Analysis Of Financial Statement

Group Member:

Khurram Mansoor Muhammad Noman Shafi Mubasher Rehman

MBA (Morning) 4th A

Submitted To :

Sir Mehmood ul Hassan

FINANCIAL STATEMENTS ANALYSIS

Honda Atlas Cars Pakistan

BALANCE SHEET (Honda Atlas Cars)
ASSETS
property, plant and equipment intangible asses capital work-in-progress long term loans, advance and deposits deferred taxation NON-CURRENT ASSETS stores and spares stock-in-trade trade and other receivables cash and bank balances CURRENT ASSETS

Rs. In Thousands Year -08 4,082,955 65,903 191,842 32,196 251,008 4,623,904 50,316 2,704,946 706,092 219,859 3,681,213 8,305,117 750,000 714,000 1,991,000 -264,332 2,440,668 1,958,334 583,333 39,627 3,283,155 3,906,115 8,305,117 Year-09 3,864,527 64,636 80,746 33,141 338,165 4,381,215 83,101 1,612,696 507,852 231,880 2,435,529 6,816,744 2,000,000 1,428,000 1,727,000 74,678 3,229,678 500,000 32,029 3,055,037 3,087,066 6,816,744 Year-10 5,190,535 195,830 19,226 35,545 571,214 6,012,350 101,942 2,954,091 853,218 20,487 3,929,738 9,942,088 2,000,000 1,428,000 1,801,500 -401,655 2,827,845 1,500,000 2,151,601 75,048 3,387,594 5,614,243 9,942,088

TOTAL ASSETS

Equity and Liabilities

authorized capital issued, subscribed and paid up capital reserves inappropriate profit SHARE CAPITAL AND RESERVES NON-CURRENT LIABILITIES current portion of long term finances short term borrowings mark up accrued on loans and other payables trade and other payables

CURRENT LIABILITIES

TOTAL EQUITY AND LIABILITIES

INCOME STATEMENT (Honda Atlas Cars)

Income Statement Sales Cost of Sales Gross Profit Less: Distribution and Marketing Costs Less: Administrative Expenses Add: Other Operating Income Less: Other Operating Expenses Profit/Loss from Operations Less: Finance Cost Profit/Loss before taxation Taxation Profit/Loss after taxation Earnings per Share (rupees) Year 2008 17,055,115 16,955,181 99,934 214,889 147,274 150,585 64,514 176,158 305,491 481,649 217,109 264,540 2.08 Rupees in Thousands Year 2009 14,715,495 14,088,001 627,494 209,677 139,163 23,589 4,975 297,268 233,651 63,617 11,393 75,010 0.55 Year 2010 14,149,646 13,973,144 176,502 190,088 139,749 64,844 311,025 399,516 222,769 622,285 220,452 401,833 2.81

Financial Analysis
Ratio Analysis
Liquidity Ratios
Ratios Current Ratio Quick Ratio 2007 0.94 0.23 2008 0.80 0.24 2009 0.70 0.15

Its current ratio has been less than one for three years which shows that its current liabilities are greater than its current assets. Although its current assets increased by 61% in Financial Year 2009 but its current liabilities also increased by 82% so current ratio further decreased. Apparently it looks that its liquidity position is very weak but actually it is not true because of the nature of its current liabilities. In its current liabilities one main portion is its trade payables, as it purchases its raw material from parent company Honda Japan so it can get a lot of relaxation in making payment to its parent company. In its current liabilities one portion consist of advances from dealers which are not likely to demand all of their money in near future. So if we consider these factors then its liquidity position looks better even with low quick and current ratios.

It has to pay its payables in Japanese Yens so change in currency rate can affect the figure of payables so a risk is also involved. Its quick ratio is very low as most of the current assets consist of inventory, other assets like receivables and cash are very low. Its receivables are very low or are nil as it makes sales on cash even gets money in advance which further increases its current liabilities. Its cash position is very low as it did its expansion in plant capacity in 2007 and a lot cash was used there.

Asset Management Ratios

Inventory Turnover (Days) Total Asset turnover 2007 58.50 2.05 2008 43.33 2.16 2009 78.73 1.42

I have not calculated its receivable turnover as I have explained that it either does not has its receivables or they are very low. Its inventory turnover increased showing that it took longer for the company to sell its stock in trade. It has increased from 43 to 79. Its basic reason is decrease in over all demand of cars due to bad financing condition. The company has to make big batches of each model to reduce set up cost but this over production takes time in selling as demand has decreased due to due to high interest rates. The total asset turnover ratio has decreased showing that the assets are not being used efficiently as it has been discussed that capacity is much higher than production and sales.

