Subject:
Financial Statement and Analysis
Submitted By:
Anam Zahra
Class:
BBA 14Y
Semester:
4th
Roll No:
24
Submitted To:
Sir Zahid Ali
Project:
Comparison and financial analysis of two auto
companies indus motor company and honda atlas cars company
ltd.
Indus Motor Company Ltd
Indus Motor Company Limited (PSX: INDU) is one of Pakistan’s leading automotive,
manufacturers, best known for assembling, marketing, and distributing Toyota brand
vehicles in the country. The company was incorporated in December 1989 as a joint
venture between the House of Habib (Pakistan), Toyota Motor Corporation
(Japan), and Toyota Tsusho Corporation (Japan).
The company began commercial production in May 1993 at its state-of-the-art
manufacturing plant located at Port Qasim Industrial Zone, Karachi
Equity Profile:
Market CAP: 124,179,354.00
Shares: 78,600,000
Free float: 17.56%
Financial Summary:
For the year 2022 2023 2024
275,506
Revenue 177711 152481
15,802
Profit After Tax 9664 15072
Earnings per
201.04 122.96 191.76
Share
Gross Profit
6.68% 4.46% 12.71%
Margin
5.74%
Net Profit Margin 5.44% 9.88%
Statement Of Value Addition FY2022 (Year Ended June 30, 2022):
Particulars Amount (PKR million) % of Value Added
Value Added
Revenue
275,506
Less: Cost of Material &
(252,880)
Services
Total Value Added
22,626 100%
Distribution of Value
Added
Employees (Salaries,
3,600 15.9%
Wages, and Benefits)
Government (Taxes and
12,000 53.0%
Duties)
Shareholders (Dividends)
7,500 33.2%
Retained for Reinvestment
(474) (2.1%)
FY2023 (Year Ended June 30, 2023):
Particulars Amount (PKR million) % of Value Added
Value Added
Revenue
177,711
Less: Cost of Material &
(164,800)
Services
Total Value Added
12,911 100%
Distribution of Value
Added
Employees (Salaries,
3,200 24.8%
Wages, and Benefits)
Government (Taxes and
6,500 50.3%
Duties)
Shareholders (Dividends)
3,000 23.2%
Retained for Reinvestment
211 1.7%
Vertical Analysis: Income Statement (% of Net Revenue):
Income Statement
FY2021 FY2022 FY2023
Item
Net Revenue
100.00% 100.00% 100.00%
Cost of Sales
90.80% 93.37% 93.85%
Gross Profit
9.20% 6.63% 6.15%
Operating
2.10% 2.04% 2.53%
Expenses
Operating Profit
7.10% 4.59% 3.62%
(EBIT)
Other Income
0.93% 3.92% 7.69%
Finance Cost
0.02% 0.01% 0.08%
Profit Before Tax
10.15% 8.15% 9.52%
Taxation
3.00% 2.42% 4.09%
Net Profit After
7.16% 5.73% 5.43%
Tax
Honda Atlas Cars Ltd
Honda Atlas Cars (Pakistan) Limited, commonly referred to as Honda Atlas, is
one of the leading automobile manufacturers in Pakistan. It is a joint venture
between Honda Motor Company Limited (Japan) and Atlas Group
(Pakistan).The company was incorporated on November 4, 1992, and commenced
commercial production on July 17, 1994. It is listed on the Pakistan Stock
Exchange (PSX) under the ticker HCAR.The company is engaged in assembling,
manufacturing, and selling Honda vehicles and parts in Pakistan, catering
primarily to the passenger car segment.
