Ibf-Full n Final

8/9/2019 Ibf-Full n Final

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Acknowledgement

In the name of Allah the praiseworthy, the passionatewhose blessings made it possible for us to complete this

complex task.I would like to show my gratitude towards our honorable

instructor Sir Asif Naji, with his encouragement,guidance and support from the initial to the final levelenabled me to develop an understanding of the subject.Lastly, I am indebted to many of my colleagues who

supported me in any respect during the completion of myproject.

Muhammad Umair Azhar


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Cross-Sectional Analysis:-

For the year 2009:-

1. CURRENT RATIO:Current ratio = Current Assets

Current Liabilities

= 3,929,738

5,614,243

= 0.699 times or 0.7 times

INTERPRETATION:-

Current ratios measures a firms ability to meet

its short-term obligations. It shows the

relationship between current assets and current

liabilities.

In this company current ratio is 0.7 times. Itmeans that companys current assets are 0.7 times more than that of its current liabilities.

If we compare the results of the company with the results of industry, companys results are

showing worst position because current ratio of the company is less than that of i ndustrys

current ratios.

2. QUICK RATIO:Quick Assets = Cash+ Marketable securities + Account receivable

Current liabilities

= 20,487+0+0

5,614,243

= 0.00364: 1

INTERPRETATION:-

Quick ratios measures a firms ability to meet its short-term obligations. It shows the

relationship between quick assets and current liabilities.

In this company quick ratio is 0.00364 times. It means that companys quick assets are 0.00364

times more than that of its current liabilities.If we compare the results of the company with the results of industry, companys results are

showing worst position because current ratio of the company is less than that of industrys quick

ratios.

3. CASH RATIO:Cash ratio = Cash

Current liabilities


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= 20,487

5,614,243

= 0.00364

INTERPRETATION:-

Cash ratios measures a firms ability to meet its short-term obligations. It shows the relationship

between cash and current liabilities.

In this company quick ratio is 0.00364 times. It means that companys cash are 0.00364 times

more than that of its current liabilities.


showing worst position because current ratio of the company is less than that of industrys cash

ratios.

4. WORKING CAPITAL:Working capital = Current assetsCurrent liabilities

= 3,929,738 - 5,614,243

= (1,684,505)

INTERPRETATION:

Working capital measures a firms ability to meet its short-term obligations. It shows the

relationship by subtracting current assets with current liabilities.

In this company working capital is (1684505). It means that companys cash are (1684505) times

less than that of its current liabilities.


showing worst position because working capital of the company is less than that of industrys

working capital.

5. DEBT RATIO:Debt ratio = Total debts

Total Assets

= 7,114,243

9,942,088

= 0.71

INTERPRETATION:-Debt ratio measures a firms ability to meet its long-term obligations. It shows the relationship

between total debts and total assets

In this company debt ratio is 0.71 times. It means that the companys total debts are 0.71 times of

its total assets.


showing worst position because companys debt ratio is more than that of industrys debt ratio.


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6. DEBT TO EQUITY RATIO:Debt to equity ratio = Total Debts

Total shareholders equity

= 7,114,243

2,827,845

= 2.5

INTERPRETATION:-

Debt to equity ratio measures a firms ability to meet its long-term obligations. It shows the

relationship between total debts and total shareholders equity.

In this company debt ratio is 0.71 times. It means that the companys total debts are 0.71 times of

its total shareholders.


showing worst position because companys debt ratio is more than that of industrys debt to

equity ratio.

7. TIME INTEREST EARNED:Time interest earned = Operating Profit

Interest expense

= (399,516)

222,769

= (1.79) times

INTERPRETATION:-

Time interest earned indicates that how many times a company can pay its expenses from its

operating profit.

In this company time interest earned is 1.79 times. It means that a company can pay its interest

expenses 1.79 times from its operating profit.


showing worst position because companys time interest earned ratio is less than that of

industrys time interest earned ratio.

