Financial Statement Analysis (Hinopak Motors LTD,.)

Analysis of Financial Statement
Hino Pak motors Pvt. Ltd.
Presented to:
Mr. Salman Majeed

Presented by:
Basit Nazir
(05)
Hafiz M. Jahangir (14)

Program:
BBA 8th (M)

Session:
2010-2014
Sr. #
Contents
Page No.
Executive Summary
Directors
Project Description
Capacity Utilization
Average Relevant item? Product line
Condensed Income statement
Condensed Balance Sheet
Ratio Analysis
a. Liquidity Analysis
b. Activity Analysis
c. Long-term Analysis
Introduction
10
10
Industry
11
11
History
12
12
Income Statements
14
13
14
a. Horizontal Analysis
14
b. Vertical Analysis
15
Liquidity Analysis
16
a. Current ratio
16
b. Quick ratio
17
c. Cash ratio
18
d. Cash flow from operating activities
19
e. Defensive interval
20
f. Networking Capital
21
g. Operating Cycle
22
h. Cash Cycle
23
Activity Analysis
24
a. A/R turnover
24
b. A/R turnover in days
25
15
16
17
c. Inventory turnover
26
d. Inventory turnover in days
27
e. A/P turnover
28
f. A/P turnover in days
29
g. Activity ratio
30
h. Fixed assets turnover
31
i. Total assets turnover
32
Long-term Analysis
33
a. Time interest earned ratio
33
b. Debt service Charges
34
Long-term Analysis of Balance sheet
35
a. Debt Ratio
35
b. Debt / Equity ratio
36
c. Debt to tangible assets ratio
37
d. Fixed assets leverage ratio
38
Profitability analysis
39
a. Gross profit Margin
39
b. Operating profit margin
40
c. Profit before tax
41
d. Net profit Margin
42
e. Return on Assets
43
18
Due Pound Analysis
44
19
Due Pound return on Operating Assets
45
20
Operating Assets turnover
46
21
Return on Operating Assets
47
22
Sales to Fixed Asset
48
23
Return on Investment
49
24
Return on Equity
50
25
SWOT analysis
51
Executive summary
Company:
Hinopak Motors Limited
Addresses:
Head office:
(KARACHI)
D-2, S.I.T.E., Manghopir Road, P.O. Box No.
10714,
Karachi-75700, Pakistan.
Tel : +92 (21) 32563510-8, 32563525-7
FAX : +92 (21) 32564517
E-mail : marketing@hinopak.com
Area Offices:
LAHORE
19 Km, Multan Road, Lahore.
Tel: +92 (042) 37512003-5 Fax: +92 (042)
37512005
Email: hino-lahore@hinopak.com
ISLAMABAD
1-D, Unit 14, Rehmat Plaza,2nd Floor, Blue Area,
Islamabad.
Tel: +92 (051) 2276234-5 Fax: 92 (051) 2272268
Email: hino-islamabad@hinopak.com
PESHAWAR
C/O Hino PeshawarRing Road,
Near Kohat Road BridgePeshawar.
Tel: +92 (091) 2586004 Fax:+92 (091) 2586005
Email: hino-peshawar@hinopak.com
QUETTA
Room # 3, 1st Floor Kasi Plaza # 1 Zarghoon Road,
Quetta.Tel: (081) 2452598 FAX: (081) 2451217
Email: hino-quetta@hinopak.com
Share Registrar:
Technology Trade (Pvt.) Limited

Dagia House 241-C, Block-2
P.E.C.H.S., Off Shahrah-e-Quaideen
Karachi.
Allied Bank Limited
Bankers:
Bank Alfalah Limited

Citibank, N.A
Habib Metropolitan Bank Limited
Habib Bank Limited
National Bank of Pakistan
Bank Al Habib Limited
Standard Chartered Bank (Pakistan) Limited
The Bank of Tokyo-Mitsubishi UFJ, Limited
United Bank Limited
Auditors
A.F. Ferguson & Co. Chartered Accountants
Legal Advisor:
Sayeed & Sayeed
Directors:
Sr.
#
1
Name of Directors
Title
Status
Nationality
Chairman
Non-Executive director
Pakistan
Date of
appointment
Dec., 2013
Mr. Kunwar Idris
Mr. Keiichiro Utsumi
Managing
Director &
CEO
Japan
Feb, 2012
Mr. Tsutomu Mori
---
Japan
April, 2011
MR. Kazuo Kakishima
Deputy
Managing
Director
Deputy
Managing
Director
---
Japan
Feb., 2013
Mr. Takuji Umemura
Japan
Feb., 2013
Mr. Hiroshi Kokaji
Director production,
Quality & Assurance
Senior Managing
director
Japan
June, 2010
Mr. Toyoki Kuno
Japan
Nov., 2012
Mr. Fahim Aijaz Sabzwari
Pakistan
Oct., 2005
Director
production
NonExecutive
director
NonExecutive
director
Company
Secretary &
CFO
Project Description
Customers:
Knocking the door projects
Training of Customers and dealers
Development of Eco-Parts & Hino Genuine
oil
Employees:
In house training session
Computers provided to companys worker
Scholarship provided to workers children
Health related programs
Capacity Utilization
Production:
Plant productivity improved by 7%. The number of
chassis produced was 1,359 compared to 2,222 in the
preceding year. In addition 4,260 IMV (Hilux) frames
were introduced for Indus motor company.
Body Fabrication:
Only 305 bodies of different and specialized varieties
were produced against 1,067 produced in the
preceding year. A significant reason for this steep
decline was reduced budgets of the govt. institutions
that are our major customers. The plant productivity,
nevertheless, improved by 7%.
Business process improvement and

