mean that the company is over investing in the property, plant and equipment.

TOTAL ASSETS TURNOVER

The results of total assets turnover of Vesbe are equal to 1.62-1,43-2,11 times ,while Arçelik's are 0.92-1,03-0,97 .Arçelik's performance is weaker than Vesbe's due to miss management of Assets Turnover. Total assets turnover measures how

efficiently a company utilizes total assets to create sales revenue. Vesbe's ability to generate more profitable from its assets in terms of Arcelik's in years.

To sum up, liquidity management of Vesbe is not as good as its assets management.However it does not mean that Vesbe cannot pay back its liabilities .When it has to pay its debts.

6.5.3. PROFITABILITY MANAGEMENTPROFIT MARGIN ON SALES

Higher the percentage, the more profitable your business is. Vesbe, having a lower profit margin indicates that it is a less profitable company that has weaker control over its costs compared to Arçelik. Vesbe having a negative margins result that do not make a profit or break even in 2012.

RETURN ON TOTAL ASSETS (ROA)

An important ratio is the return on assets ratio for its ability to measure earnings per dollar from its assets. Vesbe having a lower ROA is not better at converting its investment into profit when compare to Arçelik. The main problem for Vesbe is that it has a negative ROA in 2012 meaning A negative ROA suggests that a company is not properly utilizing its capital, and may have questionable management.

BASIC EARNING POWER (BEP)

This ratio is extremely important. When BEP of two companies compared, we see that vesbe are equal to 0.02-(-0,01)-0,06 times while Arçelik is 0.07 ,which shows that Vesbe is facing difficulties in obtaining a loan .Especially, in 2012 credibility of vesbe is below zero. After that Vesbe has almost as much credibility rate as Arçelik has in 2013, respectively (0,06-0,07 times)

RETURN ON COMMON EQUITY

The return on equity for Vesbe averages respectively 0,04X in 2011 (-0,04)X in 2012 while Arçelik does 0,14X -0,14X within the first two years. An observation of this profitability measure shows that Vesbe is visibly less attractive for potential investors for its ability to manage and use funds generated through shareholders equity.However, Vesbe will be attractive in 2013 because of having the biggest rate within 3 years.

6.5.4. DEBT MANAGEMENTLEVERAGE MULTIPLIER

The equity multiplier is a method of evaluating a company’s ability to use its debt for financing its assets A high equity multiplier is not necessarily better than a low multiplier. In order to develop a better picture of a company’s financial health, investors should take into account other financial ratios and metrics, such as net profit margin or asset turnover. and When Vesbe's dupont ratio 1 and 2 are extremely

low comparative to Arçelik and the leverage multiplier extremely high the management of Vesbe in terms of dupont 1 and 2 .That is why it needs a revised a strategic plan.

TIMES INTEREST EARNED (TIE)

Arçelik having a higher value of times interest earned ratio (5,94X) in 2011 is favorable which means it has a greater ability to repay its interest and debt. On the opposite, Vesbe having Lower value (2.31X) in 2011 is unfavorable. That is why times interest earned ratio is of special importance to creditors. They can compare the debt repayment ability of similar companies using this ratio, and when the interest coverage ratio is smaller than 1, the company is not generating enough cash from its operations EBIT to meet its interest obligations. VESBE would then have to either use cash on hand to make up the difference or borrow funds in 2012. Typically, it is a warning sign.

TOTAL DEBT TO TOTAL ASSETS

This ratio for the company is equal to 58%, While Arçelik is 60%, which means that Vesbe has 42% of equity in the balance sheet The debt to total assets ratio tells you that 58% of the corporation's assets for Vesbe are financed by the creditors or debt in 2011 and Arçelik has greater ratios than Vesbe in other years like 2011 as well. As a result; a higher percentage indicates more leverage and more risk. However the results of two companies are so close to each other within 2 years except 2013.

EBITDA COVERAGE

Vesbe's ratio comes out to be 0.22-0,27-0,37 within 3 years while Arçelik has higher ratios of EBITDA. Such a low ratio makes company risky. A negative EBITDA indicates that a business has fundamental problems with profitability and with cash flow. A positive EBITDA, on the other hand, does not necessarily mean that the business generates cash.

6.5.5. MARKET VALUELEVERAGE MULTIPLIER

The equity multiplier is a method of evaluating a company’s ability to use its debt for financing its assets. A high equity multiplier is not necessarily better than a low multiplier. In order to develop a better picture of a company’s financial health, investors should take into account other financial ratios and metrics, such as net profit margin or asset turnover. and When Vesbe's dupont ratio 1 and 2 are extremely low comparative to Arçelik and the leverage multiplier extremely high the management of Vesbe in terms of dupont 1 and 2 .That is why it needs a revised a strategic plan.

