RAI BUSINESS SCHOOL

ASSIGNMENT

Subject: Indian Capital Market and Security Analysis

Program: PM Semester: 2
Name: MANINDER SINGH HANSPALL
& PRAVEEN KUMAR JAISWAL
Section: 1
Type: Group
Marks:25

Email I. D : maninder.singh671@gmail.com

Description of the Assignment:

1) You are required to take an interview of any official of minimum financial

manager level in the finance division of any company with a turnover of at least
100 Crores and get the following information from the meeting:
• What are the major responsibilities they are handling as being the financial
manager?
• What is their role and contribution in the overall growth of the company as a
whole?
• What are the important personality traits one must have to be a successful
finance professional?
• What are the academic and professional qualifications that generally their
company looks for while recruitment a fresh executive in a finance
department.

Note:- The assignment is to be done in the group of 2 students

 ASSIGNMENT ANSWERS

BUSINESS CARD OF CAPT.S.S.YADAV(HONDA MOTORS PVT.LTD)

MAJOR RESPONSIBILITIES OF FINANCIAL MANAGER

Since the Financial Management is the subject that bridges the gap between the investors
of fund and the saves of the fund, so is the role of financial manager in an
organisation.

The key responsibilities of Financial Manager in an Organisation are:

1) Arrangement of Short Term and Long Term funds i.e,

working capital and term loan for the survival of a
particular project.

2) To make decisions regarding the financial feasibility of

projects (by checking the Net Present value or Discounted
Cash Flows of a particular project)

3)To focus on the Cost Minimisation and Profit Maximation.

4) To ensure the wealth maximization of the shareholder's

of the company.

5) achive the organizational goals.

6) Right mixture of the debt and equity.

7) Prepare the right financial statement.

8)Anticipation of funds(capitalisation).

9)Anticipation of fund(raising of fund).

10)Allocation of fund(investment decision).

11)Assessment of fund(evaluation of financial activities).

ROLE AND CONTRIBUTION IN THE OVERALL GROWTH OF THE

COMPANY

Honda Motor Company, Limited is a multinational corporation, engine manufacturer

and engineering corporation headquartered in Tokyo, Japan. Founded on September 24,
1948 by founder & then CEO Soichiro Honda. The Company has grown to become the
world’s largest motorcycle manufacturer and one of the leading automakers. With a
global network of 501subsidiaries and affiliates.

INDUSTRY AND PRODUCTS

The company manufactures automobiles and motorcycles, trucks, scooters, robots, jets
and jet engines, ATV, water craft, electrical generators, marine engines, lawn and garden
equipment, and aeronautical and other mobile technologies. Honda's lines of luxury cars
are branded Acura in North America and China. The Group's major trademarks includes
Honda, Acura, Accord, Civic, Fit, Odyssey, CR-V, Pilot, Mobilio, Element, Step WGN,
MDX, Stream, Life, ACTY, Vamos, That’s, CUB, Wave and Gold Wing.

Honda is the 5th largest automobile manufacturer in the world as well as the largest
engine-maker in the world, producing more than 14 million internal combustion engines
each year. As of August 2008 Honda surpassed Chrysler as 4th largest automobile
manufacturer in United States. Currently, Honda is the second largest manufacturer in
Japan behind Toyota and ahead of Nissan.

GEOGRAPHICAL DISTRIBUTION

Honda is headquartered in Tokyo, Japan. American Honda Motor Co. is based in

Torrance, California. Honda Canada Inc. is headquartered in the Scarborough district of
Toronto, Ontario, and is building new corporate headquarters in Markham, Ontario,
scheduled to relocate in 2008. Hero Honda, a joint venture

between India's Hero Group and Honda, is the largest manufacturer of two wheelers in
the world. Honda of Canada Manufacturing is based in Alliston, Ontario. Honda has also
created joint ventures around the world, such as Honda Siel Cars India Ltd, Hero Honda
Motorcycles India Ltd, Guangzhou Honda and Dongfeng Honda Automobile Company
in China and Honda Atlas Cars Pakistan

FINANCIAL STANCE

Market cap US$ 58.74 Billion (2008)

Revenue US$ 119.801 Billion (2008)
Operating income US$ 9.513 Billion (2008)
Net income US$ 5.989 Billion (2008)
Total assets US$ 125.916 Billion (2008)
Total equity US$ 45.356 Billion (2008)
Employees 167,231 (Sep 2008)
Fiscal year ends March

FINANCIAL ANALYSIS

SALES ANALYSIS
 Honda Motor Co., Ltd. reported sales of ¥12.00 trillion (US$113.31 billion) for the
fiscal year ending March of 2008. This represents an increase of 8.3% versus 2007, when
the company's sales were ¥11.09
trillion. Sales at Honda Motor Co., Ltd. have increased during each of the previous five
years. Honda Motor Co., Ltd. also saw significant increases in sales in Motorcycle
Business (up 13.7% to ¥1.56 trillion).
Sales Comparisons (Fiscal Year ending 2008)

Sales Sales Sales/

Company (trlns) Growth Emp (US$) Largest Region
Honda Motor Co., Ltd. 12.003 8.3% 633,140 North America (50.8%)

Just over half of the company's 2008 sales were in North America: in 2008, this region's
sales were ¥6.09 trillion, which is equivalent to 50.8% of total sales. In 2008, sales in
Rest of the World were up at a rate that was much higher than the company as a whole.
Honda Motor Co., Ltd. also experienced significant increases in sales in Europe (up
22.3% to ¥1.50 trillion) and Asia (up 27.6% to ¥1.31 trillion).

