PRINCIPLES OF FINANCE

(FINANCIAL REPORT)
SUBMITTED TO: MISS SUNDUS WAQAR
GROUP MEMBERS:
SYED HAIDER ABBAS (14177)
SHAIKH YASIR FEROZ (15902)
OSAMA RAZA KHAN (15924)
TAMKINAT JEHAN MALIK (15101)
SYEDA SHEEZA ABBAS (15086)
SYED RAZA ALI (14702)
Table of Content:
1. Introduction
2. Balance Sheet and Income Statement
3. Common Size Statement (Horizontal and Vertical)
4. Ratios
5. Graphs
6. Commenting on Ratios
7. Shares Analysis
8. Conclusion
PAK SUZUKI:
Pak Suzuki Company limited was formed in August 1983 just after the joint venture between
Pakistan Automobile Corporation and Suzuki motor company, Japan.
Pak Suzuki first started with commercial production in 1984 with assembling, manufacturing
and marketing of ordinary cars, vans and some other 4 by 4 vehicles in Pakistan. Then further
more they came up with the idea of automobiles, heavy bikes, motorcycles and outboards
which are their main products of the company.
The target population of the company is on the basis of general environment as most of the
people of Pakistan belong to middle class families and cannot afford luxurious cars so the
company also has economic vehicles such as Suzuki Mehran, Bolan van and also some
affordable motorcycles on the basis of demographic environment as well considering the age,
race and occupation of the people. Heavy bikes are specially manufactured to target the youth
and racers and other well manufactured and established cars for upper class people.
The company is enough diversified and has a vast product line of cars and other bikes including
 Swift
 Ciaz
 Cultus
 Jimny
 Cargo vans
 Vitara
 Bolan
 Ravi pickup
 Mehran
 Wagon-r
 GS bikes
 Sprinters
 Outboards
 Inazuma bikes

Company is further more working on products which are being discussed in the interviews and
press releases. Recently Pak Suzuki announced 4 new vehicles in a launch event. On 4th
December in Islamabad, the products that were announced were Cultus (Auto Gear Shift),
Mega carry, GR 150 and GSX-R600.
The company's manufacturing plant is manufactured near Bin Qasim, the future project of the
company which is in process is to manufacture another plant with the invested help of Japan
which will be completed in 2-3 years of continuous work.
 BALANCE SHEET & INCOME STATEMENT
ASSETS 2014 2015 2016 2017 2018
Fixed Assets
Property, Plant and Equipment 4996 4594 6745 8985 15768
Long term investment 0 0 0 208 329
Long Term Deposit 23 25 29 382 456
Long Term Loans 10 10 231 2 4
Long Term installment sale receivables 162 114 96 145 118
Total Fixed Assets 5191 4743 7101 9722 16346
Current Assets
Stores, spare parts 82 99 111 115 147
Stock in Trade 14976 13084 16289 23946 29397
Trade depts. 1352 1562 1205 211 238
current portion of long term installments sales receivable 388 348 291 321 551
Advances 515 198 201 37 41
Trade deposit and pre payments 53 71 77 966 1357
Others receivable 134 87 129 93 0
accrued profit on bank deposits 16 193 121 29 269
Sales tax adjustable and income tax refundable 3750 1590 3546 1144 4370
Cash and Bank Balances 1841 15006 8548 9189 1515
Taxation-net 0 0 0 4900 5798
deferred taxation 56 195 234 237 1152
Total Current Assets 23163 32433 30752 41188 44835
Total Assets 28354 37176 37853 50910 61181

EQUITIES
LIABILITIES
Long Term Liabilities
Advances 2159 4226 1625 5332 2276
Security deposits 1917 2068 3673 4601 4222
Unclaimed dividend 0 0 0 0 22
provision of custom duties and sales tax 86 36 36 36 36
Trade and other payables 4945 6442 6300 11392 14410
Accrued markup/interest 9 0 0 0 0
Short term borrowings 0 0 0 0 11310
Total Liabilities 9116 12772 11634 21361 32254

