Shaheed Zulfiqar Ali Bhutto Institute of Science & Technology (SZABIST)

FINANCIAL
MANAGEMENT

FINAL PROJECT
REPORT

AUTOMOBILE
INDUSTRY

Assigned by:
Sir Raza Ali Memon
Subject:
Financial Management
Group members:
Karamullah Bhutto (1911157) (BBA-7)
Basit Ali Khokhar (1911205) (BBA-6)
Muhammad Faisal
Hyder Ali

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 OUTLINES

 Pakistan's economy

 Automobile industry of Pakistan and its contribution in Pakistan’s economy

1. Hino Pak Motors

2. Ghandhra Nissan
3. Honda Atlas Cars (Pakistan) Limited
4. Indus Motor Company Limited
5. Sazgar Engineering Works Limited

 Ratio Analysis

o What are ratios used for

o Each company’s ratio analysis along with interpretations

 Suggestions for the investment based on ratio analysis

2
 Pakistan’s Economy:

The economy of Pakistan is the 24th-largest worldwide in terms of GDP based on

purchasing power parity (PPP). According to a 2021 estimate, the Country has a population
of 227 million people (5th-largest worldwide); the nominal GDP of Pakistan stands at
US$347 billion with a nominal GDP per capita of US$1,562 (172nd worldwide); its GDP
based on PPP stands at US$1.329 trillion with a GDP (PPP) per capita of US$5,973 (156th
worldwide).
Pakistan is a developing country with a semi-industrial economy. Primary export commodities
include textiles, leather goods, sports equipment, chemicals, and carpets/rugs. The growth
poles of Pakistan's economy are the Indus River diversified economies of Karachi and major
urban centers in Punjab, co-existing with lesser developed areas in other parts of the Country.
The Pakistani economy has suffered in the past from internal political turmoil, a rapidly
growing population, and mixed levels of foreign investment. Regular worker remittances
bolster foreign exchange reserves, but a growing current account deficit driven by a widening
trade gap as import growth outstrips export expansion could draw down resources and dampen
GDP growth in the medium term. Pakistan is currently undergoing a process of economic
liberalization, including the privatization of all government corporations, which is aimed at
attracting foreign investment and decreasing budget deficits. The Pakistani government has
predicted that growth rates will be decreased to 2% percent on. According to the World Bank,
the levels of poverty in Pakistan fell from 64.3 percent in 2001 to 21.9 percent in 2018.
In 2021, Agriculture contributed around 22.96% in Pakistan GDP, 18.7% came from industry
sector 52.15% came from services sector. Pakistan inflation rate eased to 23.8% in Nov of
2022 from 26.6% in previous month.
History of sector

The first car ran on the roads of South Asia in 1897, and until the 1930s, cars were
imported directly, but in very small numbers. They were used largely by the rich or the senior most
civil servants belonging to the elitist Indian Civil Service. This changed just after the start
of the Second World War. In 1945 the brothers Mahindra began assembling the Jeep CJ-3A
utility vehicles under license from Willys and soon branched out into the manufacture of light
commercial vehicles (LCVs) and agricultural tractors. In Pakistan the history can be divided
into several periods. The periods are 1947 until the assembly of trucks (the Bedford “Rocket”)
started. The next growth phase is from 1972 until the private sector was introduced. The third
phase saw the introduction of tractor manufacturing and when motor cycles began to be
3
assembled. The fourth is when the private sector automobile assembly plants were established
and the vendor industry began to make its presence felt. The latest phase is when exports have
begun. The first decade of the new millennium saw the automobile industry in Pakistan
growing rapidly and making a sizeable contribution to the country’s manufacturing sector,
though it has a long way to go before it can establish itself in the international market. However,
in 2008-09 it experienced a major downturn, with sales dropping by 47 percent. This sudden
fall in demand can be attributed to the on-going economic recession, which saw high interest
rates along with a sharp depreciation of the exchange rate. All this led to an increase in the
prices of cars and the cost of components. During 2009-10, the recovery in sales helped to
increase the production from 99,307 units in 2008-09 to 141,654 units. Yet the growth was far
below the highest level achieved by the industry in 2006-071 of 204,212 units. Despite this, the
overall growth in the automobile industry is impressive and potential for further growth is
considerable.

