Altus Honda Cars Pakistan Limited

2010

Income Statement
Rs (000) Sale Cost of goods sold Gross Profit/Loss Distribution & Marketing Cost Admin Exp Other operating income Other operating Exp Profit/Loss from Operation Finance Cost Profit/Loss before Tax Taxation Profit/Loss after tax 2009-10 15854142 16093687 -239545 -124916 -136131 26368 -58628 -532852 -455128 -987980 135780 -852200 2010-11 22026109 21826799 199310 -139185 -171729 83977 -64945 -92572 -152255 -244827 -53625 -298452 Vertical Analysis 2009-10 Sale Cost of goods sold Gross Profit/Loss Distribution & Marketing Cost Admin Exp Other operating income Other operating Exp Profit/Loss from Operation Finance Cost Profit/Loss before Tax Taxation Profit/Loss after tax 100 101.51 -1.51 -0.79 -0.86 0.17 -0.37 -3.36 -2.87 -6.23 0.86 -5.38 2010-11 100 99.10 0.90 -0.63 -0.78 0.38 -0.29 -0.42 -0.69 -1.11 -0.24 -1.35 2011-12 100 100.27 -0.27 -0.79 -0.96 1.23 -1.31 -2.09 -0.92 -3.00 -0.20 -3.21 2011-12 16599608 16643607 -43999 -130550 -158943 204456 -217842 -346878 -151926 -498804 -33409 -532213

Altus Honda Cars Pakistan Limited

Horizontal Analysis 2009-10 Sale Cost of goods sold Gross Profit/Loss Distribution & Marketing Cost Admin Exp Other operating income Other operating Exp Profit/Loss from Operation Finance Cost Profit/Loss before Tax Taxation Profit/Loss after tax Profit/Loss Per share 100 100 100 100 100 100 100 100 100 100 100 100 100 2010-11 138.93 135.62 -83.20 111.42 126.15 318.48 110.77 17.37 33.45 24.78 -39.49 35.02 35.02

2010

2011-12 104.70 103.42 18.37 104.51 116.76 775.39 371.57 65.10 33.38 50.49 -24.61 62.45 62.45

Balance Sheet
Equities & Liabilities Share Capital & Reserves Authorized Capital issued Capital Reserves Accumulated loss/profit Total Equities Non-current liabilities Long -term finance- Secured Total non-Current Liabilities 1333333 416667 83333 1428000 1401500 -853855 1975645 1428000 548500 -299307 1677193 1428000 249500 -532520 1144980 2009-10 2010-11 2011-12

Altus Honda Cars Pakistan Limited

Current Liabilities Current portion of long term finance Short term Borrowing- Secured Mark-up accrued on borrowing Trade and Other Payables Total Current Liabilities Total Equities & Liabilities 37400 5448222 5652289 8961267 4302 8058598 8479567 10573427 166667 416667

2010

83334 65496 8102678 8251508 9479821

Assets Non-Current Assets Property, Plant & Equipment Intangible Assets Capital work in process Long term Loans and Advances Long Term Deposits Differed Taxation Total Non-current Assets Current Assets Stores And Spares Stock in trade Trade debts Advances,payments,other Receivables Cash And Bank Balance Total Current Assets Total Assets 994229 82046 3526804 8961267 1245786 868741 5663620 10573427 1581062 82477 4629201 9479821 121368 2329161 106039 3443054 112139 2853523 4445810 125988 21813 33896 4042 802914 5434463 3847016 87023 11448 33532 4042 926746 4909807 3255755 56366 355812 33855 4042 1144790 4850620

Altus Honda Cars Pakistan Limited

2010 Vertical Analysis

2009-10 2010-11 2011-12

Equities & Liabilities Share Capital & Reserves Authorized Capital issued Capital Reserves Accumulated loss/profit Total Equities Non-current liabilities Long -term finance- Secured Total non-Current Liabilities Current Liabilities Current portion of long term finance Short term Borrowing- Secured Mark-up accrued on borrowing Trade and Other Payables Total Current Liabilities Total Equities & Liabilities 15.94 15.64 -9.53 22.05 0.00 14.88 0.00 0.00 1.86 0 0.42 60.80 63.07 100 13.51 5.19 -2.83 15.86 0.00 3.94 0.00 0.00 3.94 0 0.04 76.22 80.20 100 15.06 2.63 -5.62 12.08 0.00 0.88 0.00 0.00 0.88 0 0.69 85.47 87.04 100

