ANNUAL REPORT

2014, 2105 & 2016

SUZUKI MOTOR CORPORATION

FINANCIAL STATEMNTS
&
Financial Ratio Analysis
 SUZUKI MOTOR CORPORATION
BALANCE SHEET
AS ON DEC 31…..

ASSETS

2014 2015 2016

Millions of yen Millions of yen Millions of yen

ASSETS
Current assets:
Cash and cash equivalents 710,611 932,261 450,088
Receivables:
Notes and accounts receivables-trade 310,694 316,826 335,343
Allowance for doubtful accounts -4,804 -4,156 -5,528
Inventories 276,285 314,391 286,301
Deferred tax assets 105,064 115,015 116,378
Other 392,982 334,391 450,046
Total current assets 1,790,832 2,008,729 1,632,630
Property, plant and equipment:
Land 238,532 259,540 255,013
Buildings and structures 385,797 403,922 416,217
Machinery, equipment, vehicles 1,120,381 1,280,563 1,286,385
Tools, furniture and fixtures 378,011 391,797 408,683
Construction in progress 96,560 70,456 50,361
2,219,283 2,406,280 2,416,660
Accumulated depreciation -1,524,862 -1,610,388 -1,659,584
Total property, plant and equipment 694,420 795,892 757,076
Investments and other assets:
Investment securities 270,329 341,325 226,516
Investments in affiliates 55,699 59,544 46,250
Assets for retirement benefits 15,862 1,860 50
Deferred tax assets 20,924 19,985 14,773
Other 26,005 25,462 24,709
Total investments and other assets 388,821 448,179 312,301

Total assets ¥2,874,074 ¥3,252,800 ¥2,702,008

 LIBILITIES & OWNER`S EQUITY

2014 2015 2016

Millions of Millions of Millions of
yen yen yen
LIABILITIES AND NET ASSETS
Current liabilities:

Short-term loans payable 197,413 177,805 201,507

Current portion of long-term loans payable 38,748 104,145 64,982

Accounts payable-trade 433,819 479,950 402,624
Electronically recorded obligations 64,055
Income taxes payable 46,628 21,797 29,486
Accrued expenses 171,274 181,217 183,695
Provision for product warranties 61,447 60,305 66,032
Deferred tax liabilities 967 6,190 481
Other 106,634 121,188 133,089
Total current liabilities 1,056,933 1,152,601 1,145,956
Noncurrent liabilities:
Long-term loans payable 209,166 272,717 262,797
Liabilities for retirement benefits 36,918 40,791 56,346
Provision for disaster 16,596 8,923 3,056
Deferred tax liabilities 43,766 43,766 7,484
Other 30,923 32,609 38,663
Total noncurrent liabilities 322,783 398,808 368,348
Total liabilities 1,379,717 1,551,409 1,514,305

Shareholders’ equity:
Capital stock:
Common stock: Authorized-1,500,000,000 shares Issued,
as of 31 March 2015 – 561,047,304 138,014 138,014
as of 31 March 2014 – 561,047,304 138,014
Capital surplus 144,364 144,364 144,166
Retained earnings 1,008,555 1,082,440 913,656
Treasury stock -57 -62 -191,169
Total shareholders’ equity 1,290,877 1,364,757 1,004,668
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities 104,745 158,788 77,624
Deferred gains or losses on hedges 131 679 536
Foreign currency translation adjustment -72,898 -42,997 -115,551
Accumulated adjustment for retirement benefits 3,867 864 -9,580
Total accumulated other comprehensive income 35,846 117,333 -46,970
Subscription rights to shares 168 250 188
Minority interests 167,464 219,048 229,816
Total net assets ¥1,494,357 ¥1,701,390 ¥1,187,703
Commitments and contingent liabilities
Total liabilities and net assets ¥2,874,074 ¥3,252,800 ¥2,702,008

SUZUKI MOTOR CORPORATION

PROFIT & LOSS ACCOUNT
FOR THE PERIOD ENDED DEC 31…..
2014 2015 2016
Millions of Millions of Millions of
yen yen yen
Net sales ¥2,938,314 ¥3,015,461 ¥3,180,659
Cost of sales 2,142,754 2,190,309 2,313,779
Gross profit 795,559 825,152 866,879
Selling, general and administrative expenses 607,812 645,727 671,571
Operating income 187,747 179,424 195,308
Other income (expenses):
Interest and dividend income 18,441 25,259 20,885
Interest expense -6,158 -9,433 -6,381
Equity in earnings (losses) of affiliates -115 -1,454 -2,492
Other -2,823 -549 38,311
Income before income taxes 197,090 193,246 245,631
Income taxes:
Current 67,212 70,589 87,279
Deferred 2,387 -4,970 5,051
69,600 65,619 92,330
Income before minority interests 127,489 127,627 153,300
Minority interests in income 20,005 30,765 36,640

