Ratio analysis of Indus motors

Done by:
Ali Husnaen O9-HITEC-BBA-03

Wajih-ul-Hassan 09-HITEC-BBA-12

Instructed by: Ms.Faiza Saleem

HITEC UNIVERSITY TAXILA

ACKNOWLEDGEMENT

WE would start this report by saying that ALLAH Almighty has graced me with enough energy to work in this period and complete this report. First of all we would like to acknowledge out parents who encouraged us to do BBA. Their prayers enable us to complete this report. We would really like to acknowledge our teacher Ms. Faiza Sleem, who provided us opportunity to work on this report. She really encourages us to complete this report. She provided us helpful knowledge regarding this project. At the end, we would like to acknowledge the people who provided us help to get this financial report and work on this report.

VISION
"IMC·s Vision is to be the most respected and successful enterprise, delighting customers with a wide range of products and solutions in the automobile industry with the best people and the best technology".

MISSION
IMC s Mission is reflected in our Company s Slogan ACT #1 Action, Commitment and Teamwork to become # 1 in Pakistan. The Indus Team is committed to ACT So that it achieves the #1 position in the Auto Industry in:      

Respect & Corporate Image Quality & Safety Customer Satisfaction Production & Sales Profitability Best Employer

Background
The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. The shares of company are quoted on the stock exchanges of Pakistan i.e. Karachi, Lahore and Islamabad stock exchanges. The stock code for dealer in equity shares of Indus Motor Company Limited at KSE, LSE and ISE is INDU. Toyota Motor Corporation and Toyota Tsusho Corporation have 25 % stake in the company equity. The majority shareholder is the House of Habib. Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota Motor Corporation Japan (TMC), and Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd vehicles in Pakistan through its dealership network. IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres. Indus Motor Company¶s plant is the only manufacturing site in the world where both Toyota and Daihatsu brands are being manufactured. Heavy investment was made to build its production facilities based on state of art technologies. To ensure highest level of productivity world-renowned Toyota Production Systems are implemented. IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4x2 and 4 versions of Daihatsu Cuore. We also have a wide range of imported vehicles.

Shareholder Information:
Factory / Registered Office
Plot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi. PABX 92-21-34720041-48 Fax 92-21-34720056 Shares Registrar Noble Computer Services (Private) Limited Mezzanine Floor, House of Habib Building (Siddiqsons Tower), 3-Jinnah C. H. Society, Main Shahrah-e- Faisal, Karachi - 75350. PABX 92-21-34325482-87 Fax 92-21-34325442

Annual General Meeting
The Annual General Meeting will be held at 09:00 a.m. on October 28, 2009 at the Pearl Continental Hotel, Karachi. Shareholders as of October 21, 2009 are Encouraged to participate and vote. Any shareholder may appoint a proxy to vote on his or her behalf. Proxies should be filed with the Company at least 48 hours before the meeting time.

Ownership
On June 30, 2009, there were 4,010 shareholders on record of the Company¶s ordinary shares.

Dividend Payment
The proposal of the Board of Directors for dividend payment will be considered at the Annual General Meeting. Following approval, the dividend warrants will be sent within one week thereafter to persons listed in the register of members on October 21, 2009. Income Tax and Zakat will be deducted in accordance with the current regulations. Shareholders who wish to have the dividends deposited directly in their bank accounts should contact the Shares Department by October 21, 2009.

Listing on Stock Exchanges
Indus Motor Company Limited equity shares are listed on Karachi, Lahore and Islamabad Stock Exchanges.

Stock Code
The stock code for dealer in equity shares of Indus Motor Company Limited at KSE, LSE and ISE is INDU.

PRODUCTS & SERVICES

Service:
The focus on after sales services continues to increase with the rising number of Toyota and Daihatsu vehicles in Pakistan. Following the signing of the After Sales Service Mid Range Plan a number of activities have been undertaken to upgrade service operations, prepare for business growth and to provide high quality and consistent after sales service to our valued customers. Our aim is to get our Service department recognized throughout the Toyota affiliates. With our continued commitment to enhance the level of technical education in Pakistan and to cater to the needs of the northern region of the country we selected the Construction Technology Training Institute (CTTI), Islamabad to launch the 3rd Toyota Technical Education Program (T-TEP) on February 20, 2009. We are confident that T-TEP graduates from this institute would prove highly productive for IMC, Toyota dealers and Auto industry vendors. To enhance the technical and management skill level and create a competitive environment for dealer¶s service staff, a National Skill Contest for

General Technicians, Service Advisors and Paint Technicians was organized on June 12, 2009.