Assets Non-Current Assets Property, Plant & Equipment Intangible Assets Capital work in process Long term Loans and Advances Long Term Deposits Differed Taxation Total Non-current Assets Current Assets Stores And Spares 49.61 1.41 0.24 0.38 0.05 8.96 60.64 0.00 1.35 36.38 0.82 0.11 0.32 0.04 8.76 46.44 0.00 1.00 34.34 0.59 3.75 0.36 0.04 12.08 51.17 0.00 1.18

Altus Honda Cars Pakistan Limited

Stock in trade Trade debts Advances,payments,other Receivables Cash And Bank Balance Total Current Assets Total Assets

2010
25.99 0.00 11.09 0.92 39.36 100 32.56 0.00 11.78 8.22 53.56 100 30.10 0.00 16.68 0.87 48.83 100

Horizontal Analysis
2009-10 Equities & Liabilities Share Capital & Reserves Authorized Capital issued Capital Reserves Accumulated loss/profit Total Equities Non-current liabilities Long -term finance- Secured Total non-Current Liabilities Current Liabilities Current portion of long term finance Short term Borrowing- Secured Mark-up accrued on borrowing Trade and Other Payables Total Current Liabilities Total Equities & Liabilities Assets Non-Current Assets Property, Plant & Equipment Intangible Assets 100 100 86.53 69.07 73.23 44.74 100 100 100 100 11.50 147.91 150.02 117.99 175.12 148.72 145.99 105.79 100 250.00 50.00 100 31.25 6.25 100 100 100 100 100 39.14 35.05 84.89 100 17.80 62.37 57.95 2010-11 2011-12

Altus Honda Cars Pakistan Limited

Capital work in process Long term Loans and Advances Long Term Deposits Differed Taxation Total Non-current Assets Current Assets Stores And Spares Stock in trade Trade debts Advances,payments,other Receivables Cash And Bank Balance Total Current Assets Total Assets 100 100 100 100 125.30 1058.85 160.59 117.99 100 100 87.37 147.82 92.40

2010
100 100 100 100 100 52.48 98.93 100.00 115.42 90.35 1631.19 99.88 100.00 142.58 89.26

122.51 159.02 100.53 131.26 105.79

Ratios Calculation
2009-10 Current Ratio 0.623960311 2010-11 0.667913822 2011-12 0.561012726

Quick Ratio

0.035987898

0.114956342

0.023585507

Cash Ratio

0.014515535

0.102451104

0.009995385

Inventory Turnover

6.092341232

7.562711715

5.286557125

Inventory Turnover in days Net Working Capital Days Sale in Inventory Sales to Working Capital

59.91128633 -2125485 52.82467374 -8.322406096

48.26311167 -2815947 57.57668406 -8.914868807

69.04304473 -3622307 62.57873639 -5.156555799

Altus Honda Cars Pakistan Limited

2010

Graphical Representations and Interpretation

Current Ratio
0.68 0.66 0.64 0.62 Current Ratio 0.6 0.58 0.56 0.54 0.52 0.5 2009-10 2010-11 Years 2011-12

The current ratio indicates the firm liquidity position. It indicates that for the payment of one Rupee current liability how many rupees of current assets you have. But the liquidity

position of Altus Honda Cars is not good because it has only Rs 0.62 for the payment of Rs 1 liability. In 2010-11 there is slight increase but in 2011-12 it decrease again. This thing will give bad signal to creditor because they think that the firm has not enough current assets to pay the current liabilities at the due date. Company should improve it minimum to 2. Because the operating cycle

Altus Honda Cars Pakistan Limited

2010 Acid Test Ratio

0.12 0.1 0.08 Quick Ratio 0.06 0.04 0.02 0 2009-10 2010-11 Years 2011-12

Quick ratio of company is very low it shows the most liquid position of firm than current ratio because in calculating the quick ratio we deduct the inventory and prepaid expenses from the current assets because these cannot be easily convertible into cash without losing their value. It shows how company can pay its current liabilities in case of emergency. The company should increase this ratio to minimum 0.75. Creditors will hesitate to invest to give credit because this ratio is very low.

