Indus Motor Company LTD Ratio Analysis

PROFESSIONAL PROJECT
INDUS MOTOR COMPANY LIMITED
Mansoor Humayun
Student No. 623/ BBA-Hons 8th Semester (Evening) 2006-2010
Submitted to the
Department Of Management Sciences

UNIVERSITY OF EDUCATION, LAHORE
OKARA CAMPUS
Indus Motor Company Ltd (Financial Analysis)
Project Supervisor: Mr. Rai Imtiaz Hussain
Submitted by: Mansoor Humayun

623-E
BBA(Hons) 8th Semester
2006-2010
02/03/2010
In the Name of Allah the Most Gracious, the

Most Beneficent and the Most Merciful
Read (O Prophet,) in the name of yours Rub,

Who created. Created man from a clot of
congealed blood. Read; and your Lord is Most
Generous, Who taught knowledge by the pen;
taught man what he did not know.
(Al-Alaq, Surah # 96, Ayats 1-4, Para # 30)
DEDICATION
I would like to dedicate my work,
As a little token of gratitude for my Loving Parents.
The wisdom and love of my parents enables me to strive towards a
legacy of honor. Without their knowledge, wisdom and guidance,
I would not have the goals, I have to strive and be the best to reach my
dreams!
To my Siblings for their gentle encouragement and valuable support.
To my little and lovely Nephew.
iii
ACKNOWLEDGEMENT
I find no words at my command to express my deepest sense of gratitude
to the Almighty ALLAH, the most Gracious, the most Merciful and the
most Beneficent, who gives me the talent to complete this task
successfully, He is the one who gave me courage to do this.
I am much obliged to my loving Parents whose prayers have enabled me

to reach this stage. At this occasion I cant forget my parents for their
guidance at the crucial moments of my life.
Next I owe my bottomless thanks to our esteemed resource person Mr. Rai
Imtiaz Hussain who directed me well and was always available to clear
my doubts and misunderstandings through out this project.
It is also a matter of immense pleasure for me to express my gratitude to

the Faculty of Department of Management Sciences and professional
projects evaluation Committee of the University of Education for giving
us their precious time and tried their best as helpful as possible.
I wish to thanks all my Friends and Classmates who really helped me by