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Pakistan’s Automobile industry and its contribution in Pakistan’s economy:
The automobile industry in Pakistan is one of the fastest-growing industries in the country,
growing by 171% between just 2014 and 2018. It contribute 4% of Pakistan's GDP and employed
a workforce of over 3.5 million people as of 2018. Pakistan is the 35th largest producer of
automobiles. Its contribution to the national exchequer is nearly Rs. 50 billion

(US$376.49 million). Pakistan's auto market is among the smallest, but fastest-growing in Asia.
Pakistan Motors vehicles sales dropped 3.8% in Nov 2022, compared with decrease of 36% in the
previous month, including sales of non-PAMA (Pakistan Automotive Manufacturers Association),
came in at around 27,000 units, which was almost flat month-on-month amid higher car prices and
Eid holidays at the start of month. Honda Atlas Car (HCAR) recorded second highest increase of
11% month-on-month to 2,910 units in May 2022 led by increase in sales of City and Civic by
18% month-on-month. Similarly, Indus Motors (INDU) also posted increase of 2% month-on-
month due to increase in sales of Corolla and Yaris by 4% month-on-month. The value added by
the sector has been estimated on the basis of the share of value
added in value of production of different sub-sectors derived from the CMI of 2005-06. These
shares have been adjusted downwards to allow for the decline in profitability (as percentage of
sales) between 2005-06 and 2009-10. The resulting estimates of value added by different sub-
sectors in 2009-10 are presented in Table 2.12. Overall, the sectoral value added is Rs 108 billion.
The largest subsector is auto parts with a share of 42 percent, followed by cars with share of 31
percent, and motorcycles with a share of 15 percent. The estimated value added by the sector
appears to about 5 percent of the total value added in the manufacturing sector of Pakistan. This
share places the sector as one of the larger industries of Pakistan after textiles, petroleum refining,
iron and steel products, fertilizers and cement. In fact, the automotive sector is larger than the
sugar, vegetable ghee and pharmaceutical industries. About 13 percent of the double-digit growth
in the large-scale manufacturing sector between 2002-03 and 2006-07 is attributable to the
dynamism of the automotive sector. Data on investment in the automotive sector is available only
for publicly quoted companies or for units which make their financial statements available on the
internet.
Investment during a particular year is measured as the change in fixed assets at cost (prior to
provision for depreciation). We have been able to collect this information for units which account
for 52 percent of the turnover in the sector. Therefore, a blow up factor has been applied of 1.923
to our estimates. The resulting estimates are presented in table 2.11. There is evidence of a
business cycle of investment in the sector. Investment expanded rapidly from 2003 to 2007, during
the period when there was very rapid growth in sales. Thereafter, investment has fallen
simultaneously with the down turn in the economy.
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Cumulatively, the total investment in the sector is about $2.7 billion. The motivation for new
investment has been limited by the presence of excess capacity in most sub-sectors.

Financial Ratio Analysis

What are Ratio Analysis?

Ratio analysis compares line-item data from an organization’s financial statements to

show insights concerning profitability, liquidity, asset management, and Debt
management.
Ratio analysis can mark how a corporation is appearing through the years, while
comparing a corporation to another inside the equal industry or sector. While ratios
provide beneficial insight right into an organization, they should be paired with other
metrics, to gain a broader picture of an organization’s financial health.