SHARE HOLDER'S EQUITY

Share Capital 823 823 823 823 823
Reserves 18414 23856 25394 28727 28410
Total Equity 19237 24679 26217 29550 29233
Total Liability and Equity 28353 37451 37851 50911 61509
 2014 2015 2016 2017 2018
Sales 53665 84549 76516 101812 119854
cost of sales 49481 73061 69167 (92159) (112809)
Gross profit 4184 11488 7349 9653 7045
distribution cost 746 1946 2004 (2804) (2707)
administration expenses 1102 1231 1540 (1600) (2301)
other operating expenses 196 653 334 (414) (154)
other income 510 1058 1040 865 566
Operating Profit 2650 8716 4511 5700 2449
Share of loss of equity 0 0 0 (12) (3)
Finance cost 27 31 96 (69) (363)
Profit before taxation 2623 8685 4415 5620 2083
Taxation 702 2843 1643 (1793) (785)
profit after Taxation 1921 5842 2772 3827 1298
EPS 23.35 70.99 33.69 46.49 15.77
COMMON SIZE STATEMENT (HORIZONTAL AND VERTICAL)
1. Horizontal Analysis in Dollar Change:
ASSETS
Fixed Assets 2014 2015 2016 2017 2018
Property, Plant and Equipment -79 -402 2151 2240 6783
Long Term Investment -2 0 0 208 121
Long Term Deposit -14 2 4 353 74
Long Term Loans 4 0 221 -229 6
Long Term installment sale receivables -8 -48 -18 49 -27
Total Fixed Assets -99 -448 2358 2621 6957
Current Assets
Stores, spare parts 16 17 12 4 32
Stock in Trade 4249 -1892 3205 7657 5451
Trade depts. 369 210 -357 -994 27
current portion of long term installments sales receivable 57 -40 -57 30 230
Advances 103 -317 3 -164 4
Trade deposit and pre payments -10 18 6 889 391
Others receivable 20 -47 42 -36 -93
accrued profit on bank deposits 3 177 -72 -92 240
Sales tax adjustable and income tax refundable 50 -2160 1956 -2402 3226
Cash and Bank Balances -123 13165 -6458 641 -7674
Taxation-net 0 0 0 4900 898
deferred taxation -92 139 39 3 915
Total Current Assets 4642 9270 -1681 10436 3647
Total Assets 4543 8822 677 13057 10604

EQUITIES
LIABILITIES
Long Term Liabilities
deffered tax 0 0 0 0 0
Advances 1530 2067 -2601 3707 -3056
Unclaimed dividends 0 0 0 0 22
Security deposits 1830 151 1605 928 -379
provision of custom duties and sales tax -52 -50 0 0 0
Trade and other payables 1249 1497 -142 5092 3018
Accrued markup/interest 9 -9 0 0 0
Short term borrowings 0 0 0 0 11310
Total Liabilities 2950 3656 -1138 9727 10915

SHARE HOLDER'S EQUITY

Share Capital 0 0 0 0 0
Reserves 1592 5442 1538 3333 -317
Total Equity 1592 5442 1538 3333 -317
Total Liability and Equity 4542 9098 400 13060 10598

