Indus Motor Company LTD Ratio Analysis

PROFESSIONAL PROJECT INDUS MOTOR COMPANY LIMITED
Mansoor Humayun Student No. 623/ BBA-Hons 8th Semester (Evening) 2006-2010
Submitted to the
Department Of Management Sciences UNIVERSITY OF EDUCATION, LAHORE OKARA CAMPUS
Indus Motor Company Ltd (Financial Analysis)
Project Supervisor: Mr. Rai Imtiaz Hussain
Submitted by: Mansoor Humayun 623-E BBA(Hons) 8th Semester 2006-2010
02/03/2010
In the Name of Allah the Most Gracious, the Most Beneficent and the Most Mercifu
l
Read (O Prophet,) in the name of yours Rub, Who created. Created man from a clot
of congealed blood. Read; and your Lord is Most Generous, Who taught knowledge
by the pen; taught man what he did not know.
(Al-Alaq, Surah # 96, Ayats 1-4, Para # 30)
DEDICATION
I would like to dedicate my work, As a little token of gratitude for my Loving Pa
rents. The wisdom and love of my parents enables me to strive towards a legacy o
f honor. Without their knowledge, wisdom and guidance, I would not have the goal
s, I have to strive and be the best to reach my dreams! To my Siblings for their
gentle encouragement and valuable support. To my little and lovely Nephew.
iii
ACKNOWLEDGEMENT
I find no words at my command to express my deepest sense of gratitude to the Al
mighty ALLAH, the most Gracious, the most Merciful and the most Beneficent, who
gives me the talent to complete this task successfully, He is the one who gave m
e courage to do this.
I am much obliged to my loving Parents whose prayers have enabled me to reach th
is stage. At this occasion I cant forget my parents for their guidance at the cru
cial moments of my life.
Next I owe my bottomless thanks to our esteemed resource person Mr. Rai Imtiaz H
ussain who directed me well and was always available to clear my doubts and misu
nderstandings through out this project.
It is also a matter of immense pleasure for me to express my gratitude to the Fa
culty of Department of Management Sciences and professional projects evaluation C
ommittee of the University of Education for giving us their precious time and tr
ied their best as helpful as possible.
I wish to thanks all my Friends and Classmates who really helped me by giving su
ggestions and critical review of the manuscript.
Obviously this achievement was not possible without all of you.
Mansoor Humayun
iv
FORWARDING SHEET
This professional project of Mansoor Humayun (Student No 623) entitled Indus Moto
r Company Limited (Financial Analysis) has been completed under by the guidance a
nd supervision for the fulfillment of requirement for the 8th Semester of BBA (H
ons) degree program of University of Education Lahore, Okara campus.
Dated: _______________
__________________ Supervisor
v
DISCLAIMER
The purpose of the project is to introduce the subject matters and provide a gen
eral idea and financial information about the Indus Motors Company Limited. All
the material included in this document is based on data/information gathered fro
m various sources and is based on certain assumptions. Although, due care, dilig
ence and reasonable efforts has been taken to compile this project, the containe
d information may vary due to any change in any of concerned factors and the act
ual results may differ substantially from the presented information.
Project does not assume any liability for any financial or other loss resulting
from this document in consequence of undertaking this activity. Therefore the co
ntent of this document should not be relied upon for making any decision, invest
ment or otherwise. The content of the information does not bind PROJECT MAKER in a
ny legal or other form.
Project does not also assume any rectifications, errors, omission and misprintin
g between the electronic and printed version of document.
Financial Analysis of IMC doest not accept any responsibility for the validity a
nd correctness of the information published on its project.
vi
Table of Contents
Page No EXECUTIVE SUMMARY 1 4 5 5 6 7
CHAPTER NO 1
1.1 1.2 1.3 1.4
INTRODUCTION
REASON FOR CHOOSING THE ORGANIZATION AIMS AND OBJECTIVES OF THE PROJECT AUTOMOBI
LE INDUSTRY IN PAKISTAN CURRENT SITUTATION OF CAR INDUSTRY
CHAPTER NO 2
2.1 2.2 HISTORY PRODUCT LINE 2.2.1 COROLLA 2.2.2 CUORE 2.2.3 HILUX 2.3
INDUS MOTOR COMPANY LIMITED
9 10 11 11 12 12 12 12 12 13 13 13 13 14 15 16 16 16 17 17 17 18
COMPANYS PROFILE 2.3.1 NAME OF COMPANY 2.3.2 INDUSTRY TYPE 2.3.3 MAJOR INVESTORS
2.3.4 SLOGAN 2.3.5 VISION 2.3.6 MISSION 2.3.7 CORE VALUES 2.3.8 STRATEGIC OBJECT
IVES
2.4
COMPANYS INFORMATION 2.4.1 BOARD OF DIRECTORS 2.4.2 BANKERS 2.4.3 AUDITORS 2.4.4
LEGAL ADVISORS 2.4.5 REGISTRAR 2.4.6 FACTORY/REGISTERED OFFICE vii
Page No 2.4.7 CHIEF FINANCIAL OFFICER 2.4.8 COMPANY SECRETARY 2.4.9 AUDIT COMMIT
TEE MEMBERS 18 18 18
CHAPTER NO 3
3.1 SWOT ANALYSIS
COMPANYS ANALYSIS
19 20 20 22 23 23 24 25 25 26 26 27 28 28 29 29 29
3.1.1 STRENGTHS 3.1.2 WEAKNESSES 3.1.3 OPPORTUNITIES 3.1.4 THREATS 3.2 PEST ANAL
YSIS 3.2.1 POLITICAL FACTORS 3.2.2 ECONOMICAL FACTORS 3.2.3 SOCIAL FACTORS 3.2.4
TECHNOLOGICAL FACTORS 3.3 BOSTON CONSULTING GROUP MATRIX 3.3.1 STARS 3.3.2 CASH
COWS 3.3.3 QUESTION MARK 3.3.4 DOGS 3.4 TOYOTA COROLLA BCG MATRIX
CHAPTER NO 4
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 NET SALES
INCOME STATEMENT ANALYSIS
31 32 33 34 35 36 37 38 39
CONDENSED INCOME STATEMENT
COST OF GOODS SOLD GROSS PROFIT OPERATING EXPENSES OPERTAING PROFIT OTHER OPERAT
ING EXPENSES OTHER OPERATING INCOME viii
Page No 4.9 PROFIT BEFORE INTEREST AND TAX 40 41 42 43 44
4.10 FINANCE COST 4.11 PROFIT BEFORE TAXATION 4.12 TAXATION 4.13 PROFIT AFTER TA
XATION
CHAPTER NO 5
5.1 5.2 5.3 5.4 5.5 5.6 5.7
BALANCE SHEET ANALYSIS
45 46 47 48 49 50 51 52
CONDENSED BALANCE SHEET CURRENT ASSETS CURRENT LIABLITIES TOTAL FIXED ASSETS TOT
AL ASSETS LONG TERM DEBT TOTAL LIABILITIES AND EQUITY
CHAPTER NO 6
6.1
RATIO ANALYSIS
53 54 54 55 56 57 58 59 59 60 61 62 63 64 64 65
SHORT TERM DEBT PAYING ABILITY 6.1.1 NET WORKING CAPITAL 6.1.2 CURRENT RATIO 6.1
.3 ACID TEST RATIO 6.1.4 CASH RATIO 6.1.5 CASH FLOW FROM OPERATIONS RATIO
6.2
LONG TERM DEBT PAYING ABILITY 6.2.1 TIME INTEREST EARNED RATIO 6.2.2 FIXED CHARG
ED COVERAGE RATIO 6.2.3 DEBT RATIO 6.2.4 DEBT EQUITY RATIO 6.2.5 DEBT TO TANGIBL
E NETWORTH
6.3
SHORT TERM LIQUIDITY 6.3.1 DAYS SALES IN A/R 6.3.2 ACCOUNTS RECEIVABLE TURNOVER i
x
Page No 6.3.3 DAYS SALES IN INVENTORY 6.3.4 INVENTORY TURNOVER 6.4 PROFITABILITY
INDEX 6.4.1 NET PROFIT MARGIN 6.4.2 TOTAL ASSETS TURNOVER 6.4.3 RETURN ON ASSETS
6.4.4 OPERATING INCOME MARGIN 6.4.5 OPERATING ASSETS TURNOVER 6.4.6 RETURN ON O
PERATIN ASSETS 6.4.7 SALES TO FIXED ASSETS 6.4.8 RETURN ON EQUITY 6.4.9 GROSS PR
OFIT MARGIN 6.5 INVESTORS ANALYSIS 6.5.1 EARNING PER SHARE 6.5.2 PRICE EARNING RA
TIO 6.5.3 DIVIDEND PAYOUT RATIO 6.5.4 DIVIDEND YIELD RATIO 66 67 68 68 69 70 71
72 73 74 75 76 77 77 78 79 80
CONCLUSION
81
REFRENCES
83
ANNEXURES
85
x
Table of Annexure
Page No I. SUMMARIZED INCOME STATEMENT I.I COMPARATIVE CHAIN BASE INCOME STAEMEN
T I.II PERCENATGE COMPARATIVE CHAIN BASE INCOME STATEMENT I.III PERCENTAGE COMPA
RATIVE 2005 BASE INCOME STATEMENT I.IV VERTICAL COMMON SIZE INCOME STATEMENT 95
93 91 89 87
II.
SUMMARIZED BALANCE SHEET II.I COMPARATIVE CHAIN BASE BALANCE SHEET II.II PERCENT
AGE COMPARATIVE CHAIN BASE BALANCE SHEET II.III PERCENTAGE COMPARATIVE 2005 BASE
BALANCE SHEET II.IV VERTICAL COMMON SIZE BALANCE SHEET
98
101
104
106
108
III.
SHORT TERM DEBT PAYING ABILITY
110
IV.
LONG TERM DEBT PAYING ABILITY
112
V.
SHORT TERM LIQUIDITY
114
VI.
PROFITABILITY INDEX
116
VII.
INVESTORS ANALYSIS
119
xi
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT
Executive Summary
Indus Motor Company is one of the Automobile Companies which formed with the hel
p of house of Habib, Toyota Motor Corporation, Toyota Tsusho Corporation. It man
ufactures and imports cars and enjoys a healthy share in the market. It is compe
ting with the Honda, Nissan, Suzuki and Mitsubishi. To sustain its lead IMC must
maintain strategic competitive advantage which is its production strength, abil
ity to produce quality cars with respect to low cost and research and developmen
t in hybrid and bio fuel cars. But recently company is in stabilization mode try
ing to improve its functional area, consolidation of resources and maintaining S
CA. In my Opinion it is the best move made by IMC to survive the financial holoc
aust.
Operating Highlights:
For the Year ended June 30, 2009 Vehicle Sales: down 30.6% to 35,276 units
Vehicle Production: down 28.9% to 34,298 units
Net Revenues: down 8.6% to Rs. 37.9 billion
Profit after tax: down 39.5% to Rs.1.4 billion
Earning per share: down 39.5% to Rs. 17.6
Manpower: down 6.7% to 1,893 employees
Total assets: up 50.5% to Rs. 20.69 billion
Share holders equity: up 9.1% to Rs. 10.3 billion UNIVERSITY OF EDUCATION OKARA
CAMPUS 1
1) Short Term Debt Paying Ability
a) Net Working Capital b) Current Ratio c) Acid Test Ratio d) Cash Ratio e) Cash
Flow from Operations Ratio
Times Rs (bn) Times Times Times
2005
3.51 1.46 1.05 0.88
2006
4.65 1.49 1.07 0.79
2007
6.15 1.83 1.44 1.15
2008
5.89 2.56 1.86 1.16
2009
6.83 1.69 1.28 0.98
0.12
0.28
0.38
(0.21)
0.66
2) Long Term Debt Paying Ability
a) Times Interest Earned b) Fixed Charged Coverage c) Debt Ratio d) Debt Equity
Ratio e) Debt to Tangible Net worth
Times Times % % %
25.48 22.60 63.30 0.00 172.86
33.08 32.10 60.45 0.00 152.99
187.44 187.40 48.65 0.00 94.78
1284.23 1284.23 31.36 0.00 45.71
78.09 78.09 50.22 0.00 100.93
3) Short term Liquidity
a) Days Sales in Accounts Receivable b) Accounts Receivable Turnover c) Days Sales
in Inventory d) Inventory Turnover
Times Days Times Days
13.09
24.89
15.86
18.90
26.02
27.89 11.80 42.20
14.66 15.55 29.20
23.01 5.57 37.38
19.32 10.92 45.49
14.03 14.20 28.36
UNIVERSITY OF EDUCATION OKARA CAMPUS
2
4) Profitability Ratio
a) Net Profit Margin b) Total Assets Turnover c) Return on Assets d) Operating I
ncome Margin e) Operating Assets Turnover f) Return on Operating Assets g) Sales
to Fixed Assets h) Return on Equity i) Gross Profit Margin
% Times % % Times % Times % %
2005
5.38 2.26 12.17 7.73
2006
7.52 2.23 16.74 9.93
2007
7.03 2.49 17.53 9.38
2008
5.53 3.01 16.66 7.40
2009
3.66 1.83 6.70 3.97
30.63
25.02
20.53
11.53
9.71
164.77 27.63 33.17 9.80
188.06 20.53 42.32 11.77
144.29 18.66 34.13 11.37
63.73 10.27 24.28 9.29
35.51 9.62 13.45 6.14
5) Investors Analysis
a) Earning Per Share b) Price Earning Ratio c) Dividend Payout Ratio d) Dividend
Yield Ratio
Rs Times % %
18.89 4.76 52.94 11.11
33.70 5.67 35.61 6.28
34.93 8.75 37.22 4.26
29.15 6.86 36.02 5.25
17.62 6.11 56.75 9.28
3
1.1 REASON FOR CHOOSING THE ORGANIZATION:
When I was informed that I would have to do the financial analysis of last five
years of any listed company than the primary challenge for me was to choose the
organization on which I can start my working. It was bit difficult and confusing
for me to select the organization. I started brainstorming and came up with man
y well known organizations having large operations, both in Pakistan and Worldwi
de. After gathering data and relevant information I ended with three business se
ctors, Automobile industry, Textile industry and Tobacco industry. I choose best
companies in their respective class, but after applying hindsight I decided to
go with Automobile industry and the organization I selected was Indus Motor Compa
ny Limited.
1.2 AIMS AND OBJECTIVES OF THE PROJECT:
The main objectives and aims of this project are to analyze and evaluate the ove
rall performance of the company by applying different conceptual models and disc
uss the liquidity, cash flow situation and produce informative report usable by
the users of the statements assessing the financial position, performance and ad
aptability of the organization.
The performance evaluation is based on historic and current available data about
the operations of the company. Under the constantly increasing competition in t
he business market, these analyses portray a very clear and informative picture
to the investors, shareholders, regulators and other players in the stock market
.
Finally the project draws conclusions based on my analysis about the current sit
uation and the prospects of the Indus Motor Company Limited .
5
1.3 AUTOMOBILE INDUSTRY IN PAKISTAN:
Auto market is one of the largest segments in world trade. Changing models, impr
oving fuel efficiency, cutting costs and enhancing user comfort without compromi
sing quality are the most important challenges of the auto industry in a fast gl
obalizing world.
The automotive assembling in Pakistan started in 1950 when National Motors Limit
ed, a public limited company and the pioneer in the industry, came into existenc
e, established by General Motors of USA. National Motors assembled passenger car
s as well as commercial vehicles which carried General Motors brands such as Bedfo
rd, Vauxhall, Chevrolet.