Debt Management Ratios

Debt/Equity (Times) Times Interest Earned (Times) 2007 2.40 -0.58 2008 1.11 1.27 2009 2.52 -1.79

The total liabilities of the company have almost doubled during 2009. Its major reason is that it long term debt has doubled. Negative ratio is due to loss in 2007 and 2009. Long term debt is paid through profit which Honda is not generating but still this loss does not show very weak position as major expense is depreciation expense which is converting profit into loss and we know that the company does not has to pay this expense. It is a non cash expense. If we exclude this expense then company can show some better debt position. But overall position is not so good as demand of cars has decreased in last three years.

Profitability Ratios
Net Profit Margin Return on Asset Return on Equity Earning Per Share 2007 -1.55 -3.19 -10.84 -3.71 2008 0.51 1.10 2.32 0.55 2009 -2.84 -4.04 -14.21 -2.81

As the company is in loss therefore all profitability ratios are negative. Actually in this type of business big fixed cost is involved which can only be recovered if production is done at large scale but due to low demand it is very difficult to recover and which converts the contribution generated from sale into loss. Although it looks that its shareholders are in loss but that is not the reality its parent company sells parts to it and earns profit on this sale so even if Honda Atlas is in loss still parent company is earning profit. ROA went down because of the dual reason of decreasing returns and increase in asset size. The asset base of the company widened during 2007 due to capacity expansion and introduction of new models because there was increasing trend of demand when this expansion was started. The company was able to keep its cost of sales in a bit low during 2009. The cost of sales in 2009 due to restricted production of cars and cost minimization. However, lower costs could not restrict the impact of lower sales revenue on the profitability of the company.

Common Size Analysis of Balance Sheet (Assets Side)

ASSETS
property, plant and equipment intangible asses capital work-in-progress long term loans, advance and deposits deferred taxation NON-CURRENT ASSETS stores and spares stock-in-trade trade and other receivables cash and bank balances CURRENT ASSETS

TOTAL ASSETS

Rs. In Thousands Year -08 Year-09 Year-10 4,082,955 3,864,527 5,190,535 65,903 64,636 195,830 191,842 80,746 19,226 32,196 33,141 35,545 251,008 338,165 571,214 4,623,904 4,381,215 6,012,350 50,316 83,101 101,942 2,704,946 1,612,696 2,954,091 706,092 507,852 853,218 219,859 231,880 20,487 3,681,213 2,435,529 3,929,738 8,305,117 6,816,744 9,942,088

Common Size (%) Year 2008 Year 2009 Year 2010 49% 57% 52% 1% 1% 2% 2% 1% 0% 0% 0% 0% 3% 5% 6% 56% 64% 60% 1% 1% 1% 33% 24% 30% 9% 7% 9% 3% 3% 0% 44% 36% 40% 100% 100% 100%

Common Size Analysis of Balance Sheet (Equity and Liabilities Side)

Equity and Liabilities
Rs. In Thousands Year 2008 Year 2009 Year 2010 750,000 714,000 1,991,000 -264,332 2,440,668 1,958,334 583,333 39,627 3,283,155 3,906,115 8,305,117 2,000,000 1,428,000 1,727,000 74,678 3,229,678 500,000 2,000,000 1,428,000 1,801,500 -401,655 2,827,845 1,500,000 2,151,601 75,048 3,387,594 5,614,243 9,942,088 Year 2008 9% 9% 24% -3% 29% 24% 7% 0% 0% 40% 47% 100% Indexed (%) Year 2009 29% 21% 25% 1% 47% 7% 0% 0% 0% 45% 45% 100% Year 2010 20% 14% 18% -4% 28% 15% 0% 22% 1% 34% 56% 100%

authorized capital issued, subscribed and paid up capital reserves inappropriate profit SHARE CAPITAL AND RESERVES NON-CURRENT LIABILITIES current portion of long term finances short term borrowings mark up accrued on loans and other payables trade and other payables

32,029 3,055,037 3,087,066 6,816,744

CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES

Index Analysis of Balance Sheet (Assets Side)