Net income ¥ 107,484 ¥ 96,862 ¥ 116660

2014 2015 2016

C.S outstanding Shares 1,500,000,000 1,500,000,000 1,500,000,000
Earnings Per Share
Primary 191.6 172.67 234.98
Fully diluted 191.57 172.63 234.92
Dividend Per Share 24 27 32
 FINANCIAL RATIOS
The following are financial ratios:

1 Liquidity ratio

2 Activity ratio

3 Profitability ratio

4 Debt ratio

5 Market ratio

There details are as follows:

Liquidity Ratio
1: Current Ratio
Current Ratio = Current Assets / Current Liabilities

Years 2014 (000) 2015 (000) 2016 (000)

Current assets 1,790,832 2,008,729 1,632,630
Current liabilities 1,056,933 1,152,601 1,145,956
Current ratio 1.69 1.74 1.42
Interpretation
A Measure of liquidity calculated by dividing the firm`s current assets by current liabilities. In
the year of 2014 current ratio is 1.69 and in 2015 current ratio is 1.74 and in 2016 current
ratio is 1.42. Greater current ratio shows that company have more current assets for paid
their current liabilities at any time. So that`s why in 2015 is more favorable than others
years current ratios.

2: Quick Ratio
Quick ratio = Current Assets - Inventory / Current Liabilities

Years 2014 (000) 2015 (000) 2016 (000)

Current assets 1,790,832 2,008,729 1,632,630
Inventory 276,285 314,391 286,301
Sub total 1,514,547 1,694,338 1,346,329
Current liabilities 1,056,933 1,152,601 1,145,956
Quick ratio 1.43 1.47 1.17
Interpretation
A Measure of liquidity calculated by dividing the firm`s current assets minus inventory by
current liabilities. In the year of 2014 quick ratio is 1.43 and in the year of 2015 quick ratio is 1.47
and in 2016 the quick ratio is 1.17. Greater quick ratio shows that company have more liquidity of his
inventory means that inventory of the company is easily convertible into cash rather than other
year’s quick ratios to pay their current liabilities. In 2016 quick ratio is lesser than other years which
shows that inventory liquidity of the company is slow to pay their current liabilities.

Activity Ratio
1: Inventory Turnover Ratio
Inventory Turnover Ratio = Cost of goods sold / Inventory

Years 2014 (000) 2015 (000) 2016 (000)

C.G.S 2,142,754 2,190,309 2,313,779
Inventory 276,285 314,391 286,301
Inventory Turnover
7.75 6.96 8.08
Ratio
Interpretation
Measure the activity or liquidity, of a firm inventory. Inventory turnover ratio shows that
performance of the management whether it`s good or poor. In the year of 2016 inventory
cycle 8.08 times complete in the one year which shows that in remaining years inventory
cycles are less than 2016 inventory cycle in 2016 management performance is good but in
2015 and 2014 are not good as compare to 2016 which are unfavorable as compared to
2016.

2: Average age of Inventory

Average age of inventory = 365 / Inventory Turnover

Years 2014 (000) 2015 (000) 2016 (000)

Days 365 365 365
Inventory Turnover 7.755592957 6.966831112 8.081630871
Average age of
47 52 45
inventory
Interpretation
Average age of inventory means that how much days are required to complete a one
inventory cycle? Average age of inventory shows that one inventory cycle takes how much
time to complete one inventory cycle. In 2016 inventory cycle complete within 45 days
which are good for the company rather than other`s years because in remaining years days
are more than 2016 days.2016 is favorable than 2014 at the last 2015 favorable but least
favorable is 2015.
 3: Average Collection Period
Average collection period = Account receivable / Annual sale per day

Annual sale per day = Annual sale / 365

Years 2014 (000) 2015 (000) 2016 (000)

Account Receivable 310,694 316,826 335,343
Annual sale 2,938,314 3,015,461 3,180,659
Days 365 365 365
Sub total 8,050 8,262 8,714
Average Collection
38.59 38.34 38.48
Period
Interpretation
The average amount of time needed to collected account receivable. Average collection
period shows the company account receivables in how much average time required for the
collection of cash from the account receivables. In 2015 AVC period is less than others years
AVC periods so that`s why 2015 is most favorable than others years AVC periods. Least days
are more favorable for the company.