product development:
Knowledge of the emerging technologies and
enterprise resource planning system in the
manufacture of components and process has given the
companys products a quality edge in the market.
KAIZEN activities involve all employees in
continuous improvements in quality, productivity,
house-keeping and safety as also in cost cutting and
savings. Skill development programmes devised for
the workers helped analyze their skill levels and
development of multi-skill workforce.
Corporate Social Responsibility:

The company donated a vehicle to Edhi Foundation.
The company complies fully with the SECPs code of
corporate governance and Toyota Group guidelines.
Contribution to National Exchequer:

The company continues to pursue localization of parts
to reduce costs and save foreign exchange. The
localization through vendors saved the country Rs.
882 million in foreign exchange. The company paid
around Rs. 650 million in taxes, duties and cesses to
the Govt.
Future Outlook:
The growth and profitability are affected by a number
of external factors, inflation, political turn oil, power
shortage and uncertain law and order tend to upset the
companys set targets. However the management
remains the market leadership through innovation to
make up for the reduced volumes.
Average Relevant Items:
Buses:
Roadliner Supreme
Rapidliner Deluxe
Senator Pride
Hino Splendor
Citibus
Urban Bus
CNG Bus
Citiliner Classic
Trucks:
HINO 500 Series'
Dutro
FG 1J 4 X 2
FL 1J 6 x 2
FM 1J 6 X 4
SG 1J 4 x 2
FM2P Prime Mover
Specialized vehicles
Prime Mover
High Wall Dumper
Cargo Carrier
Water/ Fuel Bowser
Mobile Eye Clinic
Garbage Collector
NLC Truck
Mobile Dispensary
School Bus
Mobile kitchen
Nadra Mobile Registration Van
Beverage Carrier
Condensed Income statement:
Condensed income statement

Contents
2009
2010
2011
2012
2013
Net sales
12,151,021
11,127,551
9,281,822
8,766,997
7,528,140
Gross Profit
1,279,135
389,481
737,292
908,078
807,521
Operating profit/Loss
794,354
15,287
342,359
491,977
369,881
Profit/Loss before taxation
115,828
-130,419
40,485
173,436
44,882
Net Profit
69,923
-148,069
-30,140
27,264
28,411
Condensed Balance sheet:

2009
2010
2011
2012
2013
Rs. 000
Rs. 000
Rs. 000
Rs. 000
Rs. 000
948,535
5,499
13,094
5,475
972,603
918,593
2,688
11,751
3,989
12,738
949,759
1,788,255
2,038
3,908
5,881
1,800,082
1,779,457
1,089
2391
10400
6015
1,799,352
1,714,507
438
4,434
13,704
6,025
1,739,108
33,309
2,398,605
1,135,332
51,886
53,398
149,202
9,135
133,370
70,206
4,034,443
26,340
2,949,130
906,272
66,673
36,463
406,288
3,239
335,944
63,263
4,793,612
19,794
1,677,525
482,570
83,382
27,253
225,479
28,876
144,567
63,416
2,752,862
19,194
2,410,682
1,823,092
37,739
34,680
87,893
31,839
324,901
124,526
4,894,546
21,549
2,161,904
276,904
12,244
23,436
206,002
9,619
436,865
173,347
3,321,870
5,007,046
5,743,371
4,552,944
6,693,898
5,060,978
32,000
11,499
43,499
32,000
49,787
81,787
47,372
73,105
120,477
69,390
67,235
136,625
42,235
71,412
113,647
Assets
Non-current Assets
Property, plant and equipment
Intangible asset
Long-term investment
Long term loan receivable - unsecured
Long term deposits
Deferred taxation
Total non-current Assets
Current Assets
Stores, Spares and Loose Tools
Stock in trade
Trade debts
Loans and advances - considered good
Trade deposits, prepayments and other receivables
Refunds due from the government
Other receiveables
Taxation - payments less provision
Cash and bank balances
Total Current Assets
Total Assets
Liabilities & Equity

