ZMR INSTITUTE OF TECHNOLOGYFACULTY OF ENGINEERING DEPARTMENT

SPRING 2015

EM 507 Financial Analysis and Engineering Economics

COMPANY REPORT

Mehmet KIRGZOLU Faik KKL

1. INTRUDUCTIONIt is obviously seen that the firm in the white goods sector has established new networks and innovative works with emphasis on R&D and technology. Vestel is one of the biggest company which has huge production facility and significant market share both in Turkey and abroad with its own brand. Other firms in the same sector has become really important innovative firms as well, like Arelik, Arnica Senur, etc. 2. ECONOMIC ANALYSISa. GDP (Gross Domestic Produce) Annual Gross Domestic Product was 1 416 817 Million TL. at current prices. Annual gross domestic product in 2012 increased by 9.2% and reached to 1 416 817 Million Turkish Liras current prices, increased by 2.2% and reached to 117 754 Million Turkish Liras at constant prices. GDP by production approach increased by 4.0% compared to previous year in 2013 and reached to 122 388 Million TL at constant prices and increased by 10.2% and reached to 1 561 510 Million TL at current prices. The nine months growth rate of gross domestic product increased by 2.8% in the third quarter of 2014 and reached to 93 billion 733 million Turkish Liras at constant prices. The nine months growth rate of gross domestic product increased by 11.9% in the third quarter of 2014 and reached to 1 trillion 296 billion 774 million Turkish Liras at current prices. [1]b. Trade Deficit In November 2012; exports increased by 24,8% and reached to 13 829 Million Dollars and imports increased by 12,5% and reached to 20 986 Million Dollars compared with November 2011. At the same month, foreign trade deficit decreased from 7 571 Million Dollar to 7 158 Million Dollars. In November 2013; exports were 14 252 Million Dollars with a 3.6% increase and imports were 21 403 Million Dollars with a 2.2% increase compared with November 2012. In November 2014; exports were 13 billion 132 million dollars with a 7.5% decrease and imports were 21 billion 448 million dollars with a 0.2% increase compared with November 2013. [1]c. Budget Deficit In December 2013, budget was 18,5 billion TL deficit while budget deficit 29,4 billion TL in December 2012. The budget deficit was 22.7 billion TL in January-December 2014, while it was 18.5 billion TL in January-December 2013. [2]

d. Interest RateThe interest rate in Turkey between the years 2012-2014 is shown in the graph below. [3]

e. Unemployment RateUnemployment rates between the years 2012 - 2014 are in the table (with the values of beginning and end of the year) and shown in the graph.[3]201220132014

Unemployment Rate9,29,7 - 9,19,2 - 10,7

3. SECTOR ANALYSISa. About The White Goods IndustryWhite Goods Industry, included in the scope of electricity appliances as well as durable goods, possesses a wide range of products due to the varying technologies it incorporates. Refrigerator, deep freezer, washing machine, dryer, dishwasher and oven are regarded as the six main products whereas durable goods such as cookers, vacuum cleaners, toasters, food processors, fruit presses, blenders, and mixers are included in the small home appliances category. Products such as air-conditioners, water heaters and water purifiers are also counted among the electricity home appliances.With its production capacity of 25 million units and actual production of 21 million units, the white goods industry has become a significant focus of production in the last 10 years and Turkey has become the LEADING country in Europe in the white goods sector.The industry, having achieved 14 million units in exports, is exporting 70% of its manufacture to more than 100 countries in such markets as European countries, neighbouring countries and Africa.The Turkish market used to sell 2 million units in domestic sales in the 1990s; however, in the last 5 years, domestic sales have gone up to 5 million units and achieved another record by rising up to 6.5 million units by the end of 2011.The white goods companies operating in Turkey are making significant investments in the R&D (Research and Development) area and they are able to achieve success in the world as a result of the competitive power they gain through these investments. In the last 10 years, improvements in the energy efficiency of the products have reached up to 65%.The white goods sector also strikes out with the number of its patent applications. Having assumed a leading position in many white goods categories, Turkey is making a significant impact in the world with the washing machine thatconsumes the least water, the dishwasher thatwashes fastest and consumes the least water, the refrigerator and tumble dryer that consumes the least energy, themost silentwashing machine, dishwasher and oven.b.The Use of White Goods & Energy ConservationHome appliances can be used with less energy without affecting the desired level of service and comfort. It is possible to ensure a reduction in electricity bills by using efficient home appliances. Efficient appliances might be more expensive than similar models but the difference paid when buying efficient appliances returns through the reduction in electricity bills.When buying white goods, it is important to compare the products not only on a price-basis but also on the basis of their energy efficiency. Even though the investment cost of a more energy efficient device is higher, the energy savings it will provide during its 10 to 15 years of service life will return the difference. When buying home appliances, keep in mind that the ones bearing A and higher marks are the most efficient. It should be remembered that there is more than 60% difference between the consumptions of highly efficient and very low efficiency devices.