8. INVENTORY TURNOVER:Inventory turnover = Cost of goods sold

Average inventory

= 13,973,144

2,954,091

= 4.730 times


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11.GROSS PROFIT MARGIN:Gross profit margin = Gross profit

Net sales

= 176,502

14,149,646

= 0.0124 or 1.24%

INTERPRETATION:-

It shows the relationship between gross profit and net sales. It is a percentage of gross profit

based on the value of net sales.

In this company gross profit margin is 0.0124 or 1.24%. It means that company generates 0.0124

or 1.24% of gross profit based on the value of net sales.


showing worst position because companys gross profit margin is less than that of industrys

gross profit margin.

12.OPERATING PROFIT MARGIN:Operating profit margin = Operating profit

Net sales

= (399,516)

14,149,646

= 0.028 or 2.8%

INTERPRETATION:-

It shows the relationship between operating profit and net sales. It is a percentage of operating

profit based on the value of net sales.

In this company operating profit margin is 0.028 or 2.8%. It means that company generates 0.028

or 2.8% of operating profit based on the value of net sales.


showing worst position because companys operating profit margin is less than that of industrys

operating profit margin.

13.NET PROFIT MARGIN:Net profit margin = Net profit

Net sales

= (401,833)

14,149,646

= 0.0283 or 2.83%


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INTERPRETATION:-

It shows the relationship between net profit and net sales. It is a percentage of net profit based on

the value of net sales.

In this company net profit margin is 0.0283 or 2.83%. It means that company generates 0.0283 or

2.83% of net profit based on the value of net sales.


showing worst position because companys net profit margin is less than that of industrys net

profit margin.

14.RETURN ON ASSETS:-Return on assets = Net profit

Total assets

= (401,833)

9,942,088

= 0.040 or 4%

INTERPRETATION:-It shows the relationship between net profit and total assets. It is a percentage of net profit based

on the value of total assets.

In this company return on assets is 0.040 or 4%. It means that company generates 0.040 or 4% of

net profit based on the value of total assets.


showing worst position because companys return on assets is less than that of industrys return

on assets.

15.RETURN ON EQUITY:Return on equity = Net profit

Total shareholder equity

= (401,833)

2,827,845

= 0.142 or 14.2%

INTERPRETATION:-

It shows the relationship between net profit and total shareholder equity. It is a percentage of netprofit based on the value of total shareholder equity.

In this company return on equity is 0.142 or 14.2%. It means that company generates 0.142 or

14.2% of net profit based on the value of total shareholder equity.


showing worstposition because companys return on equity is less than that of industrys return

on equity.


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16.EARNINGS PER SHARE:Earnings per share = Net profit after taxDividend to preferred stockholders

No. of common stocks issued

= 401,833 - 0

142,800,000

= 0.00281 or 2.81 per share

For the year 2008:-


Current Liabilities

= 2,435,5293,087,066

= 0.788 or 0.8 times


Current liabilities

= 231,880+0+0

3,087,066

= 0.0751: 1


Current liabilities

= 231,880

3,087,066

= 0.0751


= 2,435,529 - 3,087,066

= (651,537)


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Total Assets

= 3,587,066

6,816,744

= 0.52



= 3,587,066

3,229,678

= 1.11


Interest expense

= 297,268

233,651

= 1.27 times


Average inventory

= 14,088,001

1,612,696

= 8.735 times

9. FIXED ASSETS TURNOVER:Fixed assets turnover = Net sales

Fixed assets

= 14,715,495

4,381,215

= 3.639 times

10.TOTAL ASSETS TURNOVER:Total assets turnover = Net sales

Total assets


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= 14,715,495

6,816,744

= 2.158 times


Net sales= 627,494

14,715,495

= 0.04264 or 4.264%


Net sales

= 297,268

14,715,495

= 0.020 or 2.0%


Net sales

= 75,010

14,715,495

= 0.0050 or 0.50%

14.RETURN ON ASSETS:Return on assets = Net profit

Total assets

= 75,010

6,816,744

= 0.011 or 1.1%



= 75,010

3,229,678

= 0.023 or 2.3%


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= 75,010 - 0

142,800,000

= 0.00525 or 0.525 per share

For the year 2007:-


Current Liabilities

= 3,681,2133,906,115

= 0.942 or 0.9 times


Current liabilities

= 219,859+0+0

3,906,115

= 0.0562: 1


Current liabilities

= 219,859

3,906,115

= 0.0562


= 3,681,213 - 3,906,115

= (224,902)


