THE

AUTOMOBILE
INDUSTRY
A Financial Analysis
2017-2021

Group Members:
Leena Salman
Masooma Hashim
Hafsa Akhter
 OUTLINE
01 Introduction

02 Liquidity Ratios

03 Profitability Ratios

04 Solvency Ratios

05 Efficiency Ratios

06 Conclusion
 INDUS
MOTORS
COMPANY
LTD
 INTRODUCTION
• Indus Motor Company Ltd. (IMC) is a joint venture between the House
o f H a b i b , To y o t a M o t o r C o r p o r a t i o n , a n d To y o t a Ts u s h o
Corporation.

• I M C i n P a k i s t a n i s t h e e x c l u s i v e m a n u f a c t u re r, a s s e m b l e r, a n d
d i s t r i b u t o r o f To y o t a v e h i c l e s .

• P o p u l a r m o d e l s i n c l u d e To y o t a C o ro l l a , C a m r y, F o r t u n e r, H i l u x , a n d
Ya r i s .
 LIQUIDITY RATIOS

A f t e r e v a l u a t i n g I M C ’s f i n a n c i a l s t a t e m e n t s , i t i s e v i d e n t t h a t t h e
c o m p a n y i s i n a s t ro n g l i q u i d i t y p o s i t i o n .

CURRENT RATIO QUICK RATIO

All their ratios are above 1, I M C ’s r a t i o s i n d i c a t e i t s a b i l i t y t o

indicating a strong likelihood of p a y o f f i t s c u r re n t l i a b i l i t i e s
b e i n g a p p ro v e d f o r c re d i t . several times over.
Current Ratio

Quick Ratio
PROFITABILITY RATIOS

IMC can earn profits on a consistent basis.

ROE ROA NET PROFIT GROSS PROFIT

MARGIN MARGIN
IMC is effective in The entrance of
The company can IMC was able to
generating profit from economies of scale in
increase its profits generate profit from its
existing assets, the automobile
with each investment sales. While covering its
streamlining its industry, reduced
rupee that it spends. operating costs without
processes. production costs. any problems.
Return on Equity (ROE)

Return on Assets (ROA)

Gross Profit Margin

Net Profit Margin

SOLVENCY RATIOS

The company is an attractive option for

investors.

Debt-to-Equity Ratio
IMC’s debt to equity ratio was lower than the industry average for
FY2019-2021, indicating that their debts are manageable and tightly
controlled. It’s safe to say that the company will not default on its
lenders.
Debt-to-Equity
Ratio
 EFFICIENCY RATIOS

T h e c o m p a n y c a n o p t i m a l l y u t i l i z e i t s re s o u rc e s t o m a k e p ro f i t a n d
i n c re a s e e f f i c i e n c y o f o p e r a t i o n s .

ASSET TURNOVER INVENTORY TURNOVER

RATIO RATIO
This ratio is low, because of long- The company restocks its inventory every
term loans. Also, all the company’s 3 months and has a healthy balanced
assets are being utilized. inventory management system.
Asset Turnover Ratio

Inventory Turnover Ratio

 CONCLUSION
• Indus Motor Company Ltd, has a strong financial position in the automobile
industry. It generates a sizeable profit consistently.
• The company has high liquidity and has doubled short term investments.
• The total assets of the company have also increased by 80% and a rise is seen
in inventory due to an increase in customer demand.
• Overall, the company has experienced growth after recovering from
COVID-19, as evidenced by the major ratios of the company remaining strong.
 PAK
SUZUKI
MOTORS
COMPANY
INTRODUCTION
Pak Suzuki M otor Company Limited is a leading automobile
manufacturing company in Pakistan. The company produces a
wide r ange of vehicles, including cars, vans, pickups, and
motorcycles. The company has a strong market presence in
Pakistan, with a distribution network that spans across the
country
OBJECTIVES
• List of objectives for the financial analysis:

• Analyze Pak Suzuki's financial performance over the last five

years.
• Compare Pak Suzuki's financial ratios with industry averages.
• Assess Pak Suzuki's solvency and liquidity ratios
• Evaluate Pak Suzuki's profitability ratios
• Conduct a SWOT analysis of Pak Suzuki's position in the
market.
• Provide recommendations for improving financial
performance.
COMPANY
OVERVIEW
Brief description of Pak Suzuki:
Provide an overview of Pak Suzuki, highlighting its history,
industry position, and market share.