Cash Ratio
0.12 0.1 0.08 Cash Ratio 0.06 0.04 0.02 0 2009-10 2010-11 Years 2011-12

Altus Honda Cars Pakistan Limited

2010

Cash ratio of the company is not enough as mention above. Company should improve it to a reasonable point because it shows the immediate liquid position of the firm. It shows how much cash and marketable securities company has to pay its current liabilities. In 2010-11 this ratio is improved to some extent but in 2011-12 it decrease again this is not a good sign for company liquidity position. But this ratio should not be too high because it shows that firm is not efficiently using its cash

Inventory turnover
8 7 6 Inventory 5 turnover in 4 times 3 2 1 0 2009-10 2010-11 Years 2011-12

This ratio indicates how many times company inventory is converted into sale. In 2010-11 the ratio is improved which shows that company inventory is more times in sale. But in 2011-12 it is decrease by very much firm should take into account and try to improve it. The reasons of it may be increase in average inventory and decrease in CGS. Higher the ratio is more beneficial for the firm.

Altus Honda Cars Pakistan Limited

2010

Inventory turnover in Days

70 60 50 40 Inventory turnover in days 30 20 10 0 2009-10 2010-11 Years 2011-12

This ratio indicates how many days company average inventory is converted into sales. The lower ratio beneficial for the company. In 2010-11 it is decrease by approximately 12 days which is good for the company but in 2011-12 it is increased by 21 day which is presenting alarming situation. The fluctuation in this ratio is very high which mean there are problem in sales department. The main reason of it is disturbance in supply chain due to drastic flood in Thailand.

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Altus Honda Cars Pakistan Limited

2010 Net working Capital

0 2009-10 2010-11 2011-12

-500000 -1000000 -1500000 Working Capital -2000000 -2500000 -3000000 -3500000 -4000000

Years

Networking capital of the company is negative and these figures are increasing because the company liabilities are increasing more rapidly than current assets. This is very bad for the firm because in general terms it shows the liquidity of firm. The above calculated figures indicate the alarming situation for the firm. The firm should take steps to improve it.

Days sale in inventory

64 62 60 58 Days sales in 56 inventory 54 52 50 48 46 2009-10 2010-11 Years 2011-12

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Altus Honda Cars Pakistan Limited

2010

This ratio indicates how many days company ending inventory is converted in to sale. The lower the ratio is beneficial for the firm but company ratio is continuous increasing. In 2010-11 it is almost increase by 5 days and in 2011-12 it is also increase by 5 days it is not good for the firm because the days which are taken to convert ending inventory into sale is increasing.

Sales to working capital

0 -1 -2 -3 Sales to working -4 capital -5 -6 -7 -8 -9 Years 2009-10 2010-11 2011-12

This ratio shows how effectively firm is using its working capital to generate sale. In other words we can say that it link the networking capital of firm with sale of the firm. This ratio of company is also is not as the other liquidity ratios. In 2011-12 there is somehow improvement but there more need to improve it. Company negative ratio indicates that company is not effectively using the working capital to generate the sale.