2014 2015 2016 2017 2018

Sales 2604 30884 -8033 25296 18042
cost of sales 1663 23580 -3894 22992 20650
Gross profit 941 7304 -4139 2304 2608
distribution cost 186 1200 58 800 -97
administration expenses 142 129 309 60 701
other operating expenses 21 457 -319 80 -260
other income -353 548 -18 -175 -299
Operating Profit 239 6066 -4205 1189 -3251
Share of loss of equity 0 0 0 12 -9
Finance cost -31 4 65 -27 294
Profit before taxation 270 6062 -4270 1205 -3536
Taxation 198 2141 -1200 150 -1008
profit after Taxation 72 3921 -3070 1053 -2528
2. Horizontal Analysis in Percentage:
ASSETS
Fixed Assets 2014 2015 2016 2017 2018
Property, Plant and Equipment -1.6 -0.1 46.8 33.2 75.5
Long Term Investment -100.0 0.0 0.0 0.0 58.2
Long Term Deposit -37.8 0.1 16.0 1217.2 19.4
Long Term Loans 66.7 0.0 2210.0 -99.1 100.00
Long Term installment sale receivables -4.7 -0.3 -15.8 51.0 -18.6
Current Assets
Stores, spare parts 24.2 0.2 12.1 3.6 27.8
Stock in Trade 39.6 -0.1 24.5 47.0 22.8
Trade depts. 37.5 0.2 -22.9 -82.5 12.8
current portion of long term installments sales receivable 17.2 -0.1 -16.4 10.3 71.3
Advances 25.0 -0.6 1.5 -81.6 10.8
Trade deposit and pre payments -15.9 0.3 8.5 1154.5 40.5
Others receivable 17.5 -0.4 48.3 -27.9 -100
accrued profit on bank deposits 23.1 11.1 -37.3 -76.0 827.6
Sales tax adjustable and income tax refundable 1.4 -0.6 123.0 -67.7 282.0
Cash and Bank Balances -6.3 7.2 -43.0 7.5 -83.5
Taxation-net 0.0 0.0 0.0 0.0 18.3
deferred taxation -62.2 2.5 20.0 1.3 386.1
Total Assets 19.1 0.3 1.8 34.5 20.8

EQUITIES
LIABILITIES
Long Term Liabilities
deffered tax 0.0 0.0 0.0 0.0 0.0
Advances 243.2 1.0 -61.5 228.1 -57.3
Unclaimed dividends 0 0.0 0.0 0.0 57.1
Security deposits 2103.4 0.1 77.6 25.3 -8.2
provision of custom duties and sales tax -37.7 -0.6 0.0 0.0 0.0
Trade and other payables 33.8 0.3 -2.2 80.8 26.5
Accrued markup/interest 0.0 -1.0 0.0 0.0 0.0
Short term borrowings 0.0 0.0 0.0 0.0 100

SHARE HOLDER'S EQUITY

Share Capital 0.0 0.0 0.0 0.0 0.0
Reserves 9.5 0.3 6.4 13.1 -1.1
Total Equity 9.0 0.3 6.2 12.7 -1.1
Total Liability and Equity 19.1 0.3 1.1 34.5 20.8
 2014 2015 2016 2017 2018
Sales 5.1 57.5 -9.5 33.1 17.7
cost of sales 3.5 47.7 -5.3 33.2 22.4
Gross profit 29.0 174.6 -36.0 31.4 -27
distribution cost 33.2 160.9 3.0 39.9 -3.5
administration expenses 14.8 11.7 25.1 3.9 43.8
other operating expenses 12.0 233.2 -48.9 24.0 62.8
other income -40.9 107.5 -1.7 -16.8 34.56
Operating Profit 9.9 228.9 -48.2 26.4 -57
Share of loss of equity 0.0 0.0 0.0 0.0 -75
Finance cost -53.4 14.8 209.7 -29.2 526
Profit before taxation 11.5 231.1 -49.2 27.3 -62.9
Taxation 39.3 305.0 -42.2 9.1 -56.2
profit after Taxation 3.9 204.1 -52.6 38.1 -66.1
3. Vertical Analysis in percentage:
ASSETS
Fixed Assets 2014 2015 2016 2017 2018
Property, Plant and Equipment 17.6 12.4 17.8 17.6 25.6
Long Term Investment 0.0 0.0 0.0 0.4 0.5
Long Term Deposit 0.1 0.1 0.1 0.8 0.9
Long Term Loans 0.0 0.0 0.6 0.0 0.0
Long Term installment sale receivables 0.6 0.3 0.3 0.3 0.2
Total Fixed Assets 18.3 12.8 18.8 19.1 27.2
Current Assets
Stores, spare parts 0.6 0.3 0.3 0.3 0.2
Stock in Trade 52.8 35.2 43.0 47.0 47.8
Trade depts. 4.8 4.2 3.2 0.4 0.4
current portion of long term installments sales receivable 1.4 0.9 0.8 0.6 0.9
Advances 1.8 0.5 0.5 0.1 0.1
Trade deposit and pre payments 0.2 0.2 0.2 1.9 2.2
Others receivable 0.5 0.2 0.3 0.2 0.3
accrued profit on bank deposits 0.1 0.5 0.3 0.1 0.0
Sales tax adjustable and income tax refundable 13.2 4.3 9.4 2.2 7.1
Cash and Bank Balances 6.5 40.4 22.6 18.0 2.5
Taxation-net 0.0 0.0 0.0 9.6 9.4
deferred taxation 0.2 0.5 0.6 0.5 1.9
Total Current Assets 81.7 87.2 81.2 80.9 72.8
Total Assets 100.0 100.0 100.0 100.0 100.0