What Does Ratio analysis tell you?

investors and analysts employ ratio analysis to evaluate the economic health of companies by
means of comparing past and present day financial statements. Ratios can show how a
company is performing over time and may be used to estimate probable future overall
performance. This statistic can also compare an organization’s economic status with industry
averages while measuring how a company stacks up against others within the identical sector.
Investors can use ratio analysis easily, and every figure needed to calculate the ratios is found
on a company's financial statements. Ratios are comparison points for organizations. They
evaluate stocks within an industry. Likewise, they measure a company today against its
historical numbers. In most cases, it's also important to understand the variables driving ratios
as management has the power to, at times, modify its strategy to make its stock and
organization ratios more appealing. commonly, ratios are typically not utilized in isolation
however as a substitute in combination with other ratios. Having a good concept of the ratios
in each of the four previously mentioned classes will come up with a complete view of the
company from different angles and help you spot potential red flags.

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 1: Hino Pak Motors.

Introduction:

Hino Motors Japan and Toyota Tsusho Corporation in collaboration with Al-Futtaim Group of
UAE and PACO Pakistan formed Hinopak Motors Limited in 1986. Hinopak is the trusted market
leader with over 65% share in the Pakistani Truck and Bus industry

The decision to invest in Hinopak at the time when the country was passing through economic
turmoil and the sales of commercial vehicles were at extreme depression. However, our Principals
reflects confidence on Hinopak and showed their commitment to Pakistani market. Soon Hinopak
became the trusted market leader in the Pakistani Truck and Bus industry. As a leader, Hinopak is
a vital contributor in saving foreign exchange, providing jobs and plays a pivotal role in the
development of the local industry through its progressive manufacturing.

Hinopak is planning to export buses and trucks to the Middle East and Africa to help reduce the
country’s trade deficit.

Threats to Hino Pak Motors

 Political instability

 change of government policies

 economic downturn

 rising competition

 increased taxes

 extreme price competition

Competitors of Hino Pak motors:

 Toyota Indus
 Ghandhara Industries Limited Pakistan
 Master Motors
 Daewoo Pak Motors
 Hyundai Nishat Pakistani automobile manufacturer and joint venture
between Hyundai and Nishat Mills
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Hino Pak products:

 Truck
 Buses
 Specialized Vehicles
 Technology

8
 Financial Ratio Analysis of Hino Pak Motors

2022 2021 2020 2019 2018

1.2420195 1.3231280 0.7752146 1.0645362 1.275191
Current asset 8 8 1 6 8
0.8909932 0.2596660 0.2940100 0.719764
Quick ratio 8 0.6536362 4 4 9
13.041550 10.221669 18.309909 9.804643
DSO 3 22.985354 1 5 2
0.1687625 0.3506280 0.2339307 0.580108
Debt ratio 9 0.1629551 5 8 1
Fixed asset 3.2271628 2.5129594 3.5787030 6.0056245 8.479750
turnover 1 3 3 7 6
Liability to asset 0.3192623 0.2893417 0.8224222 0.7508576 0.634259
ratio 9 7 6 9 2
Equity to asset 0.6807376 0.7106582 0.1775777 0.2491423 0.365740
ratio 1 3 4 1 8
-
Time interest - - 0.7820210 - 3.458826
earned 6.5495028 0.3002505 9 0.4909224 3
Gross profit 1.9034744 1.9247306 2.0129186 1.9418052 1.885987
margin 2 8 7 7 9
0.0332881 - - 0.043185
Net profit margin 5 -0.031569 0.1557855 0.0456487 1
Operating profit 0.0531930 0.0077305 0.0262206 0.088241
margin 5 7 -0.061346 5 4
Basic earning 0.0398360 0.0059473 0.0351014
power 2 3 -0.085568 2 0.16231
0.0249293 - - - 0.079434
Return on asset 4 0.0242869 0.2172961 0.0611096 1
- - -
Return on equity 0.0840029 0.0667717 1.2023816 0.2452798 0.217187
Total assets 0.7488952 0.7693253 1.3948417 1.3386937 1.839386
turnover 9 8 2 7 9
Inventory - -
turnover -6.37621 -4.1747183 -3.4224528 2.2698555 4.8207214

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Ratio analysis if Hino Pak along with interpretation

Liquidity Ratios are performing well which means company and pay its short term bills with
its easily convertible assets.

