Project

On
Atlas Honda Motorbikes

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 PROJECT

On

Atlas Honda Motorbikes

(Ratio Analysis)

Submitted By:

Zia UlRehman (02)

M. Irfan (03)

M. Imtiaz (04)

M. Usman (12)

M.Touseef (09)

M.Waqas (11)

M.Ilyas (10)

M.Amir (15)

Submitted To:

Mr. Asif Bhatti

BZU, BAHADUR SUB CAMPUS LAYYAH

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 ACKNOWLEDGMENT
Finally by the grace of Al-mighty Allah we had managed to finish our
final project. We have studied “The company Analysis Related to Ratios. Itwas a healthy
learning experience and we are very thankful to mymproject supervisor Mr.Asif Bhatti for his
sincere gratitude and technical guides throughout the project. I am also very thankful to my
friends specially who supported me throughout the project and gave
me the moral encouragement.

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 Table of Content
Contents Page No.

Introduction of company 05

Vision 06

Mission 06

Ratio Analysis 11

Suggestion & Recommendation 21

Conclusion 20

References 22

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 Introduction

Atlas Honda Limited is a public listed company which was incorporated on October 16, 1962. It
is a joint collaboration between Honda Motor Company Limited Japan, the largest and most
reputed motorcycle brand in the world, and Atlas Group, one of Pakistan’s most renowned
business conglomerates. The Company is principally engaged in progressive manufacturing and
marketing of motorcycles and spare parts.

Atlas Honda Limited is the largest motorcycle manufacturer in Pakistan with the strongest brand
value and highest customer loyalty. The Company is considered a pioneer of motorcycle industry
in the country and has been leading two wheeler market successfully for over 50 years.

The Company currently has a production capacity of over 1.35 million units per annum and
continues to maintain its status as market leader both in terms of volume and quality. It also
exports its motorcycles and spare parts to Bangladesh and Afghanistan.

With highest quality products, state of the art manufacturing facilities, largest dealership network
& impeccable after sales service, Atlas Honda Limited is today considered a benchmark for two
wheeler manufacturing. It has been proudly and successfully fulfilling its role as the flag bearer
of motorcycle industry in Pakistan.

As one of the largest tax payers in the private sector and being one of the best employers in the
country, Atlas Honda Limited stands as a beacon of light for the corporate, social and intellectual
sectors of Pakistan.

Manufacturing Facilities:

a. Sheikhupuraplant
26-27KM,Lahore-SheikhupuraRoad,Sheikhupura-39321
This plant is the country’s largest in-house manufacturing facility for motorcycles and
related spare parts. It’s a modern state of the art factory that is involved in
manufacturing of all the models of the Company. Its spread over 27 acres.

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 b. Karachi plant
c. F-36,EstateAvenue,S.I.T.E.,Karachi-75730
This is the mother plant of the Company. Atlas Honda Limited started its operations
from here back in 1963. It is spread over 5 acres and is used for manufacturing CD70 (one of
Company’s most famous models). It also operates as Company’s Head Office.

Vision & Mission

Vision
“Market leader in the motorcycle industry, emerging as a global competitive centre of production
and exports.”

Mission
“A dynamic growth oriented company through market leadership, excellence in quality and
service and maximizing export, ensuring attractive returns to equity holders, rewarding
associates according to their ability and performance, fostering a network of engineers and
researchers ensuing unique contribution to the development of the industry, customer satisfaction
and protection of the environment by producing emission friendly green products as a good
corporate citizen fulfilling its social responsibilities in all respects.”
Strategic Goals
Customers
Our Customers are the reason and the source of our business. It is our joint aim with our dealers
to ensure that the customers enjoy the highest level of satisfaction from use of Honda
motorcycles.
Quality
To ensure that our products and services meet the set standards of excellence.
Local Manufacturing
To be the industry leader in indigenization of motorcycle parts.
Technology
To develop and maintain distinct business advantages through continuous induction of improved
hard and soft technologies.

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Shareholders

To ensure health and viability of business and thus safeguarding shareholders’ interest by
maximizing profit. Payment of regular satisfactory dividends and adding value to the shares.

Employees

To enhance and continuously update each member’s capabilities and education and to provide an
environment which encourages practical expression of the individual potential in goal directed
team efforts and compensate them attractively according to their abilities and performance.

Corporate Citizen

To comply with all Government laws, rules and regulations and to maintain a high standard of ethics in
all operations and to act as a responsible member of the society.

Quality Policy

 Commitment to provide high quality motorcycles & parts.

 Right work in first attempt and on time.
 Maintain and continuously improve quality.
 Training of manpower and acquisition of latest technology.
 Safe, clean and healthy environment.
 Market leadership and prosperity for all.

