Fiscal Statement Analysis plays a critical function in concern activity. Fiscal Statement Analysis tells the company stableness in the state. Fiscal Statement analysis is the cardinal factor to comparison the company. Fiscal Statement Analysis provides the better option of investing and generates more gross another investing. Financial Statement explained efficaciously and expeditiously company stableness. Fiscal Statement describes important relationship between companies. Because of this Analysis, a director can do good determinations and happen the best possible solutions of the jobs in a concern and in concern related everything. A director, creditors, investors, hearers, Shareholder, analysts, regulators and consumers determine the fiscal place of a company with the aid of this Financial statement analysis.
1.2.1 Industry Background:
Automobile corporation was established as concern covering in motor vehicle import and distribution. Automobile is one of major industries of Pakistan. Automobile industries generate the more gross for Pakistan Govt. and lend the stableness of economic system. Automobile industry provides strong, beautiful and sufficient monetary value autos for client. In our state many cars workss are being operated by different companies. Pakistan imports a mass measure of vehicle from many other states like Japan, UK, Germany. The motor industry in Pakistan was started in 1950 and nationalisation was established in 1980. The motor industry operates under licence and proficient co-operation understanding with China Korea Japan & A ; Europe. The degree of motor industry has been step by measure turning over the twelvemonth.
1.2.2 Suzuki Motors Limited:
With a corporate history crossing over 85 old ages Suzuki Motor Corporation has achieved international success by keeping a uninterrupted policy of planing and bring forthing value-packed, quality merchandises to innovatively run into mundane client demands.
During the last 40 old ages, design and technological expertness has produced a scope of alone and land interrupting 4×4 vehicles that emphasizes this spirit and achieved an enviable repute and regard throughout the universe.
A longtime leader in the vehicle fabrication industry, Suzuki Company, based in Japan. The company has a strong and longstanding tradition of service, dependability, and quality that reaches back many of the old ages. Sponsored by Suzuki the Company was incorporated in Japan.
The fabrication works operating is one of the most efficient and best maintained in the state and has mass one-year production.
1.2.3 Honda Motors Limited:
Honda Companyaa‚¬a„?s headquarter is based in Tokyo, Japan. And it was established in September 24, 1948. Honda Motor Co. , Ltd. operates under the basic rules of “ Respect for the Individual ” .
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan.
The company was incorporated on November, 1992 and joint venture understanding was signed on August, 1993. The company is listed on Karachi, Lahore and Islamabad Stock Exchanges.
On July 14, 1994, auto engagements started at six franchises in Karachi, Lahore, and Islamabad. In add-on to supplying regular service to clients, the company besides on a regular basis conducts Service Campaigns, to ease client ‘s demand for service. This has given our clients absolute assurance in our autos, clearly apparent from the of all time increasing sale volumes.
It is the changeless enterprise of Honda Atlas Cars ( Pakistan ) Limited to accomplish No.1 Customer satisfaction. Honda Atlas Cars ( Pakistan ) Limited is committed to run into client outlooks, and to supply good value for money. Presently 8 different theoretical accounts of Honda CIVIC and CITY autos are being offered in broad scope of colourss with alone technological and other characteristics.
The chief aim of our undertaking is to analyse the fiscal place and fiscal strength of company. The major intent of our undertaking to cipher and analyse of two top motor companies in Pakistan 1 is Honda Motor Limited and 2nd is Suzuki Motor Limited. Financial Statement Analysis shows the true and clear image of company. Fiscal Statement Analysis provides information of company operations and public presentation and besides provides the realistic and existent facts and figures to investors, creditor, stakeholder and stockholder. Some aims of fiscal statement analysis are as followers:
To happen out the strengths and failings of the companies through fiscal Statement Analysis.
Provide dependable, clear, and existent figure of fiscal statement to stockholders and investors.
To supply true and right figure of fiscal information.
Provide faithful fiscal information about the alterations in company resources and company growing.
To supply bright manner for future growing of the two companies.
To demo all fiscal information harmonizing to the demands of creditor, investor, stakeholder, and stockholder.
Which company is better executing?
Which company is better for the investing?
Fiscal statement analysis is really of import for every organisation. When fiscal statement analysis is conducted a batch of informations is summarizes and is describes briefly which helps in good determination devising. This statement analysis is fundamentally Tells about the fiscal place of the company. Significance of the undertaking would be straight to the survey of the companies under the selected undertaking. This analysis creates an chance to hold a batch of informations at their disposal for carry oning analysis and for farther determination devising. The rivals of the above mentioned companies decidedly have the significance of this undertaking. They would be able to judge where they stand with regard to other companies.
Chapter 2: Undertaking Proceedings
My undertaking will be base on computation and analysis of fiscal ratios of the companies. The chief portion of this undertaking would be faithful to the computation and analysis of the assorted fiscal ratios. Financial Ratio shows the fiscal strength and place of the company every bit compared to another company. Following are some common ratios which are used in this undertaking.
2.1 Ratio Analysis
The ratios analysis is a major tool of fiscal statement analysis. In simple word Ratio means is the numerical relationship between two variables which are connected with each other. Following are some common ratios which are used in this undertaking.
Liquidity ratios are the ratios measure the short term fiscal place of a house. Liquidity ratios are designed to look into the ability of the house to run into short term duty.
Acid trial ratio
Gross saless to Working Capital
Activity ratios are besides known as Efficiency ratios. Activity ratios step the efficiency of the company. These are besides known as turnover ratios.
Inventor / stock turnover ratio
Average aggregation period
Debtor / receivables turnover ratio
Fixed assets turnover ratio
Creditors / collectible turnover ratio
Long Term Solvency or Leverage Ratios:
Debt Coverage Ratio
Time Interest Earn
Debt to equity ratio
Interest coverage ratio
Tax return on equity capital
Net incomes Per Share Ratio
Gross net income ratio
Net net income ratio
Dividend output ratio
Dividend payout ratio
Common size analysis
Chapter No 3: Methodology
Data Collection Beginnings:
Datas collected from cyberspace and stock exchange and more good is secondary beginnings of informations are used in this undertaking. Honda and Suzuki Company are good repute in the state and collect the informations really easy and available in the web site. Honda and Suzuki Motors Company are listed in Lahore stock exchange to collected one-year study, balance sheet, and projected related informations and so measure them.
Data Collection Tools/Instruments:
Data aggregation tools are based on observation. Observation is working as lifeblood is data aggregation tools. Observation is a good tool of garnering informations. Observation is the informations aggregation tool that fulfills the demand of Financial Statement Analysis. I am working on fiscal statement analysis of two major listed companies because I will utilize Observational informations aggregation tool.
3.3 Data Processing and Analysis:
Harmonizing to my undertaking I will utilize Microsoft Word and Microsoft Excel work sheets to cipher the assorted ratios and besides used tabular arraies, graphs/ charts and mathematical operations to demo the clear fiscal place of the house. With the usage of tabular array, graph and charts easy checkout the company position and company growing.