RATIO ANALYSIS OF PAK SUZUKI MOTORS

Ratio Analysis on Pak Suzuki Motors
PakSuzuki Motors
Ratio Analysis on
Pak Suzuki
Motors

PakSuzuki Motors
International Islamic University
Islamabad
(Faculty of Management Sciences)
SUBMITTED TO: Prof. Ch. Mazhar Hussain
GROUP MEMBERS: REGISTRATION NO:
Muhammad Badar-ud-Duja 6230-FMS/MBA/F13
Muhammad Wasim 6256-FMS/MBA/F13
Sehree Mumtaz 6253-FMS/MBA/F13
Wasim Aslam 6248-FMS/MBA/F13
Ishfaq Ali 6259-FMS/MBA/F13

PakSuzuki Motors
ACKNOWLEDGEMENT:
First of all, we thanks to Allah, the almighty, for giving us the strength and will
to do work on this project.
We take this opportunity to express our profound gratitude and deep
regards to our respectable teacher “SirCh. Mazhar Hussain” for his
exemplary guidance, monitoring and constantencouragementthroughout
the course ofsemester. The encouragementand guidance given by him will
help us in future life of study.
We also like to pay gratitude to our group members (M. Badar-ud-Duja,
Muhammad Wasim, WasimAslam, ishfaq Ali & Sehree Mumtaz) for their
constantencouragementand participation without which this project
would not be possible.
.

PakSuzuki Motors
Contents
INTRODUCTION:........................................................................................................................... 1
VISION.........................................................................................................................................1
MISSION...................................................................................................................................1
PRODUCT CATEGORIES.............................................................................................................. 2
Year of Listing:.............................................................................................................................. 2
Statement of Corporate Governance: ............................................................................................ 2
Ratio Analysis:.............................................................................................................................. 3
Liquidity Ratio........................................................................................................................... 3
Leverage Ratios ........................................................................................................................ 5
Coverage Ratios........................................................................................................................ 7
Activity Ratios........................................................................................................................... 8
Profitability Ratios .................................................................................................................. 13
COMMON SIZE ANALYSIS OF BALANCE SHEET .............................................................................. 17
ASSET SIDE.......................................................................................................................... 17
COMMON SIZE ANALYSIS OF PROFIT AND LOSS ACCOUNT........................................................ 19
INDEX ANALYSIS OF BALANCE SHEET ........................................................................................... 20
INDEX ANALYSIS OF PROFIT AND LOSS ACCOUNT...................................................................... 22
TREND ANALYSIS ........................................................................................................................ 23
Explanation of Trend Analysis.................................................................................................. 23
Conclusion:................................................................................................................................ 25
References:................................................................................................................................ 25

Suzuki motors Page 1
INTRODUCTION:
Pak Suzuki Motor Company Limited (PSMCL) is public limited company with its shares
quoted on Stock Exchanges in Pakistan. The Company was formed in August 1983 in
accordance with the terms of a joint venture agreement between Pakistan Automobile
Corporation Limited (representing Government of Pakistan) and Suzuki Motor Corporation
(SMC) - Japan.
The Company started commercial production in January 1984 with the primary objective of
progressive manufacturing, assembling and marketing of Cars, Pickups, Vans and 4 x 4
vehicles in Pakistan. The Company’s long term plans inter-alia includes tapping of export
markets. The foundation stone laying ceremony of the Company’s existing plant located at
Bin Qasim was performed in early 1989 by the Prime Minister then in office.
This Plant has total area of 259000 m2 and the cost for building it accounted up to Rs. 11.096
billion. This plant has production capacity of 150000 units / annum and works in double
shifts.
Pak Suzuki Motors has largest distribution network in Pakistan. There are currently 74
dealers of Pak Suzuki which are spread all over the cities of Pakistan
VISION
To be recognized as a leading organization that values Customer’s needs and provides
motoring solutions with strong customer care.
MISSION
 Strive to market value packed vehicle that meet customer’s expectations.
 Provide a platform where over stake holders passionately contribute, invest and excel.
 Make value able contribution to social development of Pakistan.