Hino Pak DSO Ratio is good that means they receive payment within 13, 10, 22 days after
sales

Debt ratio is 16.87% 2022 which is good too well showing the company is less risky
Total assets turnover is also well which means company is using its assets in efficient
manner.
Net profit margin of is good in previous years except from 2020 due to covid crises but in
2021 its again getting better showing the company is earning profit from its sales.
BEP, ROA and ROE all are low and negative which again indicates the company's
shortcomings company not being able to earn much even before taxes and debts.

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 Ghandhra Nissan Motors.

Introduction:

Ghandhra Nissan Motors limited is a Pakistani automobile manufacturer based in Karachi it is

vehicle manufacturing company produce Truck, bus, car, Ghandhra Nissan was incorporated on
august 8,1981 as private limited company. The principal activity of Ghandhara Nissan Limited is
progressive manufacturing and assembling of vehicles including JAC Trucks, import and sale of
Nissan, Dongfeng and Renault vehicles in a completely built-up condition and assembly of other
vehicles under contract agreement. The company manages its production facilities and assembling
plant in Port Qasim, Karachi. Ghandhara Nissan is committed to maximizing its market share by
producing and marketing highest quality vehicles in Pakistan.

Threats to Ghandhra Nissan Motors

 Political instability
 change of government policies
 economic downturn
 rising competition
 increased taxes
 Rise cost of raw material

Competitors of Ghandhra Nissan Motors:

 Toyota Indus
 Hino Pak Motors
 Master Motors
 Daewoo Pak Motors
 Hyundai
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 Ghandhra Nissan products:

 Truck
 Buses
 Car
 Technology

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13
 Ratio Analysis of Ghandhra Nissan
2022 2021 2020 2019 2018
1.1718610 2.8292405 3.57155119 3.83316536 3.19741074
Current asset 5 2 9 2 4
0.6661331 1.8686252 1.69787890 1.83066005 2.20410466
Quick ratio 5 2 9 1 2
22.497947 40.279110 70.6944434 38.8224686 42.8604803
DSO 4 7 4 7 5
0.4636824 0.0887929 0.06997194 0.05229665 0.11940581
Debt ratio 5 5 4 1 1
Fixed asset 0.8274123 0.33793276 0.49328314 0.70361662
turnover 4 0.6619794 4 1 3
Liability to 0.5380690 0.1770927 0.14825180 0.14286062 0.19869559
asset ratio 9 9 3 5 8
Equity to asset 0.4619309 0.8229072 0.85174819 0.85713937 0.80130440
ratio 1 1 7 5 2
-
Time interest - 5.9494153 2.36898929 -
earned 1.8926151 4 7 1.02054802 -55.96427
Gross profit 1.9230734 1.8927637 1.99698030 1.86515471 1.80470664
margin 8 1 2 3 8
-
Net profit 0.0405341 0.12424116 - 0.46761847
margin 0.0188755 2 7 0.01213523 1
-
Operating 0.0516431 0.0430603 0.09129927 0.57464211
profit margin 8 7 6 0.11342475 6
-
Basic earning 0.0209695 0.0190262 0.02199960 0.03793215
power 7 9 2 8 0.21886708
-
Return on 0.0076643 0.0179100 0.02993732 -
asset 5 6 7 0.00405833 0.1781044
-
Return on 0.0165919 0.0217643 0.03514809 - 0.22226809
equity 8 7 5 0.00473474 1
Total assets 0.4060472 0.4418514 0.24096141 0.33442575 0.38087545
turnover 8 8 2 6 9

- - -
Inventory 3.6655743 1.73616650 2.2832933
turnover -1.7744058 7 6 -1.82136648 8

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15
16
 Ratio analysis of Ghandara Nissan along with interpretation

Ghandhra Nissan Motors has High Liquidity Ratio as compare to other similar company it
means has capable to pay of short term obligation

DSO Ratio is bad in previous Year but in 2022 is 22 that means they receive payment within
22 days after sales.

Total asset turnover ratio 40.60% they are using asset efficiently as compare to other
company.

