fsa presentation

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-HCARFinancial Highlights Income Statement – HCAR & AHL*Balance Sheet *Distribution charts

Reason of Selection, RecommendationsConclusions

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 statementHONDA ATLAS CARS LIMITED

Balance SheetHONDA ATLAS CARS LIMITED

DividendBonus

Right

0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%

2016

2015

2014

2013

2012

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)

Gross profit / (loss) margin Operating profit / (loss) margin Profit / (loss) before tax Profit / (loss) after tax

15.1

12.9 12.9

8.9

12.6

10 10

8.47.3

5.5 5.4

2.7

4.8

-2.4

1.70.8-0.3

-2.1-3 -3.2

0.9 -0.4-1.1 -1.4

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

Current ratio Quick ratio Long term debt to equity Total liabilities to equity

1.51

0

2

1.20.6

0

2.7

0.90.5

0

5.2

0.80.4

0

11.1

0.60.2 0.2

8.4

0.70.2

0.5

6.3

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

T assets turnover F. assets turnover Stock turnover ratio Interest cover (BT) Interest cover (AT) # of days stock2.5 10.6 7.1

741.8

509.6

51

2.7 12.9 7

202.8170.4

52

3.2 12.9 8.9

56.129.2 41

2 8.6 8 3.7 2.3

46

1.7 4.5 5.3-2.3 -2.5

69

2.1 5.6 7.6-0.6 -1 48

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

Earning Return on capital employed

Return on equity (BT) Return on equity (AT)

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

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

Earning / (loss) per share (AT)

Price earning ratio (AT) Dividend yield Dividend per ordinary share Price to book

24.9

10.1

2.91

7

4.33

22.1

8.3

3.465

4.03

7.5 7.3 6.84

3 2.621.7

17.1

1.740.3

1.78

-3.7 -30 0

1.21

-2.1

-4.8

0 00.98

2016 2015 2014 2013 2012 2011

Market measures

F. economic conditions Rise in Auto Financing Launch of New Models

Financial Business Analysis HIGHLIGHTSReason 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.

Finan

cial B

usin

ess A

nalys

is HI

GHLIG

HTS

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 HighlightsATLAS HONDA LIMITED

Financial HighlightsATLAS HONDA LIMITED

Financial HighlightsATLAS HONDA LIMITED

Financial HighlightsATLAS HONDA LIMITED

Financial Business Analysis HIGHLIGHTSReason 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

&symboldes=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/