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RESEARCH PROJECT
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COURSE: FUNDAMENTALS OF FINANCE

ghjklzx SUBMITTED TO: Prof. Dr ABDUL REHMAN

SUBMITED BY: SANIYA BIBI (04151813020)
BSBA 4 TH (SECTION B)

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 BALUCHISTAN WHEELS LTD
Address the following questions related to your company:

 Who are the owner of the company?

Ans: Muhammad Siddique Misri is the owner of the company.

 Director of the company

Ans: Mr. Syed Haroon Rashid, Mr. Razak Bengali, Mr. Irfan Ghani, Mr. Aamir
Amin.

 Brief history of company

Ans: BWL is located in the industrial zone of Hub about 35 km from Karachi,
BWL was setup in 1980 for the manufacturing of steel wheels for automobiles
with technical collaboration of GKN Sankey Limited UK. The plant has a covered
area of 1600 square meters and builds a land of 97000 square meters. It has the
capability to manufacturing diverse range of wheels.

 What are the company’s principle lines of business and major

competitors?

Ans: Principle Lines: To produce automotive wheels and allied products of

international quality standard wheels and contribute towards substitution,
exports, taxation, employment and consistency compensate the stake holders.

Competitors:

1: Pakmoto Lahore. a

2: Indus wheels LTD.

3: RASTGAR Wheels LTD.

 Market Price of share

 Ans: Trades end of the day
Open (lowest) Rs.55.70 Volume

Close (highest) Rs.57.89 Previous

 Listing Date
Ans: It is listed on Karachi Stock exchange.

 Total Capitalization
Ans: Market Capitalization: 0.77bn

Paid up Capitalization: 133.34mn

Authorized Capitalization: 250,00mn

 On what day does the company’s Fiscal year end?

Ans: A fiscal year end is usually the end of any quarter, such as March 31, June
30, September 30 or December 31.

 What method of depreciation is used by the company to depreciate its

original assets?

Ans: Depreciation is charged to statement of profit or loss applying the

reducing balance method, except for computers which are depreciated on
straight line method.

 What inventory method is used to state the value of the company’s

inventory?

Ans: For stores, spare parts and loose tools average cost method is used. For
raw materials: annual average basis. For work in progress and finished goods:
Average manufacturing cost.

 What is the average income tax rate for the fiscal year reported?
Ans: The average income tax for the fiscal year is 22443.
  Strengths and weaknesses.
Strenghts: BWL is one of the best wheel machinery manufacturers the
latest developed process have been installed to produce wheel rims upto 16’
diameter. For commercial vehicle wheels process improvement has been
implemented with the assistance of Dong feng. Quality assurance system is
backed by a laboratory equipped with tensile testing, hardness testing ,
metallographic and chemical testing equipment. A constant need to come with
newer and better modes of production has been the halimark of BWL corporate
philosophy. The R&D department is engaged in developing of new products. BWL
has always keep in continuous investment in machinery and equipment to
increase productivity and to achieve high quality. BWL supplies wheels for all
major companies, OEM’s of Pakistan Automotive industry . BWL supplies wheels
for all major companies. BWL is using the latest technology for the production of
the highly quality products which also enhances the production capacity of
employees.

WEAKNESSES:

1) HIGH COST PRODUCTION:

The resources are not being used properly and due to the economic crisis the
rates are going up rapidly and hence cost of production is increasing as well.

2) BUREAUCRATIC ORGANIZATION:

Another weakness is the bureaucratic environment within the organization. The

upper management takes all decision ignoring the employee’s suggestions.

3) INTERNATIONAL MARKET:

BWL has week international market, its a big problem and the market share price
has gone down as well.

4) EMPLOYEE BEBEFITS AND REWARDS:

BWL is not providing any kind of benefits or rewards even the medical allowance
and transport facilities are not given to their employees and this put the
productivity down and therefore there is the lack of motivation in the BWL.

