preseen Information Flashcards
Number of tractors sold last year
31,150
Revenue last year
2,990 million
Gross margin
25.9%
Operating margin
8.7%
Market growth areas
Small, mini tractors, alternative fuel sources in Europe (landscaping and grass cutting)
Increased mechanisation and automation in some parts of the world ie Asia. Typically, larger, tractors designed for heavy work better the lower spec than those in Europe.
Profits from yeah 21 to 22
Up 31% after tax
Inventory holding
Down on previous year
29 days
Trade receivables
2022 _ 37 days
2021 - 34 days
Trade payables
Down on previous year
67 days
Working capital cycle
-1 days
Negative working cycle, indicating an increasing cash flow situation
Tax depreciation rate
25% on a reducing balance basis. A full years allowance is available in the first year that the asset is acquired. Tax depreciation allowances are not available for property assets.
Corporation tax rate
30%
AgRI, overview
Parent company with numerous subsidiaries
Experience established in 1860
Generally operates as a parent company and sets up subsidiaries beneath it
Launched its first engine powered tractor in North America in 1920 
Tracks America coverage
America, Australia, and parts of Asia
Overview of dealers
All sales of three dealers
Very strong relationship with dealers.
Sales team can provide discounts of up to 15%
Sales team earn commission on sales.
Finance, director
Karl Lomas
Good connections with finance providers
Production, director
Jack Newman
Passionate about quality and TQM
Product development, director
Jo Steiner
Embraces new technologies and ultimate fuel sources
Costing system
Operate a standard absorption costing system
Uses either direct labour or machine hours
Production overheads are allocated and apportioned to one of five production cost centres and absorbed on either direct labour or machine our basis.
Uses current standards which are reviewed once per year.
ABC, not a good idea as all tractors are similar processes.
Normal raw material losses are included in standard costs 
Budget setting
Currently done by the board on an annual basis using an incremental process.
There is currently no input from managers.
Relationship with dealers
Payment terms for 30 days.
Some large dealers have a longer
Very good relationship with dealers, all paid on time.
Contract with dealers specify that the price The dealer charges to the end user should be the price agreed between the dealer and the sales team plus an agreed percentage to give the dealer a margin. 
Tracks Europe also sells parts components and subassemblies to dealers who deal with the servicing and repairs for the tractors
Production site in Europe
Oh production from the one site in Europe for tracks Europe
Strength, because this involves minimal transport costs.
Efficient.
There are five production departments at this site 
The production facility includes the tractor product, development centre, warehousing for various raw materials, a huge assembly plant, a testing facility, and the finish goods warehouse 
Steel plate and paint sourcing
Steel plate all comes from one supplier. This is both the strength and weakness.
Strengthen that they built have a good relationship and probably negotiated a very good cost with a supplier
Weakness because they are reliant on this one supplier, and if there was any sort of problems, they do not have a secondary supplier to fall back on
Both suppliers are large companies that service a lot of the vehicle manufacturers that operate in Teeland
Direct labour, overtime
The premium is treated as a variable production overhead
Idle time is not budgeted for 
Tractor fashion
Upgrading tractors to extend their life.
That all tractor owners have the right of repair a paragraph
pre-cycling of tractors– making tractors in such a way that they are easily recyclable.
Designed for disassembly, tractors designed in a way that makes it easy to dissemble and reuse.
Red diesel alternatives
Electric - issues regarding space for batteries
Hydrogen – issues regarding space for the electrolytes needed. Possibly only suitable for larger operations. 
Tractor demanding into the future
More compact with integrated telematics
Where there is an increased demand for mechanisation, generally due to labour shortages. These can be caused by the following
restrictions on movement of people between countries.
Change to exchange rates, making it less beneficial for people to work in different countries.
Foreign policies discouraging the use of foreign labour 
Supplier issues, with raw materials for tractors
 Semiconductors – shutdowns in China, leading to shortage of semiconductors across the world
Steel and aluminium costs, – prices have increased, which is expected to raise prices and slow market development in the coming months 
Tracks Europe sourcing policy
Tracks Europe sources parts, components and subassemblies from suppliers are mainly located close to tracks Europe production facility. Many of the components and sub assemblies are specific to tracks Europe and are made by the suppliers using dies and tooling that has been approved for use by tracks Europe 
Supply discounts
Where feasible, the company does seek to take advantage of bulk discounts. Payment terms, ranging from 30 days to 60 days depending on the supplier.
Total number of employees
4120
Product development
Development for all AgRi tractors is undertaken at the tractor product development centre located in Thailand.
This involves developing new tractor ranges and models as well as refining existing models.
There are mechanics, technicians, mechanical engineers and vehicle designers, who work together to develop parts components and subassemblies that are incorporated into new or refined models. within the centre, there is a small foundry which allows parts and components to be cast from molten metal and workshops which all parts components and subassemblies are created.
Once a part of assemblies developed the team in the development team works closely with suppliers to ensure the exact specifications are achieved.
Revenue increase from, 21 to 22
Up 7%
Profit for, 2022
T€159 million
2022 cash flow movement
Net increase of T$35 million 
Tractor popularity within ranges
A+, most popular. Followed by A and A++
The regular model is most popular in the A++ and A+ range. In the A range, the premium model is most popular.
A++ is the most profitable tractor followed by A+ and then A.
Tracks Europe market share, percentage
20% market share
Third largest supplier of six in Europe 
Mini tractors
Not currently produced by tracks Europe
Sam, but not all of the manufacturers of agricultural tractors also manufacture and sell, compact and mini tractors.
The market though is dominated by specialist small, mechanical equipment, manufacturers. 
Three channels, a farmer can use to buy new tractor
Visits are tracks Europe dealers showroom
Enquiries on the tracks Europe website – this enquiries pass on to a dealer
Enquiries at tracks Europe stand at an agricultural trade show – this inquiry is passed on to a dealer 
Cash and cash equivalents available at tracks Europe
T$49
a+ power standard cost card
Shows that production overheads account for 32% of total production cost of production, using mainly direct labour hours, and to a lesser degree direct machine hours.
Debt, gearing
83% 
Current ratio
0.92
Quick ratio
0.62 