The indigenized parts in these vehicles did not exceed 20% with only exception o
f Bed Ford trucks with a deletion level of 80%. By the end of 70s practically al
l automobile assembling in Pakistan ceased.
A regular car industry started in the country in 1983, when Suzuki commenced pro
duction eyeing the small and LCV car segment of 800cc-1000cc range, and introduc
ed Suzuki car which targeted the middle-income group (constituting the larger se
gment of the market) by providing an affordable car.
Then there was a long gap until the early 90s when Indus Motor Company was establ
ished to manufacture Toyota vehicles in Pakistan. Soon after Honda Atlas came wi
th the Civic and Gandhara Nissan entered the market with Sunny.
In the late 90,s Dewan Farooque Motors set up a plant to manufacture Hyundai and
Kia vehicles in Pakistan. Since then the market has changed all together. After
struggling through UNIVERSITY OF EDUCATION OKARA CAMPUS 6
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT nineties, a decade full of unce
rtainties and frequent policy the Pakistani Auto Industry has been able to achie
ve double digit growth consistently since the last 4 years. The industry operate
s under franchise and technical cooperation agreements with Japanese, European a
nd Korean manufacturers.
Lately Few new market players entered the market such as Gandhara Nissan again w
ith now the imported Nissan range of vehicles, Dewan Mushtaq Motors with importe
d Mitsubishi range of vehicles, Nexus Automotive with Chevrolet imported vehicle
s and others imported Chinese vehicles such as Karakoram Motors, Roma Automobile
s and Foton by Dewan Innovations Limited along with Pak Cherry Automobiles. Sigm
a Motors made its mark with Rover recently.
Apart from these the big brands of the auto industry also entered the Pakistani
market such as BMW , Mini & Rolls Royce by Dewan Motors, Porsche, Mercedes and A
udi have also launched their brands in Pakistan catering to the very upper niche
.
1.4 CURRENT SITUTAION OF CAR INDUSTRY:
Locally produced cars have taken an unexpected drastic downturn to the extent of
frustrating all future growth prospects and projections. According to the curre
nt figures, in due comparison with the figures of year 2007 for September to Dec
ember period, the sales of cars has gone down by 15 percent. As a result the pro
duction has also gone down culminating with its impact on supply schedule; both
import and local. This downturn has come at a crucial time as most of the manufa
cturing had just increased their investment in the expansion projects and vendin
g industry had made equally huge investment to complement the capacity expansion
exercise. The local vendors have now to face the curtailed orders, which may mo
st hit the smaller ones with closures. All this obviously has also adversely imp
acted the UNIVERSITY OF EDUCATION OKARA CAMPUS 7
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT government revenues in substant
ial terms. The government has suffered a revenue loss of Rs. One billion (9%) wh
en September to December data is compared with last year.
In the budget 2007-08, government announced a withholding @ 5 percent on purchas
e of cars which was reduced to 2.5 percent and imposed from 1st September 2007.
The intension was obviously to enhance government revenue. The current situation
however, has proved a reversal in collection of the revenue.
Last year, the ECC approved the five years policy (AIDP) for auto sector prior t
o announcement of budget. Levy of such tax is a deviation from the spirit of pre
announced policy thus causing anxiety to thee auto manufactures.
The uplift in the car market is also suffering due to stringent regulations anno
unced by State Bank of Pakistan recently for car financing. Moreover, the cost o
f financing has also increased interest rates from nearly 8 to 15 percent.
With low custom duty rates for CBUs and unprecedented import of used cars, the l
ocal industry is putting utmost effort to survive and looking at the government
not to deviate from the pre-announced policy and ensure strict compliance of rul
es on import of used from cars and stop further release of smuggled vehicles.
8
2.1 HISTORY:
Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota
Motor Corporation Japan (TMC) and Toyota Tsusho Corporation Japan (TTC) for asse
mbling, progressive manufacturing and marketing of Toyota vehicles in Pakistan s
ince July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihats
u Motor Company Ltd. vehicles in Pakistan through its dealership network. It man
ufactures and Imports Cars and enjoys a healthy share in the market.
The company was incorporated in Pakistan as a public limited company in December
1989 and started commercial production in May 1993. The shares of company are q
uoted on the stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Ts
usho Corporation have 25 % stake in the company equity. The majority shareholder
is the House of Habib.
IMC is competing with the Honda, Nissan, Suzuki and Mitsubishi. To sustain its l
ead IMC must maintain Strategic Competitive Advantage which is its Production St
rength, ability to produce quality cars with respect to low cost and Research an
d Development in Hybrid and Bio Fuel Cars. But recently Company is in Stabilizat
ion mode trying to improve its functional area, consolidation of resources and m
aintaining SCA.
Indus Motor is the country s second largest auto manufacturer, after the Pak Suz
uki Motors. IMC s production facilities are located at Port Bin Qasim Industrial
Zone near Karachi in an area measuring over 105 acres, having an assembling cap
acity of 55,000 units per annum.
Indus Motor Companys plant is the only manufacturing site in the world where both
Toyota and Daihatsu brands are being manufactured. Its core business is to manu
facture and market UNIVERSITY OF EDUCATION OKARA CAMPUS 10
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT cars. In addition, the company
also sells auto parts and accessories. Heavy investment was made to build its pr
oduction facilities based on state of art technologies. To ensure highest level
of productivity world-renowned Toyota Production Systems are implemented.
Its product line includes 6 variants of newly introduced Toyota Corolla, Toyota
Hilux and 3 variants of Daihatsu Cuore. The company also offers six different im
ported vehicles namely Toyota Camry, Prado, Land Cruiser, RAV, Hilux and Hiace.
Major contributor to the revenue is Corolla, having a contribution of 66.5% in c
ompany s sales.
2.2 PRODUCT LINE:
2.2.1 COROLLA:
Corolla includes six variants of cars which are: 1) XLi 2) GLi 3) Corolla Altis
M/T 4) Corolla Altis A/T 5) 2.0D 6) 2.0D Saloon
UNIVERSITY OF EDUCATION OKARA CAMPUS 11
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 2.2.2 CUORE:
Cuore consist of 3 variants of cars that are as under: 1) CX 2) CX CNG 3) CX A/T
2.2.3 HILUX:
Hilux consist of following car. 1) 4 x 2 S/Cab
2.3 COMPANYS PROFILE:
2.3.1 NAME OF COMPANY: Indus Motor Company Limited.
2.3.2 INDUSTRY TYPE: Automobile Industry (Cyclical) UNIVERSITY OF EDUCATION OKAR
A CAMPUS 12
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 2.3.3 MAJOR INVESTORS: a) House
of Habib. b) Toyota Motor Corporation Japan. (TMC) c) Toyota Tsusho Corporation
Japan. (TTC) 2.3.4 SLOGAN:
2.3.5 VISION: To be the most respected and successful enterprise, delighting cus
tomers with a wide range of products and solutions in the automobile industry wi
th the best people and the best technology.
2.3.6 MISSION:
IMCs mission is Companys Slogan.
reflected
in
ACT#1 Action, Commitment and Teamwork to become #1 in Pakistan. The Indus Team i
s committed to ACT so that it achieves the #1 position in the Auto Industry in:
Respect & Corporate image. Customer Satisfaction. Profitability. Quality & Safet
y. Production & Sales. Best Employer.
2.3.7 CORE VALUES: Customer Satisfaction. Team Work. Ethics and Practices. UNIVE
RSITY OF EDUCATION OKARA CAMPUS 14
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 2.3.8 STRATEGIC OBJECTIVES: 1.
Achieving Market Leadership by Delivering Value to Customers: a) Following our Cu
stomer First philosophy in manufacturing and providing high quality vehicles and
services that meet the needs of Pakistani customers. b) Enhancing the quality an
d reach of our 3S Dealership Network. c) Employing customer insight and feedback
for continuous corporate renewal, including product development, improving serv
ice and customer care. 2. Bringing Toyota Quality to Pakistan a) Maximizing QRD
(Quality, Reliability and Durability) by built-in engineering. b) Transferring t
echnology and promoting indigenization at IMC and Vendors. c) Raising the bar in
all support functions to meet Toyota Global Standards. 3. Optimizing Cost by Ka
izen a) Fostering a Kaizen culture and mindset at IMC, its Dealers and Vendors.
b) Implementing Toyota Production System.
c)
Removing waste in all areas and operating in the lowest cost quartile of the ind
ustry.
4. Respecting our People a) Treating employees as the most important sustainable
competitive resource. b) Providing a continuous learning environment that promo
tes individual creativity and teamwork. UNIVERSITY OF EDUCATION OKARA CAMPUS 15
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT c) Supporting equal employment
opportunities, diversity and inclusion without discrimination.
d) Building competitive value through mutual trust and mutual responsibility
between the Indus Team and the Company. 5. Becoming a Good Corporate Citizen a)
Following ethical business practices and the laws of the land. b) Engaging in ph
ilanthropic and social activities that contribute to the enrichment of Pakistani
society, especially in areas that are strategic to both societal and business n
eeds e.g. Road Safety, Technical Education, Environment Protection, etc. c) Enha
ncing corporate value and respect while achieving a stable and longterm growth f
or the benefit of our shareholders.
2.4 COMPANYS INFORMATION:
2.4.1 BOARD OF DIRECTORS: 1) Mr. Ali S. Habib (Chairman) 2) Mr. Koji Hyodo (Vice
Chairman) 3) Mr. Yutaka Arae 4) Mr. Parvez Ghias (Chief Executive Officer) 5) M
r. Farhad Zulficar 6) Mr. Mohamedali R. Habib 7) Mr. M. Ilyas Suri 8) Mr. Mitsuh
iro Sonoda
9) Mr. Yosuki Tsubaki
2.4.2 BANKERS: Askari Bank Limited. UNIVERSITY OF EDUCATION OKARA CAMPUS 16
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT Bank Alfalah
Bank PLC. Bank Al-Habib Limited. Citibank N.A. Habib Bank Limited. Habib Metropo
litan Bank Limited. HSBC Bank Middle East Limited. MCB Bank Limited. National Ba
nk of Pakistan. NIB Bank Limited. Soneri Bank Limited. Standard Chartered Bank (
Pakistan) Limited. The Royal Bank of Scotland Limited. The Bank of Tokyo-Mitsubi
shi UFJ Limited. United Bank Limited.
2.4.3 AUDITORS: F. Ferguson & Co. Chartered Accountants, State Life Building 1-C
Chundrigar Road, Karachi 2.4.4 LEGAL ADVISORS: K. Brohi & Company Mansoor Ahmed
Khan & Co. Mahmud & Co. Sayeed & Sayeed Co.
2.4.5 REGISTRAR: UNIVERSITY OF EDUCATION OKARA CAMPUS 17
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT Noble Computer Services (Privat
e) Limited, Mezzanine Floor, House of Habib Building (Siddiqsons Tower), 3-Jinna
h C. H. Society, Main Shahrah-e-Faisal, Karachi - 75350. 2.4.6 FACTORY/REGISTERE
D OFFICE: Plot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi. Phones (PABX) (92
-21) 34720041-48 (UAN) (92-21) 111-TOYOTA (869-682) Fax (92-21) 34720056 www.toy
ota-indus.com 2.4.7 CHIEF FINANCIAL OFFICER: Muhammad Faisal
2.4.8 COMPANY SECRETARY: Mustafa Hasan Lakhani
2.4.9 AUDIT COMMITTEE MEMBERS: Mohamedali R. Habib (Committee Chairman) Farhad Z
ulficar Yutaka Arae Mitsuhiro Sonoda Ahson Tariq (Secretary)
3.1 SWOT ANALYSIS:
In formulating sound strategic plans, an organization must assess its internal s
trengths and weaknesses in relation to the external opportunities and threats it
faces. An effective strategy will take advantage of an organizations strengths
and opportunities at the same time it minimizes or overcomes weaknesses and thre
ats. Regular assessment and SWOT analysis is thus given importance.
3.1.1 STRENGTHS: Strengths are the core competencies of any organization & as fa
r as Indus Motor Company Limited is concerned the core competencies of this orga
nization are: Toyota has become the generic name in the Pakistan market. Wheneve
r the company launches the new car in the market it has always the great support
of the already market orientation so the car introduced by it easily covers the
introduction stage. People have a lot
20
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT of trust for their name and thi
s is why Toyota is the leader in automobile industry. Toyota has a great strengt
h for its 2.OD car, Toyota is the hot selling diesel engine car in Pakistan and
is the only company offering the diesel engine in this category of cars. The imp
ortant edge over the company editors are the ample availability of the spare par
ts in the markets. The price of spare parts is comparatively low and availabilit
y all over the country has proved to be beneficial for the company. Toyota is a
financially strong company. This can be seen by analysis of the financial report
s of the previous years. Toyota vehicles have got a much stronger resale value t
han other car in Pakistan. This is why people prefer to buy a Toyota. Toyota veh
icles are made according to the Pakistani environment. No doubt the other cars a
re available but Toyota has an edge because it has learnt various conditions of
the Pakistan environment and people. So new additions and changes are proving to
be successful. Toyota has an edge over others because it is the only automobile
company in Pakistan, while offers many variants of its vehicles. Also Toyota of
fered many variants of colors. Toyota is proud to have a successful team of comp
etent managers and skilled workers. Extensive training has enabled the employees
to perform outstandingly. Toyota is the only company having the most sophistica
ted network of dealerships where customers are treated by professional dealers.
There UNIVERSITY OF EDUCATION OKARA CAMPUS 21
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT are twenty five dealers in Paki
stan where sales, service and spare parts are offered, leading to convenience fo
r the customers. 3.1.2 WEAKNESSES: Weaknesses are the lacking points which every
organization must avoid in order to make its operational effectiveness. There i
s some weakness in the case of ergonomic interior of Toyota corolla as well. The
power steering is not speed sensitive and the air conditioning system in severe
heat is in-effective. Interior dimensions are less and heavy body and small eng
ine sometimes create problems in hilly areas. There are some weaknesses in the d
ealership network. The dealers sometimes tend to deviate from the recommended co
urse of action and principles of Toyota. This results in customers complaints so
metimes. The company is besieged with internal operating problems which are not
very serious. Because of dependency on Toyotas principles delivery of cars is don
e after 4-6 months. This is because CKD kits are ordered four months before and
once they arrive from Japan, assembly and delivery takes some more time. A lot o
f effort is pull into the sales forecasting because of the changing political an
d economic scenarios. For this reasons inventory has to be kept low. The company
feels that one weakness is the changing policies of the government and also the
30% cash L/C margin. This has lead to an adverse environment.