 RECOMMANDATIONS:
 Product expansion:
 The very important opportunity for the BWL is that it should expand its
products.
 Low cost production:
 The BWL should use the resources in a good way so that the production
can be reduced to a great extent and can maximum the profit ration.
 International market:
 BWL should take the benefits of global recession and has a chance to
increase its market share price internationally
 Better understanding of internal and external factors which could impact
the industry.
 Increase business/sales activities by understanding your competitors’
businesses better.
 Recognize potential partnerships and suppliers
 At BWL, such bonus facilities are given only to production department. In
my point of view, they should provide these such bonus facilities other
departments as well, this act will increase the loyalty of their officers and
employees and it also can be motivating factor as well for them.
 Favoritism should be eliminated and the recruitment should be done on
purely merit basis.
 Proper training at each level should be given to the employees.
 Special bonuses and incentives such as on Eid days should give to the
employees.
 BWL should hire trained and highly qualified young professionals.
 BWL should try to reduce their financial expenses.
 The bargaining power of the buyers or customers, their traditions, income
and living standard should examine.
 The company should keep a close watch on costs in areas such as research
and development, sales and services.  The company may try to have low
cost structure compared with that of its competitors.
 Promotion in lower and middle level is usually based on age not on
performance. Rate of promotion is also slow. So the employees feel
dissatisfaction.
Upper management should encourage the existing employees to go for
further training and special education; in near future it will be beneficial for
the company.
 INTERPRETATION OF THE RATIO:
 CURRENT RATIO
10
9
8
7
6
5
4
3
2
1
0
2019 2018 2017 2016 2015

CURRENT RATIO

Interpretation
Company debts over five years are less and its assets are greater company can pay
its debts.

QUICK RATIO
10
9
8
7
6
5
4
3
2
1
0
2019 2018 2017 2016 2015

QUICK RATIO

Interpretation
BWL has acid test ratio greater than 1 and has ability to pay its current liabilities
over the years.
 TOTAL ASETS TURNOVER
0.05
0.04
0.04
0.03
0.03
0.02
0.02
0.01
0.01
0
2019 2018 2017 2016 2015

TOTAL ASETS TURNOVER

Interpretation
As after every year fixed assets is increasing it mean fixed assets are being used.

INVENTORY TURNOVER
35
30
25
20
15
10
5
0
2019 2018 2017 2016 2015

INVENTORY TURNOVER

Interpretation The inventory turnover ratio of BWL has normal it has

average stock.
 INVENTORY TURNOVER IN DAYS
18
16
14
12
10
8
6
4
2
0
2019 2018 2017 2016 2015

INVENTORY TURNOVER IN DAYS

Interpretation
The inventory turnover in days’ ratio was calculated in 2015 was 13.5 days which
was continuously increases to 2019 which was 13.8 days that show the inventory
turnover in days’ increase.

OPERATING PROFIT MARGIN

18
16
14
12
10
8
6
4
2
0
2019 2018 2017 2016 2015

OPERATING PROFIT MARGIN

Interpretatio
n
The operation profit margin in 2015 was 5.35as show in the graph was going up
and down as the year past and then after gradually decrease in the operation profit
margin, which last recorded is 5.59.
 GP MARGIN
0.3

0.25

0.2

0.15

0.1

0.05

0
2019 2018 2017 2016 2015

GP MARGIN

Interpretation
Its GP margin is 0.15 in 2019 so its trying to make a responsible profit.

NET PROFIT MARGIN

12

10

0
2019 2018 2017 2016 2015

NET PROFIT MARGIN

Interpretatio
n
The net profit margin of BWL is high it mean its efficient at converting sales into
actual profit.
 RETURN ON INVESTMENT
14
12
10
8
6
4
2
0
2019 2018 2017 2016 2015

RETURN ON INVESTMENT

Interpretation
The Return on investment in 2015 fiscal years is 6.035 that was gradually
decreased over the last 4 years that will effect on the net income in the financial
statements of the company.

RETURN ON EQUITY
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2019 2018 2017 2016 2015

RETURN ON EQUITY
Interpretatio
n
The return on equity in 2015 was 0.38 that are decreased to 0.28 in 2019 which
shows that the company returns on shareholders’ equity was decrease over last 4
years.
 DEBT-TO-EQUITY RATIO
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2019 2018 2017 2016 2015

DEBT-TO-EQUITY RATIOS
Interpretatio
n As over the years debt ratios is increasing it mean BWL is financially not much

TOTAL DEBT TO ASSETS

1.4
1.2
1
0.8
0.6
0.4
0.2
0
2019 2018 2017 2016 2015

TOTAL DEBT TO ASSETS

stable.

The debt total asset ratio in 2015 was 1.09 and last recorded was 1.12 that’s show
the company debts are decreases and the asset are increases gradually.