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Financial statements analysis projectAlas Honda & Suzuki MotorsSubmitted to: Dr. Aamir InamGroup members Sikander Ali, Zeeshan Abid Abdullah Bashir Abu BakerRoll no: 21584 21587 21591 21569Program BBA (HONS)Session 2017-Section Finance (A) MorningLyallpur business schoolGovernment College Univer...

Description

Financial statements analysis project Alas Honda & Suzuki Motors

Submitted to:

Dr. Aamir Inam

Group members

Sikander Ali,

Zeeshan Abid

Abdullah Bashir

Roll no:

21584

21587

21591

Program

BBA (HONS)

Session

2017-2021

Section

Finance (A) Morning

Abu Baker 21569

Lyallpur business school

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Government College University Faisalabad

Table of Contents EXECUTIVE SUMMARY.......................................................................................3 SELECTION OF COMPANIES...............................................................................3 Research questions....................................................................................................3 Objective of this project............................................................................................4 Introduction of ATLAS Honda..................................................................................5 MISSION STATEMENTS.....................................................................................5 MISSION STATEMENTS.....................................................................................5 INTRODUCTION OF SUZUKI MOTORS.............................................................6 1. VISSION STATEMENT:.................................................................................6 2. MISSION STATEMENT:................................................................................6 PRODUCTS OF ATLAS HONDA...........................................................................7 PRODUCTS OF SUZUKI........................................................................................8 CODE OF CONDUCT OF BOTH ORGANISATIONS...........................................8 CORPORATE SOCIAL RESPONSIBILITY...........................................................9 BALANCE SHEETS OF ATLAS HONDA............................................................11 Vertical Analysis Balance Sheet...........................................................................12 Balance Sheet Horizontal Analysis......................................................................14 BALANCE SHEETS OF SUZUKI MOTOR.........................................................16 Vertical Analysis Of Balance Sheet(%)................................................................18 Horizontal Analysis Of Balance Sheet(%)...........................................................20 2019......................................................................................................................20 INCOME STATEMENTS OF HONDA..................................................................25 Vertical analysis (Honda).....................................................................................26 Horizontal analysis (Honda).................................................................................28 INCOME STATEMENTS OF SUZUKI MOTOR..................................................29 Vertical analysis (Suzuki motors).........................................................................31

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Horizontal analysis (Suzuki motors)....................................................................33

CASH FLOW STATEMENTS OF HONDA..........................................................37 Vertical Analysis Cash Flow Statement...............................................................38 Horizontal Analysis Cash Flow Statement...........................................................41 LEVERAGE ANALYSISOF ATLAS HONDA......................................................42 LEVERAGE ANALYSIS OF SUZUKI MOTOR...................................................44 LIQUIDITY ANALYSIS OF HONDA...................................................................46 LIQUIDITY ANALYSIS OF SAZUKI MOTOR...................................................47 EFFICIENCY ANALYSIS OF HONDA................................................................48 EFFICIENCY ANALYSIS OF SAZUKI MOTOR.................................................50 PROFITABILITY ANALYSIS OF HONDA..........................................................52 PROFITABILITY ANALYSIS OF SAZUKI MOTOR..........................................53 CASH FLOW ANALYSIS OF HONDA................................................................55 CASH FLOW ANALYSIS OF SAZUKI MOTOR.................................................56 Results and discussion.............................................................................................58 Conclusion...............................................................................................................60

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REFERENCE & SOURCE USED..........................................................................61

EXECUTIVE SUMMARY This project is very informative for all group members because in this project we conduct financial statements analysis of both organisations and then compare the analysis of both. Our chosen organisations are ( Atlas Honda and Suzuki Motors ). In this project we also learn about that how we make a report or project like professionals. We learn that both companies ( Atlas Honda or Suzuki Motors ) play a very vital role in developing of country and both companies also invest in many sectors of Pakistan. These two companies are very respectable in all business communities because they never compromise on their ethics or moral values. And these companies also respect the all cultures or societies because Pakistan have a ethnic and cultural diversity or these companies products are mostly used in every house in Pakistan because bike is a need of every house or family of Pakistan because Pakistan have a no good local transportation system.