22
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 3.1.3 OPPORTUNITIES: In fact, w
hen we study all our weaknesses critically & deeply than we come to know that we
can convert our weaknesses into strengths. So basically these are our opportuni
ties. The opportunities for IMC are: Export is a major opportunity for Toyota In
dus Motors. Vehicles were exported to Bangladesh just once in order to prove the
plant capacity and efficiency of the company. This should be started again. The
contract with the government departments e.g. Motorway Police, Shaheen Force an
d the dignitaries where corolla has an opportunity to deal with the business mar
kets along with dealing in consumer markets. Toyota can do better by focusing on
segments much more than presently being done. Toyota should also try to lower i
ts price of Corolla in the segment where Honda city has penetrated. It can offer
discounts to Government departments and large organizations on purchase of its
vehicles in more quantities. Success of the manufacturing of Daihatsu cuore is a
major opportunity for Toyota to excel further careful planning and the right ti
me to launch the new car can prove to be a success. 3.1.4 THREATS: Though Indus
Motor Company Limited has a strong footing and maintain a good number of loyal c
ustomer, still bank has threats in various sectors. When we see the possible thr
eats for IMC, the threats are prevailing such as:
23
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT Even though Toyota enjoys the p
osition of being the no.1 automobile company, still it faces some threat from co
mpetitors especially Honda. Honda has adopted aggressive strategies for capturin
g the market. Even though Toyota keeps a careful eye on the changing trends, sti
ll the changing customer needs and trends can prove to be a threat. A major thre
at is the changing political and economic scenarios of Pakistan. Changing govern
ment policies affect the companys performance. Devaluation of rupee adverse shift
s in foreign exchange rates, trade policies of governments is a threat. Moreover
the company is threatened by the ongoing rate of 30% cash L/C margin. Import of
re-conditioned cars is also considered as a threat for the company. The planned
car manufacturing plants of Hyundai and Daewoo can prove to be tough competition
for Toyota if they are successful.
3.2 PEST ANALYSIS:
PEST analysis is the analysis which we tend to perform in order to analyze the e
xternal as well as the internal environment in which organization is currently w
orking. PEST analysis revolves around the four things.
24
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 3.2.1 POLITICAL FACTORS: Govern
ment at all levels is an important component of the general environment. No orga
nization or industry is immune from the various decisions made by the government
. The Pakistan Governments inconsistent policies, frequent change in duty tariff
and smuggling are main reasons of unstable market conduction. Like other motor c
ompanies Toyota is also affected by the current changing policies of the governm
ent. Previously the automobile industry had to cope with more than 77000 yellow
cabs that were imported during the yellow cabs scheme and was later turned lose
to the market after a change of government and the policy scrapped.
In 1995, all the previous taxes and duties were rolled into one import duty of 3
0 percent on CKD kits as well as CBU vehicles. In 1996 the sales tax on CBU was
increased cost to 18 percent. In 1997 the ministry of industries and production
recommended that duty on CKD be reduced form 40 percent to 35 percent while the
car sales should be exempted from CVT and the deletion program should be acceler
ated.
Just a half year back the general sales tax has been increased to 16 percent pro
moting more price like. So there is going to be a Rs. 80,000 to Rs. 1,00,000 inc
rease in vehicles. 3.2.2 ECONOMICAL FACTORS: Government economic policies at the
federal level clearly influence the ability of the industries to survive and pr
ogress. Inflation is a major economic factor which has affected the Pakistans Aut
omobile industry including Toyota. The current inflation UNIVERSITY OF EDUCATION
OKARA CAMPUS 25
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT rate is 21% to 23% annually pri
ces in the auto market were deregulated in 2000 and grew almost 20 percent to 30
percent per annum to allow Toyota to bring their prices to profitable levels. A
fter three years of Still Market, the market picked up.
The recent increase of 16 percent sale tax is however, going to result in a pric
e increase. 3.2.3 SOCIAL FACTORS: Society holds a global or summary belief that
an organization is proper and worthy of support. Toyota takes pride in being the
most trusted name all over Pakistan. Its vehicles are regarded as a status symb
ol. It is the guiding principles of Toyota which has strongly developed trust in
the people.
Toyota respects the culture and customs of every nation and community and contri
butes to the economic and social development through corporate activities in the
communities. Toyota believes in honoring the language and spirit of the law of
every nation and undertakes open and fair corporate activities to be a good corp
orate citizen of the world. This is the reason that Toyota is proud of the fact
that Pakistani society considers Toyota vehicles to be a symbol of reliability,
comfort, luxury and a have to be trusted. 3.2.4 TECHNOLOGICAL FACTORS: Technolog
y is of particular importance because it has been and continues to be the main s
ource of increases in productivity. Despite changes in the means used to motivat
e people and the variety of incentives that have been offered to stimulated prod
uction, the resulting increase has been negligible when compared to that of crea
ted by technology. UNIVERSITY OF EDUCATION OKARA CAMPUS 26
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT The locally produced Toyota Cor
olla introduced in May 1993 is now in its 17 th year. Its excellent quality, low
maintenance cost and high resale value has won it the support and loyalty of it
s customers. Product diversification and a wide range of colors has allowed cust
omers to exercise greater options and has sustained this threat. The total compa
nys product range comprises of 8 variants of Corolla and 5 variants of Hilux. As
a result of the Safety First commitment; for the first time in Pakistan SRS Seconda
ry Restrain System Airbags have been introduced in the GLI Automatic and GLI manu
al models, side impact bars which protect vehicles for side collisions have howe
ver been routinely fitted in all Corolla variants since inception. The process o
f making a car more durable includes Pitospaate Primer, total immersion in a catho
lic Electro-deposit primer, which assures long term anti corrosion and an extra
thick color coat that is better than all others, ensuring that New Car look New for
years to come.
3.3 BOSTON CONSULTING GROUP MATRIX:
The BCG matrix measures market attractiveness by market growth rate and it asses
ses the firms ability to compete by its relative market share. The BCG matrix ass
umes the causal relationship between market share and profitability. BCG matrix
consists of four factors which are: Stars. Question mark. Cash cows. Dogs.
27
3.3.1 STARS: Toyota Corolla of IMC falls into the category of Stars. It generate
s large amount of cash because of its strong relative market share, but also con
sume large amounts of cash because of its high growth rate; therefore the cash i
n each direction approximately nets out. However companies usually invest in sta
r units as they are feeling that the future of their company depends on the succ
ess or failure of that particular unit or product. 3.3.2 CASH COWS: If IMCs Toyot
a Corolla could maintain its large market share, it will become a Cash Cow when
the market growth rate would decline. The portfolio of a diversified company alw
ays should have stars that will become the next cash cows and ensure future cash
generation. Typically needs this cash to support its rapid and significant grow
th. It generates large amounts of cash for the organization and usually segments
in which management can make additional investments and earn attractive returns
. In UNIVERSITY OF EDUCATION OKARA CAMPUS 28
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT case of Indus Motor Company Lim
ited, the Hilux is a cash cow for the company which earns a lot of cash for the
company and company utilize this cash to run its future units like Toyota Coroll
a. 3.3.3 QUESTION MARK: According to Boston consulting group matrix, a question
mark is such a business unit about which you are not about the success or failur
e. The unit can be very successful in the market or it can be simply being ruine
d of. In case of IMC the question mark is actually the Cuore. It is due to the l
arge competition of in this category of cars. As the Suzuki Aulto, Mehran, Santr
o and some imported vehicles like Vitz are already present in the market. 3.3.4
DOGS: This category of BCG matrix includes the product that has no market share
as well as consuming the large amount of cash instead of generating the cash. Th
e company wants to dissolve that product.
3.4 TOYOTA COROLLA BCG MATRIX:
If we analyze the position of Toyota Corolla by using the Boston consulting grou
p matrix in a market than it will show the following result.
29
STAR 2.0D 2.0D Saloon
CASH COWS SE Saloon GLi
QUESTION MARK Xli 1.3
DOGS
30
4.1 CONDENSED INCOME STATEMENT:
Indus Motor Company Limited Condensed Income Statement For The Year Ended June 3
0,
2005 Net Sales Gross Profit Operating Profit Profit before Taxation Net Profit 2
7,601,034 2,706,178 2,134,221 2,302,957 1,484,646
2006 35,236,535 4,147,629 3,500,256 4,072,777 2,648,464
2007 (Rupees in 000) 39,061,226 4,440,594 3,665,306 4,229,481 2,745,701
2008 41,423,843 3,848,487 3,063,830 3,541,711 2,290,845
2009 37,864,604 2,324,186 1,501,952 2,046,013 1,385,102
It is clearly seen that net sales of the company is showing an increasing trend
in all the years except that of FY 2009 which was caused due to the low producti
ons of cars. The reason behind low production is the instable environment of Pak
istan in last year.
The gross profit is also showing the same trend up to FY 2007 but there is a mas
sive decrease in gross profit in FY 2008 which was due to the increase in cost o
f goods sold. Than gross profit again decrease in FY 2009. It is due to the low
sales of the company.
The details and trends are all discussed below in the item wise analysis of summ
arized income statement of the company and the annexed notes form an integral pa
rt of this income statement.
32
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 4.2
NET SALES:
2005 2006 2007 (Rupees in 000) 2008 2009
Net Sales Comparative Chain Base
27,601,034
35,236,535
39,061,226
41,423,843
37,864,604
7,635,501
3,824,691
2,362,617
(3,559,239)
Percentage Comparative Chain Base
27.66%
10.85%
6.05%
-8.59%
Percentage Comparative 2005 Base
127.66%
141.52%
150.08%
137.19%
Vertical Common Size
100.00%
100.00%
100.00%
100.00%
100.00%
In comparison with FY 2005, sales of FY 2006 have been increased by 7.63 billion
s. Similarly in FY 2007 and FY 2008 there is an increasing trend by 3.82 billion
s and 2.36 billions while there is decrease in sales of 3.55 billions in FY 2009
with respect to the preceding years.
In the term of percentage sales have increased by 27.66% in FY 2006 as compared
to FY 2005. In FY 2007, as compared to FY 2006, sales increased by 10.85% wherea
s the increase was 6.05% in FY 2008, as compared to FY 2007, while there is a de
crease of 8.59% in sales in FY 2009 as compared to the FY 2008. The sales have i
ncreased 41.52%, 50.08% and 37.19% in FY 2007, FY 2008 and FY 2009 as compare to
FY 2005.
33
4.3 COST OF GOODS SOLD:
2005 2006 2007 (Rupees in 000) 2008 2009
C.G.S
24,894,856
31,088,906
34,620,632
37,575,356
35,540,418
Comparative Chain Base
6,194,050
3,531,726
2,954,724
(2,034,938)
24.88%
11.36%
8.53%
-5.42%
124.88%
139.07%
150.94%
142.76%
Vertical Common size
90.20%
88.23%
88.63%
90.71%
93.86%
In FY 2006, FY 2007 and FY 2008 increase in C.G.S has been recorded with 6.19 bi
llions, 3.53 billions and 2.95 billions with respect to the preceding year. In F
Y 2009 C.G.S has been decreased by 2.03 billions as compared to FY 2008 due to t
he low production.
An increasing trend was recorded by 24.88%, 11.36% and 8.53% in FY 2006, FY 2007
and FY 2008 respectively as compare to the preceding years. While C.G.S decreas
ed by 5.42% in FY 2009 with respect to FY 2008. As compared to FY 2005 C.G.S inc
reased by 39.07%, 50.94% and 42.76% in FY 2007, FY 2008 and FY 2009 respectively
.
There is a deceasing trend in C.G.S as a part of sales. C.G.S has decreased by 9
.80%, 11.77%, 11.37%, 9.29% and 6.14% in FY 2005, FY 2006, FY 2007, FY 2008 and
FY 2009 respectively. UNIVERSITY OF EDUCATION OKARA CAMPUS 34
4.4 GROSS PROFIT:
2005 2006 2007 (Rupees in 000) 2008 2009
Gross Profit
2,706,178
4,147,629
4,440,594
3,848,487
2,324,186
1,441,451
292,965
(592,107)
(1,524,301)
53.27%
7.06%
-13.33%
-39.61%
153.27%
164.09%
142.21%
85.88%
9.80%
11.77%
11.37%
9.29%
6.14%
G.P of FY 2006 and FY 2007 increased by 1.44 billions and 292 millions as compar
ed to the FY 2005 and FY 2006 respectively. In FY 2008 and FY 2009 there was a d
ecrease of 592 millions and 1.52 billions in G.P as compared to FY 2007 and FY 2
008 respectively.
G.P has been increased by 53.27% and 7.06% in FY 2006 and FY 2007 as compared to
the FY 2005 and FY 2006 respectively. While GP of FY 2008 and FY 2009 decreased
by 13.33% and 39.61% with respect to preceding years respectively. As compared
to FY 2005 G.P has been increased by 64.09% and 42.21%, in FY 2007 and FY 2008 r
espectively while in FY 2009 the decrease of 14.12% as compared to FY 2005 was r
ecorded.
As compared to sales, G.P has been decreased by 90.02%, 88.23%, 88.63%, 90.71% a
nd 93.86% in FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009 respectively. UNIVER
SITY OF EDUCATION OKARA CAMPUS 35
4.5 OPERATING EXPENSES:
2005 2006 2007 (Rupees in 000) 2008 2009
Operating Expenses
571,957
647,373
775,288
784,657
822,234
75,416
127,915
9,369
37,577
13.19%
19.76%
1.21%
4.79%
113.19%
135.55%
137.19%
143.76%
2.07%
1.84%
1.98%
1.89%
2.17%
Operating expenses have been increased by 75.1 millions, 127 millions, 9.3 milli
ons and 37.5 millions in FY 2006, FY 2007, FY 2008 and FY 2009 respectively in c
omparison with the preceding years.
In terms of percentage, operating expenses have been increased by 13.19%, 19.76%
, 1.21% and 4.79% in FY 2006, FY 2007, FY 2008 and FY 2009 respectively in compa
rison with the preceding years. As compared to FY 2005 increase of 35.55%, 37.19
%, 43.76% was recorded in FY 2007, FY 2008 and FY 2009 respectively.
As compare to sales, there is a significant decrease in operating expenses by 97
.93%, 98.16%, 98.02%, 98.11% and 97.83% in FY 2005, FY 2006, FY2007, FY 2008 and
FY 2009 respectively.
36
4.6 OPERATING PROFIT:
2005 2006 2007 (Rupees in 000) 2008 2009
Operating Profit
2,134,221
3,500,256
3,665,306
3,063,830
1,501,952
1,366,035
165,050
(601,476)
(1,561,878)
64.01%
4.72%
-16.41%
-50.98%
164.01%
171.74%
143.56%
70.37%
7.73%
9.93%
9.38%
7.40%
3.97%
Operating profit is increasing from FY 2006 to FY 2007 by 1.36 billions and 165
millions in comparison with the FY 2005 and FY 2006 respectively. While it decre
ased in FY 2008 and FY 2009 by 601 millions and 1.56 billions respectively with
respect to the previous years.
In FY 2006 and FY 2007 operating profit increased by 64.01% and 4.72 % respectiv
ely as compared to FY 2005 and FY 2006. Then it decreased by 16.41% and 50.98% i
n FY 2008 and FY 2009 respectively as compared to FY 2007 and FY 2008. In FY 200
7 and FY 2008 increase of 71.74% and 43.56 was recorded as compared to the FY 20
05, while the decrease of 29.63% was recorded on FY 2009 as compared to FY 2005.
Operating profit is 7.73% and 9.93 % of sales in FY 2005 and FY 2006 then it dec
reased to 9.38%, 7.40% and 3.97 % in FY 2007, FY 2008 and FY 2009 respectively.
4.7 OTHER OPERATING EXPENSES:
2005 2006 2007 (Rupees in 000) 2008 2009
Other Operating Expenses
186,614
321,746
348,430
306,193
156,479
135,132
26,684
(42,237)
(149,714)
72.41%
8.29%
-12.12%
-48.90%
172.41%
186.71%
164.08%
83.85%
0.68%
0.91%
0.89%
0.74%
0.41%
In FY 2006 and FY 2007 other operating expenses increased by 135 millions and 26
millions respectively as compared to the preceding years. While the decrease of
42 millions and 149 millions was recorded in FY 2008 and FY 2009 respectively a
s compared to preceding years.