Non-current Liabilities
Long term security deposits
Deferred taxation
Retirement benefits obligations
Total non-current liabilities
Current Liabilities
Trade and other payables
Accrued mark-up
Short term borrowings
Total Current liabilities
Total Liabilities
1,617,511
44,934
1,355,557
3,018,002
3,383,884
7,721
494,204
3,885,809
1,597,894
9,763
296,310
1,903,967
2,721,889
41,289
1,238,331
4,001,509
1,703,736
32,693
645,948
2,382,377
3,061,501
3,967,596
2,024,444
4,138,134
2,496,024
Equity
Surplus on revaluation of property, plant and equipment 277,490
share capital
124,006
Reserves
1,544,049
Accumulated loss
-
271,796
124,006
1,379,973
-
1,049,014
124,006
1,355,480
-
1,026,250
124,006
1,405,508
1,002,990
124,006
1,437,958
-
1,668,055
1,503,979
1,479,486
1,529,514
1,561,964
Total Equity
Total Liabilities & equity

5,007,046 5,743,371 4,552,944 6,693,898 5,060,978
Ratio Analysis:
1. Liquidity Analysis
a. Current Ratio
2009
2010
2011
2012
2013
1.336792686
1.233620078
1.445855942
1.223175057
1.394351104
2009
2010
2011
2012
2013
b. Quick Ratio
0.821055122
0.776062848 0.929541846 0.641519737
0.98425648
c. Cash Ratio
2009
2010
0.818028285 0.775229302
2011
2012
0.914375617 0.633562988
2013
0.980218916

2009
2010
2011
2012
0.314890116 0.240927436 0.161260673 0.194568349
2013
0.298922882
2009
2010
2011
2012
139.5636867 333.3868531 223.7404109 795.1021162
2013
573.1574792
2009
1,016,441
2010
2011
2012
907,803
848,895
893,037
2010
2011
2012
90.6361532
187.8633677
2011
2012
85.54261957
184.603328
2013
939,493
g. Operating cycle
2009
114.6317779 129.9715504
2013
130.8396517
h. Cash cycle
2009
2010
110.0991908 126.3304528
2013
127.7309942
2. Activity analysis
a. A/R turnover
2009
10.70261474
2010
12.2783789
2011
19.2341463
2012
4.80886154
2013
27.1868229
2010
29.7270514
2011
18.9766675
2012
75.9015407
2013
13.4256217
2010
3.64109754
2011
5.09353363
2012
3.26003969
2013
3.10865746
2009
80.52796221
2010
100.244499
2011
71.6594857
2012
111.961827
2013
117.41403
2009
6.415366572
2010
3.17026973
2011
5.08333532
2012
2.9543725
2013
3.7796695
2009
56.89464443
2010
115.13216
2011
71.8032507
2012
123.545694
2013
96.5692899
2009
11.95447744
2010
12.2576715
2011
10.9340048
2012
9.81705909
2013
8.01298147
2010
12.1136902
2011
5.19043537
2012
4.92678216
2013
4.39084821
2009
2010
2011
2012
2013
2.426784375
1.9374599
2.03864181
1.30969982
1.4874872

