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Presented to:
Sir Shahid Latif
Presented by:
Zeba Tariq Batch 3rd
Adil Nisar batch 3rd
Usman Sheikh Batch 3rd
Zeeshan Ahmed Batch 1st
 U N I V E R S I T Y O F M A N A G E M E N T A N D T E C H N O L O G Y
Financial Statement
Analysis [2016]
Report On ‘’ Honda Atlas Cars (Pakistan) limited’’
“ Atlas Honda Limited”
Introduction-HCAR
Financial Highlights
Income Statement – HCAR & AHL
*Balance Sheet *Distribution charts
Reason of Selection, Recommendations
Ratio Analysis of HCAR & AHL (2011-2016)
Performance charts (2011-2016)
Introduction-
HCAR
Stock Information: Security Code HCAR
Number of Shares Authorized: 200,000,000
Number of Shared Issued: 142,800,000
Number of Shareholders: 4,941
Income statement
HONDA ATLAS CARS LIMITED
Balance Sheet
HONDA ATLAS CARS LIMITED
2016
2015
2014
2013
2012
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Dividend
Bonus
Right
2016 2015 2014 2013 2012
Financial Statement Ratios
HONDA ATLAS CARS LIMITED
Profitability 2016 2015 2014 2013 2012 2011
Gross profit / (loss) margin 15.1 12.6 7.3 4.8 (0.3) 0.9
Operating profit / (loss)
margin
12.9 10.0 5.5 ((2.4) (2.1) (0.4)
Profit / (loss) before tax 12.9 10.0 5.4 1.7 (3.0) (1.1)
Profit / (loss) after tax 8.9 8.4 2.7 0.8 (3.2) (1.4)
15.1
12.9 12.9
8.9
12.6
10 10
8.4
7.3
5.5 5.4
2.7
4.8
-2.4
1.7 0.8
-0.3
-2.1
-3 -3.2
0.9
-0.4 -1.1 -1.4GROSS PROFIT / (LOSS) MARGIN OPERATING PROFIT / (LOSS)
MARGIN
PROFIT / (LOSS) BEFORE TAX PROFIT / (LOSS) AFTER TAX
2016 2015 2014 2013 2012 2011
Profitability
Liquidity 2016 2015 2014 2013 2012 2011
Current
ratio
Times 1.5 1.2 0.9 0.8 0.6 0.7
Quick ratio Times 1.0 0.6 0.5 0.4 0.2 0.2
Long term
debt to
equity
Times - - - - 0.2 0.5
Total
liabilities
to equity
Times 2.0 2.7 5.2 11.1 8.4 6.3
Financial Statement Ratios
HONDA ATLAS CARS LIMITED
Liquidity
1.5
1
0
2
1.2
0.6 0
2.7
0.9
0.5 0
5.2
0.8
0.4 0
11.1
0.6 0.2 0.2
8.4
0.7 0.2 0.5
6.3
CURRENT RATIO QUICK RATIO LONG TERM DEBT TO EQUITY TOTAL LIABILITIES TO EQUITY
2016 2015 2014 2013 2012 2011
LIQUIDITY
Activity/
Asset
Utilization
2016 2015 2014 2013 2012 2011
Total
assets
turnover
Times 2.5 2.7 3.2 2.0 1.7 2.1
Fixed
assets
turnover
Times 10.6 12.9 12.9 8.6 4.5 5.6
Stock
turnover
ratio
Times 7.1 7.0 8.9 8.0 5.3 7.6
Interest
cover (BT)
Times 741.8 202.8 56.1 3.7 (2.3) (0.6)
Interest
cover (AT)
Times 509.6 170.4 29.2 2.3 (2.5) (1.0)
Number of
days stock
Days 51 52 41 46 69 48
Financial Statement Ratios
HONDA ATLAS CARS LIMITED
2.5 10.6 7.1
741.8
509.6
51
2.7 12.9 7
202.8
170.4
52
3.2 12.9 8.9
56.1
29.2 412 8.6 8 3.7 2.3 461.7 4.5 5.3
-2.3 -2.5
69
2.1 5.6 7.6
-0.6 -1
48
T ASSETS TURNOVER F. ASSETS TURNOVER STOCK TURNOVER
RATIO
INTEREST COVER (BT) INTEREST COVER (AT) # OF DAYS STOCK
2016 2015 2014 2013 2012 2011
Activity/ Asset Utilization
Return on
investment
2016 2015 2014 2013 2012 2011
Earning
Return on
capital
employed
% 54.5 84.2 57.2 18.4 (28.0) (10.0)
Return on
equity (BT)
% 79.3 100.3 111.7 42.1 (35.6) (13.4)
Return on
equity (AT)
% 54.5 84.2 57.2 19.6 (37.9) (16.3)
Financial Statement Ratios
HONDA ATLAS CARS LIMITED
54.5
79.3
54.5
84.2
100.3
84.2
57.2
111.7
57.2
18.4
42.1
19.6
-28
-35.6 -37.9
-10
-13.4
-16.3
EARNING RETURN ON
CAPITAL EMPLOYED
RETURN ON EQUITY
(BT)
RETURN ON EQUITY
(AT)
2016 2015 2014 2013 2012 2011