Products:

Corolla Variants 1.3 XLI 1.3 GLI 1.8 ALTIS M/T 1.8 ALTIS M/T SR 1.8 ALTIS A/T 1.8 ALTIS A/T SR 2.0 D 2.0 D SALOON 2.0 D SALOON SR COURE CX CX-ECO CX-AUTO CX-ECOMATIC HILUX 3.0 HILUX 4X2 S/C (STANDARD) 3.0 HILUX 4X2 S/C (UP SPECS) 1419000 1459000 665000 709000 694000 749000 Ex-Plant Price 1289000 1414000 1699000 1784000 1784000 1869000 1347000 1699000 1784000

LAND CRUISER PRADO LANDCRUISER PRADO 4.0 L VX A/T (GASOLINE) LANDCRUISER PRADO 3.0 L VX A/T TURBO (DIESEL) LANDCRUISER PRADO 2.7 L TX M/T (GASOLINE) LANDCRUISER PRADO 3.0 L TX M/T TURBO (DIESEL)
TOYOTA FORTUNER 2.7L A/T (GASOLINE) TOYOTA AVANZA 21.5L M/T STD (GASOLINE) TOYOTA AVANZA 21.5L M/T UP SPECS (GASOLINE) DAIHATSU TERIOS 1.5L A/T (GASOLINE) DAIHATSU TERIOS 1.5L M/T 4X4 (GASOLINE)

13500000

13500000

9700000

9700000
7500000 1900000 2100000 2500000 2600000

Ratio analysis

Current Ratio = C.A/C.L
2006 14,095,657/9,444,554 1.49 2007 13,560,329/7,410,926 1.82 2008 9,664,784/3,779,631 2.56 2009 16,715,319/9,884,850 1.69

3 2.5 2 1.5 1 0.5 0 2006 2007 2008 2009

Analysis: This shows an increasing trend in the first three years and then shows an decreasing trend in the last year this is because that the increase in liability decreases the current ratio value of the company.

Quick Ratio= Quick Assets / Current Liabilities

2006

2007

2008

2009

14,095,6573,959,316/9,444,554 1.07

13,560,3292,859,951/7,410,926

16,715,319 4088858/9,884,850 3.34

96647842637629/3,779,631 1.85

1.44

4 3 2 1 0 2007 2008 2009 2010

Analysis : This shows an increasing trend in the first three years and then there is an sudden decreasing trend in the last year this is because of the sudden decrease in the value of the liability and it is good for the company.

Debt to Equity Ratio=Total Liabilities / Total Stockholder's Equity

2006 9,444,554/6,257,879 1.51

2007 7,410,926/8,043,975 0.92

2008 1,736,631/ 10,296,973 0.17

2009 1,332,832 /9,436,340 0.14

2 1.5 1 0.5 0 2006 2007 2008 2009

Analysis: This shows a decreasing trend in these four years, and this is beneficial for its shareholders.

Debt to asset=total debt/ total assets

2006

2007

2008

2009

9,444,554/15,822,468 0.59

7,410,926/15,665,050 0.47

4,311,769/13,748,109 0

10,388,550/20,685,523 1

1.5 1 0.5 0 2006 2007 2008 2009

Analysis: It shows an decreasing trend in the beginning and then shows an increasing trend in the ending years.

Receivable Turnover Ratio= Sales / Average Account Receivables

2006

2007

2008

2009

35,236,535/1988498 17.72

39,061,226/1271372 30.72

41,423,843/1,442,204 28.722

37,864,604/1,855,477 20.406

35 30 25 20 15 10 5 0 2006 2007 2008 2009

Analysis: This shows a slight increase in the beginning and then at the end decreasing trend but the value that is 17.72 is the best year because they collect there money from there customers in that mean time.