EQUITIES
LIABILITIES
Long Term Liabilities
Advances 7.6 11.4 4.3 10.5 3.7
Deposits against display of vehicles 0.0 0.0 0.0 0.0 0.0
Security deposits 6.8 5.6 9.7 9.0 6.9
provision of custom duties and sales tax 0.3 0.1 0.1 0.1 0.1
Trade and other payables 17.4 17.3 16.6 22.4 23.4
Accrued markup/interest 0.0 0.0 0.0 0.0 0.0
Short term borrowings 0.0 0.0 0.0 0.0 0.0
Total Liabilities 32.2 34.4 30.7 42.0 34.1

SHARE HOLDER'S EQUITY

Share Capital 2.9 2.2 2.2 1.6 1.3
Reserves 64.9 64.2 67.1 56.4 46.2
Total Equity 67.8 66.4 69.3 58.0 47.5
Total Liability and Equity 100.0 100.7 100.0 100.0 100.0
 2014 2015 2016 2017
Sales 189.3 227.4 202.1 200.0
cost of sales 174.5 196.5 182.7 181.0
Gross profit 14.8 30.9 19.4 19.0
distribution cost 2.6 5.2 5.3 5.5
administration expenses 3.9 3.3 4.1 3.1
other operating expenses 0.7 1.8 0.9 0.8
other income 1.8 2.8 2.7 1.7
Operating Profit 9.3 23.4 11.9 11.2
Share of loss of equity 0.0 0.0 0.0 0.0
Finance cost 0.1 0.1 0.3 0.1
Profit before taxation 9.3 23.4 11.7 11.0
Taxation 2.5 7.6 4.3 3.5
profit after Taxation 6.8 15.7 7.3 7.5
 RATIOS
(a) Liquidity Ratio 2014 2015 2016 2017 2018
1. Current Ratio 2.54 2.54 2.64 1.93 1.39
2. Quick or Acid Test Ratio 0.88 1.51 1.21 0.79 0.48
3. Cash Ratio 0.20 1.17 0.73 0.43 0.04
4. Working Capital Management 23163 32433 30752 41188 12581

(b) Asset Management Ratio 2014 2015 2016 2017 2018

1. Inventory Turnover Ratio 3.58 6.46 4.7 4.25 4.07
2. Days Sales in Inventory 110.47 65.37 85.96 94.84 95.115
3. Receivables Turnover Ratio 400.49 971.83 593.15 1094.75 503.59
4. Days Sales in Receivables 0.91 0.38 0.62 0.33 0.73
5. Fixed Assets Turnover Ratio 10.34 17.83 10.78 10.47 7.33
6. Total Assets Turnover Ratio 1.89 2.27 2.02 2 1.96