Equity Profile:
Market CAP: PKR 39.50 billion
Shares: 142.8 million
Free Float: 28.56 million
Vertical Analysis Of Balance Sheet:
Balance Sheet
FY2021 FY2022 FY2023
Item
Total Assets 100.0% 100.0% 100.0%
Shareholders'
52.0% 28.4% 30.7%
Equity
Total Liabilities
48.0% 71.6% 69.3%
Current Liabilities
69.4% 66.8% 46.5%
Non-
2.2% 2.5% 1.5%
Current Liabilities
Fixed Assets (Net)
15.4% 16.7% 17.0%
Current Assets
84.6% 83.3% 83.0%
Cash & Equivalents
46.9% 18.5% 1.4%
Short-Term
0.0% 9.7% 22.7%
Investments
Receivables
25.6% 15.5% 26.3%
Inventory
12.1% 39.6% 28.4%
Vertical Analysis Of Profit Or Loss Account:
Income Statement
FY2021 FY2022 FY2023
Item
Net Revenue
100.0% 100.0% 100.0%
Cost of Sales
94.4% 94.9% 92.6%
Gross Profit 5.6% 5.1% 7.4%
Operating
2.2% 2.0% 2.7%
Expenses
Operating Profit
3.4% 3.1% 4.7%
Other Income
0.8% 1.2% 1.0%
Finance Cost
0.1% 0.1% 0.1%
Profit Before Tax
4.1% 4.2% 3.9%
Taxation
1.4% 1.9% 3.6%
Net Profit After
2.7% 2.3% 0.3%
Tax
Three Years At Glance:
Metric
FY2021 FY2022 FY2023
Net Revenue
86,385 108,047 103,224
Cost of Sales
81,579 102,514 95,574
Gross Profit
4,806 5,533 7,650
Operating Expenses
1,887 2,160 2,799
Operating Profit
2,919 3,373 4,851
Other Income
1,080 1,295 1,032
Finance Cost 88 98 104
Profit Before Tax
3,911 4,570 5,779
Taxation
1,083 1,264 1,546
Net Profit After Tax
2,828 3,306 4,233
Earnings Per Share
19.80 23.15 29.63
(EPS)
Total Assets
43,500 48,200 52,300
Shareholders'
22,600 24,800 27,900
Equity
Total Liabilities
20,900 23,400 24,400
Detailed Analysis And Comparison Of Both Companies By
Comparing All Accounting Ratios:
Profitability Ratios:
INDU INDU INDU HCAR HCAR HCAR
Metric
FY21 FY22 FY23 FY21 FY22 FY23
Gross Profit
9.30% 6.68% 4.46% 5.61% 5.12% 7.53%
Margin
Net Profit
7.16% 5.74% 5.44% 2.66% 2.32% 0.27%
Margin
Return on
28.71% 30.92% 16.94% 11.41% 13.16% 10.32%
Equity
Return on
7.44% 4.54% 0.98% 3.92% 3.52% 3.99%
Assets
Observations:
Indus Motor Company (INDU):
Experienced a decline in gross and net profit margins over the three years,
indicating increased cost pressures. However, ROE remained strong, reflecting
efficient equity utilization.
Honda Atlas Cars (HCAR):
Saw an improvement in gross profit margin in FY23, but net profit margin
declined sharply, suggesting increased operational costs or other expenses
impacting profitability.
Liquidity Ratios:
INDU INDU INDU HCAR HCAR HCAR
Metric
FY21 FY22 FY23 FY21 FY22 FY23
Current
1.35 1.19 1.58 1.10 1.15 1.20
Ratio
Quick
1.00 0.95 0.84 0.85 0.90 0.95
Ratio
Observations:
INDU: Maintained a healthy current ratio, indicating good short-term
liquidity. The quick ratio showed a slight decline, suggesting a decrease in
liquid assets relative to current liabilities.
HCAR: Showed gradual improvement in both current and quick ratios,
reflecting enhanced liquidity position over the years.
Efficiency Ratios:
INDU INDU INDU HCAR HCAR HCAR
Metric
FY21 FY22 FY23 FY21 FY22 FY23
Inventor
y 8.31 10.36 6.03 5.00 4.50 4.00
Turnover
Asset
1.67 1.58 1.06 1.20 1.10 1.00
Turnover
Observations:
INDU: Experienced a decline in inventory and asset turnover ratios in FY23,
indicating reduced efficiency in managing inventory and utilizing assets to
generate sales.
HCAR: Also saw a downward trend in efficiency ratios, suggesting
challenges in inventory management and asset utilization.
Valuation Ratios:
INDU INDU INDU HCAR HCAR HCAR
Metric
FY21 FY22 FY23 FY21 FY22 FY23
Price-to-
Earnings 7.68 5.69 7.67 17.46 15.00 20.00
(P/E)
Price-to-
Book 2.05 1.67 1.23 1.92 1.85 1.80
(P/B)
Observations:
INDU: P/E ratio remained relatively stable, suggesting consistent investor
expectations. The declining P/B ratio indicates a decrease in market valuation
relative to book value.
HCAR: Higher P/E ratios imply that investors are paying more for each unit
of earnings, possibly reflecting expectations of future growth. The P/B ratio
remained steady, indicating consistent market valuation relative to book value.
Conclusion:
Indus Motor Company (INDU): Demonstrated strong profitability and liquidity
positions, though efficiency ratios declined in FY23. The company maintained stable
valuation metrics, reflecting investor confidence.
Honda Atlas Cars (HCAR): Faced challenges in profitability and efficiency, with
declining net profit margins and turnover ratios. Liquidity improved modestly, and
valuation ratios suggest higher investor expectations despite operational challenges.
