Accounting and Finance at Arçelik A.Ş.

By Dr. Özlem Olgu Akdeniz, Assistant Professor, Koç University, Department of

Accounting & Finance, Istanbul.

Arçelik A.Ş, established by Mr. Vehbi Koç in 1955, is a domestic company in the Turkish
white goods market. It has become Turkey's largest private industrial company today. Having
operations in the durable consumer goods industry with production, marketing and after-sales
services, Arçelik A.Ş. offers products and services around the world with its 22,000
employees and 14 different production facilities in five countries (Turkey, Romania, Russia,
China and South Africa). It has sales and marketing companies around the world and owns
ten brands (Arçelik, Beko, Grundig, Blomberg, ElektraBregenz, Arctic, Leisure, Flavel, Defy
and Altus) under its umbrella. A summary of its financial statements and figures on important
profitability ratios for the period of 2007-2011 is presented below.
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Assume that Mr. Kutlu, the CEO of Arcelik A.Ş., is an expert in engineering, but a novice in
accounting and finance. As your are the accounting manager of the company, Mr. Kutlu has
asked you to prepare a report explaining the financial position of the company since 2007. He
has given you less than a week to prepare the report. Using your knowledge in financial
statements, you believe the report will be ready in time. To start with, you have listed
questions that need to be clearly answered in this report.

 Determine the overall percentage increase in total assets from 2007 to 2011. What was
the average increase per year?

 Comment on the Arçelik A.Ş.'s liquidity. Does working capital or the current ratio
appear to provide a better indication of the company's liquidity? What might explain
the change in figures during the 2007-2011 period?

 Comment on the change in Arçelik's profitability during this period. How might this
affect your prediction about its future profitability?

 Based on the ratios calculated, discuss briefly the improvement or lack thereof, in
financial position and operating results from 2007 to 2011.

 Explain the enormous change in most of the figures in 2008.

If you need more information for the calculations visit:

http://www.arcelikas.com/UserFiles/file/ArcelikFRENG2011.pdf