PRODUCT CATEGORIES
AUTOMOBILES MOTORCYCLES HEAVY BIKES
Swift GS 150 Hayabusa
Liana GD 110 Intruder
Cultus Raider Inazuma
Mehran Sprinter Eco
Bolan
Cargo van
Ravi pickup
Year of Listing:
Pak Suzuki Motor Company Limited (PSMCL) was incorporated as a public limited
company in August 1983.
Statement of Corporate Governance:
o Statement of corporate governance has been developed and written by the Board of
the Directors of the company. This statement is prepared to comply with the
regulation of Karachi Stock Exchange for the purpose of establishing a frame work
of good governance. The company encourages representation of independent non-
executive directors. The company also make sure that none of them is working in
more than seven listed companies and also checked by the company that none of their
spouse and family members are engaged in the business of brokerage and shareholder
of that company where he is appointed as a director.
o The board of directors also fill the casual vacancies in the company and the code of
conduct is also being prepared by the board. Vision and mission of the company,
overall corporate strategy and significant policies of the company are developed by
the board.
o The power of the board have been duly exercised and decision on material
transactions, appointment, remuneration, terms and conditions, employment of CEO
have been taken by the Board.
o Board also held annual and interim meetings, appointment of CFO, Company
Secretary, and Head of Internal Audit including their remuneration, terms and
conditions of the employment.
o All of the rules and regulations are briefly given in the corporate of governance,
which are compulsory for the running of business of the company. Audit reports,
statutory meetings are issued with approval of the CFO and CEO.
o The Directors, CEO and Executives do not hold any interest in the shares of the
company other than that disclosed in the pattern of shareholding.

Ratio Analysis:
We analysed the data of Suzuki motors of three years from 2009 to 2011. The sources of data
are given at the end of this report.
Liquidity Ratio
 Current Ratio
Definition:
Current ratio means that to know about the company liquidity current position, which can be
calculate through total current assets over the total current liabilities.
Formula:
Current ratio = Total current assets / Total current liabilities
Table:
Company 2009 2010 2011
Suzuki Motors 3.70 3.01 2.30
Graph:
0
0.5
1
1.5
2
2.5
3
3.5
4
2009 2010 2011
Current Ratio
CR

 Quick Ratio
Definition:
Quick ratio are those which can easily be converted it into any financial institution, which
are cash and marketable securities add account receivable over the total current liabilities.
Formula:
Quick ratio = cash+ marketable securities+ account receivable / total current liabilities
Table:
Company 2009 2010 2011
Graph:
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2009 2010 2011
Quick Ratio

Leverage Ratios
 Debt to Equity Ratio
Definition:
Debt to equity ratio is that how much ratio is available in debt and equity, which can be
calculated total debts to total common stock equity.
Formula:
Debt to Equity ratio = total debts / total common stock equity
Table:
Company 2009 2010 2011
Graph:
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2009 2010 2011
Debt Equity Ratio

 Debt Ratio
Definition:
Debt ratio is that ratio where financing side of liabilities are been performed in operation to
know about their liabilities ratios, which can be done through total debts to the total assets.
Formula:
Debt ratio = total debts / total assets
Table:
Company 2009 2010 2011
Graph:
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
2009 2010 2011
Debt Ratio

Coverage Ratios
 Interest Coverage Ratio
Definition:
A ratio used to determine how easily a company can pay interest on outstanding debt
Formula:
ICV = Earnings before income tax / Financial charges
Table:
Company 2009 2010 2011
Graph:
0
10
20
30
40
50
60
70
80
90
2009 2010 2011
Interest Coverage Ratio

