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# Liquidity ratio 1.

Current ratio = current asset/ current liabilities

2011=22587757/10395919 = 2012=24088975/10395919 = 2. Quick ratio=current asset – inventory/current liabilities

2011=22587757-5690052/10395919 = 2012= 24088975-7529571/10395919 = Leverage ratio: 1. Debt to Total Asset Ratio = Total debt/ total asset

2011 = 12714970/26834618 = 2012 = 10561860/27575718 = Analysis: Debt to total asset ratio describes the percentage of total funds that are provided by creditors. Honda’s ratio is71.56% in 2009 which rose increased to 80.19% in 2010. This means that the creditors are financing more than the owners 2. Debt to Equity Ratio=Total debt/ total equity

2011 = 12714970/14119648 = 2012 = 10561860/17013858 = Analysis: Debt to Equity ratio describes the percentage of total funds provided by creditors versus by owners. The figure of this ratio was 2.52% in 2009 which rose to 5.05% in 2010. This increase was caused by the increase in credit financing.

. Activity ratio 1. The figure for Honda was 0. The increase is attributed due to increase in the debt financing. This shows that Honda is aggressively selling the cars. the more capable the company is at paying the interest on its debt. Which is also the case with Honda because TIE was -2.53times in 2009 which increased to 0. 4. The figure was 4.8x in 2009 which increased to 6.17x in the 2010.3.81x in 2010. Inventory turnover = sales/inventory 2011= 61702677/5690052 = 2012 = 76962642/7529571 = Analysis: Inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year describes whether a firm holds excessive stocks of inventories and whether a firm is slowing selling its inventories compared to the industry average. Long Term Debt to equity Ratio= long term debt/ total equity 2011 = 454012 /14119648 = 2012 = 165941/17013858 = Analysis: Long term debt to Equity ratio tells us about the balance between debt and equity in a firm’s long term capital structure.67 times in 2010.79x in 2009 which further declined to -2. Times-Interest-earned Ratios= EBIT/ total interest charges 2011 = 4088570/77115 = 2012 = 6371072/58805 = Analysis: Time interest earned ratio describes the extent to which earning can decline without the firm becoming enable to meet its annual interest rate. The larger the time interest earned.

4. Fixed Asset turnover = sales/total fixed asset 2011 = 61702677/4246881 = 2012 = 76962642/ 3486743= Analysis: Fixed assets turnover describes sales productivity and plant & equipment utilization.19% in 2010.2.58% in 2009 which declined to 16. 5. This shows that Honda has become a little lax in their credit policies. Accounts Receivables Turnover = sales/ account receivables 2011 = 61702677/149533 = 2012 = 76962642/447569 = Analysis: Account receivable turnover describes the average length of time it takes a firm to collect sales. This shows that Honda is generating a sufficient volume of business given its total asset investment. The figure was 16. 3. The figure was 2.77x in 2010.35x in 2009 which increased to 2. This explains that the sales productivity and plant & equipment utilization is up to the mark at Honda. Total Asset Turnover = sales/total asset 2011 = 61702677/26834618 = 2012=76962642/27575718 = Analysis: Total asset turnover describes whether a firm is generating a sufficient volume of business for the size of its asset investment. Average collection period =Account receivables/ sales/365 .42x in 2009 which increased to 1.92x in 2010. The figure was 1.

Profit Margin = net income / sales . 2. Operating profit Margin = EBIT /sales 2011 =4088570 /61702677 = 2012 = 6371072 /76962642 = Analysis: Operating profit margin describes profitability without consent for taxes and interest. Honda sales declined coupled with different factors including economic crisis and socio-political tension were responsible for this decrease. The figure was 22 days in 2009 which rose to 23 days 2010. Gross profit Margin = sales-CGS / sales 2011 = 4089135/61702677 = 2012 = 6561854/76962642 Analysis: Gross Profit Margin describes the total margin available to cover operating expenses and yield a profit.2011 = 149533 /61702677/365 = 2012 = 447569/76962642/365 = Analysis: Average collection period describes the average length of time it takes a firm to collect on sales.23% in 2010. The figure was 1. The reason for this is being the same as described in Gross Profit Margin.4% in 2010 which declined to -6.5% in 2010. 3. This reason can also be attributed that Honda has started tightening its credit policy Profitability ratio 1. The figure was -4.24% in 2009 which declined to -1.

This was due to the fact that the company was facing losses and also investors were being discouraged by the company’s performance. of common shares outstanding 2011 = 2743384/ 786000 2012 = 4302715/ 786000 . The declines also points out the fact that the company is not generating profit. The figure was -14.21% in 2009 which further declined to -43.35% in 2010. The figure was -2.2011 = 2743384/61702677 = 2012 = 4302715 /76962642 = Analysis: Net profiting margin describes after tax profits per dollar of sales. The figure was -4.37% in 2010. 5. Return on Equity = net income/ total equity 2011 = 2743384/14119648 = 2012 = 4302715/ /17013858 Analysis: Return on Equity describes after tax profit per dollar stockholders investment in the firm. 6. Earnings Per Share = net income/ no.04% in 2009 which further declined to -5. this ratio is also called the return on investment.37% in the first quarter of 2010. Return on Asset = net income/ total asset 2011 = 2743384/26834618 = 2012 = 4302715/ 27575718 = Analysis: Return on total assets describes after tax profit per dollar of assets. 4.84% in 2009 which further declined to -5.

which shows that Honda’s net income is following the increasing trend.Analysis: Earnings per share describe earning available to the owners of common stock. The figure was -2. it still reeks of positivity on the equity market.55x in 2009 which increased to -1.4302715/4302715 Analysis: Net income growth describes the firm’s growth in profits. . 7. The figure of percentage change of net income comes out to be 64.81 in 2010 which declined to -5. Sales Growth: Percentage change in growth of sales = -76962642/76962642 Analysis: Sales growth describes the firm’s growth rate in sales.97 in 2010 because of the bad situation that the company was facing.97%. Growth ratio 1. The figure was -3. which shows that Honda’s sales is following the increasing trend Net Income Growth: Percentage change in Net Income growth = .92%. The figure of percentage change of sales growth comes out to be 38. Honda being a multinational firm.67x in 2010. Price Per Earning Ratio = market price per share/ EPS 2011 = 10/ 2012 = 10/ Analysis: Price to earnings ratio describes attractiveness of firm on equity market.