4: Average Payment Period

A.P.P = Account Payable / Annual Purchases per day
Annual Purchases per day = Annual Purchase / 365

Years 2014 (000) 2015 (000) 2016 (000)

Account payable 433,819 479,950 402,624
Annual purchases 276,285 314,391 286,301
Days 365 365 365
Sub total 757 861 784
Average Payment
573 557 513
Period
Interpretation
The average amount of time needed to pay account payable. Average payment shows that
company paid to their accounts payables in how much average time period more time
period provided by the accounts payables are favorable for the company. In 2014 almost
573 days are available for the payments to their accounts payables which is favorable than
other years AVC periods. More days means more favorable for the company but sometimes
it`s becomes unfavorable for the company because investors thinks that more liability more
risk so that`s why investors feels hesitation to invest their capital in companies where
liabilities of the company is higher than their assets.
5: Total Assets Turnover
Total Assets Turnover = Sales / Total Assets

Years 2014 (000) 2015 (000) 2016 (000)

Sales 2,938,314 3,015,461 3,180,659
Total Assets 2,874,074 3,252,800 2,702,008
Total Assets Turnover 1.02 0.92 1.17
Interpretation
Indicates the efficiency with which the firm uses its assets to generate sale. Total assets
turnover shows that efficiency of sales by using right assets or perfectly used of the assets
for increase sales of the company. In the 2016 1.17 total assets turnover which is higher
than other`s years in this 2016 assets are used more perfectly to increase the efficiency of
the sales rather than other years ratios. Least favorable is 2015 year in which 0.92 total
assets turnover which is lesser than other years. Higher the ratio means higher the total
assets turnover.

Debt Ratios
1: Debt ratio
Debt ratio = Total Liabilities / Total Assets

Years 2014 (000) 2015 (000) 2016 (000)

Total Liabilities 1,379,717 1,551,409 1,514,305
Total Assets 2,874,074 3,252,800 2,702,008
Debt ratio 0.48 0.47 0.56
Interpretation
Measure the proportion of total assets financed by the firm’s creditors. Debt ratio shows
that how much debt used to purchase the assets for the company
Greater used of debt it’s become unfavorable least debt used for the purchase of assets
Than it’s favorable for the company. In 2015 debt ratio is lesser than other year’s debt
Ratios which is more favorable than other years debt ratio because in 2015 least debt
Used for the purchase of the assets.

2: Time Interest Earned Ratio

Time Interest Earned Ratio = EBIT / Interest

Years 2014 (000) 2015 (000) 2016 (000)

EBIT/O.P 187,747 179,424 195,308
Interest 20,005 30,765 36,640
 TIE ratio 9.38 5.83 5.33
Interpretation
Measure the firm`s ability to make contractual interest payments sometimes called the
interest coverage ratio. In this 2014 company earned 9.38 times more interest rather than other`s
years which is most favorable for the company than 2015 comes in the year of 2015 5.83 times more
earned interest which is less than 2014 but its low favorable than 2014 in 2016 5.33 times earned
interest which is 5.33 times more than interest paid. Which least favor able is for the company as
compared to others year’s ratio?

Profitability Ratio
1: Gross Profit Margin
Gross Profit Margin = Gross Profit / Sales * 100
Gross Profit Margin = Sales – CGS / Sales * 100

Years 2014 (000) 2015 (000) 2016 (000)

Gross Profit 795,559 825,152 866,879
Sales 2,938,314 3,015,461 3,180,659
G.P Margin 27.07 % 27.36 % 27.25 %

Interpretation
Measure the percentage of each sale rupee remaining after the firm has paid for its goods.
Gross profit margin shows gross profit of the company and remaining portion consist with
C.G.S. When company g.p margin is more than its better for the company. In 2014 g.p
margin is 27.07% and remaining portion of percentage is CGS and same in the year of 2015
g.p margin is 27.36% which is more than previous year and in the year of 2016 27.36%
Which again decrease from previous year 2015. The best year is 2015 as compared to
remaining years g.p margin because 2015 g.p ratio is more than others which is most
favorable for the company.

2: Operating Profit Margin

Operating Profit Margin = Operating Profit / Sales * 100
Operating Profit Margin = EBIT / Sales * 100

Years 2014 (000) 2015 (000) 2016 (000)

Operation Profit 187,747 179,424 195,308
Sales 2,938,314 3,015,461 3,180,659
O.P Margin 6.38 % 5.95 % 6.14 %
Interpretation
Measure the percentage of each sale rupee remaining after all cost and expenses other than
interest, taxes and preferred stock dividends are deducted, the pure profit earned on each
sales rupee. Operating profit margin shows operating profit of the company with remaining
part of percentage consist with CGS and Operating expenses of the company.
In the 2014 O.P margin is 6.38% and remaining part of almost 93.62% contains CGS +
operating expenses. Same in the year of 2015 O.P margin is 5.95 % and remaining portion of
percentage 94.05 % consist with CGS + O.expenses. In the year of 2016 O.P margin is 6.14%
and remaining is 93.86 % contains CGS = O.expenses. In the year of 2014 O.P margin is
greater than as compared to others so that`s why company is favorable than others years
O.P margin.