TIMES INTEREST EARNED (TIE)

Arçelik having a higher value of times interest earned ratio (5,94X) in 2011 is favorable which means it has a greater ability to repay its interest and debt. On the opposite, Vesbe having Lower value (2.31X) in 2011 is unfavorable. That is why times interest earned ratio is of special importance to creditors. They can compare the debt repayment ability of similar companies using this ratio, and when the interest coverage ratio is smaller than 1, the company is not generating enough cash from its operations EBIT to meet its interest obligations. VESBE would then have to either use cash on hand to make up the difference or borrow funds in 2012. Typically, it is a warning sign.

TOTAL DEBT TO TOTAL ASSETS

This ratio for the company is equal to 58%, while Arçelik is 60%,which means that Vesbe has 42% of equity in the balance sheet The debt to total assets ratio tells you that 58% of the corporation's assets for Vesbe are financed by the creditors or debt in 2011 and Arçelik has greater ratios than Vesbe in other years like 2011 as well. As a result; A higher percentage indicates more leverage and more risk. However the results of two companies are so close to each other within 2 years except 2013.

EBITDA COVERAGE

Vesbe's ratio comes out to be 0.22-0,27-0,37 within 3 years while Arçelik has higher ratios of EBIDTA. Such a low ratio makes company risky. A negative EBITDA indicates that a business has fundamental problems with profitability and with cash flow. A positive EBITDA, on the other hand, does not necessarily mean that the business generates cash.

6.6. DUPONT ANALYSIS

6.6.1. DUPONT ANALYSIS OF VESBE

Year 2011 2012 2013

Net İncome 20,10 -17,50 52,70

Sales 1.973,20 1.883,40 2.028,70

Equity 509,70 491,30 540,80

Assets 1.219,00 1.315,20 1.352,90

Total Debt 709,30 824,00 812,10

Year 2011 2012 2013

ROA 0,02 -0,01 0,04

ROE 0,04 -0,04 0,10

Net Profit Margin 0,01 -0,01 0,03

Assets Turnover 1,62 1,43 1,50

Leverage Ratio 2,39 2,68 2,50

6.6.2. DUPONT ANALYSIS OF ARCLK

Year 2011 2012 2013

Net İncome 506,50 519,70 597,80

Sales 8.437,20 10.556,90 11.097,70

Equity 3.545,60 3.841,70 4.062,90

Total Assets 9.197,80 10.228,20 11.410,90

Total Debt 5.546,10 6.300,90 7.272,20

Year 2011 2012 2013

ROE 0,14 0,14 0,15

Net Profit Margin 0,06 0,05 0,05

Assets Turnover 0,92 1,03 0,97

ROA 0,06 0,05 0,05

Leverage Ratio 2,59 2,66 2,81

6.6.3. DUPONT ANALYSIS COMPARISON IN REFERENCE TO ARCLKDupont analysis below belongs to VESBE in reference to ARCLK:

Firm’s (VESBE’s) fixed assets turnover is above ARCLK’s. This might be because that the firm’s assets are older than others’. This could possibly account for the higher ratio.

The profit margin is below ARCLK’s, which means, company has a weaker control over its costs compared to ARCLK and, also, company has not kept operating cost down.

The result of debt ratio for both companies is so close to each other but VESBE is more efficient than ARCLK’s (58% - 60 %)

When we look at the result of TIE, ARCLK, having a higher ratio which means it has a greater ability to pay its debts and interests.

VESBE, having a lower ROA for three years, means that company is not better at converting its investment into profit. Company also has lower ROE compared to ARCLK’s, meaning that company is not better than ARCLK at using and managing its funds generated through shareholder’s equity.

Generally, VESBE is not good at managing assets such debt, liquidity, profitability and market value.

Leverage ratio shows that VESBE is not good at using its debt for financing its assets, except in 2012 where it is slightly above the leverage result of ARCLK.

VESBE has higher assets turnover than ARCLK’s, which means that VESBE is more able to use its assets to generate sales revenue.

7. CONCLUSIONSIn 2013, ARCELIK increases its current assets from 65, 86% to 67, 12% whereas VESTEL decreases its current assets from 72, 59% to 71, 19 %. It indicates that although ARCELIK follows a better trend by increasing its liquidity, VESTEL hasalready a better position when meeting its short term obligations. These proportions are more meaningful with current liabilities proportions. ARCELIK’s current liabilities proportion is 35, 85% (53, 43% of its current assets) in 2013 and VESTEL’s current liabilities proportion is 41, 12% (57,76% of its current assets).