SELECTION OF COMPANIES We select these companies because this sector are one of those active sectors that have create a more jobs or opportunities directly or indirectly and thousands of peoples are working with these organisations. And we also choose these organizations because when we conduct the comparison then the situations are clear for us, because almost everyone is attached these organizations products. And when we do the financial statements analysis at this time we clearly conduct our conclusion that which one is better performing then other.

Research questions The following research questions are to be answered from this this project:  What about the financial performance of these industry over the past

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three years?

 Are liquidity and profitability of selected firms improving or turning down?  How efficiently these firms are performing their operations?  What is the level of leverage of these firms?  Is there any signal of insolvency or the firms are in strong solvency position?  What is the future trend of these firms? Are they showing growth or vice versa?  What are key performance indicators of the industry? How these helpful in determining firms’ performance?

Objective of this project After successfully analysing and selecting the topic of this project, the following research objectives have been derived from it:  Analysis about financial performance of both companies for the past three years.  analysis of financial statement and conclusions about financial performance of these companies.  To analysis future growth and trend of the industry and of these companies.  Check the firms performance over past three years is improving or going to

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turn down for certain internal and external environment.



Examine different performance indicators that are key success factors for these firms as well as for industry.

Introduction of ATLAS Honda 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 requested motorcycle brand in the world and atlas group one of Pakistan most renowned business conglomerates the company is principally engaged in progressive manufacturing and making 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’s industry in the country and has been leading two wheeler market successfully for over 50year. The company currently has the production capacity of over 1.35million unites per annum and continues to maintain its status as market leader in both term of value and quality. It also exports its motorcycles and spare parts to Bangladesh and Afghanistan. MISSION STATEMENTS

“Market leader in the motorcycles industry emerging as a global competitive center of the production and exports” MISSION STATEMENTS

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“A dynamic growth oriented company through market leadership excellence in quality and service and maximizing exports ensuring attractive return to quality holders rewarding associates according to their ability and performance festering a network of engineers and the development of the industry customer satisfaction and protection of the environment by producing emission friendly green products as a corporate citizen fulfilling its social responsibilities in all respect.”

INTRODUCTION OF SUZUKI MOTORS In this project we only discuss or take a information about Suzuki Motor Cycles. Pak Suzuki Motor Company Limited (PSMCL) is public limited company with its shares quoted on stock exchange in Pakistan. The company was formed in August 1983 (Started commercial operations in January 1984) in accordance with the terms of a joint venture agreement between Pakistan Automobile Corporation Limited (representing Government of Pakistan) and Suzuki Motor Corporation Japan (SMC). Pak Suzuki Motor Co. Limited is located in Karachi, Pakistan and is part of the Automobile manufacturing industry. Pak Suzuki Motor Co. Limited has 1964 total employees across all of its locations and generates $ 447.42 million in sales. Suzuki originally owned 25% of the stock, and gradually increased their holding, they now own 73.09%. Pak-Suzuki was a joint venture between the semigovernmental Pakistan Automobile Corporation (PACO), Pak Suzuki is the market leader in Pakistan Automobile Market by having more than 60% (as of December 2011) of market share. 1. VISSION STATEMENT:  “To be recognized as a leading organization that values customer’s needs and provides strong customer care”. 2. MISSION STATEMENT:  “Strive to market value packed vehicle that meet customer’s expectation.  Provide a platform where our stakeholders passionately contribute, invest and excel.  Make valuable contribution to social development of Pakistan”.

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PRODUCTS OF ATLAS HONDA

1. Honda 70 The Honda (later rebadged as the Honda CD70) is a four stroke motorcycles produced by Honda of japan from 1970 to 1991. Production moved to Atlas Honda of Pakistan in 1991.introduced to company against two stroke small capacity motorcycles the Honda 70 had a four stroke engine with an displacement of 72cc. models from 1970 to 1983 were called the Honda 70 with a honda70 logo on the side covers. The Honda 70 had a rectangular speedometer with gear range marking and a maximum calibration of 60mph (97km/h) the claimed top speed was 58mph the engine was constantly upgraded and modified. It had a variety of changing logo stickers and in 2012, there were changes in the shape of engine carburetor and rear indicator which were moved lower near the rear light.