(c) Debt Management Ratio 2014 2015 2016 2017 2018

1. Debt Ratio 0.32 0.34 0.31 0.42 0.52
2. Debt Equity Ratio 0.47 0.52 0.44 0.72 1.10
3. Equity Multiplier 1.47 1.51 1.44 1.72 2.09
4. Long Term Debt Ratio 0.00 0.00 0.00 0.00 0.00
5. Times Interest Earned Ratio 3.73 3.05 2.68 -3.13 -2.65
6. Cash Coverage Ratio 0.20 1.17 0.73 0.43 0.05

(d) Profitablity Ratios 2014 2015 2016 2017 2018

1. Operating Margin 0.05 0.1 0.06 0.06 0.02
2. Profit Margin 0.04 0.07 0.04 0.04 0.01
3. Return on Total Assets 0.07 0.16 0.07 0.08 0.02
4. Basic Earning Power Ratio 0.09 0.23 0.12 0.11 0.03
5. Return on Common Equity 0.1 0.24 0.11 0.13 0.04

(e) Market Value Ratios 2014 2015 2016 2017 2018

1. Price/Earning Ratio 0.43 0.14 0.15 0.11 1.35
2. Market/Book Ratio 11.55 9.34 9.29 10.22 1.11
3. Book Value per share 23.37 29.99 31.86 35.91 0.99
 GRAPHS

Total assest
70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
2014 2015 2016 2017 2018

Total assests
35000
Total Equity
30000

25000

20000

15000

10000

5000

0
2014 2015 2016 2017 2018

Total Equity
 Net Income
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2014 2015 2016 2017 2018

Net Income

Current Ratio
3

2.5

1.5

0.5

0
2014 2015 2016 2017 2018

Current Ratio
 Quick Ratios
1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2014 2015 2016 2017 2018

Quick Ratios

Cash Ratio
1.4

1.2

0.8

0.6

0.4

0.2

0
2014 2015 2016 2017 2018

Cash Ratio
 Working Capital Management
45000

40000

35000

30000

25000

20000

15000

10000

5000

0
2014 2015 2016 2017 2018

Working Capital Management

Inventory Turnover Ratio

7

0
2014 2015 2016 2017 2018

Inventory Turnover Ratio

 Receivables Turnover Ratio
1200

1000

800

600

400

200

0
2014 2015 2016 2017 2018

Receivables Turnover Ratio

Days Sale in Inventory

120

100

80

60

40

20

0
2014 2015 2016 2017 2018

Days Sale in Inventory

 Days Sale in Receivables
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2014 2015 2016 2017 2018

Days Sale in Receivables

Fixed Asset Turnover

20
18
16
14
12
10
8
6
4
2
0
2014 2015 2016 2017 2018

Fixed Asset Turnover

 Total Asset Turnover
2.5

1.5

0.5

0
2014 2015 2016 2017 2018

Total Asset Turnover

Debt Ratio
0.6

0.5

0.4

0.3

0.2

0.1

0
2014 2015 2016 2017 2018

Debt Ratio
 Debt Equity Ratio
1.2

0.8

0.6

0.4

0.2

0
2014 2015 2016 2017 2018

Debt Equity Ratio

Equity Multiplier
2.5

1.5

0.5

0
2014 2015 2016 2017 2018

Equity Multiplier
 Longterm Debt Ratio
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2014 2015 2016 2017 2018

Longterm Debt Ratio

Cash Coverage Ratio

1.4

1.2

0.8

0.6

0.4

0.2

0
2014 2015 2016 2017 2018

Cash Coverage Ratio

 Time Interest Earned Ratio
5

0
2014 2015 2016 2017 2018
-1

-2

-3

-4

Time Interest Earned Ratio

Cash Coverage
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Category 1 Category 2 Category 3 Category 4

Series 1
 Operating Margin
0.12

0.1

0.08

0.06

0.04

0.02

0
2014 2015 2016 2017 2018

Operating Margin

Profit Margin
0.08

0.07

0.06

0.05

0.04

0.03

0.02

0.01

0
2014 2015 2016 2017 2018

Profit Margin
 Return of Total Asset
0.18

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2014 2015 2016 2017 2018

Return of Total Asset

Basic Earning Power

0.45

0.4

0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2014 2015 2016 2017 2018

Basic Earning Power

 Return of Common Equity
0.3

0.25

0.2

0.15

0.1

0.05

0
2014 2015 2016 2017 2018

Return of Common Equity

Type equation here.