Both companies have risks about liquidity;

¸ ARCELIK should follow the same trend and increase its liquidity, while also caring about rate of returns of short term assets,

¸ VESTEL should not allow decrease in its liquidity.

ARCELIK finances its 63, 73% of its total assets by liabilities and this proportion is61, 60% in 2012. On the other hand VESTEL finances 60, 03% of its total assets by liabilities and it is 62,65% in 2012. Financing assets with debt might provide higher returns for the shareholders. However these returns might be volatile depending on the debt contracts and cause a very important risk.

ARCELIK’s gross profit proportion increases from 28,89% to 30,53% whereas VESTEL’s gross profit proportion increases from 2,78% to 8,80%. Rate of increase in VESTEL is greater than ARCELIK’s. However VESTEL’s gross profit proportion isstill very smaller than ARCELIK’s in 2013. It concludes that VESTEL should make more developments in order to decrease its cost of sales. In 2013, ARCELIK’s operating profit proportion reaches to 10,24% while VESTEL’s was 6,28%, returning to positive values.

Before taxes, ARCELIK’s profit proportion is 6, 71 and VESTEL’s is 2, 63%. It concludes that although VESTEL makes some significant improvements after 2012, it still falls behind of ARCELIK in terms of net profit proportion over net sales.

8. REFERENCES1 http://vesbe.vestelinvestorrelations.com/en/_assets/pdf/BE

_AnnualReport_2013.pdf2 Borsa Istanbul, Wikipedia

http://en.wikipedia.org/wiki/Borsa_Istanbul3 Borsa Istanbul http://www.borsaistanbul.com4 TCMA – Turkish Capital Markets Association

http://www.tspakb.org.tr5 http://www.stockopedia.com/share-prices/vestel-beyaz-

esya-sanayi-ve-ticaret-as-IST:VESBE6 www.turkbesd.org/turkbesd.php7 http://ec.europa.eu/energy/efficiency/studies/doc/201405_i

eel_product_innovation.pdf8 http://www.investing.com Balance Sheets,

Income Statements

9 http://www.investopedia.com/ How to compare financial ratios

10 http://www.kap.gov.tr Lease Payments, Interests, EBIDTA, EBIT

11 http://www.bigpara.com/analiz/performans-analizi Price per share

http://vesbe.vestelinvestorrelations.com/en/_assets/pdf/BE_AnnualReport_2013.pdf

http://vesbe.vestelinvestorrelations.com/en/_assets/pdf/BE_AnnualReport_2013.pdf

http://en.wikipedia.org/wiki/Borsa_Istanbul

http://www.borsaistanbul.com/

http://www.tspakb.org.tr/

http://www.stockopedia.com/share-prices/vestel-beyaz-esya-sanayi-ve-ticaret-as-IST:VESBE

http://www.stockopedia.com/share-prices/vestel-beyaz-esya-sanayi-ve-ticaret-as-IST:VESBE

http://www.turkbesd.org/turkbesd.php

http://ec.europa.eu/energy/efficiency/studies/doc/201405_ieel_product_innovation.pdf

http://ec.europa.eu/energy/efficiency/studies/doc/201405_ieel_product_innovation.pdf

http://www.investing.com/

http://www.investopedia.com/

http://www.kap.gov.tr/

http://www.bigpara.com/analiz/performans-analizi

9. APPENDICE

9.1. VESBE Balance Sheet [8]Currency in

As of:

31. DEC 31. DEC 31. DECMillions of Turkish New Liras 2011 2012 2013

Restated Restated TRYTRY TRY

AssetsCash And Equivalents 7,3 27,2 18,6Trading Asset Securities 12,6 -- --

TOTAL CASH AND SHORT TERM INVESTMENTS 19,9 27,2 18,6

Accounts Receivable 605,6 635,6 539,9Other Receivables 33,4 50,9 61,2

TOTAL RECEIVABLES 639 686,5 601,2Inventory 229,8 221,3 324,1Prepaid Expenses 4,4 3,4 4,2Other Current Assets 0,6 16,4 15,1

TOTAL CURRENT ASSETS 893,7 954,8 963,2Gross Property Plant And Equipment 636,5 712,8 797Accumulated Depreciation -345,4 -404,2 -467,5

NET PROPERTY PLANT AND EQUIPMENT 291 308,6 329,5

Deferred Tax Assets, Long Term -- -- --Deferred Charges, Long Term 32,8 45,5 54,2Other Intangibles 1,5 3 4,1Other Long-Term Assets -- 3,4 1,9TOTAL ASSETS 1.219,00 1.315,20 1.352,90