2. Honda 125 The Honda cg125 or Honda cg is a commuter motorcycles made by gonad japan.it was in production from 1976 to 2008 in japan and has been in production since 1992 in Pakistan the cg was originally manufactured in japan, but the source for the European market was eventually moved to brazil in 1985 and to Pakistan. In Pakistan the original cg125 is still being produced by atlas Honda ltd. Except for new cosmetic changes, the Pakistani version has remained exactly the same as the original 1980s Japanese cg125 over the past years. Other variant cg dream and cg125 deluxe with the some extra feature such as a Se model has a 5-speed and electric stat. it is one of the few motorcycles offered by Honda in Pakistan.

PRODUCTS OF SUZUKI 1. Suzuki GD- 110s

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GD 110 is a 110cc bike with EURO 2 engine technology with electric start. Currently being imported from China in CKD Forum. Fuel average is 44 km/l

price is near RS. 131000 but spare parts are very expensive. Self starter ( deluxe model of GD-110) self start and alloy rim. This is basic difference 110 and 110s having sporty headlights surrounding by fairing and considered as one of the best daily commute bike in Pakistan.

2. Suzuki GS- 150/ 150SE

GS 150 150cc bike most powerful engined bike manufactured locally with electric start system. It is one of the most selling bike in Pakistan. System

CODE OF CONDUCT OF BOTH ORGANISATIONS Pak Suzuki Motor Company Limited conducts its business fairly, in an ethical and proper manner, fully compliant with all applicable laws and regulations. The highest standards of ethical business conduct and integrity are required of Pak Suzuki employees in the performance of their official responsibilities. Employees will not engage in any conduct or activity that may raise questions as to the Company’s honesty, reputation or otherwise cause embarrassment to the Company.

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Atlas Honda give a priority to fair business and competition. Atlas Honda always give a priority to moral values and ethics. Atlas Honda always trained their employees that they work as team or they engaged with customers in very respectively or professional way. Atlas Honda always ensure that their performance is best in all situations or conditions. Or the employees of company never engage in any activity that raise the question on Company performance or reputation that is why atlas never faced any allegations.

CORPORATE SOCIAL RESPONSIBILITY Pak Suzuki, acting as a responsible corporate organization, is committed to the well-being of society through its contribution in the field of education, health, promoting environmental care in particular and to improve quality of life of underprivileged people as a whole.

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Atlas Honda always engage with society with very best way and they also held many programmes that are related with awareness of society and Honda always ensure that with their work environment never effect and they always follow the process or become a part of clean or green Pakistan.

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VERTICAL AND HORIZONTAL ANALYSIS BALANCE SHEETS OF ATLAS HONDA Balance Sheets 2018

2019

2020

Assets

Liabilities non currents Equity and Liabilities Compensated absences Share capital Deferred taxation Reserve

7976101 44905 2018 324899 31481 22573 25.06% 8399959 0.14% 1.02% 650160 0.10% 2599530 0.07% 861224 26.39% 40107 137663 2.04% 15557 8.17% 15528 2.71% 725750 0.13% 8400246 0.43% 9981615 0.05% 23427380 0.05% 31827339 2.28% 26.39% 31.36% 1034066 73.61% 14966655 100.00% 16000721

8950633 10041495 168924 135121 2019 2020 323497 322240 334467 36671 13882 13025 28.01% 32.33% 9490403 10548552 0.53% 0.44% 1.01% 1.04% 725754 683123 1.05% 0.12% 5069836 4888616 0.04% 0.04% 1116000 33.96% 813980 29.70% 43794 42752 1007128 686517 2.27% 2.20% 37614 22392 15.87% 15.74% 573080 329021 3.49% 2.62% 1149424 1487667 0.14% 0.14% 5261724 5248268 3.15% 2.21% 7480159 6308616 0.12% 0.07% 22464513 20510952 1.79% 1.06% 31954916 31059504 3.60% 4.79% 16.47% 16.90% 23.41% 20.31% 1034066 1240879 70.30% 66.04% 14331698 15339529 100.00% 100.00% 15365764 16580408

