mercedes business finance

mercedes business finance

Strategies and Practices in Mercedes-Benz Business Finance

1. Introduction to Mercedes-Benz Business Finance

To address the structure and content defined embody transformation and, having completed and maintained, form. A structured business performance management system was assumed necessary. This enabled greater control over performance and integration in the valuable budget process, a basis for performance-related remuneration opportunities, and the embracement and management of several facets of an increasing operating business. The new model does further recognize business purpose and profit or other. With it, to a larger degree, unite and develop a shared sense of purpose, strategy, and value, all with a new belief to transform business directives and management action. With vision and goals linked to customer requirements, performance ambition raised and providing exceptional customer service by serving the business first.

This entailed a change to the normal management practice: instead of concentrating on pure risk, pure return existed and, occasionally, conflict bore fruitless business operation. With no single cooperative effort to address the situation deemed unacceptable, Financial Affairs became necessary to assist the business to optimize profitability, utilization of assets and returns or both, thereby ensuring the sustainability of the business.

Mercedes-Benz required a more coherent, controlled, and effective approach to address its business-specific financial management fundamentals. This necessitated the implementation of a country-specific manual aimed to provide management and financial departments with perceptions in respect of credit control, accounts payable, corporate cards, annual financial budgets, management reporting, sales, asset and facilities, human resources, and controls relating to information technology.

2. Key Financial Concepts and Tools in the Automotive Industry

Automotive companies must understand and continually analyze and forecast their cash and working capital requirements in order that they are able to evaluate and allocate the financing that they will require. As a result, automotive finance professionals commonly dedicate considerable resources to tracking and forecasting both the demand for and supply of cash among automotive stakeholders. The amount of cash held by the company is a result of decisions concerning the level of cash required to cover both the time taken by customers to pay and the time necessary for the company to convert its working capital into a sale and deliver it to, and receive payment from, the customer. Decisions concerning the financing of the working capital required in an automotive company’s business model will influence both the amount of cash held and the means by which the company satisfies the financial needs of its working capital requirements.

Accounting and finance comprise the main cornerstones of analysis adopted by the various members of the automotive ecosystem, as clearly demonstrated by both the legal and financial framework that underpins this product. The following is an outline of some of the key financial concepts used to construct the techniques presented above and included in the course dealing with sources of finance in the automotive industry. Of particular relevance to the following discussion is the explanation of the determinants of the relationships between the key actors in this automotive value chain and the key sustainability ratios, which the automotive companies can use to consider the quality of the relationships established with their stakeholders.

3. Financial Decision-Making and Risk Management in Mercedes-Benz Operations

The traditional corporate finance approach to financial management, utilizing the capital asset pricing model, often focuses on financial and economic indicators encompassing project profitability, contributions to corporate and stakeholder growth, financial and industrial cycle dynamics, strategic focus, and competitive positioning of decision outcomes. While strategic financial management integrates a more complete “risk across models and systems” assessment, it is typically conducted from an economic finance perspective that discounts external to internal financial relationships. Balanced stakeholder interests, incorporating opinions and position weighting that do not necessarily reflect asset market valuations in either historical or forward-looking models, drive effective finance decisions. The strategic focus, economic-financial balance, dynamic systems perspective, new currency and business finance interactions, future and stakeholder planning tools, integrated implementation plans, and suitable analysis of risks not revealed in financial performance measures distinguish unique corporate financial analysis techniques from traditional trading models. Predictability of share price performance, the issue of inflation or current value operations, embraced for future project liquidity creation and shareholder wealth maximization, places increased demand on finance techniques that anticipate, react to, and profit from emergent long-term markets. Fixed- and variable-income corporate finance decisions contrast most with coin and bank note—equivalently, market-dependent money and price decisions—relative to current asset speculation based upon rates of return and value expectations quantified through future business projections. Such stock, bond, and other corporate finance-related applied techniques, regularly approximating the actions seen in a variety of international corporate finance markets, frame modern versions of the Dennis-Whipple Ratio, the Brandt-Lehmann Product Value Equations, and the Markowitz Shoe-Leather Corollary market behaviors.

The financial decision process incorporates a very diverse group of activities associated with resource allocation, particularly where risk and return are significant. It includes such common activities as capital budgeting, working capital management, tactical pricing decisions, value-enhancing growth and merger strategies, ratio and financial risk management, as well as the selection of sources and types of capital. How does the identification of risk in financial systems differ in economics compared to the traditional internal strategic assessment of standard corporate finance practices?

4. Innovative Financing Models and Trends in the Automotive Sector

In this interview, Voss, now Head of Procure to Pay, shared her insights with “Assets to Benz” on innovative financing models and trends in the automotive sector, the relative importance of various financing sources as well as the intercompany discussions that are key to achieving a balance between corporate goals and the optimization of liquidity, the matching of assets, and the strength of the balance sheet. “Leading by example”: Some achievements on the road of the financial division and the way to manage the different professional and private goals.

Millions of investments every year enable Mercedes-Benz to design, assemble, and sell the clean automotive vehicles. But how do these investments have to be financed? The majority of the funds spent are raised using financing models that are as individual as the sources of funds being used. Many of these instruments are as unique as the company itself, setting standards not only in terms of technical innovation, design, safety, and comfort but also when it comes to developing and using financing instruments. The corporate finance department of Mercedes-Benz Bank is one of the main experts in this area. For five years, it was to be led by Anja Voss as the Head of Corporate Finance, Precious Metal Procurement, and Cash Management.