Net profit margin is higher before corona but in 2019 -21 NPM decrease due to covid-19.

Gross profit margin is also good higher gross profit margin means company has done well
in managing its cost of sales.

BEP, all are low and which indicates the company's shortcomings. Company is not being able to
earn much even before taxes and debts.

ROA is lower than other companies mean company doesn’t use its asset efficiently to earn
profit

DEBT Ratio is higher than other companies 46.36% in 2022 debt use to finance its assets
relate to equity.

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 Honda Atlas Cars (Pakistan) Limited
Introduction:

Honda Atlas Cars (Pakistan) Limited is a public company limited by shares incorporated in
Pakistan on November 4, 1992 under the repealed Companies Ordinance, 1984 (now, the
Companies Act, 2017). It is a subsidiary of Honda Motor Co., Ltd., Japan. The Company’s
principal activities are assembling and progressive manufacturing and sale of Honda
vehicles and spare parts.

Honda Atlas Cars Pakistan is a Pakistani automobile manufacturer which is a subsidiary of

Japanese car maker Honda. Founded in 1992, as a joint venture between Honda Motor and
Atlas Group, based in Lahore, Pakistan. The company stock is traded on the Pakistan Stock
Exchange.

Threats to Honda Atlas Cars (Pakistan) Limited:

 Price wars

 Substitutes services

 Instability in government policies

 Foreign brands entering in Pakistan’s market.

Competitors to Honda Atlas Cars (Pakistan) Limited:

 Toyota Pakistan

 Pak Suzuki

 BMW Pakistan

 Nissan Pakistan

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 Products of Honda Atlas Cars (Pakistan) Limited:

 Cars

 BR-V

 HR-V

 CR-V

 Accord

 Civic

 City

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 Ratio analysis of Honda Atlas Cars (Pakistan) Limited

2022 2021 2020 2019 2018

1.5456626 1.7962145 2.50792504
Current Ratio 1.289882343 2 2 7 1.29243189
1.0222088 1.87696930
Quick Ratio   1.0506285 6 6 1.08981686
Liability to asset 0.5970308 0.4800153 0.23561937
ratio 0.715914331 5 7 8 0.70967784
0.4029691 0.5199846 0.76438062
Equity to asset ratio 0.284085669 5 3 2 0.29032216
4.5827442 5.7588708 4.30881175
DSO 3.306273285 5 5 6 0.36866156
0.5670817 0.3888546 0.22805566
Debt ratio 0.687843644 1 4 6 0.70043394
8.2100515 10.505719 16.3871186
Fixed asset turnover 9.869561174 3 9 6 16.4419158
0.5635072
Time interest earned -8.807452077 -5.8661318 9 -2.90597909 -44.1044487
1.9439457 1.9256766 1.92321869
Gross profit margin 1.948378343 4 6 7 1.88583078
0.0123850 0.04048336
Net profit margin 0.023229578 0.0266203 7 2 0.07095986
Operating profit 0.0101155 0.00034180
margin 0.009448656 1 -0.0074468 2 0.00697592
0.0150902 0.00052928
Basic earning power 0.014529785 6 -0.0128736 6 0.01085647
0.0397120 0.0214105 0.06268917
Return on asset 0.035721564 1 9 1 0.11043334
0.0985485 0.0411754 0.21848238
Return on equity 0.125742226 2 3 7 0.38038206
1.4917942 1.7287414 1.54851690
Total assets turnover 1.537762068 6 6 2 1.55627907
Inventory turnover -4.507545181 -5.4062873 -4.4551102 -10.0350302 -9.80105326

Current ratio in 2018 is 1.29 which means that the company can pay for its current liabilities
1.29 times over and it has gotten little better till 2021.

the quick ratio is decreasing and is not better in 2021 than in 2018. The firm's
liquidity is getting a little worse. 

In 2018, inventory turnover ratio is -9.80 this means that this company completely sells
20
and replaces its inventory 9.8 times every year. In 2022, the inventory turnover
ratio is 4.5X. The firm's inventory turnover is decreasing. This is not good in that
they are selling less products. 

