hree of the highlighted companies have gained entry into this market with this strategy. Current trends indicated that this market has growth potential. This is due to several factors: 1.Environmental concerns2.Guaranteed funding through Federal/State and local governments3.New technology developments4.New laws pertaining to safetyThose firms already established will have a leading edge in this market. There is intense competition for the contracts to supply buses across the country. The need to replace older models will ensure continued growth.As mentioned earlier, Henlys is a newcomer to the North American bus market. Their acquisition of Blue Bird gave them a lions share of the current market. It has also been the companys saving grace. Blue Birds profits have given Henlys a substantial advantage over Navistar and Collins. Navistars engine division accounts for over 32% of total revenue, up 8% from last year. The engine division is becoming a major core competency for Navistar and may eventually support the truck division. This emphasis on the engine division is part of a current strategy to dominate the diesel engine sector, which has a major impact on the bus industry.Collins current sales have decreased by 15%. This is mainly due to decreases in the bus and ambulance divisions. The main factor contributing to this decline was a decrease in winter orders and chassis shortages due to plant shutdowns at both Ford and GM. This also led to an increase in cost of sales of 89% versus 85% for the same period in 2000. The following chart shows current industry standards for various ratios: FINANCIAL STRENGTHPROFITABILITY RATIOS (%)Quick Ratio1.16Net profit margin2.59Current Ratio1.58Gross Margin19.12Total Debt to Equity4.37Operating Margin4.21MANAGEMENT EFFECTIVENESS (%)EFFICIENCY Return on Assets1.93Asset Turnover0.75Return on Investment3.9Inventory Turnover12.6Return on Equity13.61Receivable Turnover2.38Both Navistar and Co...