Products
1. CD 70
2. CD 70 Dream
3. Pridor
4. CG 125
5. CG 125 Self
6. CB 125
7. CB 150
8. CB 250
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 Income statement

2019 2018

Total Revenue 82412.55 77478.85

Cost of Revenue, Total 75856.68

69188.1

Gross Profit 6555.87 8290.74

Total Operating Expenses 77787.1 71241.88

Operating Income 4625.44 6236.96

Interest Income (Expense), Net Non-Operating 15.7 50.61

Gain (Loss) on Sale of Assets - -

Other, Net -25.82 -22.73

Net Income Before Taxes 4615.32 6264.85

Provision for Income Taxes 1406.66 1601.21

Net Income After Taxes 3208.66 4663.64

Minority Interest - -

Equity In Affiliates - -

U.S GAAP Adjustment - -

Net Income Before Extraordinary Items 3208.66 4663.64

Total Extraordinary Items - -

Net Income 3208.66 4663.64

Total Adjustments to Net Income - -

Income Available to Common Excluding

3208.66 4663.64
Extraordinary Items

Dilution Adjustment - -

Diluted Net Income 3208.66 4663.64

Diluted Weighted Average Shares 124.09 103.41

Diluted EPS Excluding Extraordinary Items 25.86 45.1

DPS - Common Stock Primary Issue 18.33 27

Diluted Normalized EPS 25.88 45.18

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 Balance sheet

2019 2018
Period Ending:
31/03 31/03

Total Current Assets 22464.51

23427.38

Cash and Short Term Investments 12741.88 18381.86

Cash - -

Cash & Equivalents 7480.16 9981.61

Short Term Investments 5261.72 8400.25

Total Receivables, Net 2919.91 1658.17

Accounts Receivables - Trade, Net 1116 861.22

Total Inventory 5795.59 3249.69

Prepaid Expenses 113.45 103.11

Other Current Assets, Total 893.68 34.55

Total Assets 31954.92 31827.34

Property/Plant/Equipment, Total – Net 8950.63 7976.1

Property/Plant/Equipment, Total –
15918.09 13947.45
Gross

Accumulated Depreciation, Total -6967.46 -5971.35

Goodwill, Net - -

Intangibles, Net 168.92 44.91

Long Term Investments 323.5 324.9

Note Receivable - Long Term 33.47 31.48

Other Long Term Assets, Total 13.88 22.57

Other Assets, Total - -

Total Current Liabilities 15592.72 14886.9

Accounts Payable 5060.11 3005.81

Payable/Accrued - -

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 Accrued Expenses 2088.35 3424.69

Notes Payable/Short Term Debt - -

Current Port. of LT Debt/Capital Leases - -

Other Current liabilities, Total 8444.25 8456.4

Total Liabilities 16589.15 15826.62

Total Long Term Debt - -

Long Term Debt - -

Capital Lease Obligations - -

Total Debt - -

Deferred Income Tax 700.02 698.04

Minority Interest - -

Other Liabilities, Total 296.41 241.68

Total Equity 15365.76 16000.72

Redeemable Preferred Stock, Total - -

Preferred Stock - Non Redeemable, Net - -

Common Stock, Total 1034.07 1034.07

Additional Paid-In Capital 39.95 39.95

Retained Earnings (Accumulated Deficit) 14291.75 14926.7

Treasury Stock – Common - -

ESOP Debt Guarantee - -

Unrealized Gain (Loss) - -

Other Equity, Total - -

Total Liabilities & Shareholders'

31954.92 31827.34
Equity

Total Common Shares Outstanding 124.09 124.09

Total Preferred Shares Outstanding - -

* In Millions of PKR (except for per share items)

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 Ratio Analysis
Financial ratios are tools used to assess the relative strength of companies by performing simple
calculations on items on income statements, balance sheets and cash flow statements. Ratios
measure companies' operational efficiency, liquidity, stability and profitability, giving investors
more relevant information than raw financial data. Investors and analysts can gain profitable
advantages in the stock market by using the widely popular, and arguably indispensable,
technique of ratio analysis.
Liquidity Ratios
A liquidity ratio is a financial ratio that indicates whether a company's current assets will be
sufficient to meet the company's obligations when they become due
Types of Liquidity Ratios
1. Current Ratio
The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables.

Current ratio=Current asset/Current liabilities

Year 31-03-2019 31-03-2018

Current Ratio 1.45 1.57

Current Ratio

31-03-2018

Current Ratio

31-03-2019

1.35 1.4 1.45 1.5 1.55 1.6

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 2. Quick Ratio

An indicator of a company’s short term liquidity. The quick ratio measures a company’s ability
to meet its short term obligation with its most liquid assets. The higher the quick ratio, the better
the better the position of company

Quick ratio/Acid test ratio=Current asset-inventory/Current liabilities

Year 31-03-2019 31-03-2018

Quick Ratio 1. 1.25

Quick Ratio

31-03-2018

Quick Ratio
31-03-2019

0 0.5 1 1.5

Profitability Ratios
A profitability ratio is a measure of profitability, which is a way to measure a company's performance.
1. Net Profit Margin
The net profit margin is equal to how much net income or profit is generated as a percentage of
revenue.