2009
34.10381564
2009
4.532587066
e. A/P turnover
g. Activity ratio

2009
12.81030326
3. Long-term Analysis
a. Times interest earned ratio
2009
2010
2011
2012
2013
0.1707053
-0.89508325
0.1341122
0.5444699
0.1380989
2009
2010
2011
2012
2013
0.1707053
-0.89508325
0.1341122
0.5444699
0.1380989
2009
2010
2011
2012
2013
61.143856
69.08131131
44.464505
61.819496
49.319005
2009
2010
2011
2012
2013
2.5414915
5.157570537
7.5299866
8.2000962
6.7823102
2009
2010
2011
2012
2013
-5498.991
-2687.98576
-2037.974
-1088.98
-437.9775
2009
2010
2011
2012
2013
116.10715
71.2235198
38.790981
49.994679
45.533222
b. Debt service charges
c. Debt ratio
d. Debt to equity ratio
e. Debt to tangible assets ratio
f. Fixed assets coverage ratio
Introduction:
Vision:
The vision of Hinopak Motors Limited is to provide the society with safe, economical, comfortable
and environment friendly means of transportation by manufacturing and supplying commercial
vehicles and services.
Mission Statement:
TO PURSUE OUR VISION, WE COMMIT OURSELVES:
To our individual, institution and international customers:
To deliver high quality, safe, durable, reliable, comfortable environment friendly and economical
products and services to their total satisfaction.
To our employees:
To foster corporate culture of mutual trust, respect for fundamental rights at work, opportunities
for professional growth and personal welfare so that they are proud of being a member of the
Hinopak Family
To the community and our nation:
To contribute to economic and social development by providing means of transportation and by
progressive localization of the vehicles.
To the shareholders:
To act in compliance with the norms expected of a subsidiary of the Toyota Group of Companies
and make a meaningful financial return to the shareholder.
HINOPAK values:
Honesty at all cost and all spheres of business.
Integrity we do what we say at personal & corporate level.
Non bureaucratic pragmatic in systems & processes.
Openness to customers, markets and criticism.
Purpose oriented always keeping the end in mend.
Altruism fostering relationship with society and environment.
Kaizen continuous improvement.
10
Industry:
Hinopak plays a vital role in the automobile industry of Pakistan:
Automobile industry is considered to be the backbone of all industries and plays a vital role in the
economy helping directly and indirectly in the development of a country. The Automobile industry
has been an active and growing field in Pakistan for a long time. Pakistan is an emerging market
for automobiles and automotive parts offers immense business and investment opportunities.
Hinopak Motors Limited, the largest manufacturer of trucks and buses in Pakistan is playing an
important and active role for the growth of automobile sector in Pakistan by providing the latest
technological based commercial vehicles as per the requirements of the transporters of Pakistan.
Established in 1986, Hinopak is a Japanese owned multinational company with majority shares
with Hino Motors Japan (59%) and Toyota Tsusho Corporation, Japan (30%). Hinopak is the first
company to introduce the concept of 3S Dealers network in the commercial vehicles sector, which
offers Sales, Service and Spare Part facilities all under one roof. Our comprehensive network of
offices, 3S Service Dealers and Spare Parts Dealers are strategically located throughout the country
and benefiting the transporters even at the remotest of locations.
Hinopak Motors Limited has become a role model for Pakistans engineering sector in general and
automobile industry in particular. The key strengths for Hinopak Motors Limited are its reliable
and economical brand image developed by its quality products, its outstanding production
technologies and the firm trust by its customers. Its customers are assured of the highest quality
products meeting all quality and environmental standards. The company has maintained the
standards for quality and excellence that rival the best in the region. In recognition to these
efforts, company has received a number of excellence awards for its quality standards management
practices.
In year 2008 in which the world confronted extraordinary economic challenges and economic
recession, Pakistans own peculiar problems such as political disturbance, falling value of rupee
both against yen and dollar, acute shortage of energy, high inflation and rising interest rates all had
their adverse impact on the production cost and income of the company despite commendable
effort to increase productivity, promote sales and strengthen after-sales service arrangements.
Also, Hino Motors, Japan and Toyota Tsusho Corporation provided their full support to strive in
the market and perform with great resolve, supported by proven strategies and strong execution to
satisfy our customers needs.
Hinopak is capable to rewire the organization to be ready to serve the needs of a changing world
and understand that the significant challenges ahead offer tremendous potential for company
business to continue to grow and thrive. Hinopak constantly assessing new opportunities to reach
customers and meet their evolving needs.
Hinopak presence in almost every market where variety of products are sold provides them with
valuable local insights into the customers, trends, and economic and social influences in each of
our markets. This knowledge allows them to monitor their growth and identify opportunities for
expansion. Committed to satisfy their customers with technological innovation, economical
11
product, environmental protection and increased safety. In an intensely competitive industry and
challenging market, Hinopak is steadily moving forward in the right direction.
This is Pakistans first automobile company to export its buses to Middle East and African
countries in early 1990s and once again Hinopak will soon take a gigantic leap in the international
market by starting export of buses to Middle East and Africa, as it has been chosen as a hub by its
principal Hino Motors, Ltd.,Japan. The decision of Hino Motors is proof of the confidence they
have in Hinopak and on its production facilities and capabilities to meet the needs of such a huge
and diverse market.
Recently in order to address the basic requirement of providing decent, safe and, economical intra
city passenger movement, the City District Government Karachi envisages introduction of fuel
efficient, environmentally friendly large new CNG buses. This pilot project of induction of first
few CNG buses in Karachi transport system is one such step which will augur well for the citizens
of Karachi. Hinopak successfully delivered 25 units of CNG buses to City District Government
Karachi in a record frame of time. The delivery time for CNG buses was very short. Backing on
production facilities and dedicated work force Hinopak accepted the challenge and delivered 25
buses within the stipulated time. Commuters of Karachi are now enjoying the operation of recently
introduced CNG buses by CDGK. Due to the technical expertise and strong backup support of
Hinopak, delivered vehicles are running successfully in their respective route operations
In general the challenge for the overall industry particularly for automobile industry is serious, we
are hopeful that this phase will wipe out with the passage of time. It is the responsibility of the
economic masters to show professionalism and maturity during these hard times. The uplift of auto
sector will also depend on the ability to develop and produce a wide range of superior quality
vehicles for our markets, strong bond with major suppliers, reduction in production costs, and
financial developments for capital investments.
History:
The Company:
Hino Motors Japan and Toyota Tsusho Corporation in collaboration with Al-Futtaim Group of
UAE and PACO Pakistan formed Hinopak Motors Limited in 1986. Hinopak Motors manufactures
and markets Hino diesel trucks and buses in Pakistan. Hinopak Motors has gained 70% market
share making it the largest manufacturer in medium and heavy-duty truck and bus industry in
Pakistan. Hinopak Motors Head Office is located in S.I.T.E Industrial Area, Karachi, and Sindh,
Pakistan.
In 1998, Hino Motors Ltd., and Toyota Tsusho Corporation obtained majority shareholding in the
company after disinvestments by the other two founding sponsors. This decision to invest in
Hinopak at a time when the country's economy was passing through a depression and the sale of
commercial vehicles was at an all-time low reflects the confidence our Principals have in our
company and their commitment to the Pakistani market. Hinopak is the trusted market leader with
over 50% share in the Pakistani Truck and Bus industry. Hinopak a vital contributor in saving of
foreign exchange is also providing jobs and plays a pivotal role for the development of the local
industry through its progressive manufacturing.
12
By continuing to move forward and staying alert to the ever-changing market & social needs,
Hinopak will continue to be a successful and respected corporate citizen of Pakistan, reflecting
their commitment and belief in the Hinopak corporate philosophy to "contribute to the
development of a more prosperous and comfortable society by providing the world with a new set
of values".
Hino Pak Motors Limited: Committed to Excellence