ASSETS property, plant and equipment intangible asses capital work-in-progress long term loans, advance and deposits deferred taxation NON-CURRENT ASSETS stores and spares stock-in-trade trade and other receivables cash and bank balances CURRENT ASSETS TOTAL ASSETS Rs. In Thousands Year 2008 Year 2009 Year 2010 4,082,955 3,864,527 5,190,535 65,903 64,636 195,830 191,842 80,746 19,226 32,196 251,008 4,623,904 50,316 2,704,946 706,092 219,859 3,681,213 8,305,117 33,141 338,165 4,381,215 83,101 1,612,696 507,852 231,880 2,435,529 6,816,744 35,545 571,214 6,012,350 101,942 2,954,091 853,218 20,487 3,929,738 9,942,088 Year 2008 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Indexed (%) Year 2009 95% 98% 42% 103% 135% 95% 165% 60% 72% 105% 66% 82% Year 2010 127% 297% 10% 110% 228% 130% 203% 109% 121% 9% 107% 120%

Index Analysis of Balance Sheet (Equity & Liabilities Side)

Equity and Liabilities
authorized capital issued, subscribed and paid up capital reserves unappropriated profit SHARE CAPITAL AND RESERVES NON-CURRENT LIABILITIES current portion of long term finances short term borrowings

Rs. In Thousands Year 2008 Year 2009 Year 2010

750,000 714,000 1,991,000 (264,332) 2,440,668 1,958,334 583,333 2,000,000 1,428,000 1,727,000 74,678 3,229,678 500,000 2,000,000 1,428,000 1,801,500 (401,655) 2,827,845 1,500,000 2,151,601

Indexed (%) Year 2008 Year 2009 Year 2010

100% 100% 100% 100% 100% 100% 100% 100% 267% 200% 87% -28% 132% 26% 0% 267% 200% 90% 152% 116% 77% 0%

mark up accrued on loans and other payables trade and other payables CURRENT LIABILITIES TOTAL EQUITY AND LIABILITIES

39,627 3,283,155 3,906,115 8,305,117

32,029 3,055,037 3,087,066 6,816,744

75,048 3,387,594 5,614,243 9,942,088

100% 100% 100% 100%

81% 93% 79% 82%

189% 103% 144% 120%

Common Size Analysis of Income Statement

Income Statement
Sales Cost of Sales Gross Profit Less: Distribution and Marketing Costs Less: Administrative Expenses Add: Other Operating Income Less: Other Operating Expenses Profit/Loss from Operations Less: Finance Cost Profit/Loss before taxtation Taxation Profit/Loss after taxation Earnings per Share (rupees) Rupees in Thousands Year 2008 17,055,115 16,955,181 99,934 214,889 147,274 150,585 64,514 176,158 305,491 481,649 217,109 264,540 2.08 Year 2009 14,715,495 14,088,001 627,494 209,677 139,163 23,589 4,975 297,268 233,651 63,617 11,393 75,010 0.55 Year 2010 14,149,646 13,973,144 176,502 190,088 139,749 64,844 311,025 399,516 222,769 622,285 220,452 401,833 2.81 Common Size (%) Year Year Year 2008 2009 2010 100% 100% 100% 99% 96% 99% 1% 4% 1% 1% 1% 1% 0% 1% 2% 3% 1% 2% 1% 1% 0% 0% 2% 2% 0% 0% 1% 1% 1% 0% 2% 3% 2% 4% 2% 3%

Index Analysis of Income Statement

Rupees in Thousands Income Statement Sales Cost of Sales Gross Profit Less: Distribution and Marketing Costs Less: Administrative Expenses Add: Other Operating Income Less: Other Operating Expenses Profit/Loss from Operations Less: Finance Cost Profit/Loss before taxtation Taxation Profit/Loss after taxation Earnings per Share (rupees) Year 2008 17,055,115 16,955,181 99,934 214,889 147,274 150,585 64,514 176,158 305,491 481,649 217,109 264,540 2.08 Year 2009 14,715,495 14,088,001 627,494 209,677 139,163 23,589 4,975 297,268 233,651 63,617 11,393 75,010 0.55 Year 2010 14,149,646 13,973,144 176,502 190,088 139,749 64,844 311,025 399,516 222,769 622,285 220,452 401,833 2.81 Common Size (%) Year Year Year 2008 2009 2010 100% 86% 83% 100% 83% 82% 100% 628% 177% 100% 98% 88% 100% 100% 100% 100% 100% 100% 100% 100% 94% 16% 8% 169% 76% 13% 5% 28% 95% 43% 482% 227% 73% 129% 102% 152%

INTRODUCTION The General Tyre and Rubber Company of Pakistan Limited (Gentipak) is Pakistans premier industry. It was established in 1963 by General Tire USA and has been in production since 1964.