Price Earning Raio

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2014 2015 2016 2017 2018

Price Earning Raio

 COMMENTING ON RATIOS
Profitability ratios:
According to the financial report and ratios of pak Suzuki motors for the last five years shows
their increase in gross profit in every year with the increase of 10% in the year 2015. This shows
their increase in business in recent years then the years before. According to the given data of
pak Suzuki it is stated that the company had increase their operating income in the year 2015
which shows that they were good in business in the year 2015. The company shows that their
ROA decreases in last 2 years, and ROA was at peak in 2015 for the last five years and its ROE was
also increased in 2015.

Liquidity ratios:
The current ratios of pak Suzuki is decreasing with every year as we can see in the ratios, the
highest ratio was calculated in the year 2013 and since then it is decreasing for the last five years.

Asset management ratios:

Pak Suzuki motors are good with their asset management ability. Sales were very good in the
year 2014 and turnover ratio is higher in the year 2015 as compared to other years.

Debt management ratios:

The company’s debt ratio is somehow consistently same, they are very good in managing their
debts. Their time interest earned ratio is higher in the year 2015 as compared to other years and
the important thing is that their long term debt in managed very effectively throughout the years.

Market value ratios:

The company’s market value is very good, their share value is increased in every year consistently
for the last five years but their price earnings ratio is decreased in every year for the last five year.
But the important thing is that their market price of shares increases every year for the last five
years.

SHARES ANALYSIS
The fluctuations in share price for last 5 years showing the trends of shares. The share market
goes up and down due to different factors. When the company generates more revenue so the
share price goes up because of the more profit earned. When the company generates low
revenue so the share price goes down so the profit is low so the value of shares decreases the
share market fluctuates with time to time.
The share market is controlled by the shareholders itself, the share market may clash of the
country is suffering through inflations because when inflation rises in the stock market goes
down and the share price fluctuates.
As we can see the value of shares price for last 5 years, every month’s closing price is different
as compare to the previous one so we can see the fluctuation in stocks.
For the information of 5 years shares monthly openings and closing price of stocks of Pak Suzuki
motors please check Appendix A.

CONCLUSION
Since 2013 to 2017 there is a decreasing trend in the current ratio of the Co. This is a positive sign
as the Company is become more liquid. A lower current ratio mean cash utilized in an optimal
way. Same goes for the quick ratio. A decreasing trend indicates a positive sign for company’s
future growth. The Inventory Turnover Ratio measures the number of times inventory “turned
over” or was converted to sales during a time period. In our case there is a decreasing trend,
indicating that the company is not efficiently able to convert their inventory into sales during the
last 5 years. The Accounts Receivable Turnover Ratio measures the number of time accounts
receivable turned over during a time period. During these 5 years there has been fluctuation in
the accounts receivable turnover ratio. It has reached to 1094.75. This indicates that the cash
was collected quicker after sale was made. This again is a positive sign for Company’s growth.
Over the years, Assets Turnover ratio has decreased meaning the Company is not able to utilize
their assets to make a profit. An overall increase in the debt to asset ratio indicates that the
Company is financing its Assets through debt. This indicates the Company is exploring its options
and working for a better growth. Since the times interest ratio has increase over the years. This
indicates that the firm is able to pay its debts more frequently than before. There has been a
stagnant growth in the net profit margin of 0.04. This indicates that the Company is not able to
increase its sales or profit over the years. It should work on that. There has been a decrease in
the earnings per share ratio. This means that the investor will eventually lose faith in Company
as the returns are decreasing.

“THANKYOU”