A business firm does not want to have either too little or too much plant and
equipment. For this firm for 2018 FATO is 16.44 and in 2022 it is 9.86 which means
They are using their plant and equipment efficiently to generate sales.

Total asset turnover is more than 1 in all five years which shows very efficient
sale.

Net profit margin in 2018 is 7% but it decreased until 2022.

The decreased return on assets from 2020 onwards reflects the decreased sales
and lower net income for that year.

One reason for the increased return on equity in 2022 as compared to 2021 and
2020 was the increase in net income.

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 Indus Motor Company Limited

Introduction:

Indus Motor Company Limited was incorporated in Pakistan as a public limited company in
December 1989 and started commercial production in May 1993. The Company was formed
in accordance with the terms of a Joint Venture agreement concluded amongst certain
House of Habib companies, Toyota Motor Corporation and Toyota Tsusho Corporation for
the purposes of assembling, progressive manufacturing and marketing of Toyota vehicles.
The Company also acts as the sole distributor of Toyota and Daihatsu vehicles in Pakistan
and has a license for assembling, progressive manufacturing and marketing of these vehicles
in Pakistan.

Threats to Indus Motor Company Limited:

 Production issues

 Falling foreign exchange reserves

 Exchange rate crisis

 Political uncertainty

Competitors to Indus Motor Company Limited:

 Pak Suzuki

 Honda Atlas cars

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  Mater Changan motors

Products of Indus Motor Company Limited:

 Cars

 Sedan

 SUVs

 Crossover

Ratio Analysis of Indus Motor Company Limited

2022 2021 2020 2019 2018

Current asset 1.1907528 1.3502004 1.6470031 2.10341 1.650645
Quick ratio 1.0218588 1.0829057 1.222128 1.520073 1.397058
DSO 4.0946882 1.0535474 4.8362417 5.886147 3.797645
Debt ratio 0.2524291 0.2305952 0.1752997 0.247453 0.192015
Fixed asset turnover 11.559474 9.3341348 5.1716732 11.34617 18.92154
Liability to asset ratio 0.7475709 0.6400346 0.4871683 0.381855 0.551499
Equity to asset ratio 0.2524291 0.3599654 0.5128317 0.618145 0.448501
Time interest earned 1.6305479 23.658703 35.582082 45.22707 37.37108
Gross profit margin 1.9331975 1.9070465 1.91353 1.878531 1.829048
Net profit margin 0.0573558 0.0716034 0.0589788 0.086806 0.112886
Operating profit
margin -0.0006765 -0.0176382 -0.035405 -0.03538 -0.02148
Basic earning power -0.000871 -0.0235994 -0.038001 -0.047059 -0.03663
Return on asset 0.0738524 0.0958031 0.0633049 0.211706 0.192511
Return on equity 0.2925668 0.2661453 0.1234419 0.342486 0.429232
Total assets turnover 1.2876186 1.3379682 1.0733502 2.438851 1.705364
Inventory turnover -9.4095831 -7.0202008 -4.625641 -9.69297 -9.94927

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Current ratio in 2018 is 1.65 which means that the company can pay for its current liabilities
1.65 times over and it has gotten little better till 2019.

the quick ratio is decreasing and is not better in 2021 and 2022 than in 2018. The firm's
liquidity is getting a little worse. 

In 2018, inventory turnover ratio is -9.94 this means that this company completely sells and
replaces its inventory 9.94 times every year. In 2022, the inventory turnover ratio is -9.4.
The firm's inventory turnover is decreasing. This is not good in that they are selling less
products. 

A business firm does not want to have either too little or too much plant and equipment. For
this firm for 2018 FATO is 18.92 and in 2022 it is 11.55 which means they are using their
plant and equipment efficiently to generate sales.

Total asset turnover is more than 1 in all five years which shows very efficient sale.

Net profit margin in 2018 is 11% but it decreased until 2022.