Hinopak Motors Limited assembles, manufactures and markets world renowned Hino diesel trucks
and buses in Pakistan. The Company has held the top position in the domestic market for medium
and heavy-duty vehicles for 17 consecutive years and is highly acclaimed for quality and
technological excellence.
Backed by Hino's expertise Hinopak has achieved standard of quality and excellence that rival the
best in the region. With over 60,000 vehicles on road, Hinopak has gained 50% market share
making it the largest manufacturer in medium and heavy-duty truck and bus industry in Pakistan.
Hino Pak's product range has been designed and built in Hino's traditions of automotive excellence
to be the leader in its category and the main emphasis has been given to passengers' safety &
comfort.
13
Income Statement:
Horizontal Analysis of income statement
Horizontal Analysis
Consolidated Income statement
For the year ended 30 June 2013
2009
2010
2011
2012
2013
100
91.57709
83.41298
94.45341
85.86908
100
98.76916
79.57231
91.97602
85.51582
100
30.44878
189.3011
123.164
88.92639
100
67.55481
96.67995
117.5044
90.09238
100
77.95946
104.4089
114.0877
107.6688
100
5.13206
373.1445
257.9953
63.83648
100
45.36112
73.44971
201.7024
62.36511
100
1.924457
2239.543
143.7021
75.18258
100
21.4739
207.1802
105.5212
102.0274
100
-112.597
-31.0423
428.3957
25.87813
100
38.44897
400.1416
209.1696
12.04866
100
-211.76
20.35537
-85.3019
105.3403
100
85.45689
100
-211.76
20.35537
-90.4579
104.207
100
-211.702
-20.3518
85.18519
105.314
14
Vertical Analysis of income statement
Vertical Analysis
Consolidated Income statement
For the year ended 30 June 2013
2009
2010
2011
2012
2013
100
100
100
100
100
89.47302
96.49985
92.0566
89.64209
89.2733
10.52698
3.50015
7.943397
10.35791
10.7267
3.519614
2.596357
3.009312
3.743722
3.927849
1.701659
1.448621
1.813254
2.19018
2.746203
0.164208
0.009202
0.041166
0.112444
0.083593
1.39585
0.69141
0.608824
1.300126
0.944257
6.537344
0.13738
3.688489
5.611693
4.913312
5.584107
1.309417
3.252314
3.633411
4.317122
0.953237
-1.17204
0.436175
1.978283
0.59619
0.377787
0.158615
0.760896
1.685024
0.236433
0.57545
-1.33065
-0.32472
0.293259
0.359757
0.017726
0.01764
0.57545
-1.33065
-0.32472
0.310984
0.377397
4.64E-05
-0.00011
2.62E-05
2.36E-05
2.9E-05
15
Liquidity Analysis
a. Current Ratio
2009
2010
2011
2012
2013
1.336792686
1.233620078
1.445855942
1.223175057
1.394351104
Y-Values
1.6
1.4
1.2
1
0.8
Y-Values
0.6
Poly. (Y-Values)
0.4
0.2
0
2008.5 2009 2009.5 2010 2010.5 2011 2011.5 2012 2012.5 2013 2013.5
Interpretation:
This ratio shows that how much creditors are protected in case of insolvency. It also shows
that the company, ability to pay its short term obligations. Above graph shows that in 2009 its
ability is 1.33 and with the passage of years it went to increases till 1.45 in 2011 but 2012 it is
decrease is 1.23.
16
b. Quick Ratio
2009
2010
2011
2012
2013
0.821055122
0.776062848
0.929541846
0.641519737
0.98425648
Interpretation:
This ratio relates the most liquid assets to the current liabilities so that quickly the short run
obligation can be fulfilled. The above graph shows in 2011 its liquidity ratio was .92 and increased
with the passage of time to .98 in 2013.
17
c. Cash Ratio
2009
2010
2011
2012
2013
0.818028285
0.775229302
0.914375617
0.633562988
0.980218916
Interpretation:
Cash ratio relates the most liquid assets as like cash to the current liabilities so that quickly
the short run obligation can be fulfilled. The above graph shows it is above 2009, 2011 and 2013
compare to remaining years.
18

