Polaris Industries, Inc.
RATIOS
Liquidity

Polaris Current Ratios
Current Ratio 2011: $878,676/$615,531 = 1.43
Current Ratio 2010: $808,145/$584,210 = 1.38
Current Ratio 2009: $491,500/$343,074 = 1.43
Debt to Assets Ratio
2011: $727,968/$1,228,024 = 0.59
2010: $690,656/$1,061,647 = 0.65
Profitability
Return on Sales
2011: $227,575/$2,656,949 = $0.08
2010: $147,138/$1,991,139 = $0.07
2009: $101,017/$1,565,887 = $0.06
Growth
5 yr. annual growth – 13.35%
5 yr. revenue growth – 9.91%
5 yr. dividend growth – 7.74%
5 year EPS growth – 18.68%
Investments
Dividend Yield - $1.35/$79.90 = 1.6% (using 2011’s annual divided)
Yamaha Current Ratios
Current Ratio 2011: $561,205/$366,415 = 1.53
Current Ratio 2010: $639,028/$365,131 = 1.75
Current Ratio 2009: $620,800/$379,698 = 1.63

Polaris Industries Inc.
OVERVIEW
Polaris Industries Inc. is an international manufacturing company with a variety of product that falls under a general category of motorsports. They are based out of Medina, Minnesota and are one of the leading competitors in the industry. Their product line consists of snowmobiles, all-terrain vehicles (ATV’s), off road vehicles (ORV’s), and neighborhood electric vehicles (NEV’s), with a subsidiary company that produces motorcycles. The origin of what would become Polaris Industries started in the 1950’s. It began with Edgar Hetteen and business partner David Johnson. Edgar and David were partners in a business that specialized in building agricultural and industrial accessories, Hetteen Hoist & Derrick (est. 1944). Edgar’s younger brother, Allan, became a partner in the business after he completed school.
In the early 1950’s the men, along with a few employees, embarked on an idea to create a vehicle that could drive through the snow, mainly to assist with travel while hunting. Their original model consisted of a “track” fashioned from an old conveyor belt and “skis” made out of an old bumper for a Chevrolet. After completion, the concept model was sold to a local lumberyard owner to meet payroll demands, for a total of $465. From there on out, they eventually changed their name to Polaris, with Edgar quoted as saying “Polaris, that’s the North Star, and we were about as far north as you could get.”
Fast forward sixty years and Polaris Industries has become a very popular, well known company. They are the leader in the snowmobile industry to date, and one of the largest ORV manufacturers in the world. They are also the proud creator of Victory motorcycles, which is the first all-American made motorcycle in 60 years. On top of manufacturing and selling motorsport products throughout the world, they manufacture parts, accessories, and clothing as well.
REPORTS AND FINANCIAL STATEMENTS Polaris currently has manufacturing and distributing plants located in the upper Midwest – Iowa, Minnesota, Wisconsin, and South Dakota, as well as locations in Canada, Spain, Germany, France, Mexico, Norway, Sweden, and Australia. International growth is one of the main goals of the company. From 2009 to 2011 Polaris’ statements indicate growth in both the size of the corporation as a whole, and the financial well-being of the company. In 2011, Polaris announced the acquisition of Indian Motorcycles, which on top of current manufacturing growth, added a stronger and more profitable opportunity to the company.
From 2009 to 2011, total assets of the company grew 68.9% while total liabilities of the company grew 32.5%. Shareholder’s equity also grew 44.5%. Polaris has experience a 60% spike in snowmobile sales in 2011 alone. The popularity and long standing reputation of quality product is spreading; in Russia, snowmobile sales rose over 100%.
Polaris Industries’ liquidity compared to one of the leading competitors in the market, Yamaha, is justifiable. Polaris’ current ratio for 2011 was 1.43, while Yamaha’s was 1.53. After acquiring another product and increasing manufacturing due to high demand, I believe their increased liabilities go hand in hand with their increased assets and added product line. They also just completed their newest facility in Mexico, which would explain growth in both areas. Becoming a well-known, leading international company in the industry is one of Polaris’ main goals, which they are quickly achieving. Their liquidity and degree of leverage is validated in my opinion.