Receivable Turnover in Days= 365/ Receivable Turnover

2006 365/17.72 20.5 11.88

2007 365/30.72 12.71

2008 365/28.72 17.85

2009 365/20.40

25 20 15 10 5 0 2006 2007 2008 2009

Analysis: It shows an random trend but the year 2007 is the best year in this because in this the company collect money in the minimum years as we see in the table and the graph as well. Inventory Turnover Ratio= COGS/INVENTORY 2006 2007 2008 37,575,356/2,637,629 31,088,906/3,959,316 34,620,632/2,859,951 7.85 12.10 14.24 35,540,418/4,088,858 8.69 2009

15 10 5 0 2006 2007 2008 2009

Analysis: This also shows an random behavior but the year 2008 is the best year because in this we have a large amount of inventory after selling our goods so we can use this inventory for some surprising situations or bulk of orders.

Inventory Turnover in days=365/inventory turnover

2006 365/7.85 46.49

2007 365/12.10 30.16

2008 365/14.24 25.63

2009 365/8.69 42

60 40 20 0 2006 2007 2008 2009

Analysis: This also shows an random trend and in this the year 2008 is the best one because the company can get its inventory within 26 days for its use.

Total Asset Turnover Ratio= Sales / Total Assets 2006 35,236,535/ 15,822,468 2.22 2007 39,061,226/ 15,665,050 2.49 2008 41,423,843/13,748,109 37,864,604/20,685,523 3.01 1.83 2009

4 3 2 1 0 2006 2007 2008 2009

Analysis: This also shows an random trend and this ratio expresses us that how many no of assets company have after its sales for this the year 2009 is the best one because company recover its assets within minimum time as compared to the rest of the years.

Total Asset (or Capital) Turnover in Days= 365/ Total Asset Turnover

2006 365/2.22 164.41

2007 365/2.49 146.58

2008 365/3.01 121.26

2009 365/1.83 199.45

250 200 150 100 50 0 2006 2007 2008 2009

Analysis: This also shows an random trend within the years, but the year 2998 is the best one because the company capital turnover came to them in minimum no of years as compared to the others years.

2006 4,147,629/ 35,236,535

2007 4,440,594/ 39,061,226

2008 3,848,487/41,423,843

2009 2,324,186/37,864,604

0.11

0.092 0.11 Gross Profit Margin Ratio= GP/Sales

0.061

0.15 0.1 0.05 0 2006 2007 2008 2009

Analysis: This also shows an random behavior within the years but the year 2006-07 are the best one because in these years company gain a maximum profit as compared to the rest of the years.

Net Profit Margin Ratio= Net Income / Sales 2006 2007 2008 2009

2,648,464/35,236,535 2,745,701/39,061,226 2,290,845/41,423,843 1,385,102/37,864,604 0.07 0.07 0.055 0.036

0.08 0.06 0.04 0.02 0 2006 2007 2008 2009

Analysis:

This also shows an random behavior this is also best in year 2006-07 because in these years company has a grater net profit margin as compared to the rest of the years.

Return on Assets Ratio= Net Income / Average Total Assets 2006 2007 2,745,701/15,665,050 0.17 2008 2009

2,648,464/15,822,468 0.16

2290845/13748109 0.16

1385102/20685523 0.06

0.2 0.15 0.1 0.05 0 2006 2007 2008 2009

Analysis: This shows an equal trend in the beginning and then shows an decreasing trend in the ending, it is good in the year 2006-07 and in the year 2009 it is worse one. It is good if it is grater. Return on Equity= Net Income/Stockholder's Equity 2006 2007 2008 2009

2,648,464/6,257,879 0.42

2,745,701/8,043,975 0.34

2,290,845/9,436,340 0.24

1,385,102/10,296,973 0.13

0.6 0.4 0.2 0 2006 2007 2008 2009

Analysis: It shows an decreasing trend from year 2006-09, thus it is good if it is grater for keeping this concept in the mind it is grater in the year 2006 as compared to the rest of the years.