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Altus Honda Cars Pakistan Limited

2010

Graphical Representation of Balance Sheet Vertical Analysis

Total current Assets Vertical Analysis

60.00 50.00 40.00 Total current 30.00 assets % 20.00 10.00 0.00 2009-10 2010-11 Years 2011-12

Total non current Assets Vertical Analysis

70.00 60.00 50.00 40.00 Total non current assets % 30.00 20.00 10.00 0.00 2009-10 2010-11 Years 2011-12

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Altus Honda Cars Pakistan Limited

2010

Total equity Vertical analysis

25.00 20.00 15.00 Total Equity % 10.00 5.00 0.00 2009-10 2010-11 Years 2011-12

Total Current liability Vertical Analysis

90.00 80.00 70.00 60.00 Total current 50.00 liability % 40.00 30.00 20.00 10.00 0.00 2009-10 2010-11 Years 2011-12

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Altus Honda Cars Pakistan Limited

2010

Graphical Representation of Profit & Loss Account Vertical Analysis

Sales vertical Analysis

100 80 60 Sales in % 40 20 0 2009-10 2010-11 Years 2011-12

Gross profit/Loss Vertical analysis

1.00 0.50 0.00 2009-10 G.P % -0.50 -1.00 -1.50 -2.00 Years 2010-11 2011-12

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Altus Honda Cars Pakistan Limited

2010

Net profit/Loss vertical analysis

0.00 2009-10 -1.00 -2.00 N.P % -3.00 -4.00 -5.00 -6.00 Years 2010-11 2011-12

Graphical Representation of Balance Sheet Horizontal Analysis

Total Current Assets Horizental Analysis

180 160 140 120 Total current 100 assets % 80 60 40 20 0 2009-10 2010-11 Years 2011-12

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Altus Honda Cars Pakistan Limited

2010

Total non current Assets Horizental Analysis

100 95 Total non current assets % 90 85 80 2009-10 2010-11 Years 2011-12

Total equity Horizental analysis

100 80 60 Total Equity % 40 20 0 2009-10 2010-11 Years 2011-12

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Altus Honda Cars Pakistan Limited

2010

Total current liability Horizental Analysis

160 140 120 100 Total current liability % 80 60 40 20 0 2009-10 2010-11 Years 2011-12

Graphical Representation of Profit & Loss Account Horizontal Analysis

Sales Horizental Analysis

140 120 100 Sales in % 80 60 40 20 0 2009-10 2010-11 Years 2011-12

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Altus Honda Cars Pakistan Limited

2010

Gross Profit/Loss Horizental Analysis

100 80 60 40 20 G.P % 0 -20 -40 -60 -80 -100 Years 2009-10 2010-11 2011-12

Net profit/Loss horizental analysis

100 90 80 70 60 N.P % 50 40 30 20 10 0 2009-10 2010-11 Years 2011-12

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Altus Honda Cars Pakistan Limited

2010

Vertical Analysis of Balance Sheet:

In 2009-10 Total equity was only 22.05% of total liability and equity which is not good the major Portion of equity is also Reserve which shows that owner investment in firm is very low. Current liabilities are 14.88% of total equity and liabilities. Current liabilities are 63.07% of total equity and liabilities which is very high. Total non-current assets of firm are 60.64% of total assets where as current assets are 39.36% of total assets. This thing indicates that firm cannot easily pay its current liabilities which is not giving good signal to creditors. In 2010-11 total equity is 15.86% of total equity and liabilities which are low the main reasons behind that are decrease in reserves and issued capital. Long term liability is 3.94% of total equity and liabilities which means that financial institutions are not willing to give long term loans due to bad financial performance of the firm. Current liabilities are 80.20% of total equity and liabilities which shows that firm has more liability to pay within one year. In this year Non-current assets are 46.44% and current asset are 53.56% of total assets which means that firm investment in fixed and intangible assets is decreased and in current assets for example in stock in trade has been increased. Due to which firm short term debt paying ability is increased. In 2011-12 the total portion of equity in total equity and liability is 12.08% which is very low company should try to increase its which mean creditors have more firm. One reason of decrease is increase in accumulated loss. Long term debts are only .88% of total debt and equity which means creditors are not willing to give long term debts due to continues bad performance of firm. Current liabilities are 87.04% of total liabilities and equity which means firm has most of its activities on credit and firm has to pay these liabilities within one year. Non-current assets are 51.17% of total assets . Current assets are 48.83% of total assets while current liabilities are 87.04% which mean these are not enough to pay these liabilities. The major portion of current assets is stock in trade 30.10% which is not easily convertible into cash.