Polaris Industries has proven to be a successful company in various ways. As far as profitability and sales are concerned, they have again established growth the last few years. Sales have grown 70% from 2009 to 2011, with gross profit increasing by 88%. Compare that to Yamaha’s power product sales, (they manufacture and sell ATV’s, motorcycles, dirt bikes, snowmobiles, etc.). They have only grown 10% over the past 3 years and have had a 36% increase in gross profit. Over a ten year span, Polaris has increased their sales 86%. There has been proof in their financial reports of a slow, consistent, solid growth. Polaris’ return on sales has increased $0.02 the past two years, which means they are slowly increasing the amount of profit generated from each dollar of sales as well.
Given the economic situations we have experienced over the last three years, five years, ten years, and beyond, I find it impressive that Polaris has continued to steadily grow and succeed. After reviewing their financial statements and other reports on the company, there weren’t any indications that the less than ideal economic situations we have experienced, have majorly affected Polaris Industries in any way.
INVESTMENTS
Polaris Industries offers stock options, both common and preferred. It is currently selling on the market for $79.90 per share. Their basic EPS reported on their most recent statement was $3.31, with a diluted EPS of $3.20. Compare that to the basic EPS of three other industry competitors; Arctic Cat at $1.43, Honda at $1.46, Kawasaki at $0.17 and an Industry EPS for Recreational Vehicles of $1.34. As of December 31, 2011 they had no shares of preferred stock issued or outstanding and 160,000 shares of common stock authorized - 68,430 shares issued, and 68,468 outstanding. According to a report of dividends paid, issued by Polaris, they pay dividends every quarter, with occasional 2 for 1 stock splits (the most recent occurring in September 2011). The dividend amounts paid each quarter range from $0.225 - $0.45. Although Polaris doesn’t pay out monstrous dividend amounts (they have a current dividend yield of 1.6%) I think it is important to note the steady success of the company and the fact that for the past 6 years they have steadily been issuing dividends with no hiccups or threat of cutting them. According to a chart found on Bloomsberg BusinessWeek, the price of Polaris stock has steadily been rising over the past three years, with no major change or dip in activity. Polaris released a comparison graph for stock performance, comparing Polaris Industries to Russell 2000 Index and Morningstar Recreational Vehicles Industry Group Index. It assumes a $100 investment at the end of 2006 in common stock for Polaris and the two indexes mentioned, and then the reinvestment of all dividends. It compares the cumulative return to the shareholders. By 2011, Polaris well exceeded the other two, with $280.15 vs. $100.73 for Russell and $77.15 for Recreational Vehicles. The board of directors also authorized a share repurchase program in 2006 to repurchase up to 75 million shares of the company’s common stock. As of December 31, 2011 71.4 million shares have been repurchased. They are hoping by authorizing share repurchases such as this, they will be able to improve capital structure efficiency, increase earnings, and lower the cost of capital. Overall, the information and reports reviewed on Polaris’ trading securities seemed very solid and just as their company is gradually and steadily growing, their securities seem to be making a gradual increase; there have been no indications of sharp declines in activity or quick successes.
REVIEW
After doing extensive research online and reviewing the financial statements available for Polaris Industries, Inc., I believe investing in this company would be beneficial. From the very beginning of Polaris, there has been a drive and commitment to provide a quality product and continually adapt and grow to become successful. Polaris has proven to be successful, and it hasn’t been a “quick success”. They have built up their product line with quality products that have a sound reputation behind them. I believe a slow, gradual incline in business will prove to be stronger and longer lasting than a company that jumps to success in a few years. Polaris started to concentrate on international growth a few years ago, and the success they had in 2011 is reflecting upon the efforts they put into the idea. They had a 39% sales increase, with growth in each region. I believe if they continue with the vision they have created thus far, they will continue to be successful. They are dedicated to the quality of their product, meanwhile keeping their competitive edge in the market with new products, models, and innovations. Expanding internationally will continue to give Polaris an edge on competition. In conclusion, based on everything I know about this company and its strategies, the industry, and the competitors, I believe this company is worth investing in for the long term.