The 2014 financial statements of LVMH Moet Hennessey-Louis Vuitton S.A. are presented in Appendix C of this book. LVMH is a Paris-based holding company and one of the world’s largest and best-known luxury goods companies. As a member-nation of the European Union, French companies are required to prepare their consolidated (group) financial statements using International Financial Reporting Standards (IFRS).

Review the company’s IFRS financial statements. Is the company principally debt or equity financed?

Calculate the company’s long-term borrowings to total equity ratio for 2013 and 2014. Is the company’s use of debt financing increasing or decreasing over the two-year period?

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LVMH GROUP Condensed Consolidated Financial Statements Consolidated Balance Sheet Notes ( millions) ASSETS Brands and other intangible fixed assets.. Goodwill.... Property, plant and equipment... 2014 2013 2012 Investments in joint ventures and associates. Non-current available for sale financial assets. Other non-current assets. Deferred tax 346789N 13,031 12,596 11,322 8,810 9,058 7,709 10,387 9,621 8,694 519 480. 483 580 7,080 6,004 489 457 519 27 1,436 913 952 Non-current assets 35,252 40,205 35,683 Inventories and work in progress. 10 Trade accounts receivable.. Income taxes Other current assets. Cash and cash equivalents Current assets Total assets. 11 11 9,475 8,492 7,994 2,274 2,174 1,972 354 223 201 12 14 24 1,916 1,856 1,813 4,091 3,226 2,187 18,110 15,971 14,167 53,362 56,176 49,850