Return on investment
Market
measures
2016 2015 2014 2013 2012 2011
Earning / (loss)
per share (AT)
Rs 24.9 22.1 7.5 1.7 (3.7) (2.1)
Price earning
ratio (AT)
Times 10.1 8.3 7.3 17.1 (3.0) (4.8)
Dividend yield %
2.91 3.46 6.84 1.74 N/A N/A
Dividend per
ordinary share
Rs 7.0 5.0 3.0 0.3 - -
Price to book
4.33 4.03 2.62 1.78 1.21 0.98
Financial Statement Ratios
HONDA ATLAS CARS LIMITED
24.9
10.1
2.91
7
4.33
22.1
8.3
3.46
5
4.03
7.5 7.3
6.84
3 2.62
1.7
17.1
1.74 0.3 1.78
-3.7
-3
0 0 1.21
-2.1
-4.8
0 0 0.98
EARNING / (LOSS) PER
SHARE (AT)
PRICE EARNING RATIO (AT) DIVIDEND YIELD DIVIDEND PER ORDINARY
SHARE
PRICE TO BOOK
2016 2015 2014 2013 2012 2011
Market measures
F. economic conditions Rise in Auto Financing Launch of New Models
Financial Business Analysis HIGHLIGHTS
Reason of increase in Probability ratio
Government’s Apna Rozgar Scheme. NEW AUTO POLICY-2016
• Administrative expenses increased
• Selling expense decreases
Manufacturing Sector
• The Improvement Was Primarily Driven
By Better Energy Availability,
• Lower International Prices Of Key
Inputs,
• Deletion Policy
• Higher Government Spending And
Monetary Easing.
• Further, Improving Law And Order
Situation,
• Recent Cut In Electricity Tariff And
• Development Work Under China-
Pakistan Economic Corridor (CPEC)
Revenue Sector
• Third consecutive year highest-ever
annual post tax profit surpassing the
previous year’s performance!
• Sales revenue 2016 increased by 6.1%
due to increase in Sales of Honda City.
• Cost saving efforts and stable
exchange rate parity.
FinancialBusinessAnalysisHIGHLIGHTS
Critical Analysis Performance Report
[2011-2016]
• Gain competitive insight into a company's performance, growth and
operating capabilities
• What are the drivers of the company's valuation? How is the current
performance relative to peers? Does the company have any borrowing
constraints?
• comprehensive portrait of a company's history, operating performance,
• Does the company have a share price premium? Is it sustainable and
justified?
• Is the current share price based on the company's operating performance or
expectations of growth in its earnings?
• What strategy is the company following to generate margins?
• Is the company's capital investment program sufficient to support growth?
Financial Highlights
ATLAS HONDA LIMITED
Financial Highlights
ATLAS HONDA LIMITED
Financial Highlights
ATLAS HONDA LIMITED
Financial Highlights
ATLAS HONDA LIMITED
Financial Business Analysis HIGHLIGHTS
Reason of increase in Probability ratio
Agriculture
Energy Crises Exchange Fluctuations
• Law and Order
Plant Operations
• Material Price Volatility
• Capital and Money Markets
• Interest Rates
Recommendations-HCAR & HAL(2016)
• The tariff policy should be reinforced.
• Taxes (Sales and Direct)
• Ban on reconditioned or smuggled vehicles should be strictly
observed
• Eliminating duty on the basic raw materials
• Hidden designation ability should improve more…
• Competitive edge needs to improve more
• Because TOUGH TIME, TOUGH COMPETITION
among INDUS Motors and Suzuki group.
• Overall going good! Great!
References:
• http://www.honda.com.pk/pdf/2016/Annual%20Report%202016.pdf
• http://www.pakstocks.com.pk/companyinfo.asp?symbol=HCAR&symb
oldes=HONDA%20ATLAS%20CARS%20(PAK)%20LTD.