Activity Ratios
 Account Receivable turnover
Definition:
Account receivable turnover tells how much we have utilized thee cash in the business that
can be known with the total credit sales over the average account receivable.
Formula:
Account Receivable Turnover Ratio = Net Credit Sales / Average Account Receivable
Table:
Company 2009 2010 2011
Suzuki Motors 73.00 101.00 107.00
Graph:
0
20
40
60
80
100
120
2009 2010 2011
Activity Ratio

 Average Collection Period
Definition:
Average collection period is known that how much account receivable turnover are been
done in one year, which is been done through 365 days divided by account receivable
turnover.
Formula:
Average collection period = 365 / Account Receivable Turnover
Table:
Company 2009 2010 2011
Graph:
0
1
2
3
4
5
6
2009 2010 2011
Average Collection Period

 Inventory Turnover Ratio
Definition:
A ratio showing how many times a company’s inventory is sale out
Formula:
Inventory Turnover Ratio= Cost Of Goods Sold/ Average Inventory
Table:
Company 2009 2010 2011
Graph:
0
1
2
3
4
5
6
2009 2010 2011
Inventory Rurnover Ratio

 Inventory in Days
Definition:
It shows how many days a company inventory into sales
Formula:
Inventory in Days= Days in Year / Inventory Turnover Ratio
Table:
Company 2009 2010 2011
Suzuki Motors 135.18 83.52 68.35
Graph:
0
20
40
60
80
100
120
140
160
2009 2010 2011
Inventory In Days

 Total Assets Turnover
Definition:
Total assets turnover known that more we are utilizing assets turnover then we are more
contributing to generate in revenue, that can be done when average total sales over the
average total assets.
Formula:
Total assets turnover = Net Sales / Total Assets
Table:
Company 2009 2010 2011
Graph:
0
0.5
1
1.5
2
2.5
2009 2010 2011
Total Assests Turnover

Profitability Ratios
 Gross Profit Ratio
Definition:
Gross profit ratio mean that how much we have get the profit in operation in the form of
ratio, that can be calculate through gross profit over the average total sales.
Formula:
Gross Profit Ratio = Gross profit / Net Sales
Table:
Company 2009 2010 2011
Graph:
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
0.045
2009 2010 2011
Gross Profit Ratio

 Net Profit Ratio
Definition:
Net profit ratio is known that how much net profit ratio has been calculated in operation with
the net income over the average total sales.
Formula:
Net profit ratio = Net Income/Total sales
Table:
Company 2009 2010 2011
Graph:
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Category 1 Category 2 Category 3
Net Profit Ratio

 Return On Assets
Definition:
Return on assets mean that in operation how much we get return of assets in business, that
can done through net income over the average total assets.
Formula:
Return on assets = Net Income / Total assets
Table:
Company 2009 2010 2011
Graph:
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
2009 2010 2011
Return OnAssets

 Return On Equity
Definition:
Return on equity means that in business how you are getting the return of equity by
performing operation, which can be calculate through net income over the average total
shareholder equity.
Formula:
Return on Equity = Net Income / Total shareholder equity
Table:
Company 2009 2010 2011
Graph:
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2009 2010 20
Return On Equity

COMMON SIZE ANALYSIS OF BALANCE SHEET
ASSET SIDE
Assets 2009 2010 2011
Property 26.5% 21.9% 18%
Intangible
Assets
1.9% 2.62% 1.3%
28.5% 24.5% 19.32%
L.T
Investment
0.02% 0.02% 0.01%
L.T Loans 0.01% 0.005% 0.006%
L.T Deposits 0.1% 0.14% 0.08%
L.T sales
receivables
0.8% 0.88% 0.79%
Deferred
Taxes
- - -
29.6% 25.6% 20.2%
Stores 0.23% 0.33% 0.27%
Stock in
Trade--
38.9% 45.4% 55.45%
Trade
Debts
2.1% 1.2% 1.38%
Sales
Receivables
1.16% 1.3% 1.3%
Loans 1.2% 0.7% 0.9%
Trade Deposits 0.17% 0.22% 0.35%
Accrued
Mark-up
Income
0.04% 0.04% 0.02%
Other
Receivables
0.43% 0.55% 0.6%
Sales Tax 1.4% 2.02% 4.3%
Income Tax
Refundable
4.4% 7.3% 10.13%
Bank
Balances
20.0% 15.15% 4.8%
70.3% 74% 79.76%
TOTAL
ASSETS
100% 100% 100%