In terms of percentage as compared to the preceding years, in FY 2006 and FY 200
7 other operating expenses increased by 72.41% and 8.89% respectively while decr
eased by 12.12% and 48.90% in FY 2008 and FY 2009 respectively. As compared to F
Y 2005 the other operating expenses increased by 86.71% and 64.08% in FY 2007 an
d FY 2008 respectively, while decreased by 16.15% in FY 2009.
Other operating expenses are recorded as less than 1% of the sales in all the ye
ars.
38
4.8 OTHER OPERATING INCOME:
2005 2006 2007 (Rupees in 000) 2008 2009
Other Operating Income Comparative Chain Base Percentage Comparative Chain Base
449,443
1,021,212
935,290
786,834
727,080
571,769
(85,922)
(148,456)
(59,754)
127.22%
-8.41%
-15.87%
-7.59%
227.22%
208.10%
175.07%
161.77%
1.63%
2.90%
2.39%
1.90%
1.92%
In FY 2006 increase of 571 millions was recorded in other operating income as co
mpared to the FY 2005 while the decrease by 85 millions, 148 millions and 59 mil
lions was recorded in and FY 2007, FY 2008 and FY2009 respectively with respect
to the preceding years.
In terms of percentage other operating income has increased by 127.22% in FY 200
6 as compared to the FY 2005, while the massive decrease of 8.41%, 15.87 % and 7
.59% was recorded in FY 2007, FY 2008 and FY 2009 respectively with respect to t
he preceding years. As compared to FY 2005 the other operating income increased
by 108.10%, 75.07% and 61.77% in FY 2007, FY 2008 and FY 2009 respectively.
Other operating income as compared to sales was 1.63% in FY 2005 than it increas
ed to 2.90% in FY 2006 than it decreased to 2.39% and 1.90% in FY 2007 and FY 20
08 respectively. While in FY 2009 it decreased to 1.92%. UNIVERSITY OF EDUCATION
OKARA CAMPUS 39
4.9 PROFIT BEFORE INTERST AND TAX:
2005 2006 2007 (Rupees in 000) 2008 2009
Profit before Interest and Tax
2,397,050
4,199,722
4,252,166
3,544,471
2,072,553
1,802,672
52,444
(707,695)
(1,471,918)
75.20%
1.25%
-16.64%
-41.53%
175.20%
177.39%
147.87%
86.46%
8.68%
11.92%
10.89%
8.56%
5.47%
In chain base comparison, EBIT was increased by 1.80 billions and 52 millions in
FY 2006 and FY 2007 as compared to preceding years. It decreased by 707 million
s and 1.47 billions in FY 2008 and FY 2009 respectively with respect to the prec
eding years.
In terms of percentage, the profit increased by 75.20% and 1.25% in FY 2006 and
FY 2007 respectively with respect to the preceding years. But massive decrease o
f 16.64% and 41.53% was recorded in FY 2008 and FY 2009 respectively as compared
to the preceding years. As compared to FY 2005 the profit increased by 77.39% a
nd 47.87% in FY 2007 and FY 2008 respectively, while profit decreased up to 13.5
4% in FY 2009.
As a part of sales, EBIT is 8.68 % in FY 2005, 11.92% in FY 2006, 10.89% in FY 2
007, 8.56% in FY 2008, and 5.47% in FY 2009. UNIVERSITY OF EDUCATION OKARA CAMPU
S 40
4.10 FINANCE COST:
2005 2006 2007 (Rupees in 000) 2008 2009
Finance Costs
94,093
126,945
22,685
2,760
26,540
32,852
(104,260)
(19,925)
23,780
34.91%
-82.13%
-87.83%
861.59%
134.91%
24.11%
2.93%
28.21%
0.34%
0.36%
0.06%
0.01%
0.07%
Finance cost has increased by 32 millions in FY 2006 as compared to the FY 2005
while it decreased by 104 millions and 19 millions in FY 2007 and FY 2008 respec
tively as compared to the preceding years. While it increased by 23 millions in
FY 2009 as compared to the FY 2008.
In comparison with the previous years it increased by 34.91% in FY 2006, while i
t decreased by 82.13% and 87.83% in FY 2007 and FY 2008 respectively. Than massi
ve increase of 861.59% was recorded in FY 2009. As compared to the FY 2005 finan
ce cost decreased by 75.89%, 97.07% and 71.79% in FY 2007, FY 2008 and FY 2009 r
espectively.
Finance cost is recorded as less than 1% of the sales in all the years.
41
4.11 PROFIT BEFORE TAXATION:
2005 2006 2007 (Rupees in 000) 2008 2009
Profit before Taxation
2,302,957
4,072,777
4,229,481
3,541,711
2,046,013
1,769,820
156,704
(687,770)
(1,495,698)
76.85%
3.85%
-16.26%
-42.23%
176.85%
183.65%
153.79%
88.84%
8.34%
11.56%
10.83%
8.55%
5.40%
In FY 2006 and FY 2007 profit before taxation increased by 1.76 billions and 156
millions as compared to FY 2005 and FY 2006. Then it decreased by 687 millions
and 1.49 billions in comparison with the preceding years.
Profit before tax has increased by 76.85% and 3.85% in FY 2006 and FY 2007 in co
mparison with the preceding years while it decreased by 16.26% and 42.23% in FY
2008 and FY 2009 as compared to the preceding years. It increased by 83.65% and
53.79% in FY 2007 and FY 2008 respectively while it decreased by 11.16% in FY 20
09 in comparison with the FY 2005.
Profit before taxation is 8.34% of sales in FY 2005. It increased to 11.56% in F
Y 2006, and then it decreased to 10.83%, 8.55% and 5.40% in FY 2007, FY 2008 and
FY 2009 respectively. UNIVERSITY OF EDUCATION OKARA CAMPUS 42
4.12 TAXATION:
2005 2006 2007 (Rupees in 000) 2008 2009
Taxation
818,311
1,424,313
1,483,780
1,250,866
660,911
606,002
59,467
(232,914)
(589,955)
74.06%
4.18%
-15.70%
-47.16%
174.06%
181.32%
152.86%
80.77%
2.96%
4.04%
3.80%
3.02%
1.75%
Tax revenues have increased by 606 millions 59 millions in FY 2006 and FY 2007 r
espectively in comparison with the previous years. While it decreased by 232 mil
lions and 589 millions in FY 2008 and FY 2009 respectively as compared to the pr
eceding years.
In terms of percentage, it increased by 74.06% and 4.18% in FY 2006 and FY 2007
in comparison with the preceding years, while it decreased by 15.70% and 47.16%
in FY 2008 and FY 2009 respectively as compared to previous years. As compared t
o FY 2005 tax revenues increased by 81.32% and 52.86% in FY 2007 and FY 2008 res
pectively, while it decreased by 19.23% in FY 2009.
Taxation is 2.96% in FY 2005, 4.04% in FY 2006, 3.80% in FY 2007, 3.02% in FY 20
08 and 1.75% in FY 2009 of sales.
43
4.13 PROFIT AFTER TAXATION:
2005 2006 2007 (Rupees in 000) 2008 2009
Profit After Taxation
1,484,646
2,648,464
2,745,701
2,290,845
1,385,102
1,163,818
97,237
(454,856)
(905,743)
78.39%
3.67%
-16.57%
-39.54%
178.39%
184.94%
154.30%
93.30%
5.38%
7.52%
7.03%
5.53%
3.66%
As compared to the previous years, net income of the company increased by 1.16 b
illions and 97 millions in FY 2006 and FY 2007 respectively, while it increased
by 454 millions and 905 millions in FY 2008 and FY 2009 respectively.
In terms of percentage, in comparison with the preceding years the income of com
pany increased by 78.39% and 3.67% in FY 2006 and FY 2007 respectively, but it d
ecreased massively by 16.57 and 39.54% in FY 2008 and FY 2009 respectively. As c
ompared to the FY 2005 the increased of 84.94% and 54.30% was recorded in net in
come in FY 2007 and FY 2008, while it decreased by 6.70% in FY 2009.
As a part of sales, profit was 5.38%, 7.52%, 7.03% 5.53% and 3.66% in FY2005, FY
2006, FY 2007, FY 2008 and FY 2009 respectively. UNIVERSITY OF EDUCATION OKARA
CAMPUS 44
5.1 CONDENSED BALANCE SHEET:
Indus Motor Company Limited Condensed Balance Sheet As on June 30,
2005
2006
2007
(Rupees in 000)
2008
2009
Current Assets Less: Current Liabilities Net Working Capital Net Fixed Assets Ca
pital Work-in-progress Intangible Assets Other Non Current Assets Net Assets Pos
ition Non-Current Liabilities Long Term Debt Equity Net Liability and Equity Pos
ition
11,177,940 7,664,062 3,513,878 901,035 87,307 10,545 17,690 4,530,455 54,650 4,4
75,805 4,530,455
14,095,657 9,444,554 4,651,103 1,408,314 302,153 6,123 10,221 6,377,914 120,035
6,257,879 6,377,914
13,560,329 7,410,926 6,149,403 1,902,912 187,372 3,568 10,869 8,254,124 210,149
8,043,975 8,254,124
9,664,784 3,779,631 5,885,153 3,592,271 438,696 2,795 49,563 9,968,478 532,138 9
,436,340 9,968,478
16,715,319 9,884,850 6,830,469 3,900,977 29,524 3,972 35,731 10,800,673 503,700
10,296,973 10,800,673
The condensed balance sheet of FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009 is
giving a clear look at the companys resources and claims of outsiders.
Net assets of the company are showing an increasing trend from FY 2005 to FY 200
9.
The long term debt position of the company is obvious and seems that company has
a real strong background. There was no claim of outsiders on the companys resour
ces.
The detail of trends of balance sheet is discussed below item wise and the annex
ed notes are also at the end of the report which forms an integral part of the a
bove sheet.
46
5.2 CURRENT ASSETS:
2005 2006 2007
(Rupees in 000)
2008
2009
Current Assets
11,177,940
14,095,657
13,560,329
9,664,784
16,715,319
2,917,717
(535,328)
(3,895,545)
7,050,535
26.10%
-3.80%
-28.73%
72.95%
126.10%
121.31%
86.46%
149.54%
91.66%
89.09%
86.56%
70.30%
80.81%
In comparison to the preceding years, the current assets increased in FY 2006 by
2.91 billions and than decreased by 535 millions and 3.89 billions in FY 2007 a
nd FY 2008 respectively, while again increase of 7.05 billions was recorded in F
Y 2009.
In terms of percentage, with respect to the preceding years the increase of 26.1
0% was recorded in FY 2006, while current assets decreased by 3.80% and 28.73% i
n FY 2007 and FY 2008 respectively, than it increased by 72.95% in FY 2009. As c
ompared to FY 2005, increase of 21.31% was recorded in FY 2007, than it decrease
d by 13.54% in FY 2008 and again it increased by 49.54% in FY 2009.
Current assets were 91.66% of total assets in FY 2005, 89.09% in FY 2006, 86.56%
in FY 2007, 70.30% in FY 2008 and 80.81% in FY 2009.
47
5.3 CURRENT LIABILITIES:
2005 2006 2007
(Rupees in 000)
2008
2009
Current Liabilities
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
1,780,492
(2,033,628)
(3,631,295)
6,105,219
23.23%
-21.53%
-49.00%
161.53%
123.23%
96.70%
49.32%
128.98%
62.85%
59.69%
47.31%
27.49%
47.79%
As compared to the previous years, the current liabilities increased in FY 2006
by 1.78 billions and than decreased by 2.03 billions and 3.63 billions in FY 200
7 and FY 2008 respectively. It again increased by 6.10 billions in FY 2009.
The percentage change was increase of 23.23% in FY 2006 than decrease of 21.53%
and 49.00% in FY 2007 and FY 2008 respectively, and increase of 161.53% in FY 20
09 as compared to the preceding years. In comparison with FY 2005 the decrease o
f 3.30% and 50.68% was recorded in FY 2007 and FY 2008 respectively, while it in
creased by 28.98% in FY 2009.
As a part of total liabilities and shareholders equity, total currents liabilitie
s were 62.85%, 59.69%, 47.31%, 27.49% and 47.79% in FY2005, FY2006, FY 2007, FY
2008 and FY 2009 respectively.
48
5.4 TOTAL FIXED ASSETS:
2005 2006 2007
(Rupees in 000)
2008
2009
Total Fixed Assets
998,887
1,716,590
2,093,852
4,033,762
3,934,473
717,703
377,262
1,939,910
(99,289)
71.85%
21.98%
92.65%
-2.46%
171.85%
209.62%
403.83%
393.89%
8.19%
10.85%
13.37%
29.34%
19.02%
Total fixed assets were increased by 717 millions, 377 millions and 1.93 billion
s in FY 2006, FY 2007 and FY 2008 as compared with FY 2005, FY 2006 and FY 2007
respectively, while the decrease of 99 millions was recorded in FY 2009 as compa
red to FY 2008.
There was increase of 71.85%, 21.98% and 92.65% in FY 2006, FY 2007 and FY 2008
respectively as compared to the previous years, while the decrease of 2.46% was
recorded in FY 2009 in comparison with FY 2008. The increase of 109.62% in FY 20
07, 303.83% in FY 2008 and 293.89% in FY 2009 was observed in total fixed assets
as compare to the FY 2005.
In terms of total assets, total fixed assets were 8.19% in FY 2005, 10.85%in FY
2006, 13.37% in FY 2007, 29.34% in FY 2008 and 19.02 in FY 2009.
49
5.5 TOTAL ASSETS:
2005 2006 2007
(Rupees in 000)
2008
2009
Total Assets
12,194,517
15,822,468
15,665,050
13,748,109
20,685,523
3,627,951
(157,418)
(1,916,941)
6,937,414
Percentage Comparative Chain Base 29.75%
-0.99%
-12.24%
50.46%
129.75%
128.46%
112.74%
169.63%
100.00%
100.00%
100.00%
100.00%
100.00%
Total assets were increased by 3.62 billions in FY 2006 as compared to the FY 20
05, while decreasing trend of 157 millions and 1.91 billions was observed in FY
2007 and FY 2008 respectively as compared to the preceding years. It again incre
ased by 6.93 billions in FY 2009 as compared to the FY 2008.
In percentage change an increase of 29.75% was recorded in FY 2006 as compared w
ith previous year, while it decreased by 0.99% and 12.24% in FY 2007 and FY 2008
respectively as compared to the previous years. It gain increased by 50.46% in
FY 2009 in comparison with FY 2008. As compared to the FY 2005 total assets incr
eased by 28.46%, 12.74% and 69.63% in FY 2007, FY 2008 and FY 2009 respectively.
50
5.6 LONG TERM DEBT:
2005 2006 2007
(Rupees in 000)
2008
2009
Long Term Debt
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
There is no long term debt of the company so there is no change in percentage al
so.
51
5.7 TOTAL LIABILITIES AND EQUITY:
2005 2006 2007
(Rupees in 000)
2008
2009
Total Liabilities and Equity
12,194,517
15,822,468
15,665,050
13,748,109
20,685,523
3,627,951
(157,418)
(1,916,941)
6,937,414
29.75%
-0.99%
-12.24%
50.46%
129.75%
128.46%
112.74%
169.63%
100.00%
100.00%
100.00%
100.00%
100.00%
Total liabilities and share holders equity were increased by 3.62 billions in FY
2006 as compared to the FY 2005, while decreasing trend of 157 millions and 1.91
billions was observed in FY 2007 and FY 2008 respectively as compared to the pr
eceding years. It again increased by 6.93 billions in FY 2009 as compared to the
FY 2008.