• http://www.scstrade.com/StockScreening
• https://www.google.com.pk/webhp?sourceid
• https://online.capitalcube.com
• http://www.ravimagazine.com/automobile-industry-in-pakistan/
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FSA presentation

  • 1. Presented to: Sir Shahid Latif Presented by: Zeba Tariq Batch 3rd Adil Nisar batch 3rd Usman Sheikh Batch 3rd Zeeshan Ahmed Batch 1st  U N I V E R S I T Y O F M A N A G E M E N T A N D T E C H N O L O G Y
  • 2. Financial Statement Analysis [2016] Report On ‘’ Honda Atlas Cars (Pakistan) limited’’ “ Atlas Honda Limited”
  • 3.
  • 4. Introduction-HCAR Financial Highlights Income Statement – HCAR & AHL *Balance Sheet *Distribution charts Reason of Selection, Recommendations Ratio Analysis of HCAR & AHL (2011-2016) Performance charts (2011-2016)
  • 5. Introduction- HCAR Stock Information: Security Code HCAR Number of Shares Authorized: 200,000,000 Number of Shared Issued: 142,800,000 Number of Shareholders: 4,941
  • 7.
  • 9.
  • 11. Financial Statement Ratios HONDA ATLAS CARS LIMITED Profitability 2016 2015 2014 2013 2012 2011 Gross profit / (loss) margin 15.1 12.6 7.3 4.8 (0.3) 0.9 Operating profit / (loss) margin 12.9 10.0 5.5 ((2.4) (2.1) (0.4) Profit / (loss) before tax 12.9 10.0 5.4 1.7 (3.0) (1.1) Profit / (loss) after tax 8.9 8.4 2.7 0.8 (3.2) (1.4)
  • 12. 15.1 12.9 12.9 8.9 12.6 10 10 8.4 7.3 5.5 5.4 2.7 4.8 -2.4 1.7 0.8 -0.3 -2.1 -3 -3.2 0.9 -0.4 -1.1 -1.4GROSS PROFIT / (LOSS) MARGIN OPERATING PROFIT / (LOSS) MARGIN PROFIT / (LOSS) BEFORE TAX PROFIT / (LOSS) AFTER TAX 2016 2015 2014 2013 2012 2011 Profitability
  • 13. Liquidity 2016 2015 2014 2013 2012 2011 Current ratio Times 1.5 1.2 0.9 0.8 0.6 0.7 Quick ratio Times 1.0 0.6 0.5 0.4 0.2 0.2 Long term debt to equity Times - - - - 0.2 0.5 Total liabilities to equity Times 2.0 2.7 5.2 11.1 8.4 6.3 Financial Statement Ratios HONDA ATLAS CARS LIMITED
  • 14. Liquidity 1.5 1 0 2 1.2 0.6 0 2.7 0.9 0.5 0 5.2 0.8 0.4 0 11.1 0.6 0.2 0.2 8.4 0.7 0.2 0.5 6.3 CURRENT RATIO QUICK RATIO LONG TERM DEBT TO EQUITY TOTAL LIABILITIES TO EQUITY 2016 2015 2014 2013 2012 2011 LIQUIDITY
  • 15. Activity/ Asset Utilization 2016 2015 2014 2013 2012 2011 Total assets turnover Times 2.5 2.7 3.2 2.0 1.7 2.1 Fixed assets turnover Times 10.6 12.9 12.9 8.6 4.5 5.6 Stock turnover ratio Times 7.1 7.0 8.9 8.0 5.3 7.6 Interest cover (BT) Times 741.8 202.8 56.1 3.7 (2.3) (0.6) Interest cover (AT) Times 509.6 170.4 29.2 2.3 (2.5) (1.0) Number of days stock Days 51 52 41 46 69 48 Financial Statement Ratios HONDA ATLAS CARS LIMITED
  • 16. 2.5 10.6 7.1 741.8 509.6 51 2.7 12.9 7 202.8 170.4 52 3.2 12.9 8.9 56.1 29.2 412 8.6 8 3.7 2.3 461.7 4.5 5.3 -2.3 -2.5 69 2.1 5.6 7.6 -0.6 -1 48 T ASSETS TURNOVER F. ASSETS TURNOVER STOCK TURNOVER RATIO INTEREST COVER (BT) INTEREST COVER (AT) # OF DAYS STOCK 2016 2015 2014 2013 2012 2011 Activity/ Asset Utilization
  • 17. Return on investment 2016 2015 2014 2013 2012 2011 Earning Return on capital employed % 54.5 84.2 57.2 18.4 (28.0) (10.0) Return on equity (BT) % 79.3 100.3 111.7 42.1 (35.6) (13.4) Return on equity (AT) % 54.5 84.2 57.2 19.6 (37.9) (16.3) Financial Statement Ratios HONDA ATLAS CARS LIMITED
  • 18. 54.5 79.3 54.5 84.2 100.3 84.2 57.2 111.7 57.2 18.4 42.1 19.6 -28 -35.6 -37.9 -10 -13.4 -16.3 EARNING RETURN ON CAPITAL EMPLOYED RETURN ON EQUITY (BT) RETURN ON EQUITY (AT) 2016 2015 2014 2013 2012 2011 Return on investment