Horizontal & vertical analysis HORIZONTAL ANALYSIS Of BALANCE SHEET of 2006&07
EQUITIES AND LIABILITIES Share capital and reserves
Authorized capital 100000000 ordinary shares of Rs.10 each Issued, subscribed & paid up capital Capital reserve

2007

2006

2007

2006

1,000,000 786,000
7,257,975 8,043,975

1,000,000 786,000
5,471,879 6,257,879 3,871 116,164 120,035

Total equity Non-current liabilities
Liabilities against assets subject to finance lease

1,000,000 5.01 46.3 51.3 0 1.34

1,000,000 4.96 34.5

39.5
0.02 0.73

0
210,149 210,149

deferred taxation

Total non current liabilities Current liabilities
Trade and other payables advance from customers &dealers Short term running finances- secured taxation net accurate mark up

1.34

0.75

2,892,017 4,514,480

2,599,911 6,620,869

18.46 28.81 0 0 0.004

16.43 41.84 0 1.23 0.14

0 0
715 7,410,926 15,665,050

0
195,789 22,250 9,444,554 15,822,468

Total current liabilities

47.3 100.00%

59.6 100.00%

Total equity and liabilities

Trade debt increased with the passage of time which shows the lacking ability to collect receivable on time. On the other hand of balance sheet the major equity there is 51% and 39% share of debt and equity respectively. The major contributor to debt is current liabilities is which is 59% of total right hand side of balance sheet on average, and these liabilities have increased at steady pace during the last year. Long-term debt of the firm contribute 30% on average to total right hand side of balance sheet and it has increased from 2006 to 2007 and thereafter it drop down significantly due to respective decrease in fix assets during same period of time.

Assets
Non-current assets
fixed assets long term loans and advances Long term deposits

2007

2006

2007

2006

2,093,852

1,716,590

13.36 0.02 0.04

10.84 0.006 0.03

4,240

1,019

6,629

5,181

Total non current assets Current assets
Store and spare Stock-in-trade Trade debts short term prepayments accrued return on bank deposit Other receivables
Loans and advances

2,104,721

1,726,811

13.43

10.91

227,191 2,859,951

226,169 3,959,316

1.45 18.25 4.24 0.30 0.84 3.86 2.72 0.30

1.42 25.02 4.66 0.05 0.48 7.90 2.61 0

665,647

738,281

47,523

9,134

132,634

76,211

605,725

1,250,217

426,165

414,338

Taxation-net

48,520

0

Cash and bank balance

8,543,263

7,416,180

54.5

46.87

Total current assets

13,560,329 15,665,050

14,095,657 15,822,468

86.5 100.00%

89.0 100.00%

Total Assets

Analysis of Non Current Assets: In common size analysis we express the various components of a balance sheet as percentage of the total assets of the company. In addition this can be done for the income statement, but here items are related to net sales. In Indus motors balance sheets over the three year span the percentage of current assets increased. The vertical common size analysis of balance sheet shows that long-term assets remain with 10-15 % range during last two years and the major contributor to long-term assets is plant and equipment which is about 50% of total asset on average it increased for some time and after that it showed a decline due to some financial constraints of the firm. The percentage of common size for the year 2007 is 86% but for the year 2006 it is 89%. It shows a increasing trend there is improvement. It shows that there is increase of Property and Equipment in total assets. It shows that our Capital work in progress is more in 2007 then 2006. It s better for our company. Long term investments show no improvement because it s equal for 2007 and 2006. Long term loans and advances show an increasing trend. In 2006 it is 0.2 but in 2007 it is 0.006. It shows that long term loans and advances are already too much we need to control it Long term deposits show the increasing trend which is good for this company. Total noncurrent assets show the increasing trend which is good for the Indus motors. It means that company s profitability position is good in the year 2007.

Analysis of Current Assets: The vertical common size analysis of balance sheet shows that current assets remain 86.5-89% during that period. Stock in trade means inventory. It shows the increasing trend which means that in 2007 the value of inventory is high and it contributed more in total assets in the year 2007. Our loans and advances have been decreased and it s also very good for the balance sheet of our company.

HORIZONTAL ANALYSIS Of Income statement of 2006&7
Profit and loss account 2007 2006 2007 2006

Net sales Cost of goods sold
Gross profit Distribution cost Administrative expenses

39,061,226 34,620,632 4,440,594 509,986 265,302 775,288 3,665,306 348,430 3,316,876

35,236,535 31,088,906 4,147,629 404,917 242,456 647,373 3,500,256 321,746 3,178,510 1,021,212 4,199,722 126,945 4,072,777 1,424,313 2,648,464 33.70