c.Energy LabelEnergy label is designed to provide consumers with accurate, recognisable and comparable information on domestic household products regarding energy consumption, performance and other essential characteristics.It allows consumers to identify how energy efficient a product actually is and to assess a products potential to reduce energy costs.The label is uniform for all products in a given category. Consumers can compare easily the characteristics of appliances in a given category such as energy or water consumption, or capacity.The label initially classified products from A to G, A being the most efficient energy class and G the least efficient.Turkish legislation introduces three additional classes, A+, A++ and A+++, can be added to the current A to G classification scale to adapt to technological developments and to allow further product differentiation in terms of energy efficiency.Coloured arrows differentiate energy efficient from lower energy efficient products: dark green indicates a highly efficient product and red a low efficient product.Refrigerator -7 classes maximum from A+++ to D -Coloured arrows are used to differentiate energy efficient from lower energy efficient products: dark green indicates a highly efficient product and red a low efficient product -Pictograms highlight selected performances and characteristics: -Annual energy consumption in kW - Capacity of all storage compartments in litres -Capacity of frozen food storage compartments in litres -Noise emissions in decibels -The energy class is based on the energy efficiency index which takes into account: - The annual energy consumption -The volume -The lowest temperature of different compartmentsOther factors affecting this index are the type of construction (built in or free standing) and the availability of frost free feature.Washing Machine -7 classes maximum: from A+++ to D -Coloured arrows are used to differentiate energy efficient from lower energy efficient products: dark green indicates a highly efficient product and red a low efficient product -Pictograms highlight selected performances and characteristics: -Annual energy consumption in kWh -Noise emissions in decibels -Spin-drying efficiency class - Capacity in kilograms - Annual water consumption in litres - The annual energy & water consumptions, and the spin-drying efficiency class indicated on the label, are calculated on the basis of: - 60C cotton programme at full and partial load - 40C cotton programme at partial load - Left-on mode and in off-mode - Values for the annual water consumption and the spin-drying efficiency class are based on the same set of washing cycles as the energy consumption data - All washing machines with a rated capacity greater than 3 kg, must have an A class washing performance. Washing performance is then no longer indicated on the label.Dishwasher -7 classes: A+++ to D -Coloured arrows are used to differentiate energy efficient from lower energy efficient products: dark green indicates a highly efficient product and red a low efficient product -Pictograms highlight selected performances and characteristics: -Annual energy consumption in kWh - Noise emissions in decibels - Capacity in place settings - Drying efficiency class - Annual water consumption in litres (no longer per cycle) - The energy class is measured from: - The annual energy consumption of standard cleaning cycles, when loaded with the declared place settings - The power and the time duration in the left-on mode -The power and the time duration in the off-mode -The cycle information on the label is based on the standard programme which is: - suitable to clean normally soiled tableware - is the most efficient in terms of combined energy and water consumptions -All dishwashers must now have an A class cleaning performance. Cleaning performance is then no longer indicated on the label.Electric ovens - 7 classes: A to G -Coloured arrows are used to differentiate energy efficient from lower energy efficient products: dark green indicates a highly efficient product and red a low efficient product - Electric oven performances and characteristicsare shown on the label: - Energy consumption in kWh for the heating function(s) (conventional and/or the forced air convention) (of appliances) based on standard load - Usable volume of the cavity in litres - The size of appliance determined as follows: Small: 12 l