giving suggestions and critical review of the manuscript.
Obviously this achievement was not possible without all of you.
Mansoor Humayun
iv
FORWARDING SHEET
This professional project of Mansoor Humayun (Student No 623)
entitled Indus Motor Company Limited (Financial Analysis) has been
completed under by the guidance and supervision for the fulfillment
of requirement for the 8th Semester of BBA (Hons) degree program of
University of Education Lahore, Okara campus.
Dated: _______________
__________________
Supervisor
DISCLAIMER
The purpose of the project is to introduce the subject matters and
provide a general idea and financial information about the Indus
Motors Company Limited. All the material included in this document
is based on data/information gathered from various sources and is
based on certain assumptions. Although, due care, diligence and
reasonable efforts has been taken to compile this project, the
contained information may vary due to any change in any of
concerned factors and the actual results may differ substantially
from the presented information.
Project does not assume any liability for any financial or other loss
resulting from this document in consequence of undertaking this
activity. Therefore the content of this document should not be relied
upon for making any decision, investment or otherwise. The content of
the information does not bind PROJECT MAKER in any legal or other
form.
Project does not also assume any rectifications, errors, omission and
misprinting between the electronic and printed version of document.
Financial Analysis of IMC doest not accept any responsibility for the
validity and correctness of the information published on its project.
vi
Table of Contents
Page No
EXECUTIVE SUMMARY
CHAPTER NO 1
INTRODUCTION
1.1
REASON FOR CHOOSING THE ORGANIZATION
1.2
AIMS AND OBJECTIVES OF THE PROJECT
1.3
AUTOMOBILE INDUSTRY IN PAKISTAN
1.4
CURRENT SITUTATION OF CAR INDUSTRY
CHAPTER NO 2
INDUS MOTOR COMPANY LIMITED
2.1
HISTORY
10
2.2
PRODUCT LINE
11
2.2.1 COROLLA
11
2.2.2 CUORE
12
2.2.3 HILUX
12
COMPANYS PROFILE
12
2.3.1 NAME OF COMPANY
12
2.3.2 INDUSTRY TYPE
12
2.3.3 MAJOR INVESTORS
13
2.3.4 SLOGAN
13
2.3.5 VISION
13
2.3.6 MISSION
13
2.3.7 CORE VALUES
14
2.3.8 STRATEGIC OBJECTIVES
15
COMPANYS INFORMATION
16
2.4.1 BOARD OF DIRECTORS
16
2.4.2 BANKERS
16
2.4.3 AUDITORS
17
2.4.4 LEGAL ADVISORS
17
2.4.5 REGISTRAR
17
2.4.6 FACTORY/REGISTERED OFFICE
18
2.3
2.4
vii
Page No
2.4.7 CHIEF FINANCIAL OFFICER
18
2.4.8 COMPANY SECRETARY
18
2.4.9 AUDIT COMMITTEE MEMBERS
18
CHAPTER NO 3
3.1
3.2
3.3
3.4
COMPANYS ANALYSIS
19
SWOT ANALYSIS
20
3.1.1 STRENGTHS
20
3.1.2 WEAKNESSES
22
3.1.3 OPPORTUNITIES
23
3.1.4 THREATS
23
PEST ANALYSIS
24
3.2.1 POLITICAL FACTORS
25
3.2.2 ECONOMICAL FACTORS
25
3.2.3 SOCIAL FACTORS
26
3.2.4 TECHNOLOGICAL FACTORS
26
BOSTON CONSULTING GROUP MATRIX
27
3.3.1 STARS
28
3.3.2 CASH COWS
28
3.3.3 QUESTION MARK
29
3.3.4 DOGS
29
TOYOTA COROLLA BCG MATRIX
29
CHAPTER NO 4
INCOME STATEMENT ANALYSIS
31
4.1
CONDENSED INCOME STATEMENT
32
4.2
NET SALES
33
4.3
COST OF GOODS SOLD
34
4.4
GROSS PROFIT
35
4.5
OPERATING EXPENSES
36
4.6
OPERTAING PROFIT
37
4.7
OTHER OPERATING EXPENSES
38
4.8
OTHER OPERATING INCOME
39
viii
Page No
4.9
PROFIT BEFORE INTEREST AND TAX
40
4.10 FINANCE COST
41
4.11 PROFIT BEFORE TAXATION
42
4.12 TAXATION
43
4.13 PROFIT AFTER TAXATION
44
CHAPTER NO 5
45
BALANCE SHEET ANALYSIS
5.1
CONDENSED BALANCE SHEET
46
5.2
CURRENT ASSETS
47
5.3
CURRENT LIABLITIES
48
5.4
TOTAL FIXED ASSETS
49
5.5
TOTAL ASSETS
50
5.6
LONG TERM DEBT
51
5.7
TOTAL LIABILITIES AND EQUITY
52
CHAPTER NO 6
6.1
6.2
6.3
RATIO ANALYSIS
53
SHORT TERM DEBT PAYING ABILITY
54
6.1.1 NET WORKING CAPITAL
54
6.1.2 CURRENT RATIO
55
6.1.3 ACID TEST RATIO
56
6.1.4 CASH RATIO
57
6.1.5 CASH FLOW FROM OPERATIONS RATIO
58
LONG TERM DEBT PAYING ABILITY
59
6.2.1 TIME INTEREST EARNED RATIO
59
6.2.2 FIXED CHARGED COVERAGE RATIO
60
6.2.3 DEBT RATIO
61
6.2.4 DEBT EQUITY RATIO
62
6.2.5 DEBT TO TANGIBLE NETWORTH
63
SHORT TERM LIQUIDITY
64
6.3.1 DAYS SALES IN A/R
64
6.3.2 ACCOUNTS RECEIVABLE TURNOVER
65
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Page No
6.4
6.5
6.3.3 DAYS SALES IN INVENTORY
66
6.3.4 INVENTORY TURNOVER
67
PROFITABILITY INDEX
68
6.4.1 NET PROFIT MARGIN
68
6.4.2 TOTAL ASSETS TURNOVER
69
6.4.3 RETURN ON ASSETS
70
6.4.4 OPERATING INCOME MARGIN
71
6.4.5 OPERATING ASSETS TURNOVER
72
6.4.6 RETURN ON OPERATIN ASSETS
73
6.4.7 SALES TO FIXED ASSETS
74
6.4.8 RETURN ON EQUITY
75
6.4.9 GROSS PROFIT MARGIN
76
INVESTORS ANALYSIS
77
6.5.1 EARNING PER SHARE
77
6.5.2 PRICE EARNING RATIO
78
6.5.3 DIVIDEND PAYOUT RATIO
79
6.5.4 DIVIDEND YIELD RATIO
80
CONCLUSION
81
REFRENCES
83
ANNEXURES
85
Table of Annexure
Page No
I.
SUMMARIZED INCOME STATEMENT

