Implications of captive financing companies on the financial structure of car manufacturers

Abstract

This paper studies captive finance companies in the automotive industry to draw conclusions on the implications they have on the consolidated entity’s financial structure and risk profile. For the analysis, key variables will be used to determine the similarity of captive finance companies with banks, and subsequently, the Altman Z-score will be used as an accounting data-based measure of risk. The results of the analysis are ambiguous and do not confirm a direct and generalizable relationship between the impact of captive finance companies and the business risk of a consolidated group.

Date of Award	26 Feb 2018
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ricardo César Ribeiro Ventura Ferreira Reis (Supervisor)