2009
2010
2011
2012
2013
0.314890116
0.240927436
0.161260673
0.194568349
0.298922882
Interpretation:
This ratio shows how much the cash is being generated from the operations and is the
operations are working effectively or not. The above graph shows that the company has the 25%
to 30% capacity to generate cash from the operations. Its mean, company operations are not
completely effective.
19
2009
2010
2011
2012
2013
139.5636867
333.3868531
223.7404109
795.1021162
573.1574792
Interpretation:
The graph of defensive interval shows that the company condition is bad due to the
economic condition and getting help from the outsiders to maintain their operation and this is very
bad for the company to maintain their operations.
20
2009
2010
2011
2012
2013
1,016,441
907,803
848,895
893,037
939,493
Interpretation:
Net working capital ratio shows company, shirt run solvency means how much investment
in terms of current assets has been made by the owners of the company here in beginning it is at
negative sign in 2011,2012 in not better in working capital But there is some certain fluctuation
in other reasons.
21
g. Operating cycle
2009
2010
2011
2012
2013
114.6317779
129.9715504
90.6361532
187.8633677
130.8396517
Interpretation:
This ratio shows that the company can generate their cash from their inventory from the
following days. In 2010 and 2012 company generate more cash from their inventory and remaining
year it is decrease comparing to these two years.
22
h. Cash cycle
2009
110.0991908
2010
126.3304528
2011
85.54261957
2012
184.603328
2013
127.7309942
Interpretation:
This ratio shows that the cash which is remain in our business cycle. The above graph
shows that the cash in the cycle is remain during the next following days in the cycle and it is
better for the company performance.
23
Activity analysis
a. A/R turnover
2009
2010
2011
2012
2013
10.70261474
12.2783789
19.2341463
4.80886154
27.1868229
Interpretation:
This ratio is used to quantify a firms effectiveness in extending credit as well as collecting
debts. The receivable turnover ratio is an activity ratio, measuring how efficiently a firm uses its
asset. In 2010 the account receivable turnover ratio is 12.70 but it increase in 2013 the ratio is
27.18.
24
2009
2010
2011
2012
2013
34.10381564
29.7270514
18.9766675
75.9015407
13.4256217
Interpretation:
This ratio is used to determine whether the company is having trouble collecting on sales
it provided customers on credit. In highest ratio is 75.90 in 2012 but 2013 is not determine because
insufficient year the ratio is 13.42.
25
2009
4.532587066
2010
3.64109754
2011
5.09353363
2012
2013
3.26003969
3.10865746
Interpretation:
This ratio showing how many times a companys inventory is sold and replaced over a
period. The ratio high in 2011 is 5.09 but in 2012 this ratio is 3.26 and in 2013 it is lowest than
other years the ratio is 3.10.
26
2009
2010
2011
2012
2013
80.52796221
100.244499
71.6594857
111.961827
117.41403
Interpretation:
This ratio showing how many times a companys inventory is sold and replaced over a
period. The ratio is highest ratio is 117.41 in 2013 and other low remaining years 2009 and 2011.
27
e. A/P turnover
2009
2010
2011
2012
2013
6.415366572
3.17026973
5.08333532
2.9543725
3.7796695
Interpretation:
This ratio shows that how many times the money would be paid back to the creditors. As
compared to the A/R turnover this ratio is not better because we collect our A/R later and paid
back the debt amounts to the creditors in early and not possess the debt amount for long time.
28
2009
2010
2011
2012
2013
56.89464443
115.13216
71.8032507
123.545694
96.5692899
Interpretation:
This ratio shows that after how many days are required to pay our liabilities to the creditors
and the above graph shows that the A/P turnover is more than the A/R turnover it means the
company is not in better position.
29
g. Activity ratio
2009
2010
2011
2012
2013
11.95447744
12.2576715
10.9340048
9.81705909
8.01298147
Interpretation:
This ratio shows that how much the operations of company are effectively workout. The
graph shows that the company operations are not working effectively in 2013 as compared to
previous years. So, this situation is not better for company.
30
2009
2010
2011
2012
2013
12.81030326
12.1136902
5.19043537
4.92678216
4.39084821
Interpretation:
In the above graph we can see that the trend of earning on the fix assets of the company.
In 2009 the value is highest of fixed assets turnover ratio is 12.81 and it decrease in the next years
in 2012 and 2013 its value is 4.39. It means companys fixed assets turnover is not beneficial for
company.
31
2009
2010
2011
2012
2013
2.426784375
1.9374599
2.03864181
1.30969982
1.4874872
Interpretation:
This ratio measures the ability of company total assets to generate sales. The greater this
ratio is better than ability of company to generation of sales. Here in 2009 asset turnover is higher
the value is 2.42 and in next four it began to decreases.
32
Long-term Analysis
a. Times interest earned ratio
2009
2010
2011
2012
2013
0.1707053
-0.89508325
0.1341122
0.5444699
0.1380989
Interpretation:
How many time interest expense s is covered by the operating income. It is favorable if
answer is in between .50 to .10. It is positive in 2011,012 and 013 is better.
33
b. Debt service coverages
2009
2010
2011
2012
2013
0.1707053
-0.89508325
0.1341122
0.5444699
0.1380989
Interpretation:
This shows that the company is able to cover its debt or not. The above graph shows that
the company is in good position to pay the debts from its operating profits as compare to previous
years in 2009 to 2010.
34
Long-Term analysis of Balance sheet