Gentipak has a Technical Services Agreement (TSA) with CONTINENTAL AG (Germanys largest tyre manufacturer) which enables it to produce tyres of GENERAL brand and provides the latest technology for production of tyres based on Continentals, R&D. The Plant and the Offices are located in suburb of Karachi. Initial production capacity was only 120,000 tyres per annum but is now around 2,000,000 tyres per annum. The plant is constantly upgraded and is equipped with the most modern technology in tyre manufacturing.

Income Statement (Profit and Loss Account)

Analysis of Income Statement (Profit and Loss Account) CC.2 shows the income statement of The General Tyre and Rubber Company from year 2006 to 2010. It shows that the sales of the company have increased over the years in FY 2006 to FY 2010.The Sales have been increased by the 58 percent if we compare it to FY 2006. The distribution cost the company has been increasing over the years. However, the Administrative expense has shown fluctuations and it is showing a decreasing trend from FY 06 to FY 10. The Finance Cost of the company has increased drastically from a very small value in FY 06 to a relatively very high value in FY 09and this drastic increase tells us that the company has started to rely heavily on debts and it is giving out huge amount of interests on these loans. The taxes of the company are showing a declining trend and taxation value for FY 09 is negative because of the fact that the EBT of the company for this year is negative but in the FY 10 the company EBT is positive and company gave tax, the positive trend in the FY 2010 is due the new contracts with the Toyota and AltasHonda. The Net income of the company is showing a declining trend and it has incurred huge amount of losses in FY 08 and FY 09. The increasing amount of interest expenses has played a huge role in the decline and eventual loss of the company. Overall, the net income of the General Tyre and Rubber

Company shows that the performance of the company over the years is getting poorer and poorer but in FY 2010 the company made a record increase in the net income because in the FY 2010 the after myth of recession are decreased and on the same time the company got the two major contracts and they have increased the prices of their tyre as compare to the other brands and in the year FY 09 two long liabilities have come to end so the FY 10 starts with the lesser obligation so at that year company have given lesser interest so thats why the net income of the company at that time period is positive.

Balance Sheet

Analysis of Balance Sheet CC.3 includes the balance sheet of The General Tyre and Rubber Company from FY 2006 to FY 2010. The total no. of share outstanding from FY 06 to FY 10 is same. This shows that the company hasnt been increasing its no. of shareholders. However, the total amount of equity has shown a slight decrease and it is because of the decrease in the value of reserves that the company has been holding from the FY 06 to FY 09 but in the FY 2010 the equity portion is increased as compare to the previous years this is because the inappropriate profit is increased because in the FY 10 company reinvested its profit to expand the business rather than giving dividends to its shareholders. Total long-term liabilities of the company have increased from FY 06 to FY 07 but then it decreased from the FY 08 to FY 10. It seems like a good strategy on the part of the company because the company has decreased its liabilities due to adverse political and economic conditions in Pakistan. The Current liabilities of the company show an upward trend from FY 06 to FY 10. The total sum of Liabilities and Equity shows an uptrend because of the drastic increase in current liabilities from FY 05 to FY 09. Fixed Assets of the company do not show a drastic change they are rather same over the years. However, the current assets have increased from FY 06 to FY 10. This could be the counter effect of the increase in the current liabilities. Total Assets of the company also show an uptrend due to the increase in current assets.

Common Size Income Statement: 2010 Net Sales Cost of Sales Gross Profit Administrative Expenses Distribution Cost Operating Profit Other operating expenses other operating income Finance Cost (loss)/profit before taxation Taxation (loss)/profit after taxation 100.00% 84.81% 15.19% 1.38% 3.25% 10.55% 0.81% 0.78% 4.09% 6.44% 3.00% 3.44% 2009 2008 2007 2006

100.00% 100.00% 100.00% 100.00% 88.75% 11.25% 1.49% 4.38% 5.38% 3.24% 0.83% 5.62% -2.66% -0.61% -2.05% 88.94% 11.06% 1.60% 4.45% 5.01% 2.22% 1.34% 3.97% 0.16% 0.52% -0.36% 88.16% 11.84% 2.32% 4.13% 5.40% 0.33% 0.79% 3.17% 2.68% 1.09% 1.59% 86.03% 13.97% 2.03% 4.19% 7.75% 0.57% 0.78% 2.33% 5.63% 2.23% 3.40%