Key products and services offered :

Mention the range of automobiles and services offered by
Pak Suzuki.

Market presence and competitive position:

Discuss Pak Suzuki's market presence, its competitors,
and any significant Market developments.
 LIQUIDITY
RATIOS
CURRENT
RATIO
Pak Suzuki's current ratio has
remained relatively stable over
the last five years, ranging
from 1.5 to 1.9. This indicates
that the company has sufficient
current assets to cover its
short-term liabilities.
QUICK RATIO
Pak Suzuki, the quick ratio has
been decreasing over the last
free years, ranging from 0.5 to
0.8 This indicates that the
company may be relying more
on inventory to meet its short-
term obligations
LIQUIDITY RATIOS
 Pak Suzuk operates in a highly competitive and
cyclical industry,the company is becoming more
profitability ratios efficient in its operations and generating
improved profitability over time.

ROA GROSS PROFIT NET PROFIT

ROE MARGIN
MARGIN
A higher ROE indicates that the ROA measures how efficiently a The company has been able to A higher net profit margin
company is using its assets to generate maintain a healthy gross profit
company is generating more indicates that the company is
profits. A higher ROA indicates that
profit for every rupee of margin, indicating that it has operating efficiently and is able
the company is generating more profit
shareholder's equity invested in been able to generate profits from to generate higher profits from its
for every rupee invested in assets.
the company its core business operations. sales.
 SOLVENCY
RATIOS
The interest coverage ratio has also
been increasing over the last five years,
indicating that the company is
generating sufficient operating income DEBT TO EQUITY RATIO

to cover its interest expenses. Pak SUZUKI's debt to equity

ratio has shown a declining
trend over the past five years.
indicating that the company has
been reducing its reliance on
debt financing and improving
its financial leverage
solvency ratios
 EFFICIENCY
RATIOS
ASSET INVENTORY
TURNOVER TURNOVER
Pak
RATIO
Suzuki's asset turnover ratio RATIO
The inventory turnover ratio has
has been steadily increasing over fluctuated slightly over the same period,
the last five years, which indicates but remains relatively high, indicating
that the company is becoming more that Pak Suzuka is managing its
efficient in using its assets to inventory efficiently.
generate revenue
CONCLUSION
• Steady revenue growth indicates a strong market presence and demand for Pak
Suzuki's products.
• Focus on enhancing solvency ratios to ensure a healthy financial position.
• Seek collaborations and partnerships to enhance technological capabilities and
product offerings.
• Stay vigilant of economic and political conditions while adapting to government
policies and regulations.
• By leveraging strengths, addressing weaknesses, and capitalizing on opportunities,
Pak Suzuki can strengthen its competitive position and drive long-term profitability..
 ATLAS
HONDA
COMPANY
 LIQUIDITY
RATIOS
Honda Atlas Cars has improved its ability to pay short-term debts and has
higher liquidity than the industry average.
 LIQUIDITY
RATIOS
Honda Atlas Cars has improved its ability to pay short-term debts and has
higher liquidity than the industry average.
 PROFITABILI
TY RATIOS

Honda Atlas Cars' profitability has fluctuated, with lower

returns on equity (ROE) in 2021 and higher returns on
assets (ROA) in 2017. The company's gross and net profit
margins are lower compared to the industry average.
PROFITABIL
ITY RATIOS
SOLVENCY RATIOS
Honda Atlas Cars relies more on its own funds and has less debt, which
reduces financial risk.
 EFFICIENCY
RATIOS
Honda Atlas Cars efficiently generates revenue from its assets and
manages inventory well compared to industry peers.
CONCLUSION
Honda Atlas Cars has had inconsistent revenue growth but
improved liquidity and efficiency. Profitability ratios fluctuated
with lower returns on equity and varying profit margins. The
company maintains a strong solvency position with lower debt
and is focused on improving financial performance.
THANK
YOU