3: Net Profit Margin

Net Profit Margin = Net Profit / Sales * 100
Net Profit Margin = Earnings available for common stock holders / sales * 100

Years 2014 (000) 2015 (000) 2016 (000)

Net Profit 107,484 96,862 116,660
Sales 2,938,314 3,015,461 3,180,659
N.P Margin 3.65 % 3.21 % 3.66 %
Interpretation
Measure the percentage of each sale rupee remaining after all cost and expenses, including
interest taxes, and preferred stock dividend, have been deducted from the sales.Net profit
margin shows that how much company earn profit on their sales. In the year of 2014 N.p
margin is 3.65% which is the net profit of the company if 100% sales generate by the
company remaining part of the percentage contains CGS + Taxes +Interests+ O.expenses +
Per share dividend . In the year of 2015 N.p margin 3.21% which is less than 2014 N.p
margin but in 2016 N.p margin again increased than previous year and N.p margin is 3.66% .
2016 is most favorable for the company because in this year company earned more profit
than others years.

4: Earnings per Share

Earnings per Share = Earnings available for common stock holders / No. of outstanding
Shares of common stock

Years 2014 2015 2016

Earnings Per Share
Primary 191.6 172.67 234.98
Fully diluted 191.57 172.63 234.92
Interpretation
Earnings per share is generally of interested to present or prospective stock holder and
management. Earnings per share shows that how much company earn on their issued
shares. In the year of 2014 Primary and Fully diluted earnings per share are 191.6 and
191.57 and in the year of 2015 Primary and Fully diluted earnings per share are 172.67 and
172.63 and in the year of 2016 Primary and Fully diluted earnings per share are 234.98 and
234.92 which is higher than others years earnings per year which is more favorable for the
company because in 2016 earnings per share is higher than others.

5: Dividend per Share

Dividend per Share = Total Dividend / No. of outstanding Shares of common stock

Years 2014 2015 2016

Dividend Per Share 24 27 32

Interpretation
Dividend per share shows that how much company paid dividend per share to their shares
holders. A company have more investors and shareholders when more dividend paid by the
company to their shareholders.in the year of 2014 dividend per share is 24 than in 2015
dividend per share is 27 and in 2016 dividend per share is 32 which is higher than other
years dividend per share which is attract to investors for investment in the company.

6: Return on Assets
Return on Assets = Earnings available for common stock holders / Total Assets * 100

Years 2014 (000) 2015 (000) 2016 (000)

Earnings available
for common stock 107,484 96,862 116,660
holders
Total Assets 2,874,074 3,252,800 2,702,008
Return on Assets 3.73 % 2.97 % 4.31 %
Interpretation
Measure the overall effectiveness of management in generating profit with its available
assets also called the return on investment. Return on assets shows that How much earn on
assets of the company. More return on assets means more earnings by using assets. In 2014
return on assets is 3.73% means 3.73% are earnings of the company on assets for the year
of 2014. In 2015 return on assets is 2.97% which is less than 2014 company earns less than
previous year. In 2016 again return on assets is increased 4.31% which is greater than others
years return on assets and it is more favorable for the company.
7: Return on Equity
Return on Equity = Earnings available for common stock holders / Total Equity * 100

Years 2014 (000) 2015 (000) 2016 (000)

Earnings available
for common stock 107,484 96,862 116,660
holders
Total Equity 1,290,877 1,364,757 1,004,668
Return on Equity 8.32 % 7.09 % 11.61 %
Interpretation
Return on equity shows that how much company earns by using its total equity. In 2014
company earns 8.32% of return on equity and in 2015 company earns 7.09% return on
equity and in 2016 11.61% return on equity which is greater than other years return on
equity which is more favorable for the company. It means that more return on equity shows
more earnings by using their equity.

8: Return on Common Stock Equity

Return on Common Stock Equity = Earnings available for common stock holders / Total
common equity

Years 2014 (000) 2015 (000) 2016 (000)

Earnings available
for common stock 107,484 96,862 116,660
holders
Total common
138,014 138,014 138,014
equity
Return on Common
77.87 % 70.18 % 84.52 %
Stock Equity
Interpretation
Return on total common stock equity means that company earnings on by using its total
common stock equity. Return on common stock equity shows that how much profit
generates to the company by using their total common equity more using common equity
generates more profit. In 2014 77.87% generates profit on overall total common stock
equity. In 2015 70.18% generates profit on overall total common stock equity. In 2016
84.52% generates profit on overall total common stock equity. Which is greater than other`s
years which is more favorable as compared to other years return on assets.