Analysis of Common Size Income Statement: CC.6 shows us the Common size Income Statement for the FY 2005 to FY 2009. It is calculated by dividing each component of income statement with sales of that year. This common size income statement shows us that COGS has the highest percentage of sales and it has increased over the years. The cost of goods sold ratio decreased in FY 2010 it is good for the company because gross profit ratio have increased. In the FY 2010 General tyre import all the nylon, filler and bead from the Bangladesh which was cheap from the previous imports so in that why they reduced the CoGS by 3.94%. The gross profit in the income statement has the second highest percentage in the income statement and shows a downward trend from the FY 2006 to FY 2009 but there is an increase of 3.94 % in the FY 2010. Other operating income has the lowest percentage in the table although it shows an increasing trend over the 5 fiscal years. The net income of the company is continuously decreasing from the FY 2006 to FY 2009 but there is an increase in FY 2010 due to decrease in the CoGS.The company needs to generate more sales to survive in the market because there Net income is not enough as compare to their capital.

Common Size Balance Sheet: 2010 PROPERTY, PLANT AND EQUIPMENT INTANGIBLE ASSETS INVESTMENTS LONG-TERM LOANS AND ADVANCES DEFERRED TAXATION LONG-TERM PREPAYMENTS CURRENT ASSETS Stores and spares Stocks Trade debts Loans and advances Deposits and prepayments Other receivables Taxation Cash and back balances Total Assets SHARE CAPITAL AND RESERVE Issued, subscribed and paid-up Reserve LONG FINANCING LONG TERM LOANS LIABILITIES AGAINST 3.60% ASSETS 0 8.10% 0 8.42% 0.38% 10.13% 1.22% 5.89% 1.97% TERM 12.42% 15.23% MURABAHA 0.00% 15.07% 12.98% 0.00% 14.91% 15.58% 0.00% 17.00% 18.23% 0.00% 17.61% 20.56% 0.00% 7.40% 28.51% 17.80% 0.43% 0.70% 0.53% 3.30% 2.07% 9.34% 18.30% 17.15% 0.54% 0.77% 0.74% 1.48% 3.69% 9.47% 26.24% 15.96% 0.39% 1.91% 0.65% 0.00% 2.51% 10.18% 25.80% 13.29% 0.43% 0.74% 0.88% 0.00% 2.23% 8.88% 29.84% 12.07% 0.45% 1.02% 0.94% 1.18% 2.33% DEPOSITS 39.00% 0.00% 0 0.12% 0 AND 0.15% 2009 47.76% 0.00% 0 0.06% 0 0.18% 2008 42.60% 0.00% 0 0.09% 0 0.18% 2007 46.13% 0.01% 0 0.11% 0 0.20% 2006 42.92% 0.01% 0 0.12% 0 0.22%

100.00% 100.00%

100.00% 100.00% 100.00%

SUBJECT TO FINANCE LEASES STAFF BENEFITS DEFERRED CREDIT DEFERRED TAXATION 2.95% 0.00% 3.38% 3.45% 0.00% 0.23% 3.26% 0.00% 1.11% 3.54% 0.01% 1.25% 3.52% 0.01% 0.98%

LONG-TERM DEALERS CURRENT PROVISIONS

DEPOSITS

FROM 0.18%

0.25%

0.24%

0.27%

0.28%

LIABILITIES

AND

Current maturity of long-term murabaha financing long-term loans 0.00% 4.27% 0.00% 6.07% 0.38% 2.49% 2.96% 0.69% 2.84% 3.38% 0.70% 2.95% 0.00% 0.68%

liabilities against assets subject to finance 0.00% leases Short-term finances Running finances under 9.41% mark-up 24.53%

8.28% 22.82%

24.97% 5.62%

11.76% 6.60%

12.10% 2.88%

arrangements Trade and other payables Accrued mark-up Taxation Provisions Total Equity and Liability 21.21% 1.72% 0.00% 1.12% 18.86% 1.85% 0.00% 1.67% 17.49% 0.51% 0.02% 1.35% 16.14% 0.40% 0.02% 3.68% 20.75% 0.23% 0.00% 3.69%