In percentage change an increase of 29.75% was recorded in total liabilities and
share holders equity in FY 2006 as compared with previous year, while it decreas
ed by 0.99% and 12.24% in FY 2007 and FY 2008 respectively as compared to the pr
evious years. It gain increased by 50.46% in FY 2009 in comparison with FY 2008.
In comparison with the FY 2005 total liabilities and share holders equity increa
sed by 28.46%, 12.74% and 69.63% in FY 2007, FY 2008 and FY 2009 respectively.
52
6.1 SHORT TERM DEBT PAYING ABILITY:
6.1.1 NET WORKING CAPITAL: Net working capital is a financial metric which repre
sents operating
liquidity available to a business. Along with fixed assets such as plant and equ
ipment, working capital is considered a part of operating capital. It is calcula
ted by following formula: Current Assets - Current Liabilities
2005
3,513,878
2006
4,651,103
2007
6,149,403
2008
5,885,153
2009
6,830,469
Interpretation:
Working capital of the company has always been maintained very high up to FY 200
7. The company then reduced it in FY 2008 to avoid excessive working capital but
in FY 2009 it again increased which shows company has sufficient capital to pay
its liabilities.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.1.2 CURRENT RATIO: The curren
t ratio is a financial ratio that measures whether or not a firm has enough reso
urces to pay its debts over the next 12 months. It compares a firm s current ass
ets to its current liabilities. It is expressed as follows: Current Assets Curre
nt Liabilities
2005
1.46 : 1
2006
1.49 : 1
2007
1.83 : 1
2008
2.56 : 1
2009
1.69 : 1
Interpretation:
Current Ratio of the company has a increasing trend up to FY 2008. It was minimu
m in FY 2005. As the graph shows that current ratio remains positive in last fiv
e years so the company has the ability to pay its current liabilities with its c
urrent assets. Current ratio was maximum in FY 2008 than once again it decreased
in FY 2009 due to increase in liabilities
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.1.3 ACID TEST RATIO: A string
ent test that indicates whether a firm has enough short-term assets to cover its
immediate liabilities without selling inventory. The acid-test ratio is far mor
e strenuous than the working capital ratio, primarily because the working capita
l ratio allows for the inclusion of inventory assets. Current Assets - Inventory
Current Liabilities
2005
1.05 : 1
2006
1.07 : 1
2007
1.44 : 1
2008
1.86 : 1
2009
1.28 : 1
Interpretation:
Quick ratio of the company has an increasing trend up to FY 2008 showing the ade
quacy in paying off the current liabilities. Then it decreased slightly in FY 20
09. But as a whole the graph shows that company has a tendency that the most liq
uid assets of the company are in a position to payoff the current liabilities.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.1.4 CASH RATIO: The cash rati
o is a formula for measuring the liquidity of the company by calculating the rat
io between all cash and cash equivalent assets and all the current liabilities.
The formula for calculating the cash ratio is as under: Marketable Securities +
Cash Current Liabilities
2005
0.88 : 1
2006
0.79 : 1
2007
1.15 : 1
2008
1.16 : 1
2009
0.98 : 1
Interpretation:
Cash ratio of the company was quite good in FY 2005 and FY 2006, than it increas
ed in FY 2007 and FY 2008 showing that company in not using cash to its best adv
antage. In FY 2009 the decrease in cash ratio shows that company has now started
using the cash up to its maximum advantage.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.1.5 CASH FLOW FROM OPERATIONS
RATIO: Cash flow from operations or operating cash flow ratio measure of how we
ll current liabilities are covered by the cash flow generated from a company s o
perations. The formula for calculating the ratio is: Cash from Operations Curren
t Liabilities
2005
0.12 : 1
2006
0.28 : 1
2007
0.38 : 1
2008
(0.21) : 1
2009
0.66 : 1
Interpretation:
Cash flow from operations ratio of the company was low in FY 2005 showing that t
he operating profit of the company was not meeting the need of short term liabil
ities well. Ratio increased in FY 2006 and FY 2007. But the company was facing t
he problems in FY 2008 of meeting the need of current liabilities from its opera
ting profit due to the negative cash flow. In FY 2009 the ratio again increased
and now the company is in a position to meet its short term cash needs well in t
ime.
6.2 LONG TERM DEBT PAYING ABILITY:
6.2.1 TIME INTEREST EARNED RATIO: The times interest earned ratio is an Indicato
r of a companys ability to meet the interest payments on its debt. The times inte
rest earned calculation is a corporations income before interest and income tax e
xpense, divided by interest expense. The calculating method is: Earning before I
nterest and Tax Interest Expense
2005
25.48
2006
33.08
2007
187.44
2008
1,284.23
2009
78.09
Interpretation:
The times interest earned ratio of the company was very low in FY 2005 and FY 20
06. This is due to the high interest expense of the company. In FY 2007 and FY 2
008 a increasing trend is shown in the ratio which shows that company has reduce
d its interest expenses. But in FY 2009, after a massive decrease, company is st
ill able to generate 78 times the expense of interest from its operations. UNIVE
RSITY OF EDUCATION OKARA CAMPUS 59
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.2.2 FIXED CHARGED COVERAGE RA
TIO: A ratio that indicates a firm s ability to satisfy fixed financing expenses
, such as interest and leases. A ratio calculated by dividing profits before pay
ment of interest and income taxes by interest paid on bonds and other long-term
debt. It is calculated as the following: Earning before Interest and Tax Interes
t + Lease Payment + Principal Payment
2005
22.60
2006
32.10
2007
187.44
2008
1,284.23
2009
78.09
Interpretation:
Fixed charged coverage ratio of the company is mostly same as time interest earn
ed ratio. It shows that company has no long term finances on which company has t
o pay interest. Company has the liability against leased assets in FY 2005 and F
Y 2006. Figure shows the increasing trend from FY 2005 to FY 2008 which means th
at company has better position to pay its debt expenses. Than it decreased in FY
2009 but still company is in good position. UNIVERSITY OF EDUCATION OKARA CAMPU
S 60
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.2.3 DEBT RATIO: The ratio giv
es an idea to the leverage of the company along with the potential risks the com
pany faces in terms of its debt-load. A low percentage means that the company is
less dependent on leverage. The lower the percentage, the less leverage a compa
ny is using and the stronger its equity position. In general, the higher the rat
io, the more risk that company is considered to have taken on. The formula for c
alculating the debt ratio is:
(
2005
63.30%
Total Liabilities Total Assets
)100
2008
31.36%
2006
60.45%
2007
48.65%
2009
50.22%
Interpretation:
Debt ratio of the company is significantly decreasing from FY 2005 to FY 2008. I
t reached to its lowest of 31.36% in FY 2008 but than there was increase in FY 2
009. The decreasing trend of the debt ratio is due to the decrease in total liab
ilities. That is beneficial for company. But in FY 2009 the liabilities of the c
ompany increased but the assets of the company also increased.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.2.4 DEBT EQUITY RATIO: This r
atio indicates how much the company is in debt by comparing what is owed to what
is owned. A high debt to equity ratio could indicate that the company may be ov
er-leveraged, and should look for ways to reduce its debt.
(
2005
0.00%
Long Term Debt Share Holder s Equity
)100
2008 2009
0.00%
2006
0.00%
2007
0.00%
0.00%
Interpretation:
The figure shows that company had enough equity to serve over period of time. Th
e graph shows the strategy of the company that company is totally based on equit
y. Debt is not taken to run the operations of the company.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.2.5 DEBT TO TANGIBLE NETWORTH
: Debt to tangible net worth ratio measures the degree of protection that exists
for creditors. The lower the ratio the better is for company. The value is comp
uted by dividing total liabilities by total equity minus intangible assets. The
formula is:
(
2005
172.86%
Total Liabilities Owner s Equity - Intangible Assets
)100
2009
100.93%
2006
152.99%
2007
94.78%
2008
45.71%
Interpretation:
Debt to tangible net worth ratios shows the decreasing trend from FY 2005 to FY
2008 which is very good for the company. The decrease in the ratio is due to the
decrease in the intangible assets of the company. The ratios increased once aga
in FY 2009 due to increase in intangible assets of the company.
6.3 SHORT TERM LIQUIDITY:
6.3.1 DAYS SALES IN A/R: The ratios measure of the average number of days that a
company takes to collect revenue after a sale has been made. The formula of the
ratio is: Gross A/R Net Sales / 365 days
2005
13.09
2006
24.89
2007
15.86
2008
18.90
2009
26.02
Interpretation:
Accounts receivable turnover in days is 13 days in FY 2005 and then it increased
in FY 2006 up to 25 days but then it decreased to 16 days in FY 2007. After thi
s it
showed an increasing trend up to FY 2009. This shows that receivables management
of the company is not improving as compared to the previous years and 7 days ha
ve been increased in this manner in FY 2009 as compared to the FY 2008.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.3.2 ACCOUNTS RECEIVABLE TURNO
VER: Measures the number of times accounts receivable are collected during the y
ear. This ratio measures the efficiency of credit and collection policies and th
e quality of outstanding average accounts receivable. The formula of the ratio i
s: Net Sales Gross A/R
2005
27.89
2006
14.66
2007
23.01
2008
19.32
2009
14.03
Interpretation:
Accounts receivable turnover of the company was maximum in FY 2005 i.e. 27.89 ti
mes. Than it decreased to 14.66 times in FY 2006. Once again increase was record
ed in FY 2007 of 23.01 times. Than decreasing trend was recorded in FY 2008 and
FY 2009. This shows that company in not managing its receivable in better ways a
s compared to the previous years. Company is collecting receivable only 14.03 ti
mes in FY 2009 in comparison with the previous years. This is all due to the dec
rease in the volume of sales and increase in trade receivable. UNIVERSITY OF EDU
CATION OKARA CAMPUS 65
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.3.3 DAYS SALES IN INVENTORY: A
financial measure of a company s performance that gives investors an idea of ho
w long it takes a company to turn its inventory into sales. Generally, the lower
(shorter) the days sale in inventory is the better. It can be calculated by foll
owing formula: Ending Inventory Cost of Goods Sold / 365 days
2005
11.80
2006
15.55
2007
5.57
2008
10.92
2009
14.20
Interpretation:
Days sales in inventory shows and increasing trend of 4 day in FY 2007 as compare
d to the previous year. Than it decreased to 5.57 days in FY 2007. After this in
crease is recorded in FY 2007 and FY 2008. Company is taking 14.20 days to conve
rt its inventory into sales in FY 2009, while company was taking 10.92 days in F
Y 2008. The inventory management was best in FY 2007 in which company was taking
5.57 days.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.3.4 INVENTORY TURNOVER: The i
nventory turnover is an equation that measures the number of times inventory is
sold or used over in a period such as a year. The formula is expressed as follow
: Cost of Goods Sold Average Inventory
2005
42.20
2006
29.20
2007
37.38
2008
45.49
2009
28.36
Interpretation:
In FY 2005, inventory turnover was 42.20 times but then it decreased in FY 2006.
In FY 2007 and FY 2008 it increased. In FY 2009, there was a decrease in invent
ory turnover and it reached to 28.36 times. The reason behind a low turnover is
the increase in cost of sales. The cost of sales showed a massive increase becau
se of increased cost of raw material.
6.4 PROFITABILITY INDEX:
6.4.1 NET PROFIT MARGIN: A ratio of profitability calculated as net profits divi
ded by net sales. It measures how much out of every dollar of sales a company ac
tually keeps in earnings. The formula to calculate the net profit margin is:
(
2005
5.38%
Net Income Net Sales
)100
2008
5.53%
2006
7.52%
2007
7.03%
2009
3.66%
Interpretation:
Net profit of the company shows an increasing trend in up to FY 2006. Than from
FY 2007 to FY 2009 it shows the decrease in the net profit. Net profit is minimu
m in FY 2009 i.e.3.66% as compared to the previous years.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.2 TOTAL ASSETS TURNOVER: A
financial ratio that indicates the effectiveness with which a firm s management
uses its assets to generate sales. A relatively high ratio tends to reflect inte
nsive use of assets. The formula for calculating the ratio is: Net Sales Total A
ssets
2005
2.26
2006
2.23
2007
2.49
2008
3.01
2009
1.83
Interpretation:
The ratio has decreased to 2.23 in FY 2006 from 2.26 in FY 2005. Then it showed
a very good increase in FY 2007 and FY 2008 and reached to 2.49 and 3.01 respect
ively. But once again ratio decreased to 1.83 in FY 2009. The reason behind this
decrease is the decrease in volume of sales.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.3 RETURN ON ASSETS: An indi
cator of how profitable a company is relative to its total assets. ROA gives an
idea as to how efficient management is at using its assets to generate earnings.
The formula for calculating the ratio is:
(
2005
12.17%
Net Income Total Assets
)100
2008
16.66%
2006
16.74%
2007
17.53%
2009
6.70%
Interpretation:
The ratio has a increasing trend up to FY 2007. This increase is due to the incr
ease in total assets. And then it showed the decreasing trend in FY 2008 and FY
2009. The decrease in the ratio is FY 2007 was due to the decrease in total asse
ts as compared to the previous years while the reason of decrease in the FY 2009
is the decrease in the net income of the company.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.4 OPERATING INCOME MARGIN:
A ratio used to measure a company s pricing strategy and operating efficiency. O
perating margin is a measurement of what proportion of a company s revenue is le
ft over after paying for variable costs of production such as wages, raw materia
ls, etc. The formula for calculating the ratio is:
(
2005
7.73%
Operating Income Net Sales
)100
2008
7.40%
2006
9.93%
2007
9.38%
2009
3.97%
Interpretation:
The operating income margin of the company has an increasing trend up to FY 2006
. But then it decreased slightly in FY 2007 to 9.38% from 9.93% in FY 2006. The
trend remains decreasing in FY 2008 and FY 2009. The decrease in last two years
is due to the decrease in operating profit of the company.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.5 OPERATING ASSETS TURNOVER
: A financial ratio that indicates the effectiveness with which a firm s managem
ent uses its operating assets to generate sales. The calculation technique for t
he ratio is: Net Sales Operating Assets
2005
30.63
2006
25.02
2007
20.53
2008
11.53
2009
9.71
Interpretation:
The turnover is showing a decreasing trend up to FY 2009. The reason behind the
trend is the increase in operating assets.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.6 RETURN ON OPERATING ASSET
S: An indicator of how profitable a company is relative to its operating assets.