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Total Assets

= 5,864,449

8,305,117

= 0.70



= 5,864,449

2,440,668

= 2.40


Interest expense

= (176,158)

305,491

= (0.57) times


Average inventory

= 16,955,181

2,704,946

= 6.268 times

9. FIXED ASSETS TURNOVER:Fixed assets turnover = Net sales

Fixed assets

= 17,055,115

4,623,904

= 3.688 times

10.TOTAL ASSETS TURNOVER:Total assets turnover = Net sales

Total assets


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= 17,055,115

8,305,117

= 2.053 times


Net sales= 99,934

17,055,115

= 0.0058 or 0.58%


Net sales

= (176,158)

17,055,115

= 0.010 or 1.0%


Net sales

= (264,540)

17,055,115

= 0.015 or 1.5%

14.RETURN ON ASSETS:Return on assets = Net profit

Total assets

= (264,540)

8,305,117

= 0.031 or 3.1%



= (264,540)

2,440,668

= 0.108 or 10.8%


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= 264,540 - 0

71,400,000

= 0.0037 or 3.70 per share


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TIME SERIES ANALYSIS

2007 2008 2009

CURRENT RATIO 0.9 0.8 0.7

Current ratio measures the firms ability the short term obligation. It shows the relationship b/w

current assets and current liabilities.

In year 2007 the current ratio is 0.9.It means the current assets is 0.9 more than that of current

liabilities.

In 2008 current ratio reached to 0.8 and in 2009 current ratio reached to 0.7.

If we evaluate the results of the firm over the period of time, companys result show worst

position b/c there is a decreasing trend in the current ratio.

2007 2008 2009

QUICK RATIO 0.562 0.0751 0.0036

Quick ratio measures the firms ability the short term obligation. It shows the relationship b/w

quick assets and current liabilities.

In year 2007 the quick ratio is 0.562.It means the quick assets is 0.562 more than that of current

liabilities.

In 2008 quick ratio reached to 0.0751 and in 2009 quick ratio reached to 0.0036.


position b/c there is a decreasing trend in the quick ratio.

2007 2008 2009

CASH RATIO 0.562 0.0751 0.0036

Cash ratio measures the firms ability the short term obligation. It shows the relationship b/w

cash and current liabilities. In year 2007 the cash ratio is 0.562.It means the cash is 0.562 more

than that of current liabilities.

In 2008 cash ratio reached to 0.0751 and in 2009 cash ratio reached to 0.0036.

If we evaluate the results of the firm over the period, companys result show worst position b/c

there is a decreasing trend in the cash ratio.


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2007 2008 2009

WORKING CAPITAL (224902) (651537) (1684505)

In year 2007 the W.C is (224902)

In 2008 W.C reached to (651537) and in 2009 W.C reached to (1684505).


there is a decreasing trend in the working capital.

2007 2008 2009

DEBT RATIO 0.7 0.52 0.71

Debt ratio measures the firms ability the long term obligation. It shows the relationship b/w total

assets and total liabilities.

In year 2007 the debt ratio is 0.7.It means that the companys total liabilities are 0.7 of its total

assets.

In 2008 debt ratio reached to 0.52 and in 2009 debt ratio is also 0.71.


there is a decreasing trend in the debt ratio.

2007 2008 2009

DEBT TO EQUITY RATIO 2.4 1.11 2.5

Debt to equity ratio measures the firms ability the long term obligation. It shows the relationship

b/w total liabilities and total shareholder equity.

In year 2007 the debt to equity ratio is 2.4.It means that the companys total liabilities are 2.4 of

its total shareholder equity.

In 2008 debt to equity ratio reached to 1.11 and in 2009 debt to equity ratio is also 2.5.


there is a decreasing trend in the debt to equity ratio.