The decreased return on assets from 2020 onwards reflects the decreased sales and lower net
income for that year.

One reason for the increased return on equity in 2022 as compared to 2021 and 2020 was
the increase in net income.

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Sazgar Engineering Works Limited:

Introduction:

Sazgar Engineering Works Limited was incorporated in Pakistan on September

21, 1991 as a Private Limited Company and converted into a Public Limited
Company on November 21,1994. The Company is engaged in the manufacture
and sale of automobiles, automotive parts and household electric appliances

It provides motor cab rickshaw under the Sazgar Minicab brand name; three-wheel loader
under the Sazgar Tempo brand name; and tractor wheel rims. The company also offers
washers, dryers, and vacuum cleaners under the MAYTAG brand name. It provides the
motor cab rickshaws to general customers through distributor and dealers network. The
company was incorporated in 1991 and is based in Lahore, Pakistan.

Threats to Sazgar Engineering Works Limited:

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  Inflation

 Government policies

 Political instability

 Other competitors joining the market

 Price wars

Competitors to Sazgar Engineering Works Limited:

 Agriauto Industries

 Exide Pakistan.

 Atlas Battery

 Baluchistan Wheels

Products of Sazgar Engineering Works Limited:

 3 -Wheeler

 4-Wheeler

 eVe

 Tractor wheel rims

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 Ratio Analysis of Sazgar Engineering Works Limited:

2022 2021 2020 2019 2018

Current asset 0.97116755 1.19939348 2.4697895 1.70007108 1.790030613
Quick ratio 0.36640324 0.83802397 1.3357111 0.53219755 0.80706443
DSO 6.53279172 10.5804091 15.474342 13.1103689 8.978552706
Debt ratio 0.53193991 0.49451867 0.2350843 0.36412012 0.302094809
Fixed asset turnover 3.52946014 2.08698588 2.1091028 3.13573096 5.436406082
Liability to asset ratio 0.6545406 0.60503287 0.3727474 0.46993889 0.40420293
Equity to asset ratio 0.3454594 0.39496713 0.6272526 0.53006111 0.59579707
Time interest earned 5.88979613 5.9316502 1.6364757 5.6040209 53.02025712
Gross profit margin 0.06636525 0.09091719 0.1013275 0.10275591 0.11211909
Net profit margin 0.01172752 0.01879098 0.009556 0.02547664 0.0468737
Operating profit
margin 0.0315811 0.0311547 0.0362531 0.04229806 0.065413357
Basic earning power 0.05610395 0.02697706 0.0371734 0.06907303 0.16154107
Return on asset 0.02083399 0.01627124 0.0097985 0.04160353 0.115756598
Return on equity 0.06030808 0.04119643 0.0156214 0.07848817 0.194288633
Total assets turnover 1.77650422 0.86590662 1.025383 1.63300708 2.469542588
Inventory turnover -5.2778308 -4.43885537 -3.876679 -4.4200173 -7.27489456
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Current ratio in 2018 is 1.79 which means that the company can pay for its current liabilities
1.79 times over and it has gotten little better in 2020.

the quick ratio is decreasing and is not better in 2020 and 2022 than in 2018. The
firm's liquidity is getting a little worse. 

In 2018, inventory turnover ratio is -7.27 this means that this company completely sells
and replaces its inventory -7.27 times every year. In 2022, the inventory turnover
ratio is -5.27. The firm's inventory turnover is decreasing. This is not good in that
they are selling less products. 

A business firm does not want to have either too little or too much plant and
equipment. For this firm for 2018 FATO is 5.43 and in 2022 it is 3.52 which means
they are using their plant and equipment efficiently to generate sales.

Total asset turnover is more than 1 in all years except 2021 which shows very
efficient sale.

Net profit margin in 2018 is 4% but it decreased until 2022.

The increased return on assets from 2020 onwards reflects the increased sales and
higher net income for that year.

One reason for the increased return on equity in 2022 as compared to 2021 and
2020 was the increase in net income.

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