LIABILITIES & OWNER’S EQUITY SIDE
Liabilities &
Owner’s
Equity
2009 2010 2011
Authorized
Capital
8.4% 7.7% 6.4%
Paid up
Capital
4.6% 4.27% 3.5%
Reserves 76% 71% 62%
81% 75.3% 65.6%
Trade &
other
Payables
10.4% 16.00% 13.7%
Advances 2.5% 1.6% 13%
Accrued
Mark-up
0.008% - -
Short term
Borrowing
0.45% 0.25% 0.32%
Deposits
against
display of
vehicles
4% 5.5% 6%
Security
Deposits
0.49% 0.46% 0.3%
Provision for
Sales Tax
0.78% 0.71% 0.5%
18.8% 24.6% 34%
TOTAL
EQUITY &
LIABILITIES
100% 100% 100%
Explanation:
Common size analysis of balance sheet of Suzuki motors is improving year by year like as in
2010 it has larger amount then 2009 and as compare to 2010 it also increases in2011. There is
improvement in the company year by year.

COMMON SIZE ANALYSIS OF PROFIT AND LOSS ACCOUNT
ITEMS 2009 2010 2011
Turnover net 100% 100% 100%
Cost of sales (97.5%) (97.64%) (96%)
Gross profit 2% 2.3% 3.5%
Distribution
Cost
(0.81%) (0.46%) (0.5%)
Administrative
expenses
(1.8%) (1.4%) (1.3%)
Other
Operating
Income
2.3% 1.3% 1.17%
Finance cost (0.04%) (0.05%) (0.03%)
Other
operating
Expenses
(0.14%) (0.13%) (0.20%)
(0.53%) (0.78%) (0.95%)
Profit Before
Taxation
1.63% 1.5% 2.5%
Taxation 0.65% 1.07% 1.08%
Profit After
Taxation
0.97% 0.49% 1.5%
Earnings Per
Shares
3.10 2.57 9.65

INDEX ANALYSIS OF BALANCE SHEET
INDEX ANALYSIS OF BALANCE SHEET (BASE YEAR 2009)
ASSET SIDE
Assets 2009 2010
Increase or
Decrease
% 2011
Increase or
Decrease
%
Property 4684671 (458089) -9.7% (484354) -10.3%
Intangible
Assets
347732 158028 45.44% (43955) -12.6%
5032403 (300061) -5.96% (528309) -10.49%
L.T
Investment
4449 964 21.66% (259) -5.82%
L.T Loans 3162 (2052) -64.89% (1639) -51.8%
L.T Deposits 34609 (6110) -17.65% (14122) -40.80%
L.T sales
receivables
153478 16386 10.6% 32351 21.07%
Deferred
Taxes
- - - - -
5228101 (290869) -5.5% (511978) -9.79
Stores 41749 22167 53.09% 22718 54.4%
Stock in
Trade
6879729 1868302 27% 6042667 87.8%
Trade
Debts
376508 (135789) -36.06% (53831) -14.29%
Sales
Receivables
205680 45574 22.15% 98271 47.77%
Loans 226388 (91425) -40.38% (9802) -4.32%
Trade
Deposits
31738 11728 36.95% 51533 162.37%
Accrued
Mark-up
Income
7837 815 10.39% (1692) -21.58%
Other
Receivables
76685 31094 40.54% 63263 82.49%
Sales Tax 255609 133844 52.36% 767790 300.3%
Income Tax
Refundable
780089 627624 80.45% 1582585 202.8%
Bank
Balances
3545621 (628435) -17.72% (2406141) -67.86%
12427633 1885499 15.17% 6157361 49.54%
TOTAL
ASSETS
17655734 1594630 9.03% 5645383 31.97%