Vertical Analysis of Profit and Loss Account

In 2009-10 CGS was 101.51% of sales which is alarming for the company. It means company has not any control on raw- material, labor and factory overhead cost. Cost of rawmaterial is the major portion of cost of goods sold which is should be controlled by the firm. Due

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Altus Honda Cars Pakistan Limited

2010

to high CGS firm has to bear Gross loss of 1.51% in 2010. Company has loss of 6.23% before tax. Net loss after tax is 5.38 which mean company receives the tax benefits. In 2010-11 CGS has been 99.10% of sale which is also too high and company has only .90% Gross Profit of its sale. Major portion of CGS is raw-material its cost should be controlled. Loss before tax is 1.11% of total sale which is increased to 1.35% after including tax loss. In 2011-12 CGS has been 100.27% of its sales which shows that company has not doing so much to decrease its cost of goods sold. In 2012 company supply chain is also affected due to drastic flood in Thailand which is also a reason of decreasing performance of company. Loss before taxation is 3% of sale. The reasons behind that are increase in finance cost and operating cost. Due to tax loss of .20% The Loss after taxation is reached to 3.21%.

Horizontal Analysis of Balance Sheet

Total equity is continuously decreasing from 2010-11 to 2011-12. It respectively decreased by 15.11% and 42.05%. The main reasons behind it are continuously decrease in issued capital and reserves. Long term debt has been decreased because the company is paying its long term debts and new long term debts are not taken by company. The long term debts have been decreased

by 68.75% and 93.75% respectively in 2010-11 and 2011-12. Total current liabilities have been increased by 50.02% in 2010-11 and 45.99% in 201112. This is because of increase in current portion of long term finance, mark-up accrued on borrowing and trade and other payables. Total equities and liabilities has been increased by 17.99% in 2010-11 and 5.79% in 2011-12. This increase is because of increase in current liabilities which means firm has to make more payment in near future but firms financial position is not good it can create problem for the firm. On the other hand companys total equity is decreasing which mean creditors stack is increasing which can influence the decision.

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Altus Honda Cars Pakistan Limited

2010

Total non-current assets has been decreased by 9.65% and 10.74% respectively in 201011 and 2011-12 as compare to base year. This is because of decrease in fixed assets and intangible assets and it is not good for the firm because these will produce value for the firm in the future. Companys current assets have been increased by 60.59% and31.26% respectively in 2010-11 and 2011-12. This is due to increase in stock in trade, advances, other receivable and cask and bank balance. This is good because it increases the firm ability to pay current liability but in 2011-12 the increase is less than the increase in current liabilities of this year. Firms total assets have been increased more rapidly 17.99% in 2010-11 as compare to 5.79% in 2011-12. But the most of increase is in current asset which will help to improve liquidity position of firm but will not produce more value for the firm in the future. So firm should increase is investment in fixed assets.

Horizontal Analysis Profit and Loss Account

In 2010-11 Sale is increased by 38.93% as compare to 2009-10 which is good sign for the company. But in 2011-12 it is only increase 4.70% as compare to base year and also 34.23% decrease as compare to 2010-11. The reason behind that may be ban on the installation of CNG kits and the enormous influx of used cars which is marring the demand of new cars and rising inflationary pressure. The cost of goods sold increased 35.62% due to 38.93% increase in sale which means company has control some of its CGS. In 2011-12 CGS in increase by 3.42% due to 4.70% increase in sale. In 2010-11 company has gross profit because of increase in sales and decrease in cost of goods sold and in 2011-12 company has gross loss of 18.37% which is 81.63% less as compare to base year. The reasons behind it are decrease in cost of goods sold and increase in sale. In 2010-11 loss before interest and taxation has been decreased by 82.63% and 34.90% in 2011-12 this is because of decrease in gross loss and division of fixed cost. Taxation loss has been increased in 2010-11 and 2011-12.

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Altus Honda Cars Pakistan Limited

2010

Loss after tax has been decrease by 64.98% in 2010-11 and 37.55% in 2011-12. It shows that in 2010-11 company loss is more decrease than 2011-12.

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