100.00% 100.00%

100.00% 100.00% 100.00%

Analysis of Common Size Balance Sheet. CC.7 shows the Common Size Balance of General Tyre and Rubber Company for Fiscal Years 2006 to 2010. This is calculated by dividing each component of asset side with total assets and also by dividing each component of liability and equity side with total liabilities and equity. The Plant, Property and Equipment account makes the largest part of the total assets and it has an increasing trend over the years.In the FY 09 General Tyre purchased rubber and tyre recycling plant so thats why in the FY 09 the plant asset and machinery acquires more percentage. In current assets stocks make has the highest proportion of total assets. However, it shows a decline as a percentage of total assets over the 4 years but it increased by 10 percent in the FY 10 this was because General Tyre got 2 contracts for that reason they needed for stock to fulfill their targets. The whole table also shows us that that the total current assets make up a larger part of the total assets as opposed to the non-current assets. In the liabilities and equity side, Accounts payable has the highest percentage to the total liabilities and assets. Running finances under markup arrangements of FY 10 has the highest percentage in the whole table. This was due to the purchase of plant, equipments and stocks. The second highest percentage of liability component to total liability and equity is of issued, subscribed and paid-up capital. However, it has a downtrend over the five fiscal years.

Return on Invested Capital Ratio:

Analysis of Return on Invested Capital Ratio: CC.21 includes the return on invested capital ratio of The General Tyre and Rubber Company for the fiscal years 2006 to 2010. There is an increase in the ROA from the FY 06 to FY 10 this shows that the return on asset is increasing which is a positive sign. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. In the FY 2010 there is an abnormal increase in the ROA this shows that in the FY 2010 the company uses its total asset more efficiently and at the same time in the fiscal year 2010 the net income is also increased because due to decrease in the CoGS.This also shows that over company is perform good in the FY 2010 as compare to the industrial average. ROE (return of equity) measures how much the company is making profits using the investments made by investors. The ROE for our company has been decreasing massively over the years and it has become negative in the FY 08 and FY09. It tells us that our company hasnt been utilizing the investments efficiently and it really needs to work on that area. But on contrary the ROCE is increased in the FY 2010 this was also due to the increase Net income. The equity growth model shows us the growth of the company using the dividend payout ratio and ROE. Unfortunately, the growth of the company has been decreasing drastically over the years and it has become negative in the FY 07,08and09. The industry average of the companies is very high than our company growth and it tells that company needs to work really hard to improve its performance. As the ROE exceeds the ROA this means that the company is using the debt profitability, same is applied here because in the year 2006 and 2010 the ROE is greater than the return on ROA this means that the company is on the debt profitability. The asset turnover ratio shows us the total no. of sales in each year with respect to total no. of assets in that particular year. Asset turnover ratio shows fluctuated trend over the years and its highest value is in the FY 09. And our companys value is almost the same as the industry average.

Profit Margin Ratio:

Analysis of Profit Margin Ratio: These ratios simply show us the strength or potential of the company to generate profits over the years. Gross profit margin ratio which is a ratio of gross profit to sales gives us the idea how much income remains relative to sales once we subtract cost of goods sold from the sales. This ratio has a downtrend from FY 06 to FY 09. But there is an increase in the gross profit as compare to the previous this was due to the decrease in the CoGS. The operating profit margin increase which means that companyhas enough money to give up its interests on loan and other obligations due.

Market Measures: CC26 General Tyre and Rubber Company Market Measures For the year 2006 through 2010

price of 30th july, 2006 Price of 30th june,2010 Average Share Price 2010 Price to Earning(range) 70.633 Price to Book(range) Earnings Yield Dividend Yield Dividend Payout Ratio 11.589 0.014 0.000 0.000 Industry Average Price to Earning(range) 30.75 Price to Book(range) Earnings Yield Dividend Yield Dividend Payout Ratio 21.65 -0.22 317.7 -317.83

28.2 23.4 25.8 2009 -140.416 13.864 -0.007 0.000 0.000 2008 -934.323 12.618 -0.001 0.000 0.006 2007 245.093 12.450 0.004 -0.008 -1.886 2006 121.427 11.905 0.008 -0.007 -0.819

Analysis of Market Measures: CC.26 includes the market measures of The General Tyre and Rubber Company for the fiscal years 2006 to 2010. To calculate the market measures we have first calculated the average price by adding up the 1st July, 2006 and 30th July, 2010 and dividing the both prices with 2. The price to earnings ratio has been increasing from FY 05 to 07 and then it becomes negative in the FY 08 and FY 09 but it shows a dramatic increase in the year 2010 which is 70.33. The high P/E ratio is good for the investor because he is willing to earn more on it. A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. There is a decrease in the ratio in the FY 201o as compare to FY 2009. Similarly, the price to book ratio is showing an uptrend over the years which implies that the companys share price has been increasing relative to its worth, but this value is also well below the industry average.