Current liabilities Liabilities non currents Trade and other payables Compensated absences Total liabilities Deferred taxation

262882 3.25% 698042 47.02% 960924 50.27%

296409 3.24% 700024 44.85% 996433 48.09%

209148 4.00% 342594 49.39% 1155942 53.38%

14865694 0.83% 15826618 2.19%

15500137 0.93% 16589152 2.19%

13323154 0.67% 14479096 1.10%

Total equity and liabilities Current liabilities Trade and other payables

3.02% 31827339 46.71%

3.12% 31954916 48.51%

3.72% 31059504 42.90% 2 1

Vertical Analysis Non-current assetsBalance Sheet Property, plant and equipment Intangible assets Long Assetsterm investments Long term loans and advances Non-current assets Long term deposits Property, plant and equipment Intangible assets Current Long termassets investments Stores, spare andand loose tools Long term loans advances Stock in trade Long term deposits Trade debts Loans andassets advances Current Trade deposits and prepayments Stores, spare and loose tools Accrued mark up interest Stock in trade other receivable Trade debts Taxation-net Loans and advances Short term investments Trade deposits and prepayments Bank balance Accrued mark up interest other receivable Total assets Taxation-net Short term investments Equity and Liabilities Bank balance Share capital Reserve Total assets

Total equity and liabilities

49.73%

51.91%

46.62%

100.00%

100.00%

100.00%

80 70 60 50 NON CURRENT ASSETS CURRENT ASSETS LIABILITIES OWNER EQUITY

40 30 20 10 0 2018

2019

2020

INTERPRETATION

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Net liquid assets computed by deducting current liabilities form current assets. Positive working capital means that the company is able to pay off its short term liabilities. Negative working capital means that accompany currently is unable to meet its short term liabilities with its current assets. Currents assets are increased from 2016 to 2019 and decrease in 2020 and liabilities side are much similar with current assets means atlas Honda operations are stable.

Balance Sheet Horizontal Analysis 2018

2019

2020

37.10% 734.82% 32.34% 12.32% 51.12% 37.44%

53.85% 3040.44% 31.77% 1093.37% -7.06% 55.29%

72.60% 2412.01% 31.25% 30.84% -12.80% 72.60%

32.84% 39.50% 41.55% 11.79% 112.54% -7.63% 216.25% 33.87% 42.95% 109.92% 64.32% 56.25%

48.29% 172.06% 83.43% 22.07% 1454.93% 123.33% 112.02% -10.46% 57.31% 57.56% 56.88%

39.58% 162.34% 33.79% 19.16% 959.93% 32.95% 6601.04% 174.42% -10.69% 32.67% 43.86% 52.48%

0.00% 50.15% 45.43%

0.00% 43.78% 39.66%

20.00% 53.89% 50.70%

22.49% 23.17% 22.98%

38.11% 23.52% 27.52%

-2.55% -39.55% 47.94%

73.15% 68.96%

80.54% 77.11%

55.18% 54.58%

56.25%

56.88%

52.48%

Non-current assets Property, plant And equipment Intangible assets Long term investments Long term loans and advances Long term deposits Current assets Stores, spare and loose tools Stock in trade Trade debts Loans and advances Trade deposits and prepayments Accrued mark up interest other receivable Taxation-net Short term investments Bank balance Total assets Equity and Liabilities Share capital Reserve Liabilities non currents Compensated absences Deferred taxation Current liabilities Trade and other payables

Total equity and liabilities

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Assets

BALANCE SHEETS OF SUZUKI MOTOR

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Balance Sheets

2018

2019

2020

1565482 7 113297 329274 4203 456208 118318 1151888

1568585 0 345419 144959 325925 3500 378019 271873 2359062

1303860 1 246357 123864 278160 5152 465068 486490 6342840

1782801 5

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