100 88.6
11.3 1.3 0.6 1.98 9.38 0.89

100 88.2
11.7 0.19 0.6 1.83 9.93 0.91

Other operating expenses

8.49
2.39 10.88 0.05 10.82

9.02
2.89 11.91 0.36 11.55

Other operating income

935,290 4,252,166 22,685 4,229,481 1,483,780 2,745,701 34.93

Finance cost Profit before taxation

Taxation
Profit after taxation

3.79
7.02 0.00009

4.04
7.51 0.00010

Earnings per share

The vertical common size analysis of income statement shows that cost of goods sold is about 88% of total Sales on average which leave 11% gross profit on average for firm during 2007 and in 2008. Expense is about 0.6% of total sales and major contributor to operating expense is finance cost which has increased because of increased finance lease of assets. The net operating profit of company remained on average about 7.0% during 2007 and after that it increased to average of 7.5% .this is mainly because firm is able to generate much gross profit because of low cost of production which right very high margin for operating expense hence lead to high net profit.

Vertical Analysis of Balance Sheet of 2007

EQUITIES AND LIABILITIES
2007
(Rupees in '000)

2006

2007
(Rupees in '000)

2006

Share capital and reserves
Authorized capital 100000000(2008.100000000 ordinary shares of Rs.10 each Issued, subscribed & paid up capital Capital reserve

1,000,000 786,000
7,257,975 8,043,975 210,149 210,149

1,000,000 786,000
5,471,879 6,257,879 116,164 120,035

1,000,000 100% 132%

Total equity Non-current liabilities
Deferred taxation

128%
180%

1,000,000 100.00% 100.00% 100.00% 100.00%

Total non current liabilities Current liabilities
Trade and other payables advance from customers &dealers Short term running finances- secured taxation net accurate mark up

175%

100.00%

2,892,017 4,514,480

2,599,911 6,620,869

0 0
715 7,410,926 15,665,050

0
195,789 22,250 9,444,554 15,822,468

111% 68% 0% 0% 3.2%

100.00% 100.00% 100.00% 100%

Total current liabilities

78% 0.99%

100.00% 100.00%

Total equity and liabilities
Liabilities:

The right hand side of balance sheet shows the changes in liabilities and equity capital, the major change in equity portion is in general reserve which grew at a steady pace. Deferred liabilities also shows a steady increase which show that firm in not able to pay the liabilities in time. our trade and financing has been increased in 2007 that is not good for our company .our total current liabilities has been decreased due to decrease in short term borrowing and it s good for our company. If we see the overall index analysis of our company we have seen that our company is going in profit for 2009 we should decrease our liabilities and increase current assets.

Vertical ANALYSIS Of Income statement 2006&7

Profit and loss account

2007

2006

2007

2006

Net sales Cost of goods sold
Gross profit Distribution cost Administrative expenses

39,061,226 34,620,632 4,440,594 509,986 265,302

35,236,535 31,088,906 4,147,629 404,917 242,456

110 111
107 125 109.4

100 100
100 100 100

Other operating expenses

348,430

321,746

108.2

100

Other operating income

935,290 22,685 4,229,481 1,483,780 2,745,701 34.93

1,021,212 126,945 4,072,777 1,424,313 2,648,464 33.70

91.2 17.8 103

100
100 100 100 100 100

Finance cost Profit before taxation

Taxation
Profit after taxation

104
103.6 103.65

Earning per share

The Income statement horizontal analysis reveals the findings that sales have increased at a continuous rate it show a variable trend of increase trend which shows that firm is still able to grow at a steady rate. As net profit is directly related to sales so this item also shows a variable trend of increase. Profit of the firm before taxation has increased. There is increase in Provision for Taxation .its 104% less than 2007. There is decreasing trend in Finance cost for 2007 and it s so better for the reputation of our company. Our overall company is in profit because profit after taxation is so good. Our profit is 103.65% in 2007 and it shows our company is progressing in 2007 and its repo is so good then 2006.