  • 19. Market measures 2016 2015 2014 2013 2012 2011 Earning / (loss) per share (AT) Rs 24.9 22.1 7.5 1.7 (3.7) (2.1) Price earning ratio (AT) Times 10.1 8.3 7.3 17.1 (3.0) (4.8) Dividend yield % 2.91 3.46 6.84 1.74 N/A N/A Dividend per ordinary share Rs 7.0 5.0 3.0 0.3 - - Price to book 4.33 4.03 2.62 1.78 1.21 0.98 Financial Statement Ratios HONDA ATLAS CARS LIMITED
  • 20. 24.9 10.1 2.91 7 4.33 22.1 8.3 3.46 5 4.03 7.5 7.3 6.84 3 2.62 1.7 17.1 1.74 0.3 1.78 -3.7 -3 0 0 1.21 -2.1 -4.8 0 0 0.98 EARNING / (LOSS) PER SHARE (AT) PRICE EARNING RATIO (AT) DIVIDEND YIELD DIVIDEND PER ORDINARY SHARE PRICE TO BOOK 2016 2015 2014 2013 2012 2011 Market measures
  • 21. F. economic conditions Rise in Auto Financing Launch of New Models Financial Business Analysis HIGHLIGHTS Reason of increase in Probability ratio Government’s Apna Rozgar Scheme. NEW AUTO POLICY-2016
  • 22. • Administrative expenses increased • Selling expense decreases Manufacturing Sector • The Improvement Was Primarily Driven By Better Energy Availability, • Lower International Prices Of Key Inputs, • Deletion Policy • Higher Government Spending And Monetary Easing. • Further, Improving Law And Order Situation, • Recent Cut In Electricity Tariff And • Development Work Under China- Pakistan Economic Corridor (CPEC) Revenue Sector • Third consecutive year highest-ever annual post tax profit surpassing the previous year’s performance! • Sales revenue 2016 increased by 6.1% due to increase in Sales of Honda City. • Cost saving efforts and stable exchange rate parity. FinancialBusinessAnalysisHIGHLIGHTS
  • 23. Critical Analysis Performance Report [2011-2016] • Gain competitive insight into a company's performance, growth and operating capabilities • What are the drivers of the company's valuation? How is the current performance relative to peers? Does the company have any borrowing constraints? • comprehensive portrait of a company's history, operating performance, • Does the company have a share price premium? Is it sustainable and justified? • Is the current share price based on the company's operating performance or expectations of growth in its earnings? • What strategy is the company following to generate margins? • Is the company's capital investment program sufficient to support growth?
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  • 32. Financial Business Analysis HIGHLIGHTS Reason of increase in Probability ratio Agriculture Energy Crises Exchange Fluctuations • Law and Order Plant Operations • Material Price Volatility • Capital and Money Markets • Interest Rates
  • 33. Recommendations-HCAR & HAL(2016) • The tariff policy should be reinforced. • Taxes (Sales and Direct) • Ban on reconditioned or smuggled vehicles should be strictly observed • Eliminating duty on the basic raw materials • Hidden designation ability should improve more… • Competitive edge needs to improve more • Because TOUGH TIME, TOUGH COMPETITION among INDUS Motors and Suzuki group. • Overall going good! Great!
  • 34.
  • 35. References: • http://www.honda.com.pk/pdf/2016/Annual%20Report%202016.pdf • http://www.pakstocks.com.pk/companyinfo.asp?symbol=HCAR&symb oldes=HONDA%20ATLAS%20CARS%20(PAK)%20LTD. • http://www.scstrade.com/StockScreening • https://www.google.com.pk/webhp?sourceid • https://online.capitalcube.com • http://www.ravimagazine.com/automobile-industry-in-pakistan/