LIABILITIES & EQUITYAccounts Payable 442,2 413 452,1Accrued Expenses 9,4 6,3 13Short-Term Borrowings -- 264,8 --Current Portion Of Long-Term

Debt/Capital Lease 187,9 23 79,9Current Income Taxes Payable -- 3,4 3,9Other Current Liabilities, Total 20,2 9,6 7,3

TOTAL CURRENT LIABILITIES 659,7 720,1 556,3Long-Term Debt 36,4 87,7 212,1Pension & Other Post-Retirement

Benefits 9,5 12,6 12,4Deferred Tax Liability Non-Current 3,7 3,5 1,8Other Non-Current Liabilities -- -- 29,4

TOTAL LIABILITIES 709,3 824 812,1Common Stock 190 190 190Additional Paid In Capital 109 109 109Retained Earnings 201 183,4 236,1Comprehensive Income And Other 9,7 8,8 5,6

TOTAL COMMON EQUITY 509,7 491,3 540,8TOTAL EQUITY 509,7 491,3 540,8

TOTAL LIABILITIES AND EQUITY 1.219,00 1.315,20 1.352,90

9.2. VESBE Income Statement [8]

Currency in 31. DEC 31. DEC 31. DEC

Millions of Turkish New Liras 2011 2012 2013

Restated Restated TRY

TRY TRY

Revenues 1.973,20 1.883,40 2.028,70

TOTAL REVENUES 1.973,20 1.883,40 2.028,70

Cost Of Goods Sold 1.788,40 1.831,00 1.850,20

GROSS PROFIT 184,7 52,4 178,5

Selling General & Admin Expenses, Total 100,8 58 69,4

R&D Expenses 25,9 20,7 25

Other Operating Expenses -2,3 -21,1 -7,8

Other Operating Expenses 124,4 57,6 86,5

OPERATING INCOME 60,4 -5,2 92

Interest Expense -16,8 -23,6 -24,3

Interest And Investment Income 0,4 0,7 0,2

NET INTEREST EXPENSE -16,3 -22,9 -24,2

Currency Exchange Gains (Loss) -21,4 10,7 -11,9

Other Non-Operating Income (Expenses) -0,4 -0,2 -2,5

EBT, EXCLUDING UNUSUAL ITEMS 22,2 -17,5 53,5

Gain (Loss) On Sale Of Investments -- -- --

Gain (Loss) On Sale Of Assets -0,6 -- --

Other Unusual Items, Total 0 -- --

Insurance Settlements 0 -- --

Other Unusual Items -- -- --

EBT, INCLUDING UNUSUAL ITEMS 21,7 -17,5 53,5

Income Tax Expense 1,5 0 0,8

Earnings From Continuing Operations 20,1 -17,5 52,7

NET INCOME 20,1 -17,5 52,7NET INCOME TO COMMON INCLUDING

EXTRA ITEMS 20,1 -17,5 52,7NET INCOME TO COMMON EXCLUDING

EXTRA ITEMS 20,1 -17,5 52,7

9.3. VESBE Graphics

1,973.20 1,883.402,028.70

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

1

REVENUES

31.12.2011 31.12.2012 31.12.2013

1,788.40 1,831.00 1,850.20

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

1

COST of GOODS SOLD

31.12.2011 31.12.2012 31.12.2013

20.1

-17.5

52.7

-50

0

50

100

1

NET INCOME

31.12.2011 31.12.2012 31.12.2013

893.7 954.8 963.2

0

500

1000

1500

1

TOTAL CURRENT ASSETS

31.12.2011 31.12.2012 31.12.2013

1,219.001,315.20 1,352.90

0.00

500.00

1,000.00

1,500.00

1

TOTAL ASSETS

31.12.2011 31.12.2012 31.12.2013

659.7720.1

556.3

0

500

1000

1

TOTAL CURRENT LIABILITIES

31.12.2011 31.12.2012 31.12.2013

1,219.001,315.20 1,352.90

0.00

500.00

1,000.00

1,500.00

1

TOTAL LIABILITIES AND EQUITY

31.12.2011 31.12.2012 31.12.2013

9.4. ARCLK Balance Sheet [8]

Currency inMillions of Turkish New Liras

As of:

Dec 312011TRY

Dec 312012RestatedTRY

Dec 312013TRY

Assets

Cash And Equivalents 1,173.9 1,740.8 1,266.6

Trading Asset Securities 2.9 2.2 6.7

TOTAL CASH AND SHORT TERM INVESTMENTS 1,176.8 1,743.0 1,273.2

Accounts Receivable 3,180.9 3,261.5 4,182.1

Other Receivables 26.1 20.7 23.3

TOTAL RECEIVABLES 3,206.9 3,282.2 4,205.4

Inventory 1,530.1 1,599.7 1,988.4

Prepaid Expenses 40.8 22.0 31.3

Other Current Assets 79.1 89.9 160.8

TOTAL CURRENT ASSETS 6,033.8 6,736.7 7,659.1

Gross Property Plant And Equipment 3,743.7 4,017.8 4,466.2

Accumulated Depreciation -2,296.8 -2,414.4 -2,629.4

NET PROPERTY PLANT AND EQUIPMENT 1,446.8 1,603.4 1,836.8

Goodwill 196.2 177.1 172.7

Long-Term Investments 652.0 821.4 731.6

Accounts Receivable, Long Term 16.0 11.0 27.5

Deferred Tax Assets, Long Term 63.4 86.0 90.7

Deferred Charges, Long Term 198.9 241.9 285.2

Other Intangibles 584.2 545.7 601.0

Other Long-Term Assets 6.4 5.1 6.3

TOTAL ASSETS 9,197.8 10,228.2 11,410.9


Accounts Payable 1,254.0 1,174.2 1,602.6

Accrued Expenses 342.0 357.6 491.4

Short-Term Borrowings 1,078.2 785.0 611.6

Current Portion Of Long-Term Debt/Capital Lease 550.6 1,359.2 1,061.3

Current Income Taxes Payable 23.3 24.0 19.6

Other Current Liabilities, Total 294.2 246.3 313.8

Unearned Revenue, Current -11.6 -5.4 -9.2

TOTAL CURRENT LIABILITIES 3,530.6 3,941.0 4,091.1

Long-Term Debt 1,528.1 1,859.0 2,632.2

Minority Interest 106.0 85.6 75.9

Pension & Other Post-Retirement Benefits 106.8 121.0 127.2

Deferred Tax Liability Non-Current 226.1 236.4 245.5

Other Non-Current Liabilities 154.4 143.5 176.1

TOTAL LIABILITIES 5,546.1 6,300.9 7,272.2

Common Stock 675.7 675.7 675.7

Additional Paid In Capital 0.9 0.9 0.9

Retained Earnings 1,898.2 2,124.4 2,367.7

Comprehensive Income And Other 970.7 1,040.6 1,018.5

TOTAL COMMON EQUITY 3,545.6 3,841.7 4,062.9

TOTAL EQUITY 3,651.6 3,927.2 4,138.8

TOTAL LIABILITIES AND EQUITY 9,197.8 10,228.2 11,410.9

9.5. ARCLK Income Statement [8]

Currency inMillions of Turkish New Liras

As of:

Dec 312011TRY

Dec 312012RestatedTRY

Dec 312013TRY

Revenues 8,437.2 10,556.9 11,097.7

TOTAL REVENUES 8,437.2 10,556.9 11,097.7

Cost Of Goods Sold 5,904.1 7,515.8 7,716.8

GROSS PROFIT 2,533.1 3,041.0 3,380.9

Selling General & Admin Expenses, Total 1,797.2 2,201.6 2,426.7

R&D Expenses 64.8 73.5 83.2

Other Operating Expenses -12.8 0.8 -14.5

OTHER OPERATING EXPENSES, TOTAL 1,849.2 2,275.9 2,495.4

OPERATING INCOME 683.9 765.1 885.6

Interest Expense -113.1 -187.7 -209.2

Interest And Investment Income 35.6 27.2 47.3

NET INTEREST EXPENSE -77.5 -160.6 -161.9

Income (Loss) On Equity Investments 28.4 34.6 25.3

Currency Exchange Gains (Loss) -11.3 36.7 73.8

Other Non-Operating Income (Expenses) 29.9 -52.1 -76.3

EBT, EXCLUDING UNUSUAL ITEMS 653.4 623.7 746.4

Merger & Restructuring Charges -6.5 -- --

Gain (Loss) On Sale Of Investments -- -1.4 -2.9

Gain (Loss) On Sale Of Assets -1.0 -- --

Other Unusual Items, Total -30.5 0.8 1.2

Insurance Settlements -- 0.8 1.2

Other Unusual Items -30.5 -- --

EBT, INCLUDING UNUSUAL ITEMS 615.4 623.1 744.8

Income Tax Expense 74.3 76.4 122.1

Minority Interest In Earnings -34.6 -26.9 -24.8

Earnings From Continuing Operations 541.1 546.6 622.7

NET INCOME 506.5 519.7 597.8

NET INCOME TO COMMON INCLUDING EXTRA ITEMS 506.5 519.7 597.8

NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 506.5 519.7 597.8

VESTEL ANALYSIS

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