PAK SUZUKI MOTOR COMPAY LIMITED

RATIO ANALYSIS

Working Capital = Current Assent

Current liabilities

Years
2000 2001 2002 2003

Current Assets
3152839 2768706 7183211 8541540

Current Liabilities
2710563 2087090 5511463 5603769

W. Capital
442276 681616 1671748 2937771

Comment:
Pak Suzuki Motor Company Limited has enough working capital which is a good sign. You can see that Assets are growing up and Current liabilities are also going to increase and when you see the proportion of working capital that is also growing.

Current Ratio: Current Assets / Current Liabilities

Years
2000 2001 2002 2003

Current Assets
3152839 2768706 7183211 8541540

Current Liabilities
2710563 2087090 5511463 5603769

Current ration
1.16 1.33 1.3 1.5

Comments:
In year 2003Pak Suzuki Motor company Limited is in very strong position if you compare this to the other years you can easily to reach the decision that 2003 is the best year and 2000 year is not satisfactory.

Acid Test Ratio = Quick Assets / Current Liabilities

Years
2000 2001 2002 2003

Quick Assets
4502145 4725149 5190168 5797749

Current Liabilities
2710563 2087090 5511463 5603769

Ratio
1.66 2.26 0.94 1.03

Comments:
The ideal Acid test ration is 1:1 and you can see in 2002 the company has over quick assets which goes idol but in 2003 it is good because it is very close to an ideal ratio.

Inventory Turnover Ratio = Cost of goods sold / Average Inventory

Years
2000 2001 2002 2003

Cost of goods sold Average Inventory

6578898 7599439 9614256 15840739 1999521 2054251 2088767

Ratio
3.29 3.70 4.6 NA

Comments:
In all the years the company has high turnover which is a good sign for company it means company earning a lot of profit and that has overcome its expenses.

Debt Ratio = Total Debts / Total Assets

Years
2000 2001 2002 2003

Total Debts
2807563 2132090 551463 5603769

Total Asset
4567695 3993930 8159447 9674550

Ratio
0.61 0.53 0.07 0.58

Comments:
In all years the company has very satisfactory debt ratio but in 2002 it is not good it means that company has more self proportion in the investment that should take more money as a loan and in other years company has good ration that can take ratio without any hesitation.

Total Asset Turn Over Ratio = Net sales / Total Assets

Years
2000 2001 2002 2003

Net Sales
6889145 7976122 10994067 18484220

Total Assets
4567695 3993930 8159447 9674550

Ratio
1.51 1.20 1.35 1.91

Comments:
The company s total asset turnover ratio is very good it has minimum ratio in 2001 and maximum ratio in 2003 it means the company ratio is growing up steady which is a good sign. It means the company utilizing its fewer resources and getting high profit.

(8) Gross Profit Ratio = Gross profit / Net Sales

Years
2000 2001 2002

Gross profit
310247 376683 1379811

Net sales
6889145 7976122 10994067

Ratio
0.045 0.05 0.13

2003

2643481

18484220

0.14

Comments:
The company s gross profit ratio is not enough in 2000 it has very less but in 2003 it is comparatively growing, in a nut shell we can say the gross profit ratio is growing.

(9) Profit Margin Ratio = Net Income / Net Sales

Years
2000 2001 2002 2003

Net Income
(26600) 141013 850097 1570191

Net sales
19816 20434 29484 49503

Ratio
(1.34) 6.9 28.83 31.72

Comments:
The company s profit merging ratio result is very proficient because in 2000 the company s ratio was in negative but with passing of year it gain very good result and in 2003 it got very good result.

Working Capital Turnover Ratio

= Cost of goods sold / net working capital

Years
2000 2001 2002 2003

Cost of goods sold

6578898 7599439 9614256 15840739

Working capital
442276 681616 1671748 2937771

Ratio
14.88 11.15 5.75 5.39

Comments
If the working capital ratio is less it is benefited for the company its means the company is spending less and getting more products.