Return on operating assets gives an idea as to how efficient management is at u
sing its operating assets to generate earnings. The ratio is calculated as follo
w:
(
2005
164.77%
Net Income Operating Assets
)100
2008
63.77%
2006
188.06%
2007
144.29%
2009
35.51%
Interpretation:
The ratio has a increasing trend up to FY 2006. This increase is due to the incr
ease in operating assets. And then it showed the decreasing trend in FY 2007, FY
2008 and FY 2009. The reason behind the decrease in the ratio is decrease in th
e net income of the company.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.7 SALES TO FIXED ASSETS: Sa
les to fixed assets ratio measures a company s ability to generate net sales fro
m fixed asset investments specifically property, plant and equipment. A higher t
he ratio shows that the company has been more effective in using the investment
in fixed assets to generate revenues. The ratio is calculated by following formu
la: Net Sales Fixed Assets
2005
27.63
2006
20.53
2007
18.66
2008
10.27
2009
9.62
Interpretation:
The ratio has shown a decreasing trend from FY 2005 to FY 2009. The ratio was hi
ghest in FY 2005 i.e. 27.63 and lowest in FY 2009 i.e. 9.62. It is all because o
f the greater increase in fixed assets as compared to the increase in sales volu
me of the company. This all shows that company is not making productive use of i
ts fixed assets by generating good volume of sales.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.8 RETURN ON EQUITY: The amo
unt of net income returned as a percentage of shareholders equity. Return on equ
ity measures a corporation s profitability by revealing how much profit a compan
y generates with the money shareholders have invested. The formula for the ratio
is:
(
2005
33.17%
Net Income Total Equity
)100
2008
24.28%
2006
42.32%
2007
34.13%
2009
13.45%
Interpretation:
Return on equity of the company shows an increasing trend in FY 2006 as compared
to the FY 2005. The increase was due to the increase in total equity of the com
pany. Than it shows a decreasing trend from FY 2007 to FY 2009. Here total equit
y is still increasing but the decreasing trend is due to the decrease in net inc
ome of the company.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.4.9 GROSS PROFIT MARGIN: A fi
nancial metric used to assess a firm s financial health by revealing the proport
ion of money left over from revenues after accounting for the cost of goods sold
. Gross profit margin serves as the source for paying additional expenses and fu
ture savings. It can be calculated as follow:
(
2005
9.80%
Gross Profit Net Sales
)100
2008
9.29%
2006
11.77%
2007
11.37%
2009
6.14%
Interpretation:
The gross shows an increasing trend up to FY 2006. Than there is a decrease in g
ross profit in FY 2007 and trend remains same in FY 2008 and FY 2009. The decrea
se in FY 2008 was due to the increase in cost of goods sold. While the decrease
in FY 2009 is due to the low sales of the company.
6.5 INVESTORS ANALYSIS:
6.5.1 EARNING PER SHARE: The portion of a company s profit allocated to each out
standing share of common stock. Earnings per share serve as an indicator of a co
mpany s profitability. It is calculated as follow: Net Income No. of Equity Shar
es
2005
18.89
2006
33.70
2007
34.93
2008
29.15
2009
17.62
Interpretation:
EPS of the company has increasing trend from FY 2005 to FY 2007. It is due to th
e high income earned by the company. Than suddenly EPS decreased in FY2008 and F
Y 2009 rapidly. This decrease in EPS shows that company has low earnings in last
two years as compared to the previous years.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.5.2 PRICE EARNING RATIO: The
price earning ratio is a way to show how a companys earning relate to a stock pri
ce. The higher the price earning the more earnings growth investors are expectin
g and the higher premium they are willing to pay for that anticipated growth. Th
e formula for the ratio is: Market Price Per Share Earning Per Share
2005
4.76
2006
5.67
2007
8.75
2008
6.86
2009
6.11
Interpretation:
The price earning ratios shows an increasing trend from FY 2005 to FY 2009. This
increase is due to the increase in EPS. Than ratio decreased in FY 2008 and FY
2009. The decrease in the price earning ratio is due to decrease in EPS. But the
decrease in market price of share is also recorded.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.5.3 DIVIDEND PAYOUT RATIO: Th
e dividend payout ratio measures what a companys payout to investors in the form
of dividend. The ratio can be calculated by the following formula:
(
2005
52.94%
Dividend Per Share Earning Per Share
)100
2008
36.02%
2006
35.61%
2007
37.22%
2009
56.75%
Interpretation:
The dividend payout ratio of the company is high in the FY 2005 due to the low E
PS. Than it remains stable in FY 2006, FY 2007 and FY 2008 because of almost sam
e dividend per share of the company in these years. In FY 2009 the ratio decreas
e due to the decrease in EPS of the company in that year.
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6.5.4 DIVIDEND YIELD RATIO: The
dividend yield ratio allows investors to compare the latest dividend they recei
ved with the current market value of the share as an indictor of the return they
are earning on their shares. The formula for calculating the ratio is:
(
2005
11.11%
Dividend Per Common Share Market Price Per Share
)100
2008
5.25%
2006
6.28%
2007
4.26%
2009
9.28%
Interpretation:
The trend is negative in this ratio up to FY 2007 because of the increase in the
prices of the shares up to FY 2007. In FY 2008 and FY 2009 ratio shows increasi
ng trend. This increase is due to the decrease in the market price of share in t
hose years.
CONCLUSION
Indus Motor Company, with support from Toyota Motor Corporation has worked close
ly with its 62 local vendors for increased localization and technology transfer.
The company has expanded its dealership network across Pakistan to 29 dealershi
ps and this will increase further in the coming years.
IMCs products, renowned for their quality, durability, safety, fuel economy and r
esale value, are appreciated by customers in Pakistan. There has been high deman
d for the Corolla which is the market leader in this segment. Pakistan is the hi
ghest producer of Corolla in Asia.
IMC expect 2009/10 to be a better year but a critical one for sustainable growth
and development of Pakistans economy.
Profit margins are still under pressure due to foreign currency fluctuations. IM
C is working on definitive plans to expand dealer network and launch new CKD/CBU
products.
IMC will do utmost to optimize costs without compromising on quality and deliver
y. IMC has improved its market share in a declining market but will continue to
remain aggressive, focused and innovative in their marketing activities coupled
with dealership improvements.
It is essential for the government to effectively address the following challeng
es concerning consolidation of macroeconomic stability:
Mitigating the effects of the global economic crisis, in particular on manufactu

ring and exports. UNIVERSITY OF EDUCATION OKARA CAMPUS 81
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT Implementing tax policy and adm
inistration reforms and managing the security issues engulfing the nation; Make
a concrete plan to revisit the AIDP and achieve implementation recognizing the r
ecommendations made by OEMs and the Pakistan Automobile Manufacturers Associatio
n.
REFRENCES
1. Indus Motor Company Limited Annual Report 2005 2. Indus Motor Company Limited
Annual Report 2006 3. Indus Motor Company Limited Annual Report 2007 4. Indus M
otor Company Limited Annual Report 2008 5. Indus Motor Company Limited Annual Re
port 2009 6. James C. Van Horn, John M. Wachowicz, Jr (1992) Fundaments of Finan
cial
Management, 12th Edition
7. http://www.accaglobal.com 8. http://www.toyota-indus.com 9. http://economicpa
kistan.wordpress.com/2009/02/01/automobile-industry/ 10. http://www.wisegeek.com
/what-is-trend-analysis.htm 11. http://www.finpipe.com/equity/finratan.htm 12. h
ttp://www.zenwealth.com/BusinessFinanceOnline/RA/RatioAnalysis.html 13. http://w
ww.quickmba.com/strategy/swot/ 14. http://www.netmba.com/finance/financial/ratio
s/ 15. http://cbdd.wsu.edu/kewlcontent/cdoutput/TOM505/page26.htm 16. http://www
.financialmodelingguide.com/financial-ratios/financial-ratio-limitations/ 17. ht
tp://www.companypartners.com/content/resource/understanding-financial-ratios#q7
18. http://www.stocktrades.ca/stock-picking/limitations-of-financial-ratios/ 19.
http://www.referenceforbusiness.com/management/Pr-Sa/SWOT-Analysis.html 20. htt
p://fmaccounting.com/basic-understanding-of-the-swot-%20analysis/ 21. http://www
.pama.org.pk/historicaldata.htm 22. http://www.businessplans.org/ratios.html 23.
http://dictionary.reference.com/browse/acid-test+ratio?jss=1
24. http://www.opfblog.com/8447/inflation-and-its-impact-on-the-pakistan-economy
/ 25. http://fingad.duedee.com/2008/7/26/Indus-Motors-Company-Limited------
Review/37451/
26. http://www.kitchaloo.com/definitions/investing-definitions/define-net-profit
-ratio 27. http://www.valuebasedmanagement.net/methods_roce.html 28. http://fina
ncial-dictionary.thefreedictionary.com/Return+on+equity 29. http://www.vitalentu
sa.com/learn/turnover.php 30. http://www.investopedia.com/terms/g/gearingratio.a
sp 31. http://www.investopedia.com/terms/e/eps.asp 32. http://moneyterms.co.uk/i
nterest_cover/ 33. http://www.egmcartech.com/2009/01/21/toyota-beats-gm-to-becom
e-the-worlds-
largest-automaker/
34. http://www.toyota-indus.com/company/history.asp 35. http://www.toyota-indus.
com/concern/environment.asp 36. http://www.toyota-indus.com/concern/default.asp
37. http://www.brecorder.com/index.php?id=948832&currPageNo=1&query=&search=&
term=&supDate
38. http://findarticles.com/p/articles/mi_hb092/is_n9_v28/ai_n28693653/ 39. http
://www.mindbranch.com/listing/product/R302-1104.html 40. http://www.thenews.com.
pk/daily_detail.asp?id=134844 41. http://www.pakistaneconomist.com/issue2000/iss
ue19&20/i&e7.html
Annexure I
Indus Motor Company Limited Summarized Income Statement For The Year Ended June
30,
2005
2006
2007 (Rupees in 000)
2008
2009
Sales
27,601,034
35,236,535
39,061,226
41,423,843
37,864,604
Raw material consumed Stores and spares consumed Salaries, wages and other benef
its Rent, rate and taxes Repairs and maintenance Depreciation Legal and professi
onal Travelling Transportation Insurance Vehicle running Communication Printing,
stationery and office supplies Subscription Fuel and power Running royalty Tech
nical fee Parts development Staff catering, transport and
21561543 475,117 149,174 1,760 64,519 260,030 592 11,741 2,289 9,272 4,533 2,684
3,079 90 88,491 184,203 39,008 4,572 -
26,677,026 607,661 215,007 1,732 86,301 346,626 334 16,021 3,033 15,766 5,068 4,
128 3,211 53 88,024 220,920 29,863 3,058
27,846,974 643,887 229,973 1,833 84,910 321,653 797 17,294 1,913 19,168 4,812 4,
410 3,006 288 125,738 246,314 15,968 1,836
29,654,126 578,773 290,297 10,114 98,800 410,968 406 11,714 2,154 19,423 5,932 6
,675 3,819 119 107,121 278,566 21,552 2,211
29,789,139 523,311 310,377 3,137 63,221 732,376 383 10,555 1,063 26,841 10,109 5
,895 2,084 75 121,542 485,092 20,547 -
87
uniforms Staff training Opening work-in-process Closing work-in-process Cost of
goods manufactured Opening stock Purchases Closing stock 17 104,553 (106,130) 22
,862,256 374,806 2,462,855 (805,061) 82,812 3,314 106,130 (95,520) 28,425,858 80
5,061 3,182,129 (1,324,142) 104,726 16,737 95,520 (64,533) 29,740,106 1,324,142
4,084,717 (528,333) 105,501 21,225 64,533 (71,959) 31,629,503 528,333 6,541,304
(1,123,784) 102,413 11,638 71,959 (95,076) 32,200,995 1,123,784 3,597,898 (1,382
,259)
Cost of Goods Sold Gross Profit
Distribution Expenses Administration Expenses Operating Expenses
24,894,856 2,706,178
294,304 277,653 571,957
31,088,906 4,147,629
404,917 242,456 647,373
34,620,632 4,440,594
509,986 265,302 775,288
37,575,356 3,848,487
487,373 297,284 784,657
35,540,418 2,324,186
469,985 352,249 822,234
Operating Profit 2,134,221
Other Operating Expenses 186,614 1,947,607 Other Operating Income 449,443
3,500,256
321,746 3,178,510 1,021,212
3,665,306
348,430 3,316,876 935,290
3,063,830
306,193 2,757,637 786,834
1,501,952
156,479 1,345,473 727,080
Finance Costs
2,397,050
94,093
4,199,722
126,945
4,252,166
22,685
3,544,471
2,760
2,072,553
26,540
Taxation
2,302,957
818,311
4,072,777
1,424,313
4,229,481
1,483,780
3,541,711
1,250,866
2,046,013
660,911
1,484,646
2,648,464
2,745,701
2,290,845
1,385,102
Earning Per Share
18.89
33.70
34.93
29.15
17.62
88
Annexure I.I
Indus Motor Company Limited Comparative Chain Base Income Statement For The Year
Ended June 30,
2006 Sales Raw material consumed Stores and spares consumed Salaries, wages and
other benefits Rent, rate and taxes Repairs and maintenance Depreciation Legal a
nd professional Travelling Transportation Insurance Vehicle running Communicatio
n Printing, stationery and office supplies Subscription Fuel and power Running r
oyalty Technical fee Parts development Staff catering, transport and uniforms St
aff training Others Opening work-in-process Closing work-in-process Cost of good
s manufactured 7,635,501 5,115,483 132,544 65,833 (28) 21,782 86,596 (258) 4,280
744 6,494 535 1,444 132 (37) (467) 36,717 (9,145) (1,514) 82,812 3,297 4,171 1,
577 10,610 5,563,602
2007 3,824,691 1,169,948 36,226 14,966 101 (1,391) (24,973) 463 1,273 (1,120) 3,
402 (256) 282 (205) 235 37,714 25,394 (13,895) (1,222) 21,914 13,423 11,592 (10,
610) 30,987 1,314,248
2008 2,362,617 1,807,152 (65,114) 60,324 8,281 13,890 89,315 (391) (5,580) 241 2
55 1,120 2,265 813 (169) (18,617) 32,252 5,584 375 775 4,488 (9,449) (30,987) (7
,426) 1,889,397
2009 (3,559,239) 135,013 (55,462) 20,080 (6,977) (35,579) 321,408 (23) (1,159) (
1,091) 7,418 4,177 (780) (1,735) (44) 14,421 206,526 (1,005) (2,211) (3,088) (9,
587) (3,119) 7,426 (23,117) 571,492
(Rupees in 000)
89
Opening stock Purchases Closing stock 430,255 719,274 (519,081) 519,081 902,588
795,809 (795,809) 2,456,587 (595,451) 595,451 (2,943,406) (258,475)
Distribution Expenses Administration Expenses Operating Expenses
6,194,050 1,441,451
110,613 (35,197) 75,416
3,531,726 292,965
105,069 22,846 127,915
2,954,724 (592,107)
(22,613) 31,982 9,369
(2,034,938) (1,524,301)
(17,388) 54,965 37,577
Operating Profit
Other Operating Expenses
1,366,035
135,132 1,230,903
165,050
26,684 138,366 (85,922)
(601,476)
(42,237) (559,239) (148,456)
(1,561,878)
(149,714) (1,412,164) (59,754)
Other Operating Income
571,769
Finance Costs
1,802,672
32,852
52,444
(104,260)
(707,695)
(19,925)
(1,471,918)
23,780
Taxation
1,769,820
606,002
156,704
59,467
(687,770)
(232,914)
(1,495,698)
(589,955)
1,163,818
97,237
(454,856)
(905,743)
Earning Per Share
15
1
(6)
(12)
90
Annexure I.II
Indus Motor Company Limited Percentage Comparative Chain Base Income Statement F
or The Year Ended June 30,
s manufactured Opening stock Purchases Closing stock 27.66% 23.73% 27.90% 44.13%
-1.59% 33.76% 33.30% -43.58% 36.45% 32.50% 70.04% 11.80% 53.80% 4.29% -41.11% -
0.53% 19.93% -23.44% -33.11% #DIV/0! 19394.12% 372.74% 1.51% -10.00% 24.34% 114.