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2007 2008 2009

TIME INTREST EARNED (0.57) 1.27 (1.79)

Indicates that how many times a company can pay its interest expense from its operating profit.

In year 2007 the time interest earned ratio is (0.57).it means that the company can pay its interest

expense (0.57) times from its operating profit.

In 2008 T.I.E ratio is 1.27 and in 2009 T.I.E ratio reached to (1.79) times.


there is a decreasing trend in the T.I.E ratio.

2007 2008 2009

INVENTIORY TURNOVER 6.268 8.735 4.730

Inventory turnover ratio indicates that how many times company converts its inventory into cash

and sales.

In 2007 inventory turnover is 6.268 times.

In 2008 inventory turnover is 8.735 and in 2009 inventory turnover is 4.730 times.


there is a decreasing trend in inventory turnover ratio.

2007 2008 2009

FIXED ASSETS TURNOVER 3.688 3.639 2.6

Fixed assets turnover indicates that how many times revenue is generated by fixed assets of its

own worth.

In 2007 fixed assets turnover is 3.688 times.

In 2008 fixed assets turnover is 3.639 and in 2009 fixed assets turnover is 2.6 times.


there is a decreasing trend in fixed assets turnover ratio.


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2007 2008 2009

TOTAL ASSETS TURNOVER 2.053 2.158 1.423

Total Assets turnover indicates that how many times revenue is generated by total assets of its

own worth.

In 2007 total assets turnover is 2.053 times.

In 2008 total assets turnover is 2.158 and in 2009 fixed assets turnover is 1.423 times.


there is a decreasing trend in total assets turnover ratio.

2007 2008 2009

GROSS PROFIT MARGIN 0.58% 4.26% 1.24%

It shows the relationship of gross profit and net sales. It is a % of G.P based on the value of net

sales.

In 2007 gross profit margin is 0.58%.

In 2008 gross profit margin is 4.26% and in 2009 gross profit margin is 1.24%.


there is a decreasing trend in gross profit margin ratio.

2007 2008 2009

OPERATING PROFIT MARGIN (1) % (2) % (2.8) %

It shows the relationship of gross profit and net sales. It is a % of O.P based on the value of net

sales.

In 2007 operating profit margin is (1) %.

In 2008 operating profit margin is (2) % and in 2009 operating profit margin is (2.8) %.


there is a decreasing trend in operating profit margin ratio.


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2007 2008 2009

NET PROFIT MARGIN (1.5) % 0.5 % (2.83) %

It shows the relationship of gross profit and net sales. It is a % of N.P based on the value of net

sales.

In 2007 net profit margin is (1.5) %.

In 2008 net profit margin is 0.5% and in 2009 net profit margin is (2.83) %.


there is a decreasing trend in net profit margin ratio.

2007 2008 2009

RETURN ON ASSETS (3.1) % 1.1% (4) %

It shows the relationship b/w net profit and total assets. It is a % of net profit based on the value

of total assets.

In 2007 the return on assets is (3.1) %.

In 2008 the return on assets is 1.1% and in 2009 (4) %.


position b/c there is a decreasing trend in return on assets ratio.

2007 2008 2009

RETURN ON EQUITY (10.8) % 2.3% (14.2) %

It shows the relationship b/w net profit and Total shareholder equity. It is a % of net profit based

on the of total shareholder equity.

In 2007 the return on equity is (10.8) %.

In 2008 the return on equity is 2.3% and in 2009 (14.2) %.


there is a decreasing trend in return on equity ratio.