c. Debt ratio
2009
2010
2011
2012
2013
61.143856
69.08131131
44.464505
61.819496
49.319005
Interpretation:
This ratio shows that our total assets are able to pay the debt or not? The above graph shows
that average of 50% debt is covered from the assets and this is a very good position for the
company.
35
d. Debt to equity ratio
2009
2010
2011
2012
2013
2.5414915
5.157570537
7.5299866
8.2000962
6.7823102
Interpretation:
This ratio shows that the how much your debt is covered from your equity? This above
graph that the above 70% equity is able to cover the debt which is good sign.
36
e. Debt to tangible assets ratio
2009
2010
2011
2012
2013
-5498.991
-2687.98576
-2037.974
-1088.98
-437.9775
Interpretation:
The above ratio shows that how much the tangible assets cover the debt of the business?
This above graph shows that the tangible assets cannot covers the average of debt of the company
which is not better for company
37
f. Fixed assets Leverage ratio
2009
2010
2011
2012
2013
116.10715
71.2235198
38.790981
49.994679
45.533222
Interpretation:
This ratio shows that the fixed assets cover the long term debt or not. The above graph
shows that the company has ability to pay the pay their debts from the fixed assets in 2009. In year
2013 the capacity of fixed assets leverage ratio is decreased. Its means companys fixed assets is
enough to cover the long-term debt.
38
Profitability Analysis
a. Gross Profit margin
2009
2010
2011
2012
2013
10.52697547
3.50015021
7.94339732
10.3579139
10.7267001
Interpretation:
This ratio shows that how much gross profit is generated from the sales. This ratio shows
that the average of 60% to730% gross profit is generated from the sales which is better for the
organization.
39
b. Operating Profit Margin

2009
2010
2011
2012
2013
6.537
0.137
3.688
5.611
4.913
Interpretation:
This ratio tells us how much the operating profit is generated from the net sales. The above
graph shows that the average of the 4% to 7% operating profit is generated from the net sales and
this could be not beneficial because there is so much fluctuations in the graph.
40
c. Profit before tax:
2009
2010
2011
2012
2013
0.953
-1.172
0.436
1.978
0.596
Interpretation:
This ratio tells us how much the income is being generated before deduction of the tax. The
above graph shows that the 5% income before tax is generated from the net sales. In year 2010
company bear loss before deduction of tax.
41
d. Net profit Margin

2009
2010
2011
2012
2013
0.575
-1.330
-0.324
0.310
0.377
Interpretation:
This ratio tells us how much the net profit is being generated the company from the net
sales after deducting all the allowances from the sales. The graph tells only 4% to 5% profit is
being generated from the net sales. But, in year 2010 company bear loss and company not gain
profit margin from the sales.
42
e. Return on Assets
2009
2010
2011
2012
2013
1.396
-2.578
-0.661
0.407
0.561
Interpretation:
This ratio tells us how much the returns the company would earn from the assets which are
operating in the organization. The above graph shows that the first years the company generate
very good return from the assets after that the company goes down and gain loss. In 2012 company
again boom and take the better advantages from the assets.
43
Due pound Analysis
2009
2010
2011
2012
2013
23.712
-68.680
-15.927
23.744
25.371
Interpretation
This ratio tells us that how much the returns is being generated from the operating assets.
The above graph shows that the very bad condition of the company. Average 20 times returns is
being calculated from the assets. Same case in here in year 2010.
44
Due Pound return on Operating Assets

2009
2010
2011
2012
2013
0.481
-0.022
-0.062
0.085
0.081
Interpretation
This ratio tells us that how many the operating assets given the returns to the company.
The above graph shows that the only 5 to 6 times in business cycle the operating assets is
contributing in the overall returns.
45
Operating Assets Turnover

2009
2010
2011
2012
2013
0.073
-0.161
-0.016
0.015
0.016
Interpretation
The above ratio is calculated to solve the previous ratio and this ratio is given the different
calculation from the previous ratio. It shows the companys operating assets turnover is decrease
and not beneficial for the company.
46
Return on Operating Assets

2009
2010
2011
2012
2013
83.745
1.664
19.144
27.647
21.573
Interpretation
This ratio tells us that how many the operating assets given the returns to the company.
This ratio tells us that operating is contributing at least 30% above than the total returns means to
say that the 30% returns is being generated from the operating assets and remaining the other
assets.
47
Sales to Fixed Asset