79% 29.20% 64.48%
2007 10.85% 4.39% 5.96% 6.96% 5.83% -1.61% -7.20% 138.62% 7.95% -36.93% 21.58% -
5.05% 6.83% -6.38% 443.40% 42.85% 11.49% -46.53% -39.96% 26.46% 405.04% 219.13%
-10.00% -32.44% 4.62% 64.48% 28.36% -60.10%
2008 6.05% 6.49% -10.11% 26.23% 451.77% 16.36% 27.77% -49.06% -32.27% 12.60% 1.3
3% 23.28% 51.36% 27.05% -58.68% -14.81% 13.09% 34.97% 20.42% 0.74% 26.81% -55.97
% -32.44% 11.51% 6.35% -60.10% 60.14% 112.70%
2009 -8.59% 0.46% -9.58% 6.92% -68.98% -36.01% 78.21% -5.67% -9.89% -50.65% 38.1
9% 70.41% -11.69% -45.43% -36.97% 13.46% 74.14% -4.66% -100.00% -2.93% -45.17% -
41.96% 11.51% 32.13% 1.81% 112.70% -45.00% 23.00%
(Rupees in 000)
Distribution Expenses Administration Expenses
24.88% 53.27%
37.58% -12.68%
11.36% 7.06%
25.95% 9.42%
8.53% -13.33%
-4.43% 12.05%
-5.42% -39.61%
-3.57% 18.49%
91
Operating Expenses 13.19% 19.76% 1.21% 4.79%
Operating Profit
Other Operating Expenses Other Operating Income
64.01%
72.41% 63.20% 127.22%
4.72%
8.29% 4.35% -8.41%
-16.41%
-12.12% -16.86% -15.87%
-50.98%
-48.90% -51.21% -7.59%
Finance Costs
75.20%
34.91%
1.25%
-82.13%
-16.64%
-87.83%
-41.53%
861.59%
Taxation
76.85%
74.06%
3.85%
4.18%
-16.26%
-15.70%
-42.23%
-47.16%
Profit After Taxation Earning Per Share
78.39% 78.40%
3.67% 3.65%
-16.57% -16.55%
-39.54% -39.55%
92
Annexure I.III
Indus Motor Company Limited Percentage Comparative 2005 Base Income Statement Fo
r The Year Ended June 30,
s manufactured Opening stock Purchases Closing stock 127.66% 123.73% 127.90% 144
.13% 98.41% 133.76% 133.30% 56.42% 136.45% 132.50% 170.04% 111.80% 153.80% 104.2
9% 58.89% 99.47% 119.93% 76.56% 66.89%
2007 141.52% 129.15% 135.52% 154.16% 104.15% 131.60% 123.70% 134.63% 147.30% 83.
57% 206.73% 106.15% 164.31% 97.63% 320.00% 142.09% 133.72% 40.94% 40.16%
2008 150.08% 137.53% 121.82% 194.60% 574.66% 153.13% 158.05% 68.58% 99.77% 94.10
% 209.48% 130.86% 248.70% 124.03% 132.22% 121.05% 151.23% 55.25% 48.36%
2009 137.19% 138.16% 110.14% 208.06% 178.24% 97.99% 281.65% 64.70% 89.90% 46.44%
289.48% 223.01% 219.63% 67.68% 83.33% 137.35% 263.35% 52.67% 0.00% #DIV/0! 6845
8.82% 385.52% 68.83% 89.58% 140.85% 299.83% 146.09% 171.70%
(Rupees in 000)
#DIV/0! #DIV/0! #DIV/0! 19494.12% 98452.94% 124852.94% 472.74% 1508.67% 664.25%
101.51% 90.00% 124.34% 214.79% 129.20% 164.48% 91.36% 60.81% 130.08% 353.29% 165
.85% 65.63% 61.72% 67.80% 138.35% 140.96% 265.60% 139.59%
Distribution Expenses
124.88% 153.27%
137.58%
139.07% 164.09%
173.29%
150.94% 142.21%
165.60%
142.76% 85.88%
159.69%
93
Administration Expenses Operating Expenses 87.32% 113.19% 95.55% 135.55% 107.07%
137.19% 126.87% 143.76%
Operating Profit
164.01%
172.41% 163.20% 227.22%
171.74%
186.71% 170.31% 208.10%
143.56%
164.08% 141.59% 175.07%
70.37%
83.85% 69.08% 161.77%
Finance Costs
175.20%
134.91%
177.39%
24.11%
147.87%
2.93%
86.46%
28.21%
Taxation
176.85%
174.06%
183.65%
181.32%
153.79%
152.86%
88.84%
80.77%
178.39% 178.40%
184.94% 184.91%
154.30% 154.31%
93.30% 93.28%
94
Annexure I.IV
Indus Motor Company Limited Comparative Vertical Common Size Income Statement Fo
r The Year Ended June 30,
s manufactured Opening stock Purchases Closing stock 100.00% 78.12% 1.72% 0.54%
0.01% 0.23% 0.94% 0.00% 0.04% 0.01% 0.03% 0.02% 0.01% 0.01% 0.00% 0.32% 0.67% 0.
14% 0.02% 0.00% 0.00% 0.00% 0.38% -0.38% 82.83% 1.36% 8.92% -2.92%
2006 100.00% 75.71% 1.72% 0.61% 0.00% 0.24% 0.98% 0.00% 0.05% 0.01% 0.04% 0.01%
0.01% 0.01% 0.00% 0.25% 0.63% 0.08% 0.01% 0.24% 0.01% 0.02% 0.30% -0.27% 80.67%
2.28% 9.03% -3.76%
2007 (Rupees in 000) 100.00% 71.29% 1.65% 0.59% 0.00% 0.22% 0.82% 0.00% 0.04% 0
.00% 0.05% 0.01% 0.01% 0.01% 0.00% 0.32% 0.63% 0.04% 0.00% 0.27% 0.04% 0.04% 0.2
4% -0.17% 76.14% 3.39% 10.46% -1.35%
2008 100.00% 71.59% 1.40% 0.70% 0.02% 0.24% 0.99% 0.00% 0.03% 0.01% 0.05% 0.01%
0.02% 0.01% 0.00% 0.26% 0.67% 0.05% 0.01% 0.25% 0.05% 0.02% 0.16% -0.17% 76.36%
1.28% 15.79% -2.71%
2009 100.00% 78.67% 1.38% 0.82% 0.01% 0.17% 1.93% 0.00% 0.03% 0.00% 0.07% 0.03%
0.02% 0.01% 0.00% 0.32% 1.28% 0.05% 0.00% 0.27% 0.03% 0.01% 0.19% -0.25% 85.04%
2.97% 9.50% -3.65%
90.20% 9.80%
88.23% 11.77%
88.63% 11.37%
90.71% 9.29% 95
93.86% 6.14%
Distribution Expenses Administration Expenses Operating Expenses 1.07% 1.01% 2.0
7% 1.15% 0.69% 1.84% 1.31% 0.68% 1.98% 1.18% 0.72% 1.89% 1.24% 0.93% 2.17%
Operating Profit
7.73%
0.68% 7.06% 1.63%
9.93%
0.91% 9.02% 2.90%
9.38%
0.89% 8.49% 2.39%
7.40%
0.74% 6.66% 1.90%
3.97%
0.41% 3.55% 1.92%
Finance Costs
8.68%
0.34%
11.92%
0.36%
10.89%
0.06%
8.56%
0.01%
5.47%
0.07%
Taxation
8.34%
2.96%
11.56%
4.04%
10.83%
3.80%
8.55%
3.02%
5.40%
1.75%
5.38% 1889.00%
7.52% 1989.00%
7.03% 2089.00%
5.53% 2189.00%
3.66% 2289.00%
96
Annexure II
Indus Motor Company Limited Summarized Balance Sheet As on June 30,
ASSETS Current Assets
Stores and Spares Raw material and components Work in process Finished goods Veh
icles Spare parts Special service tools and publications Provision for slow movi
ng stock In transit Stock-in-trade Trade debts Current maturity of finance under
musharika arrangements Loans and advances Short-term prepayments Accrued mark-u
p Other receivables Investments Taxation-net Cash and bank balances
2005
2006
2007
(Rupees in 000)
2008
2009
137,028 1,380,676 106,130 214,482 436,479 153,755 345 876,988 3,168,855 384,511
29,259
226,169 1,627,463 95,520 744,469 413,268 165,027 1,378 912,191 3,959,316 738,281
5,811
227,191 1,108,149 64,533 59,162 283,400 185,549 222 1,158,936 2,859,951 665,647
3,710
232,142 917,921 71,959 277,233 601,065 279,052 851 (43,308) 532,856 2,637,629 1,
332,832 -
128,483 1,384,179 95,076 613,117 498,823 356,487 2,846 (128,752) 1,267,082 4,088
,858 1,736,631 -
302,888 4,371 46,543 302,171
414,338 9,134 76,211 1,250,217
426,165 47,523 132,634 605,725
737,372 23,148 35,012 74,360 54,171
894,459 16,876 50,944 67,902 9,731,166
82,315 6,719,999
7,416,180
48,520 8,543,263
209,533 4,328,585
98
TOTAL CURRENT ASSETS
11,177,940
14,095,657
13,560,329
9,664,784
16,715,319
Non-Current Assets
Long-term loans Long-term deposits Finance under musharika arrangements TOTAL NO
N-CURRENT ASSETS 388 5,149 12,153 17,690 1,019 5,181 4,021 10,221 4,240 6,629 10
,869 42,341 7,222 49,563 28,509 7,222 35,731
Fixed Assets
Property, plant and equipment Capital work-in-progress Intangible Assets TOTAL F
IXED ASSETS 901,035 87,307 10,545 998,887 1,408,314 302,153 6,123 1,716,590 1,90
2,912 187,372 3,568 2,093,852 3,592,271 438,696 2,795 4,033,762 3,900,977 29,524
3,972 3,934,473
TOTAL ASSETS
12,194,517
15,822,468
15,665,050
13,748,109
20,685,523
LIABILITIES AND SHAREHOLDER S EQUITY LIABILITIES
Current Liabilities Trade and other payables Advances from customers and dealers
Accrued mark-up Short-term running finances Current portion of liabilities agai
nst assets subject to finance lease Taxation - net TOTAL CURRENT LIABILITIES
2005
2006
2007
(Rupees in 000)
2008
2009
2,022,227 5,603,342 10,568 27,925 -
2,599,911 6,620,869 22,250 5,735 195,789
2,892,017 4,514,480 715 3,714 -
2,793,554 985,972 105 -
3,942,988 5,926,529 673 14,660
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
99
Non-current Liabilities Liabilities against assets subject to finance lease Defe
rred taxation TOTAL NON-CURRENT LIABILITIES 11,957 3,871 -
42,693 54,650
116,164 120,035
210,149 210,149
532,138 532,138
503,700 503,700
TOTAL LIABILITIES Shareholder s Equity Paid up capital Reserves TOTAL EQUITY
7,718,712
9,564,589
7,621,075
4,311,769
10,388,550
786,000 3,689,805 4,475,805
786,000 5,471,879 6,257,879
786,000 7,257,975 8,043,975
786,000 8,650,340 9,436,340
786,000 9,510,973 10,296,973
TOTAL LIABILITIES AND SHAREHOLDER S EQUITY
12,194,517
15,822,468
15,665,050
13,748,109
20,685,523
100
Annexure II.I
Indus Motor Company Limited Comparative Chain Base Balance Sheet As on June 30,
p Other receivables Investments Taxation-net Cash and bank balances TOTAL CURREN
T ASSETS
2006
2007
2008
2009
(Rupees in 000) 89,141 246,787 (10,610) 529,987 (23,211) 11,272 1,033 35,203 79
0,461 353,770 (23,448) 111,450 4,763 29,668 948,046 (82,315) 696,181 2,917,717 1
,022 (519,314) (30,987) (685,307) (129,868) 20,522 (1,156) 246,745 (1,099,365) (
72,634) (2,101) 11,827 38,389 56,423 (644,492) 48,520 1,127,083 (535,328) 4,951
(190,228) 7,426 218,071 317,665 93,503 629 (43,308) (626,080) (222,322) 667,185
(3,710) 311,207 (24,375) (97,622) (531,365) 54,171 161,013 (4,214,678) (3,895,54
5) (103,659) 466,258 23,117 335,884 (102,242) 77,435 1,995 (85,444) 734,226 1,45
1,229 403,799 157,087 (6,272) 15,932 (6,458) (54,171) (209,533) 5,402,581 7,050,
535
101
Non-Current Assets
N-CURRENT ASSETS 631 32 (8,132) (7,469) 3,221 1,448 (4,021) 648 38,101 593 38,69
4 (13,832) (13,832)
Fixed Assets
IXED ASSETS 507,279 214,846 (4,422) 717,703 494,598 (114,781) (2,555) 377,262 1,
689,359 251,324 (773) 1,939,910 308,706 (409,172) 1,177 (99,289)
TOTAL ASSETS
3,627,951
(157,418) (1,916,941)
6,937,414
nst assets subject to finance lease Taxation - net
2006
2007
2008
2009
(Rupees in 000)
577,684 1,017,527 11,682 (22,190)
292,106 (2,106,389) (21,535) (2,021)
(98,463) (3,528,508) (610) (3,714)
1,149,434 4,940,557 568 -
195,789
(195,789)
-
14,660
TOTAL CURRENT LIABILITIES Non-current Liabilities Liabilities against assets sub
ject to finance lease Deferred taxation
1,780,492
(2,033,628)
(3,631,295)
6,105,219
(8,086) 73,471
(3,871) 93,985
321,989
(28,438)
102
TOTAL NON-CURRENT LIABILITIES
65,385
90,114
321,989
(28,438)
TOTAL LIABILITIES Shareholder s Equity Paid up capital Reserves TOTAL EQUITY
1,845,877
(1,943,514)
(3,309,306)
6,076,781
1,782,074 1,782,074
1,786,096 1,786,096
1,392,365 1,392,365
860,633 860,633
3,627,951
(157,418) (1,916,941)
6,937,414
103
Annexure II.II
Indus Motor Company Limited Percentage Comparative Chain Base Balance Sheet As o
n June 30,
T ASSETS
2006
2007
2008
2009
(Rupees in 000) 65.05% 17.87% -10.00% 247.10% -5.32% 7.33% 299.42% #DIV/0! 4.01
% 24.94% 92.01% -80.14% 36.80% 108.97% 63.74% 313.74% #DIV/0! -100.00% 10.36% 26
.10% 0.45% -31.91% -32.44% -92.05% -31.42% 12.44% -83.89% #DIV/0! 27.05% -27.77%
-9.84% -36.16% 2.85% 420.29% 74.04% -51.55% #DIV/0! #DIV/0! 15.20% -3.80% 2.18%
-17.17% 11.51% 368.60% 112.09% 50.39% 283.33% #DIV/0! -54.02% -7.77% 100.23% -1
00.00% 73.03% -51.29% -73.60% -87.72% #DIV/0! 331.85% -49.33% -28.73% -44.65% 50
.80% 32.13% 121.16% -17.01% 27.75% 234.43% 197.29% 137.79% 55.02% 30.30% #DIV/0!