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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2009

Current Ratio

Company's Ratio Industry's Ratio


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0

0.2

0.4

0.6

0.8

1

1.2

1.4

2009

Quick Ratio



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-2000000

-1500000

-1000000

-500000

0

500000

2009

Working Capital



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0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2009

Debt Ratio



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0

0.5

1

1.5

2

2.5

2009

Debt to Equity

Company's ratio Industry's Ratio


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-2

0

2

4

6

8

10

12

14

16

18

2009

Time Interest Earned

company`s ratio industry`s ratio


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0

5

10

15

20

25

30

2009

Inventory turnover

Company`s ratio industry`s ratio


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2.3

2.35

2.4

2.45

2.5

2.55

2.6

2009

Fixed Asset Turnover

Company s ratio Industry`s ratio


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0

2

4

6

8

10

12

2009

Total Asset Turnover



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0

5

10

15

20

25

30

35

2009

Gross Profit Margin

company`s ratio Industtry`s ratio


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-5

0

5

10

15

20

25

2009

Operating Profit Margin

Company s ratio industry`s ratio


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-4

-2

0

2

4

6

8

10

12

14

16

2009

Net Profit Margin



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-4

-2

0

2

4

6

8

10

12

2009

Return On Asset

Company s ratio Industry`s ratio


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.

-15

-10

-5

0

5

10

2009

Return On Equity

Company`s ratio Industry`s ratio


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Current Ratio

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

20072008

2009

Current Ratio

Current Ratio


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Quick Ratio

0

0.1

0.2

0.3

0.4

0.5

0.6

20072008

2009

Quick Ratio

Quick Ratio


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Cash ratio

0

0.1

0.2

0.3

0.4

0.5

0.6

20072008

2009

Cash ratio

Cash ratio


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Working Capital

-1800000

-1600000

-1400000

-1200000

-1000000

-800000

-600000

-400000

-200000

0

20072008

2009

Working Capital

Working Capital


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Debt Ratio

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

20072008

2009

Debt Ratio

Debt Ratio


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Debt to equity Ratio

0

0.5

1

1.5

2

2.5

20072008

2009




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Time interest earned

-2

-1.5

-1

-0.5

0

0.5

1

1.5

20072008

2009




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Inventory Turnover

0

1

2

3

4

5

6

7

8

9

20072008

2009

Inventory Turnover

Inventory Turnover


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Fixed Assets Turnover

0

0.5

1

1.5

2

2.5

3

3.5

4

20072008

2009




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Gross Profit Margin %

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

20072008

2009




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Operating Profit Margin %

-3

-2.5

-2

-1.5

-1

-0.5

0

2007 2008 2009




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Net Profit Margin %

-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

20072008

2009

Net Profit Margin %

Net Profit Margin %


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Return on Assets %

-4

-3

-2

-1

0

1

2

20072008

2009

Return on Assets %

Return on Assets %


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Return on Equity %

-16

-14

-12

-10

-8

-6

-4

-2

0

2

4

20072008

2009

Return on Equity %

Return on Equity %


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Honda atlas cars

Common size balance sheet

2009 2009% of the company

Equity and liabilities:-

Share Capital And Reserves:

Authorized Capital 2,000,000 2,000,000 100 = 20.11

9,942,088

Issued Capital 1,428,000 1,428,000 100 = 14.36

9,942,088

Reserves 1,801,500 1,801,500 100 = 18.11

9,942,088

(Accumulated loss)/ Unappropiated profit (401,655) 401,655 100 = 4.04

9,942,088

Total Shareholders equity

2,827,845

2,827,845 100 = 28.449,942,088

Non-current Liabilities:

Long-term finances secured 1,500,000 1,500,000 100 = 15.089,942,088

Current Liabilities:

Short-term borrowings- secured 2,151,601 2,151,601 100 = 21.64

9,942,088

Mark-up accrued on loans and other

payables

75,048 75,048 100 = 0.75

9,942,088Trade and other payables 3,387,594 3,387,594 100 = 34.07

9,942,088

Total current liabilities

5,614,243

5,614,243 100 = 56.469,942,088

Total Equities9,942,088

9,942,088 100 = 100

9,942,088


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2009 2009% of the company

Assets:-

Non-current Assets:

Property, Plant and Equipment 5,190,535 5,190,535 100 = 52.20

9,942,088

Intangible Assets 195,830 195,830 100 = 1.96

9,942,088

Capital work-in-progress 19,226 19,226 100 = 0.19

9,942,088

Long-term loans and advances 31,503 31,503 100 = 0.31

9,942,088Long-term deposits 4,042 4,042 100 = 0.04

9,942,088

Deferred taxation 571,214 571,214 100 = 5.74

9,942,088

Total non-current assets

6,012,350

6,012,350 100 = 60.47

9,942,088

Current Assets:

Stores and spares 101,942 101.942 100 = 1.029,942,088

Stock in trade 2,954,091 2,954,091 100 = 29.71

9,942,088

Advances, prepayments and other receivables 853,218 853,218 100 = 8.58

9,942,088

Cash and bank balances 20,487 20,487 100 = 0.2

9,942,088

Total current assets 3,929,738 3,929,738 100 = 39.529,942,088

Total Assets

9,942,088

9,942,088 100 = 100

9,942,088


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Honda atlas cars

Common size income statement

2009 2009% of the companySales 14,149,646 14,149,646 100 = 100

14,149,646

Less: Cost of sales (13,973,144) 13,973,144 100 = 98.75

14,149,646

Gross profit

176,502

176,502 100 = 1.24

14,149,646

Less: Distribution and marketing cost (190,088) 190,088 100 = 1.3414,149,646

Less: Administrative expenses (139,749) 139,749 100 = 0.9814,149,646

Other operating income 64,844 64,844 100 = 0.45

14,149,646

Other operating expenses (311,025) 311,025 100 = 0.021

14,149,646

(Loss) / Profit from operations

(399,025)

399,025 100 = 0.028

14,149,646

Less: Finance cost (222,769) 222,769 100 = 0.01514,149,646

(Loss) / Profit before taxation

(622,285)

622,285 100 = 0.04314,149,646

Less: Taxation (220,452) 220,452 100 = 0.01514,149,646

(Loss) / Profit after taxation

( 401,833 )

401,833 100 = 0.028

14,149,646


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Honda atlas cars


2008 2008 % of the company



Authorized Capital 2,000,000 2,000,000 100 = 29.336,816,744

Issued Capital 1,428,000 1,428,000 100 = 20.94

6,816,744

Reserves 1,727,000 1,727,000 100 = 25.336,816,744

(Accumulated loss)/ Unappropiated profit 74,678 74,678 100 = 1.096,816,744


3,229,678

3,229,678 100 = 47.376,816,744


Long-term finances secured 500,000 500,000 100 = 07.33

6,816,744


Short-term borrowings- secured - -

Mark-up accrued on loans and other payables 32,029 32,029 100 = 0.466,816,744

Trade and other payables 3,055,037 3,055,037 100 = 44.81

6,816,744Total current liabilities

3,087,066

3,087,066 100 = 45.28

6,816,744


6,816,744 100 = 100

6,816,744


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Assets:-

Non-current Assets:


6,816,744


6,816,744


6,816,744

Long-term loans and advances 29,050 29,050 100 = 0.42

6,816,744Long-term deposits 4,091 4,091 100 = 0.06

6,816,744


6,816,744


4,381,215

4,381,215 100 = 64.276,816,744

Current Assets:

Stores and spares 83,101 83,101 100 = 1.216,816,744

Stock in trade 1,612,696 1,612,696 100 = 23.65

6,816,744

Advances, prepayments and other receivables 507,852 507,852 100 = 7.45

6,816,744


6,816,744

Total current assets

2,435,529

2,435,529 100 = 35.72

6,816,744

Total Assets

6,816,744

6,816,744 100 = 1006,816,744


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Honda atlas cars


2008 2008% of the companySales 14,715,495 14,715,495 100 = 100

14,715,495

Less: Cost of sales (14,088,001) 14,088,001 100 = 95.7314,715,495

Gross profit

627,494

627,494 100 = 4.2614,715,495

Less: Distribution and marketing cost (209,677) 209,677 100 = 1.42

14,715,495

Less: Administrative expenses (139,163) 139,163 100 = 0.94

14,715,495


14,715,495


14,715,495


297,268

297,268 100 = 2.02

14,715,495

Less: Finance cost (233,651) 233,651 100 = 1.58

14,715,495


63,617

63,617 100 = 0.432

14,715,495

Less: Taxation (11,393) 11,393 100 = 0.07714,715,495


75,010

75,010 100 = 0.50914,715,495


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Honda atlas cars





Authorized Capital 750,000 750,000 100 = 9.038,305,117

Issued Capital 714,000 714,000 100 = 8.59

8,305,117

Reserves 1,991,000 1,991,000 100 = 23.97

8,305,117

(Accumulated loss)/ Unappropiated profit (264,332) 264,332 100 = 3.188,305,117


2,440,668

2,440,668 100 = 29.388,305,117


Long-term finances secured 1,958,334 1,958,334 100 = 23.57

8,305,117


Current portion of long-term finances 583,333 583,333 100 = 7.028,305,117

Mark-up accrued on loans and other payables 39,627 39,627 100 = 0.47

8,305,117

Trade and other payables 3,283,155 3,283,155 100 = 39.53

8,305,117Total current liabilities

3,906,115

3,906,115 100 = 47.03

8,305,117


8,305,117 100 = 100

8,305,117


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Assets:-

Non-current Assets:


8,305,117


8,305,117


8,305,117Long-term loans and advances 28,105 28,105 100 = 0.33

8,305,117

Long-term deposits 4,091 4,091 100 = 0.05

8,305,117


8,305,117


4,623,904

4,623,904 100 = 55.67

8,305,117

Current Assets:

Stores and spares 50,316 50,316 100 = 0.60

8,305,117

Stock in trade 2,704,946 2,704,746 100 = 32.56

8,305,117

Advances, prepayments and other receivables 706,092 706,092 100 = 8.508,305,117


8,305,117Total current assets

3,681,213

3,681,213 100 = 44.32

8,305,117

Total Assets

8,305,117

8,305,117 100 = 1008,305,117


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Honda atlas cars


2007 2007 % of the companySales 17,055,115 17,055,115 100 = 100

17,055,115

Less: Cost of sales (16,955,181) 16,955,981 100 = 99.4117,055,115

Gross profit

99,934

99,934 100 = 0.5817,055,115

Less: Distribution and marketing cost (214,889) 214,889 100 = 1.25

17,055,115

Less: Administrative expenses (147,274) 147,274 100 = 0.86

17,055,115


17,055,115


17,055,115


(176,158)

176,158 100 = 1.03

17,055,115

Less: Finance cost (305,491) 305,491 100 = 1.79

17,055,115


(481,649)

481,649 100 = 2.82

17,055,115

Less: Taxation (217,109) 217,109 100 = 1.2717,055,115


(264,540)

264,540 100 = 1.5517,055,115


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Calculations for the year 2009:-

1.Internal Growth Rate (I.G.R):

(Loss) / Profit before taxation (622,285)

Less: Taxation (220,452)

(Loss) / Profit after taxation (401,833)

Less: Dividend to preferred stockholders -____

Dividend available for common stockholders (401,833)

Less: Dividend to common stockholders ____-____

Addition to Retained earnings 401,833

Retention ratio = Addition to retained earnings

Net profit after tax

= 401,833

401,833

= 1 or 100%

Internal Growth Rate = R.O.A b1-(R.O.Ab)

= 0.040 1

1-(0.040 1)

= 0.041667 or 4.1667%


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2.Sustainable Growth Rate (s.g.r):

(Loss) / Profit before taxation (622,285)

Less: Taxation (220,452)

(Loss) / Profit after taxation (401,833)

Less: Dividend to preferred stockholders -____

Dividend available for common stockholders (401,833)

Less: Dividend to common stockholders ____-____

Addition to Retained earnings 401,833

Retention ratio = Addition to retained earnings

Net profit after tax

= 401,833

401,833= 1 or 100%

Sustainable Growth Rate = R.O.E b

1-(R.O.E b)

= 0.142 1

1-(0.142 1)

= 0.1655 or 16.55%


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Honda atlas cars

Proforma balance sheet

As on December 31st, 2010

2010



Authorized Capital (2,000,000 x 116.55%) 2,331,000

Issued Capital (1,428,000 x 116.55%) 236,334

Reserves (1,801,500 x 116.55%) 2,099,648

(Accumulated loss)/ Unappropiated profit (401,655 x 116.55%) (468,129)

