Analysis

Atlas Honda
The current ratio: should be greater than 1. As the current ratio of atlas Honda is 1.4 for
the year 2019 which is good and in 2020 the current ratio increased to 1.5 which means the
company has performed better in the year 2020. In 2021 the current ratio is 1.4 which is
less than the year 2020 but it is in a good position.
Quick ratio: As far as the quick ratio of atlas Honda is concern, it has the same criteria
that it should be greater than 1. For the year 2019 the quick ratio of atlas Honda is 1.1
which is good for the company and the quick ratio for the year 2020 is also 1.1 which is also
good, in the year 2021 the quick ratio increased to 1.2 which is better for the company.
The inventory turnover ratio: is also good for the atlas Honda, it was 16.25 for the year
2019, 17.34 for the year 2020 and 23.13 for the year 2021 which means the inventory
turnover ratio has improved every year.
Day sale outstanding: the company was taking two days to recover the receivables in 2019,
while in 2020 it decreased to 1.4 days, in 2021 the day sale outstanding decreased to 0.03
which means that the company is receiving its receivables without any delay or just after
the sale they are making.
Fixed asset turnover ratio: the more the fixed asset ratio is the better it is for the company,
in 2019 it was 8.6 which is better while in 2020 it decreased to 8.3 which is less as compared
to 2019, it increased to 9.06 in 2021 which has increased as compared to the past two years
which is good for the company.
Total assets turnover: for the year 2019 it was 2.5, then it decreased to 2.7 in 2020 and it
was 2.1 for the year 2021, this means that the ratio decreased in 2021 as compared to the
previous two years which is not a good sign for the company.
Operating margin: the margins should be higher than 15% if the margin is higher than this
percentage than it is good for the company.
Profit margin: low profit margin is bad sign for the company.
Return on total asset: if it is greater than 5 % than it is good for the company, for atlas it is
10 % for the year 2019, then it decreased to 9 % in 2020 and it was 8% for the year 2021,
which has decreased but as it is greater than 5% it means it is good so far.
Return on common equity: less than 10% is not acceptable, if the return is greater than 10
% than it is good,
Return on invested capital: it should be greater than 2% is good sign for the company.
Baluchistan wheel limited
Current ratios: the current ratio for the year 2019 is 7.041, and it has decreased to 2020
4.612 while in 2021 it has increased to 7.723 which is good for the company as it is greater
than 1.
Quick ratio: As the quick ratio has to be greater than 1 for the betterment of the company,
the quick ratio for the year 2019 was 3.402, it was 3.403 for the year 2020 and 4.782 for the
year 2021, which is good from the company’s perspective.
Inventory turnover: increase in inventory turnover is good for any company in this case the
inventory turnover was 3.023 for the year 2019 and it has increased to 4.582 while in 2021
it decreased to 2.207 but still it is good for the company.
Fixed asset turnover: the more the asset turnover ratio it is better for the company, for
Baluchistan Wheels it was 3.531 for the year 2019 and it decreased to 1.658 in 2020, in 2021
the number again increased to 2.203 which is a good sign for the company.
Total assets turnover: it was 1.126 in 2019 and it decreased to 0.692 in 2020, the turnover
again decreased to 0.605 in 2021 which is not good for the company.
Day sale outstanding: it was 33.150 in 2019 then increased to 61.333 in 2020, by 2021 the
day sale outstanding decreased to 43.402, although it has decreased in 2021 but this is not
good for the company as it is taking more days to receive its receivables.
Total debt to asset ratio: it was 0.126 in 2019 which increased to 0.156 in 2020, while in
2021 it again decreased to 0.142, not an ideal position for the company as this ratio shows
that how much a company is capable of paying its debt.
Time interest earn ratio: the ideal ratio should be 2.5, the Baluchistan Wheels has a ratio of
-14.83 in 2019, it increased to -34.579 in 2020 and in 2021 it again decreased to -11.07 which
is not got as the company has a high risk of being bankrupt.
Operating margin: the operating margin percentage should be greater than 15%, the
company has an operating margin of 6% in 2019, it increased to 9% in 2020 and again
decreased to 3% in 2021, this is not good for the company as it is not earning enough
money to all the associated costs involved in maintaining that business.
Profit margin: it shows that how many cents of profit has been generated for each dollar of
sale, it was 5% for the year 2019, and 6% for the year 2020, and decreased to 2% in 2021,
the profit margin should be 10 % which is considered average, so the profit margin of
Baluchistan Wheel is not good
Return on total assets: the return should be 5% or greater than this, it was 0.049 in 2019
and 0.044 in 2020, it was 0.044 in 2021 which is not good for the company as it shows that
the company’s investments are not generating good value.
Return on common equity: less than 10% is considered as poor, the ratio for this company
was 0.05 in 2019, it was 0.052 in 2020 and 0.015 in 2021 which means that this company’s
shareholder receives poor return on the money they have invested.
Return on invested capital: it should be greater than 2%, for this company it was 0.09 in
2019, it was 0.097 in 2020 and 0.024 in 2021.
Basic earning power: this shows that how assets are used efficiently, for this company it
was 0.068 in 2019, it was 0.064 in 2020 and in 2021 it was 0.017 which has decreased with
time which is not good for the company.