DIVIDEND ANALYSIS

During the 12 months ending 30/6/2008, Honda Motor Co., Ltd. paid dividends totaling
¥88.00 per share. Since the stock is currently trading at ¥3,340.00, this implies a dividend
yield of 2.6%. Honda Motor Co., Ltd. has increased its dividend during each of the past 5
fiscal years, in 2003, the dividends were ¥16.00 per share. During the same 12 month
period ended 6/30/2008, the Company reported earnings of ¥338.02 per share. Thus, the
company paid 26.0% of its profits as dividends.

PROFITIBILITY ANALYSIS

On the ¥12.00 trillion in sales reported by the company in 2008, the cost of goods sold
totaled ¥8.02 trillion, or 66.9% of sales i.e., the gross profit was 33.1% of sales which is
better than in comparison as achieved in 2007, when cost of goods sold totaled 67.6% of
sales. This profit margin is lower than the level the company achieved in 2007, when the
profit margin was 5.3% of sales. The company's return on equity in 2008 was 13.4%.
This was a decline in performance from the 14.4% return that the company achieved in
2007.

Profitability Comparison

Gross Earns
Profit EBITDA bef.
Company Year Margin Margin extra
Honda Motor Co., Ltd. 2008 33.1% 12.3% 5.0%
Honda Motor Co., Ltd. 2007 32.4% 11.0% 5.3%

Honda Motor Co., Ltd. reports profits by product line. During 2008, the itemized
operating profits at all divisions were ¥953.11 billion, which is equal to 7.9% of total
sales. Of all the product lines, Financial Services had the highest operating profits in
2008, with operating profits equal to 22.1% of sales. Power Products and Other
Businesses had the lowest operating profit margin in 2008, with the operating profit equal
to only 5.3% of sales. However, in 2007, Automobile Business had the lowest profit
margin.

INVENTORY ANALYSIS

As of March 2008, the value of the company's inventory totaled ¥1.20 trillion. Since the
cost of goods sold was ¥8.02 trillion for the year, the company had 55 days of inventory
on hand. In terms of inventory turnover, this is an improvement over March 2007, when
the company's inventory was ¥1.18 trillion, equivalent to 58 days in inventory.

FINANCIAL POSITION
 As of March 2008, the company's long term debt was ¥1.84 trillion and total liabilities
(i.e., all money owed) were ¥7.75 trillion. The long term debt to equity ratio of the
company is 0.39. As of March 2008, the accounts receivable for the company were ¥2.36
trillion, which is equivalent to 72 days of sales. This is an improvement over the end of
2007, when Honda Motor Co., Ltd. had 82 days of sales in accounts receivable.

Financial Positions Honda Motors Pvt., Ltd.

LT Debt/ Days Days R&D/

Company Year Equity AR Inv. Sales
Honda Motor Co., Ltd. 2008 0.39 72 55 4.9%

NET PROFIT TURNOVER RATIO

Computation:
Net Profit Turnover Ratio = Sales/Net Profit
2007 (for Honda) 2007 (for Mitsubishi)
Net Profit Turnover Ratio = 9819973/592322 Net Profit Turnover Ratio =
2202869/8745
Net Profit Turnover Ratio = 16.57 times Net Profit Turnover Ratio = 251.6
times
2008 (for Honda) 2008 (for Mitsubishi)
Net Profit Turnover Ratio = 11304485/600039 Net Profit Turnover Ratio =
2682103/34710
Net Profit Turnover Ratio = 18.83 times Net Profit Turnover Ratio = 77.27
times
 COMPARATIVE ANALYSIS OF CURRENT FISCAL YEAR WITH
THE PREVIOUS FISCAL YEAR.

Honda’s consolidated net sales and other operating revenues for the fiscal year ended
March 31, 2008 grew ¥915.6 billion, or 8.3%, compared with fiscal 2007, to ¥12,002.8
billion. Factors behind this increase were higher unit sales in the motorcycle business in
Other Regions, higher unit sales in the automobile business in all overseas regions, and
higher unit sales of power products in Asia, as well as the positive impact of foreign
exchange rate changes.
Domestic net sales decreased by ¥95.4 billion, or 5.7%, to ¥1,585.7 billion, but
overseas net sales were up ¥1,011.1 billion, or 10.7%, to ¥10,417.0 billion as compared
to FY 2007.
Net income rose ¥7.7 billion or 1.3% from the previous year, to ¥600.0 billion.
Consolidated cash and cash equivalents for the year ended March 31, 2008 increased by
¥105.3 billion from March 31, 2007, to ¥1,050.9 billion. This can be primarily attributed
to higher unit sales in motorcycle business. The provision for credit
lossesincreasedby¥19.3 billion, which was at ¥25.5 billion on 2007 and rose to ¥44.8 in
2008, primarily as a result of the weakening U.S. economy.

ACADEMIC AND PROFESSIONAL QUALIFICATION THAT

COMPANY LOOK WHILE RECRUITMENT OF A FRESHER IN
FINANCIAL DIVISION

An individual as a fresher must be well known of the following facts.

* Preparation of Balance Sheet.

* Point of contact with RBI from the bank

* Handling Branch Accounts monitoring.

* Financial Statement - BS monitoring.

* Audit of Financial Results.

• Handling full set of accounts.

• Supervise AR Team.

• Responsible for monthly closing, inter-company reconciliation, cash flow management.

• Prepare monthly management and consol reports at Group level.

• Handle corporate income tax and GST returns.

Requirements:

• Degree in Accounting or ACCA.

• At least 5 years of relevant working experience in accounting.

• Knowledge in Oracle system will be an advantage.

• Meticulous, proactive and good team player.

Functional Area : Accounts, Finance, Tax, CS, Audit

Education :

UG - B.Com - Commerce PG - M.Com – Commerce/M.B.A(finance).