Property, plant and equipment and depreciationIn 2014, the value of property, plant and equipment (PPI) of Martinrea Inc. increased by $137,133,000, or 16.2% YoY. Net additions of $201,833,000 in land and buildings, leasehold improvements, manufacturing equipment, other assets, construction in progress and replacement parts increased the total value of the PPE. Accumulated depreciation, totaling $110,783,000, decreased the net book value, and foreign currency translation increased the ending value by $137,133,000. These PPE additions are most likely aimed at growing manufacturing and assembly lines, as Martinrea suggests they are purchasing more to invest in expansion programs, which is typical for a capital-intensive business. Depreciation is calculated either linearly or on a decreasing basis. balance method, and the calculation process varies for each piece of PPE. In total, production depreciation reached $103,997,000 and non-production depreciation reached $6,786,000, up 12.2% and 3.2%, respectively. The reason production depreciation increased much more than non-production depreciation is due to large additions last year of two of the EPI components, which use a declining balance method of depreciation. How each component of property, plant and equipment is depreciated is presented in the graph in Appendix II.Investments and acquisitionsOn July 29, 2011, Martinrea acquired Honsel AG, a leading German supplier of aluminum automotive components which was facing significant liquidity problems. Martinrea purchased 55% of the company's assets, while Anchorage LLC, a private investment firm, acquired the remaining 45%. This transaction helps Martinrea increase its aluminum market share, expands its segmented profits,...... middle of paper...... complements its own steel business. If Honsel delivers this benefit, as management expects, the increased reliance on debt to finance the purchase will be a good investment. However, if Honsel becomes a burden on their business and does not generate positive returns, Martinrea will remain saddled with increased debt. Ultimately, only time will tell whether or not this debt increase was a good strategic decision.Debt AnalysisDebt-to-Equity RatioMartinrea currently has a debt-to-equity ratio of 2.67 (up from 2.95 in 2013). A graph of how debt versus equity changes over time can be found in Appendix V. This means that for every dollar invested in the company by shareholders, $2.67 of debt is used by the company. This is higher than a number of competitors, but not alarming, given the circumstances described in the previous section..