Net Profit Margin=Net Profit /Net Sale

Year 31-03-2019 31-03-2018

Net Profit Margin 3.89 6.01

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 Net Profit Margin

31-03-2018

Net Profit Margin

31-03-2019

0 2 4 6 8

2. Return on Asset
Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets.Return on Asset=Net Income /Average Total Asset

Year 31-03-2019 31-03-2018

Return on Asset 10.1 14.65

Return on Asset

31-03-2018

Return on Asset
31-03-2019

0 5 10 15

3. Operating profit margin

The operating margin measures how much profit a company makes on a dollar of sales, after
paying for variable costs of production, such as wages and raw materials, but before paying
interest or tax. It is calculated by dividing a company’s operating profit by its net sales.

Operating Profit Margin=Operating income/Net Sale

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Year 31-03-2019 31-03-2018
Operatinf profit margin 5.61 8.04

Operatinf profit margin

31-03-2018
Operatinf profit
margin
31-03-2019

0 5 10

4. Return on operating asset

Return on operating asset is an efficiency financial ratio that calculates the percentage return a
company earns from investing money in assets used in its operating activities.

Return on Operating Asset=Operating income/Average Operating Asset

Year 31-03-2019 31-03-2018

Return on operating asset 14.47 19.59

Return on operating asset

31-03-2018
Return on operating
asset
31-03-2019

0 10 20

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 5. Total asset turnover

The asset turnover ratio, also known as the total asset turnover ratio, measures the efficiency
with which a company uses its assets to produce sales.

Total Asset Turnover=Net Sale/Average total Asset

Year 31-03-2019 31-03-2018

Total asset turrnover 2.57 2.43

Total asset turrnover

31-03-2018

Total asset turrnover

31-03-2019

2.3 2.4 2.5 2.6

6. Gross profit margin

Gross profit margin is a metric used to assess a company's financial health and business model
by revealing the amount of money left over from sales after deducting the cost of goods sold.
Gross Profit Margin=Gross Profit /Net Sale
Year 31-03-2019 31-03-2018
Gross profit margin 7.95 10.70

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 Gross profit margin

31-03-2018

Gross profit margin

31-03-2019

0 5 10 15

7. Return on Total Equity

Return on Equity (ROE) is the measure of a company's annual return (net income divided by
the value of its total shareholders' equity.
Return On Total Equity=Net Income Before Non Recurring Item/Average Total Equity
Year 31-03-2019 31-03-2018
Return on equity 20.5 31.9

Return on equity

31-03-2018

Return on equity

31-03-2019

0 20 40

Equity Ratios:
1. Earning Per Share
Earnings per share is a company's profit divided by the number of common stock shares it has
outstanding. EPS shows how much money a company makes for each share of its stock. A
higher EPS indicates more value because investors will pay more for a company with higher profits.

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Earning per Share=Net earning for Common Stock/Total Number Common Share Outstanding
Year 31-03-2019 31-03-2018
Earning per Share 31.0 45.1

Earning per Share

31-03-2018

Earning per Share

31-03-2019

0 20 40 60

3. Price Earning Ratio

The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current
share price relative to its per-share earnings (EPS).
Price Earning Ratio=Market Price Per Share/EPS
Year 31-03-2019 31-03-2018
Price Earning Ratio 12.2 11.6

Price Earning Ratio

31-03-2018

Price Earning Ratio

31-03-2019

11 11.5 12 12.5

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 4. Dividend Payout
The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders
relative to the net income of the company.
Dividend Payout=Dividend per Common Share/EPS

Dividend Payout

31-03-2018

Dividend Payout

31-03-2019

50 55 60 65 70 75

5. Dividend Yield
Dividend yield is the financial ratio that measures the quantum of cash dividends paid out to
shareholders relative to the market value per share.
Dividend yield= Dividend per Common Share/Market price per Common Share
Year 31-03-2019 31-03-2018
Dividend Yield 5.8 5.1

Dividend Yield

31-03-2018

Dividend Yield

31-03-2019

4.5 5 5.5 6

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 6. Book value per Share
The book value per share is a market value ratio that weighs stockholders' equity
against shares outstanding.
Book value per Share=Total Shareholder Equity-Proffered Stock Equity/Number of Common
Share
Year 31-03-2019 31-03-2018
Book value per Share 123.82 128.94

Book value per Share

31-03-2018
Book value per
Share
31-03-2019

120 122 124 126 128 130

Question
 Financial condition of Atlas Honda?
 Which factors that affect your sale?
 Why your company sale in 2019 is less than in 2018?
 Method of recording your financial statement?
 Suggestion and recommendation

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 Conclusion
As a conclusion of Atlas Honda Company is a largest motorbikes manufacturer that have
demand to worldwide. As the analysis of the ratio analysis in this report we conclude that atlas
Honda was not at good stage. The sale of motorbikes in 2019 is less than the year of 2018.
All the ratios show that the company financial position position not good and they not compete
the other competitors.

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 Recommendation
 Atlas Honda Should Decrease their price, so that it compete the competitors.
 They should reserve more assets to face economy fluctuation.
 Atlas Honda should be focus on advertisement of their product.
 Atlas Honda should make more attractive graphics on bikes.
 Atlas Honda should focus on the marketing strategy.

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 References
www.atlas Honda.com
www.investing.com
visit of sufi Honda palace

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