LIABILITIES & OWNER’S EQUITY SIDE
Liabilities &
Owner’s
Equity
2009 2010
Increase or
Decrease
% 2011
Increase or
Decrease
%
Authorised
Capital
1500000 - - - -
Paid up
Capital
822999 - - - -
Reserves 13502601 172315 1.2% 967432 7.16%
14325600 172315 1.2% 967432 7.16%
Trade &
other
Payables
1853034 1227317 66.23% 1358140 73.2%
Advances 441781 (114750) -25.97% 2623625 593.8%
Accrued
Mark-up
1512 (1512) -100% (1512) -100%
Short term
Borrowing
80000 (30000) -37.5% (5000) -6.25%
Deposits
against
display of
vehicles
723554 344285 47.58% 713279 98.5%
Security
Deposits
86778 1975 2.27% 5581 6.43%
Provision for
Sales Tax
138475 - - - -
3325134 1427315 42.92% 4682951 140.8%
TOTAL
EQUITY &
LIABILITIES
17655734 1594630 9.0% 5645383 31.9%
Explanation:
Suzuki motor is improving their business year by year as in 2010 there was larger amount the
in 2009 and as in 2011 it also increases, By their effective operation in the business. Suzuki
motors maintain their good will in the market.

INDEX ANALYSIS OF PROFIT AND LOSS ACCOUNT
BASE YEAR 2009
ITEMS 2009 2010
Increase or
Decrease
% 2011
Increase or
Decrease
%
Turnover net 26234061 16408701 62.5% 26484502 100.9%
Cost of sales (25664762) 15974213 62.2% 25184391 98.1%
Gross profit 569299 434488 76.3% 1300111 228.3%
Distribution
Cost
(214550) (17189) -8.0% 49101 22.8%
Administrative
expenses
(495200) 141132 28.5% 240735 48.6%
Other
Operating
Income
619572 (44494) -7% 818 0.13%
Finance cost (12564) 8785 69.9% 5281 42%
Other
operating
expenses
(38714) 17094 44.1% 68358 176%
(141456) 194316 137% 362657 256%
Profit Before
Taxation
427843 240172 56.13% 937454 219.1%
Taxation 172624 284248 164% 398252 230%
Profit After
Taxation
255219 (44076) -17.2% 539202 211%
Earnings Per
Shares
3.10 (0.53) -17% 6.55% 211%
Explanation:
index analysis of Income statement of Suzuki motors in 2010 is decreasing as compared to
2009 but in 2011 the operation was performed very well by the organization so they
increased their net income.

TRENDANALYSIS
Name ofRatio 2009 2010 2011
Current Ratio 3.7 3.01 2.3
Quick Ratio 1.66 1.16 0.7
Debt Equity 0.23 0.71 0.54
Debt Ratio 0.19 0.25 0.34
Interest Coverage Ratio 34.05 31.3 76.5
Account Receivable
Turnover 73 101 107
Average Collection Period 5 3.6 3.4
Inventory Turnover 2.7 4.37 5.34
Inventory In Days 135 84 68
Total Asset Turnover 1.5 2.2 2.26
Gross Profit Ratio 0.02 0.02 0.04
Net Profit Ratio 0.1 0.05 0.02
Return On Asset 0.01 0.01 0.03
Return On Equity 0.02 0.75 0.05
Explanation of Trend Analysis
Current Ratio:
Current ratio of Suzuki motors in 2009 was working well but in 2010 and 2011 it was been
decreased. The rate of increase in current liability is more than rate of increase in current
asset.
Quick Ratio:
Quick ratio of Suzuki motors is increasing in 2009 but it decreases in 2010 and 2011.unsold
stock increase due to that reason quick ratio increases.
Debt to Equity Ratio:
Debt to equity ratio of Suzuki motors is increasing in 2010 and then decreasing in 2011. The
rate of increase in total debt is more than the rate of increase in total equity due to this debt
equity ratio increases.
Debt Ratio:
Debt ratio of Suzuki motors is increasing year by year in 2009, 2010, 2011. Debt portion in
total asset has been increasing due to which debt ratio increase.