21.30% -27.10% 45.50% -8.68% -100.00% -100.00% 124.81% 72.95%
Non-Current Assets
N-CURRENT ASSETS 162.63% 0.62% -66.91% -42.22% 316.09% 27.95% -100.00% 6.34% 898
.61% 8.95% #DIV/0! 356.00% -32.67% 0.00% #DIV/0! -27.91%
Fixed Assets
Property, plant and equipment Capital work-in-progress 56.30% 246.08% 35.12% -37
.99% 88.78% 134.13% 8.59% -93.27%
104
Intangible Assets TOTAL FIXED ASSETS -41.93% 71.85% -41.73% 21.98% -21.66% 92.65
% 42.11% -2.46%
TOTAL ASSETS
29.75%
-0.99%
-12.24%
50.46%
nst assets subject to finance lease Taxation - net TOTAL CURRENT LIABILITIES Non
-current Liabilities Liabilities against assets subject to finance lease Deferre
d taxation TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES Shareholder s Equity
Paid up capital Reserves TOTAL EQUITY
2006
2007
2008
2009
(Rupees in 000)
28.57% 18.16% 110.54% #DIV/0! -79.46% #DIV/0! 23.23%
11.24% -31.81% -96.79% #DIV/0! -35.24% -100.00% -21.53%
-3.40% -78.16% -85.31% #DIV/0! -100.00% #DIV/0! -49.00%
41.15% 501.08% 540.95% #DIV/0! #DIV/0! #DIV/0! 161.53%
-67.63% 172.09% 119.64% 23.91%
-100.00% 80.91% 75.07% -20.32%
#DIV/0! 153.22% 153.22% -43.42%
#DIV/0! -5.34% -5.34% 140.93%
0.00% 48.30% 39.82%
0.00% 32.64% 28.54%
0.00% 19.18% 17.31%
0.00% 9.95% 9.12%
29.75%
-0.99%
-12.24%
50.46%
105
Annexure II.III
Indus Motor Company Limited Percentage Comparative 2005 Base Balance Sheet As on
June 30,
T ASSETS
2006
2007
2008
2009
(Rupees in 000) 165.05% 117.87% 90.00% 347.10% 94.68% 107.33% 399.42% #DIV/0! 1
04.01% 124.94% 192.01% 19.86% 136.80% 208.97% 163.74% 413.74% #DIV/0! 0.00% 110.
36% 126.10% 165.80% 80.26% 60.81% 27.58% 64.93% 120.68% 64.35% #DIV/0! 132.15% 9
0.25% 173.12% 12.68% 140.70% 1087.23% 284.97% 200.46% #DIV/0! 58.94% 127.13% 121
.31% 169.41% 66.48% 67.80% 129.26% 137.71% 181.49% 246.67% #DIV/0! 60.76% 83.24%
346.63% 0.00% 243.45% 529.58% 75.23% 24.61% #DIV/0! 254.55% 64.41% 86.46% 93.76
% 100.25% 89.58% 285.86% 114.28% 231.85% 824.93% #DIV/0! 144.48% 129.03% 451.65%
0.00% 295.31% 386.09% 109.46% 22.47% #DIV/0! 0.00% 144.81% 149.54%
Non-Current Assets
N-CURRENT ASSETS 262.63% 100.62% 33.09% 57.78% 1092.78% 10912.63% 128.74% 140.26
% 0.00% 61.44% 0.00% 280.18% 7347.68% 140.26% 0.00% 201.98%
Fixed Assets
Property, plant and equipment Capital work-in-progress 156.30% 346.08% 211.19% 2
14.61% 398.68% 502.48% 432.94% 33.82%
106
Intangible Assets TOTAL FIXED ASSETS 58.07% 171.85% 33.84% 209.62% 26.51% 403.83
% 37.67% 393.89%
TOTAL ASSETS
129.75%
128.46%
112.74%
169.63%
2006
2007
2008
2009
(Rupees in 000)
128.57% 118.16% 210.54% #DIV/0! 20.54% #DIV/0! 123.23%
143.01% 80.57% 6.77% #DIV/0! 13.30% #DIV/0! 96.70%
138.14% 17.60% 0.99% #DIV/0! 0.00% #DIV/0! 49.32%
194.98% 105.77% 6.37% #DIV/0! 0.00% #DIV/0! 128.98%
32.37% 272.09% 219.64% 123.91%
0.00% 492.23% 384.54% 98.74%
0.00% 1246.43% 973.72% 55.86%
0.00% 1179.82% 921.68% 134.59%
100.00% 148.30% 139.82%
100.00% 196.70% 179.72%
100.00% 234.44% 210.83%
100.00% 257.76% 230.06%
129.75%
128.46%
112.74%
169.63%
107
Annexure II.IV
Indus Motor Company Limited Comparative Vertical Common size Balance Sheet As on
June 30,
T ASSETS
2005
2006
2007
(Rupees in 000)
2008
2009
1.12% 11.32% 0.87% 1.76% 3.58% 1.26% 0.00% 0.00% 7.19% 25.99% 3.15% 0.24% 2.48%
0.04% 0.38% 2.48% 0.00% 0.68% 55.11% 91.66%
1.43% 10.29% 0.60% 4.71% 2.61% 1.04% 0.01% 0.00% 5.77% 25.02% 4.67% 0.04% 2.62%
0.06% 0.48% 7.90% 0.00% 0.00% 46.87% 89.09%
1.45% 7.07% 0.41% 0.38% 1.81% 1.18% 0.00% 0.00% 7.40% 18.26% 4.25% 0.02% 2.72% 0
.30% 0.85% 3.87% 0.00% 0.31% 54.54% 86.56%
1.69% 6.68% 0.52% 2.02% 4.37% 2.03% 0.01% -0.32% 3.88% 19.19% 9.69% 0.00% 5.36%
0.17% 0.25% 0.54% 0.39% 1.52% 31.48% 70.30%
0.62% 6.69% 0.46% 2.96% 2.41% 1.72% 0.01% -0.62% 6.13% 19.77% 8.40% 0.00% 4.32%
0.08% 0.25% 0.33% 0.00% 0.00% 47.04% 80.81%
Non-Current Assets
N-CURRENT ASSETS 0.00% 0.04% 0.10% 0.15% 0.01% 0.03% 0.03% 0.06% 0.03% 0.04% 0.0
0% 0.07% 0.31% 0.05% 0.00% 0.36% 0.14% 0.03% 0.00% 0.17%
Fixed Assets UNIVERSITY OF EDUCATION OKARA CAMPUS 108
IXED ASSETS 7.39% 0.72% 0.09% 8.19% 8.90% 1.91% 0.04% 10.85% 12.15% 1.20% 0.02%
13.37% 26.13% 3.19% 0.02% 29.34% 18.86% 0.14% 0.02% 19.02%
TOTAL ASSETS
100.00%
100.00%
100.00%
100.00%
100.00%
2005
2006
2007
(Rupees in 000)
2008
2009
16.58% 45.95% 0.09% 0.00% 0.23% 0.00% 62.85%
16.43% 41.84% 0.14% 0.00% 0.04% 1.24% 59.69%
18.46% 28.82% 0.00% 0.00% 0.02% 0.00% 47.31%
20.32% 7.17% 0.00% 0.00% 0.00% 0.00% 27.49%
19.06% 28.65% 0.00% 0.00% 0.00% 0.07% 47.79%
0.10% 0.35% 0.45% 63.30%
0.02% 0.73% 0.76% 60.45%
0.00% 1.34% 1.34% 48.65%
0.00% 3.87% 3.87% 31.36%
0.00% 2.44% 2.44% 50.22%
6.45% 30.26% 36.70%
4.97% 34.58% 39.55%
5.02% 46.33% 51.35%
5.72% 62.92% 68.64%
3.80% 45.98% 49.78%
100.00%
100.00%
100.00%
100.00%
100.00%
109
Annexure III
2005
2006
2007
2008
2009
1. Net Working Capital
11,177,940 -7,664,062 3,513,878
Current Assets - Current Liabilities
14,095,657 -9,444,554 4,651,103 13,560,329 -7,410,926 6,149,403 9,664,784 -3,779
,631 5,885,153 16,715,319 -9,884,850 6,830,469
2. Current Ratio
Current Assets Current Liabilities
11,177,940 7,664,062 1.46 : 1 14,095,657 9,444,554 1.49 : 1 13,560,329 7,410,926
1.83 : 1 9,664,784 3,779,631 2.56 : 1 16,715,319 9,884,850 1.69 : 1
3. Acid Test Ratio
Current Assets - Inventory Current Liabilities
8,009,085 7,664,062 1.05 : 1 10,136,341 9,444,554 1.07 : 1 10,700,378 7,410,926
1.44 : 1 7,027,155 3,779,631 1.86 : 1 12,626,461 9,884,850 1.28 : 1
4. Cash Ratio
Marketable Securities + Cash Current Liabilities
6,719,999 7,664,062 0.88 : 1 7,416,180 9,444,554 0.79 : 1 8,543,263 7,410,926 1.
15 : 1 4,382,756 3,779,631 1.16 : 1 9,731,166 9,884,850 0.98 : 1
5. Cash Flow from Operations Ratio
884,945 7,664,062 0.12 : 1
Cash from Operations Current Liabilities
2,675,847 9,444,554 0.28 : 1 2,823,727 7,410,926 0.38 : 1 (811,077) 3,779,631 (0
.21) : 1 6,536,529 9,884,850 0.66 : 1
111
Annexure IV
2005
2006
2007
2008
2009
1. Time Interest Earned Ratio
2,397,050 94,093 25.48
Earning before Interest and Tax Interest Expense
4,199,722 126,945 33.08 4,252,166 22,685 187.44 3,544,471 2,760 1,284.23 2,072,5
53 26,540 78.09
2. Fixed Charged Coverage Ratio
Earning before Interest and Tax Interest + Lease Payment + Principal Payment
2,397,050 106,050 22.60 4,199,722 130,816 32.10 4,252,166 22,685 187.44 3,544,47
1 2,760 1,284.23 2,072,553 26,540 78.09
3. Debt Ratio
(
7,718,712 12,194,517 63.30%
Total Liabilities Total Assets
9,564,589 15,822,468 60.45% 7,621,075 15,665,050 48.65%
)100
4,311,769 13,748,109 31.36% 10,388,550 20,685,523 50.22%
4. Debt Equity Ratio
(
4,475,805 0.00%
Long Term Debt Share Holder s Equity
6,257,879 0.00% 8,043,975 0.00%
)100
9,436,340 0.00% 10,296,973 0.00%
5. Debt to Tangible Net worth
(
7,718,712 4,465,260 172.86%
Total Liabilities Owner s Equity - Intangible Assets
9,564,589 6,251,756 152.99% 7,621,075 8,040,407 94.78% 4,311,769 9,433,545 45.71
%
)100
10,388,550 10,293,001 100.93%
113
Annexure V
2005
2006
2007
2008
2009
1. Day s Sales in A/R
989,570 75,619.27 13.09
Gross A/R Net Sales / 365 days
2,402,836 96,538.45 24.89 1,697,537 107,017.06 15.86 2,144,564 113,489.98 18.90
2,698,992 103,738.64 26.02
2. Accounts Receivable Turnover
27,601,034 989,570 27.89
Net Sales Gross A/R
35,236,535 2,402,836 14.66 39,061,226 1,697,537 23.01 41,423,843 2,144,564 19.32
37,864,604 2,698,992 14.03
3. Day s Sales in Inventory
805,061 68,205 11.80
Ending Inventory Cost of Goods Sold / 365 days
1,324,142 85,175 15.55 528,333 94,851 5.57 1,123,784 102,946 10.92 1,382,259 97,
371 14.20
4. Inventory Turnover
24,894,856 589,933.50 42.20
Cost of Goods Sold Average Inventory
31,088,906 1,064,601.50 29.20 34,620,632 926,237.50 37.38 37,575,356 826,058.50
45.49 35,540,418 1,253,021.50 28.36
115
Annexure VI
2005
2006
2007
2008
2009
1. Net Profit Margin
1,484,646 27,601,034 5.38%
(
2,648,464 35,236,535 7.52%
Net Income Net Sales
2,745,701 39,061,226 7.03% 2,290,845 41,423,843 5.53%
)100
1,385,102 37,864,604 3.66%
2. Total Asset Turnover
27,601,034 12,194,517 2.26 35,236,535 15,822,468 2.23
Net Sales Total Assets
39,061,226 15,665,050 2.49 41,423,843 13,748,109 3.01 37,864,604 20,685,523 1.83
3. Return on Assets
1,484,646 12,194,517 12.17%
(
2,648,464 15,822,468 16.74%
Net Income Total Assets
2,745,701 15,665,050 17.53% 2,290,845 13,748,109 16.66%
)100
1,385,102 20,685,523 6.70%
4. Operating Income Margin
2,134,221 27,601,034 7.73%
(
3,500,256 35,236,535 9.93%
Operating Income Net Sales
3,665,306 39,061,226 9.38% 3,063,830 41,423,843 7.40%
)100
1,501,952 37,864,604 3.97%
5. Operating Assets Turnover
27,601,034 901,035 30.63 35,236,535 1,408,314 25.02
Net Sales Operating Assets
39,061,226 1,902,912 20.53 41,423,843 3,592,271 11.53 37,864,604 3,900,977 9.71
117
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT 6. Return on Operating Assets
1,484,646 901,035 164.77%
(
2,648,464 1,408,314 188.06%
Net Income Operating Assets
2,745,701 1,902,912 144.29% 2,290,845 3,592,271 63.77%
)100
1,385,102 3,900,977 35.51%
7. Sales to Fixed Assets
27,601,034 998,887 27.63 35,236,535 1,716,590 20.53
Net Sales Fixed Assets
39,061,226 2,093,852 18.66 41,423,843 4,033,762 10.27 37,864,604 3,934,473 9.62
8. Return on Equity
1,484,646 4,475,805 33.17%
(
2,648,464 6,257,879 42.32%
Net Income Total Equity
2,745,701 8,043,975 34.13% 2,290,845 9,436,340 24.28%
)100
1,385,102 10,296,973 13.45%
9. Gross Profit Margin
2,706,178 27,601,034 9.80%
(
4,147,629 35,236,535 11.77%
Gross Profit Net Sales
4,440,594 39,061,226 11.37% 3,848,487 41,423,843 9.29%
)100
2,324,186 37,864,604 6.14%
118
Annexure VII
2005
2006
2007
2008
2009
1. Earning Per Share
1,484,646 78,600 18.89 2,648,464 78,600 33.70
Net Income No. of Equity Shares
2,745,701 78,600 34.93 2,290,845 78,600 29.15 1,385,102 78,600 17.62
2. Price Earning Ratio
90.00 18.89 4.76
Market Price Per Share Earning Per Share
191.00 33.70 5.67 305.50 34.93 8.75 200.05 29.15 6.86 107.72 17.62 6.11
3. Dividend Payout Ratio
10.00 18.89 52.94%
(
12.00 33.70 35.61%
Dividend Per Share Earning Per Share
13.00 34.93 37.22% 10.50 29.15 36.02%
)100
10.00 17.62 56.75%
4. Dividend Yield Ratio
(
10.00 90.00 11.11%
Dividend Per Common Share Market Price Per Share
12.00 191.00 6.28% 13.00 305.50 4.26% 10.50 200.05 5.25%
)100
10.00 107.72 9.28%
120

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PROFESSIONAL PROJECT INDUS MOTOR COMPANY LIMITED

Mitigating the effects of the global economic crisis, in particular on manufactu

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