2009
2010
2011
2012
2013
1374.692
1224.130
524.911
584.993
485.737
Interpretation
This ratio tells us that how much the return is being generated from the fixed assets. The
above shows that only 5 to 6 times the fixed assets given the returns to the company which is not
very well for the company.
48
Return on Investment
2009
2010
2011
2012
2013
45.576
1.636
16.068
21.659
17.745
Interpretation
The above graph shows that the how much the investment is being contributing to the total
returns. The above graph shows that the company generates the reasonable returns average of 15%
to 20% which is not beneficial for the company.
49
Return on Equity
2009
2010
2011
2012
2013
0.041
-0.098
-0.020
0.017
0.018
Interpretation
The above ratio tells us that how returns is being generated from the equity. The above
graph shows that the company generates the reasonable returns from the equity which has an
average of 20% which is a very bad sign for the company. It is not beneficial for the company.
50
SWOT Analysis
Strength:
Size advantages lower Hinopak motors Limiteds risks. The larger Hinopak motors
limited gets, the more resources they have to pursue new markets and defend themselves
against rivals. "Size Advantages (Hinopak Motors Limited)" has a significant impact, so
an analyst should put more weight into it. "Size Advantages (Hinopak Motors
Limited)" will have a long-term positive impact on this entity, which adds to its value.
When given a choice, customers are loyal to Hinopak motors limited. Instead of targeting
all customers, Hinopak motors limited only needs to target new customers in order to
grow their business.
A strong supply chain helps Hinopak motors limited obtain the right resources from
suppliers and delivery the right product to customers in a timely manner.
Unique products help distinguish Hinopak motors limited from competitors. Hinopak
motors limited can charge higher prices for their products, because consumers cant get
those products elsewhere.
A strong brand name is a major strength of Hinopak motors limited. This gives Hinopak
motors limited the ability to charge higher prices for their products because consumers
place additional value in the brand.
Strong management can help Hinopak motors limited reach its potential by utilizing
strengths and eliminating weaknesses.
Weakness:
An inefficient work environment means that Hinopak motors Limiteds goods and
services are not being utilized properly.
A high debt burden increases the risk that Hinopak motors limited goes bankrupt if they
make a poor business decision. Increasing risks can increase Hinopak motors Limiteds
debt interest payments.
High staff turnover can hurt Hinopak motors Limiteds ability to compete, because
replacing valuable staff is expenses.
51
Opportunities:
New technology helps Hinopak motors limited to better meet their customers needs with
new and improved products and services. Technology also builds competitive barriers
against rivals.
Greater innovation can help Hinopak motors limited to produce unique products and
services that meet customers needs.
New products can help Hinopak motors limited to expand their business and diversity
their customer base.
New markets allow Hinopak motors limited to expand their business and diversify their
portfolio of products and services
Threats:
A bad economy can hurt Hinopak motors Limiteds business by decreasing the number
of potential customers.
Volatile currencies make Hinopak motors Limiteds investments difficult, because costs
and revenues change so rapidly.
Intense completion can lower Hinopak motors Limiteds profits, because competitors can
entice consumers away with superior products.
Changes
to government rules and regulations can negatively affect Hinopak motors
limited.
Volatile
costs mean Hinopak motors limited has to plan for scenarios where costs
skyrocket. Cautious planning leads to development delays that can negatively

affect Hinopak motors limited.
The availability of substitute products hurts Hinopak motors Limiteds ability to raise
prices, because customers can easily switch to another product or service This
statements will have a short-term negative impact on this entity, which subtracts from its
value.
52

Financial Statement Analysis (Hinopak Motors LTD,.)

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Financial Statement Analysis (Hinopak Motors LTD,.)

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Analysis of Financial Statement

Hino Pak motors Pvt. Ltd.

Mr. Salman Majeed

Hafiz M. Jahangir (14)

BBA 8th (M)

Average Relevant item? Product line

Condensed Income statement

Condensed Balance Sheet

d. Cash flow from operating activities

b. A/R turnover in days

d. Inventory turnover in days

f. A/P turnover in days

h. Fixed assets turnover

i. Total assets turnover

a. Time interest earned ratio

b. Debt service Charges

Long-term Analysis of Balance sheet

b. Debt / Equity ratio

c. Debt to tangible assets ratio

d. Fixed assets leverage ratio

a. Gross profit Margin

b. Operating profit margin

c. Profit before tax

d. Net profit Margin

Due Pound Analysis

Due Pound return on Operating Assets

Operating Assets turnover

Return on Operating Assets

Sales to Fixed Asset

Hinopak Motors Limited

Hino Pak motors Pvt. Ltd.

Technology Trade (Pvt.) Limited

Allied Bank Limited

Bank Alfalah Limited

A.F. Ferguson & Co. Chartered Accountants

Sayeed & Sayeed

Mr. Kunwar Idris

Mr. Keiichiro Utsumi

Mr. Tsutomu Mori

MR. Kazuo Kakishima

Mr. Takuji Umemura

Mr. Hiroshi Kokaji

Mr. Toyoki Kuno

Mr. Fahim Aijaz Sabzwari

Hino Pak motors Pvt. Ltd.

Business process improvement and

Hino Pak motors Pvt. Ltd.

Corporate Social Responsibility:

Contribution to National Exchequer:

Average Relevant Items:

Hino Pak motors Pvt. Ltd.

Condensed Income statement:

Condensed income statement

Profit/Loss before taxation

Hino Pak motors Pvt. Ltd.

Condensed Balance sheet:

Liabilities & Equity

Total Liabilities & equity

5,007,046 5,743,371 4,552,944 6,693,898 5,060,978

0.776062848 0.929541846 0.641519737

d. Cash flow from operating activities

0.314890116 0.240927436 0.161260673 0.194568349

139.5636867 333.3868531 223.7404109 795.1021162