Total Shareholders equity (2,827,845 x 116.55%)

3,295,853


Long-term finances secured (1,500,000 x 116.55%) 1,748,250


Short-term borrowings- secured (2,151,601 x 116.55%) 2,507,671

Mark-up accrued on loans and other payables (75,048 x116.55%) 87,468

Trade and other payables (3,387,594 x 116.55%) 3,948,241

Total current liabilities (5,614,243 x 116.55%)

6,543,400

Total Equities (9,942,088 x 116.55%)11,587,504


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2010

Assets:-

Non-current Assets:

Property, Plant and Equipment (5,190,535 x 116.55%) 6,049,569

Intangible Assets (195,830 x 116.55%) 2,282,340

Capital work-in-progress (19,226 x 116.55%) 22,408

Long-term loans and advances (31,503 x 116.55%) 36,717

Long-term deposits (4,042 x 116.55%) 4,711

Deferred taxation (571,214 x 116.55%) 665,750

Total non-current assets (6,012,350 x 116.55%)

7,007,394

Current Assets:

Stores and spares (10,942 x 116.55%) 118,813

Stock in trade (2,954,091 x 116.55%) 3,023,413

Advances, prepayments and other receivables (853,218 x

116.55%)

994,426

Cash and bank balances (20,487 x 116.55%) 23,878

Total current assets (3,929,738 x 116.55%)

4,580,110

Total Assets (9,942,088 x 116.55%)

11,587,504


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Honda atlas cars

Proforma Income statement

For the period ended December 31st, 2010

2009

Sales (14,149,646 x 116.55%) 16,491,412

Less: Cost of sales (13,973,144 x 116.55%) (16,285,699)

Gross profit(176,502 x 116.55%)

205,713

Less: Distribution and marketing cost (190,088 x 116.55%) (221,548)

Less: Administrative expenses (139,749 x 116.55%) (162,877)

Other operating income (64,844 x 116.55%) 75,576

Other operating expenses (311,025 x 116.55%) (362,500)

(Loss) / Profit from operations (399,025 x 116.55%)

(465,064)

Less: Finance cost (222,769 x 116.55%) (259,637)

(Loss) / Profit before taxation (622,285 x 116.55%)

(725,273)

Less: Taxation (220,452 x 116.55%) (256,937)

(Loss) / Profit after taxation (401,833 x 116.55%)

( 468,336 )


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Recommendations:-

In order to increase the current and quick ratio of the company should sell more of itsproducts with respect to its liabilities generated.

Cash ratio can be maintained appropriately by doing more and more sales on cash basis. Working capital can be well managed if the company is able generate more assets as

compared to its liabilities.

In order to have best utilization of its debt ratio and debt to equity ratio, company musthave sales more on cash bases in order to reduce their liabilities with respect to totalassets and total shareholder equities.

In inventory Turnover Company has excessively invest in inventory as shown by itscurrent ratio. This extra inventory reduces inventory turnover ratio and also increase

carrying cost of inventory. The inventory should be stock as per production requirement.

In fixed assets companys measure fixed assets do not contribute generating salesrevenue. In future company should invest in fixed assets. That uses in production and

ultimately help to generate sales revenue.

In total assets companys measure total assets do not contribute generating sales revenue.In future company should invest in total assets. That uses in production and ultimately

help to generate sales revenue.

In gross profit margin company should critically analyze the reason of its low gross profitmargin. If cost of goods sold is increased due to high cost associated with carrying of

inventory it should use just in time system. If the reason of high cost of goods sold are

high production costs it should plan how the cost can be controlled.


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In operating profit margin the worst operating profit margin of a company is due to itshigh cost of goods sold rather than its operating profit.

Net profit margin is worst due to high cost of goods sold company should decrease costof goods sold.

The worst Return on assets is due to non-productive assets and low profit as compared toindustry. It can be improved by increasing net profit and total assets turnover.

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