Horizontal analysis of Balance sheet of 2008&9

EQUITIES AND LIABILITIES

2009
(Rupees in '000)

2008

2009

2008

Share capital and reserves
Authorized capital 100000000(2008.100000000 ordinary shares of Rs.10 each Issued, subscribed & paid up capital Capital reserve

1,000,000 786,000 9,510,973

1,000,000 786,000 8,650,340

1,000,000 3.80% 45.98%

1,000,000 5.72% 62.92%

Total equity Non-current liabilities
deferred taxation

10,296,973
503,700

9,436,340
532,138

49.78%
2.44%

68.64%
3.87%

Total non current liabilities Current liabilities
Trade and other payables advance from customers &dealers Short term running finances- secured taxation net accurate mark up

503,700
3,942,988 5,926,529 0 14,660 673 9,884,850

532,138
2,837,084 942,442 0 0 105 3,779,631

2.44%
19.06% 28.65% 0.00% 0.07% 0.00%

3.87%
20.64% 6.86% 0.00% 0.00% 0.00%

Total current liabilities

Total equity and liabilities

20,685,523

13,748,109

47.79% 100.00%

27.49% 100.00%

Trade debt decreased with the passage of time which shows the enhancing ability to collect receivable on time. On the other hand of balance sheet the major equity there is 49% and 69% share of debt and equity respectively. The major contributor to debt is current liabilities is which is 47% of total right hand side of balance sheet on average, and these liabilities have decreased at steady pace during the last year.

Assets
Non-current assets
fixed assets long term loans and advances Long term deposits

2009
3,934,473 28,509 7,222

2008 4033762 42,341 7,222

2009 19.02% 0.14% 0.03%

2008 29.34% 0.31% 0.05%

Total non current assets Current assets
Store and spare Stock-in-trade Trade debts short term prepayments accrued return on bank deposit Other receivables investments at fair value through profit &loss Taxation-net Cash and bank balance

3,970,204

4,083,325

19.19%

29.70%

128,483 4,088,858 1,736,631 16,876 50,944 67,902 0 0 9,731,166

232,142 2,637,629 1,332,832 23,148 35,012 74,360 54,171 209,533 9,664,784

0.62% 19.77% 8.40% 0.08% 0.25% 0.33% 0.00% 0.00% 47.04%

1.69% 19.19% 9.69% 0.17% 0.25% 0.54% 0.39% 1.52% 70.30%

Total current assets

16,715,319

9,664,784 13,748,109

80.81% 100.00%

70.30% 100.00%

20,685,523 Total Assets Analysis of Non Current Assets: -

In common size analysis we express the various components of a balance sheet as percentage of the total assets of the company. In addition this can be done for the income statement, but here items are related to net sales. In Indus motors balance sheets over the three year span the percentage of current assets increased. The vertical common size analysis of balance sheet shows that long-term assets remain with 18-30 % range during last two years and the major contributor to long-term assets is plant and equipment which is about 25% of total asset on average it increased for some time and after that it showed a decline due to some financial constraints of the firm. The percentage of common size for the year 2009 is 80% but for the year 2006 it is 70%. It shows an increasing trend there is improvement. It shows that there is increase of Property and Equipment in total assets. Total noncurrent assets show the increasing trend which is good for the Indus motors. It means that company s profitability position is good in the year 2009.

Analysis of Current Assets: The vertical common size analysis of balance sheet shows that current assets remain 80-70% during that period. Stock in trade means inventory. It shows the increasing trend which means that in 2009 the value of inventory is high and it contributed more in total assets in the year 2009. Our loans and advances have been decreased and it s also very good for the balance sheet of our company.

Horizontal analysis Of Income statement of 2008&09

2009
(Rupees in '000) 37,864,604 37,864,604 -35540418

2008

2009
(Rupees in '000) 100.00%

2008

Sales

Net sales
Cost of sale(c.g.s)

41,423,843 41,423,843 37,575,356

100.00%

100.00%
-93.86%

100.00%
-90.71%

Gross profit
Operating expense Marketing, selling and distribution cost Administrative expense other operating expense

2,324,186
-469,985 -352,249 -156,479

3,848,487
-487,373 -297,284 -306,193

6.14%
-1.24% -0.93% -0.41% -2.58%

9.29%
-1.18% -0.72% -0.74% -2.71%

Total operating exp Profit from operation before finance costs
Finance costs

-978,713 1,345,473
-26,540

1,123,718 2,757,637
-2,760

3.55%
-0.07%

6.66%
-0.01%

Profit from operation after finance costs
Other income

1,318,933
727,080

2,754,877
786,834

3.48%
1.92%

6.65%
1.90%

Profit before taxation
Taxation

2,046,013
-660,911

3,541,711
-1,250,866

5.40%
-1.75%

8.55%
-3.02%

Profit after taxation

1,385,102

2,290,845

3.66%

5.53%

The vertical common size analysis of income statement shows that cost of goods sold is about -90% of total Sales on average which leave 7% gross profit on average for firm during 2008 and in 2009. Expense is about -2.5% of total sales and major contributor to operating expense is finance cost which has increased because of increased finance lease of assets. The net operating profit of company remained on average about 3.55% during 2007 and after that it increased to average of 6.65% .this is mainly because firm is able to generate much gross profit

because of low cost of production which right very high margin for operating expense hence lead to high net profit.