Interest Coverage Ratio:
The rate of increase in financial cost is more than rate of increase in earnings before taxes
that is why interest coverage ratio decrease.
Account Receivable turnover:
The credit collection mechanism of Suzuki Motors is strong, that is why Account receivable
increases every year.
Average Collection Period:
Average collection period of Suzuki motors in 2009 is working well but it decreases in 2010
and 2011. Due to high Account Receivable Turnover ratio the average collection period
decreases at every year.
Inventory Turnover Ratio:
Account receivable turnover of activity ratio of Suzuki motor is increasing in2009, 2010 and
2011. Inventory turnover ratio increases shows that overall performance of company is
improving &their unsold stock decreases time to time.
Inventory in Days:
Inventory in days decrease due to high inventory turnover ratio
Total Assets Turnover:
Total assets turnover of Suzuki motors is improving their performance in 2010 and 2011.The
rate of increase in net sales is higher than rate of increase in total assets because of this
portion of revenue obtain from total asset is increased.
Gross Profit Ratio:
Gross profit ratio of Suzuki motors is not generating the profit to much in 2009, 2010 and
2011. In 2009&2010 gross profit ratio remain same in 2011, Gross profit ratio is increase
because rate of gross profit more than rate increase in net sales.
Net Profit Ratio:
Net profit margin of Suzuki motors is working at average level in 2009, 2010 and 2011. The
net profit ratio is increasing because the rate of increase in net profit is higher than the rate of
net sales.
Return on Assets:
Return on assets of Suzuki motors in 2009, 2010 and 2011 is working in average. Due to high
performance of company return assets is increase in 2011.

Return on Equity:
Return on equity of Suzuki motors is positively working in 2009, 2010 and 2011. Return on
equity is increase from 2009 to 2010 it indicates the stakeholder profitability increasing & it
decreases from 2010 to 2011 that indicate the profitability of shareholder decreases.
Conclusion:
 Suzuki motors maintain a good relationship in the market.
 In 2011 they maintain business and make the effective operation, so for that they
increased their business and get benefits from that year.
 Index analysis of income statement of Suzuki motors in 2009 had get the profit in
their business but in 2010 they get less amount of profit as compare to 2009.
 In 2011 they get highly amount of profit as compare to 2009.
 Common size analysis of balance sheet of Suzuki motors has been increased year by
year in 2009, 2010 and 2011.
 Common size analysis of income statement increased the profit in 2011 but it was
been decreased in last year of 2010.
 In 2009 the liquidity ratio analysis has showing the positive relation.
 Suzuki motors of liquidity ratio analysis had the positive relation such as in 2009 has
fewer amount then 2010 and in 2011 it has higher amount then 2010.
 Suzuki motors of activity ratio analysis had the greater ratio year by year in 2009,
2010 and 2011.
 Suzuki motors of profitability ratio in 2010 maintain their position but in 2011 it were
been decreased.
 Suzuki motors of marketable ratio in 2009, 2010 and 2011 are increasing year by
year.
References:
Reference ofthe Website
PAK SUZUKI MOTORS
http://www.paksuzuki.com.pk/Automobile/PDF%20file/Financial/Suzuki%20Annual%20Repo
rt%202011.pdf
PRODUCT CATEGORIES
http://www.paksuzuki.com.pk/Automobile/Pages/Home.aspx
introduction
http://www.paksuzuki.com.pk/Automobile/PDF%20file/Financial/Suzuki%20Annual%20Repo
rt%202011.pdf

RATIO ANALYSIS OF PAK SUZUKI MOTORS

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