fsa presentation
TRANSCRIPT
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/