Vertical Analysis Balance Sheet For the year ended 2008&9

EQUITIES AND LIABILITIES
2009
(Rupees in '000)

2008

2009
(Rupees in '000)

2008

Share capital and reserves

Authorized capital 100000000(2008.100000000 ordinary shares of Rs.10 each 1,000,000 1,000,000 1,000,000 1,000,000

Issued, subscribed & paid up capital Capital reserve

786,000 9,510,973

786,000 8,650,340

100.00% 109.95%

100.00% 100.00% 100.00%

Total equity Non-current liabilities
Deferred taxation

10,296,973

9,436,340

109.12%

503,700

532,138

94.66%

100.00%

Total non current liabilities Current liabilities

503,700

532,138

94.66%

100.00%

Trade and other payables (Mark up accused on short term running Finances and long term loans advance form customers & dealers taxation net

3,942,988

2,837,084

138.98%

100.00%

673 5,926,529 14,660

105 942,442 0

640.95% 628.85% 100.00%

100.00% 100.00% 100.00%

Total current liabilities

9,884,850

3,779,631

261.53%

100.00%

Total equity and liabilities

20,685,523

13,748,109

150.46%

100.00%

Liabilities: The right hand side of balance sheet shows the changes in liabilities and equity capital, the major change in equity portion is in general reserve which grew at a steady pace. Deferred taxation also shows a steady decrease which show that firm in able to pay the liabilities not on time. our trade and payable has been increased in 2009 that is not good for our company .our total current liabilities has been increased due to increase in short term lender and it s good for our company. If we see the overall index analysis of our company we have seen that our company is going in profit for 2009 we should decrease our liabilities and increase current assets.

Vertical analysis of Income statement for 2008&9
2009
Sales (Rupees in '000) 37,864,604 37,864,604 -35,540,418

2008
41,423,843 41,423,843 -37,575,356

2009
(Rupees in '000) 91.41% 91.41% 94.58%

2008
100.00% 100.00% 100.00%

Net sales
Cost of sale(c.g.s)

Gross profit Operating expense
Marketing, selling and distribution cost Administrative expense other operating expense

2,324,186

3,848,487

60.39%

100.00%

-469,985 -352,249 -156,479

-487,373 -297,284 -306,193

96.43% 118.49% 51.10% 87.10%

100.00% 100.00% 100.00% 100.00%

Total operating exp Profit from operation before finance costs
Finance costs

-978,713 1,345,473
-26,540

-1,123,718 2,757,637
-2,760

48.79%
961.59%

100.00%
100.00%

profit from operation after finance costs
Other income

1,318,933
727,080

2,754,877
786,834

47.88%
92.41%

100.00%
100.00%

Profit before taxation
Taxation

2,046,013
-660,911

3,541,711
-1,250,866

57.77%
52.84%

100.00%
100.00%

Profit after taxation

1,385,102

2,290,845

60.46%

100.00%

The Income statement horizontal analysis reveals the findings that sales have decreased at a continuous rate it show a variable trend of decrease trend which shows that firm is still able to decrease at a steady rate. As net profit is directly related to sales so this item also shows a variable trend of decrease. Profit of the firm before taxation has decreased. There is increasing trend in Finance cost for 2009 and it s so better for the reputation of our company. Our overall company is in loss because profit after taxation is so bad. Our profit is 60.46% in 2009 and it shows our company is progressing in 2009 and its repo is so bad then 2008.

Conclusion:
We have done the following things in this project;
y y y y y y y y Company introduction. Abstract Historical Background of the Company. Mission, Vision. The Company Products/Services. Financial Statement (ratio) Analysis for the last 4 Years. Trend analysis and Plot Line graph of each Ratio Common Size and Index Analysis.

REFERENCES
1. 2. 3. 4. 5. www.toyota-indus.com www.motormania.com www.pakmotors.com www.pakwheels.com www.indus_cars.com

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