I.I
COMPARATIVE CHAIN BASE

INCOME STAEMENT
I.II
89
PERCENATGE COMPARATIVE CHAIN BASE

INCOME STATEMENT
I.III
91
PERCENTAGE COMPARATIVE 2005 BASE

INCOME STATEMENT
I.IV
93
VERTICAL COMMON SIZE

INCOME STATEMENT
II.
95
SUMMARIZED BALANCE SHEET

II.I
98
COMPARATIVE CHAIN BASE

BALANCE SHEET
II.II
87
101
PERCENTAGE COMPARATIVE CHAIN BASE

BALANCE SHEET
104
II.III PERCENTAGE COMPARATIVE 2005 BASE

BALANCE SHEET
106
II.IV VERTICAL COMMON SIZE

BALANCE SHEET
108
III.
SHORT TERM DEBT PAYING ABILITY
110
IV.
LONG TERM DEBT PAYING ABILITY
112
V.
SHORT TERM LIQUIDITY
114
VI.
PROFITABILITY INDEX
116
VII.
INVESTORS ANALYSIS
119
xi
INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT
Executive Summary
Indus Motor Company is one of the Automobile Companies which formed
with the help of house of Habib, Toyota Motor Corporation, Toyota Tsusho
Corporation. It manufactures and imports cars and enjoys a healthy share
in the market. It is competing with the Honda, Nissan, Suzuki and
Mitsubishi. To sustain its lead IMC must maintain strategic competitive
advantage which is its production strength, ability to produce quality cars
with respect to low cost and research and development in hybrid and bio
fuel cars. But recently company is in stabilization mode trying to improve its
functional area, consolidation of resources and maintaining SCA. In my
Opinion it is the best move made by IMC to survive the financial holocaust.
Operating Highlights:
For the Year ended June 30, 2009
Vehicle Sales: down 30.6% to 35,276 units
Vehicle Production: down 28.9% to 34,298 units
Net Revenues: down 8.6% to Rs. 37.9 billion
Profit after tax: down 39.5% to Rs.1.4 billion
Earning per share: down 39.5% to Rs. 17.6
Manpower: down 6.7% to 1,893 employees
Total assets: up 50.5% to Rs. 20.69 billion
Share holders' equity: up 9.1% to Rs. 10.3 billion

UNIVERSITY OF EDUCATION OKARA CAMPUS
1) Short Term Debt

Paying Ability
2005
2006
2007
2008
2009
a) Net Working Capital
Rs (bn)
3.51
4.65
6.15
5.89
6.83
b) Current Ratio
Times
1.46
1.49
1.83
2.56
1.69
c) Acid Test Ratio
Times
1.05
1.07
1.44
1.86
1.28
d) Cash Ratio
Times
0.88
0.79
1.15
1.16
0.98
Times
0.12
0.28
0.38
(0.21)
0.66
a) Times Interest Earned
Times
25.48
33.08
187.44
1284.23
78.09
b) Fixed Charged Coverage
Times
22.60
32.10
187.40
1284.23
78.09
c) Debt Ratio
63.30
60.45
48.65
31.36
50.22
d) Debt Equity Ratio
0.00
0.00
0.00
0.00
0.00
e) Debt to Tangible Net worth
172.86
152.99
94.78
45.71
100.93
Days
13.09
24.89
15.86
18.90
26.02
Times
27.89
14.66
23.01
19.32
14.03
c) Days Sales in Inventory
Days
11.80
15.55
5.57
10.92
14.20
d) Inventory Turnover
Times
42.20
29.20
37.38
45.49
28.36
e) Cash Flow from

Operations Ratio
2) Long Term Debt

Paying Ability
3) Short term Liquidity

a) Days Sales in
Accounts Receivable
b) Accounts Receivable
Turnover
4) Profitability Ratio
2005
2006
2007
2008
2009
5.38
7.52
7.03
5.53
3.66
Times
2.26
2.23
2.49
3.01
1.83
c) Return on Assets
12.17
16.74
17.53
16.66
6.70
d) Operating Income Margin
7.73
9.93
9.38
7.40
3.97
Times
30.63
25.02
20.53
11.53
9.71
164.77
188.06
144.29
63.73
35.51
Times
27.63
20.53
18.66
10.27
9.62
h) Return on Equity
33.17
42.32
34.13
24.28
13.45
i) Gross Profit Margin
9.80
11.77
11.37
9.29
6.14
Rs
18.89
33.70
34.93
29.15
17.62
Times
4.76
5.67
8.75
6.86
6.11
c) Dividend Payout Ratio
52.94
35.61
37.22
36.02
56.75
d) Dividend Yield Ratio
11.11
6.28
4.26
5.25
9.28
a) Net Profit Margin

b) Total Assets Turnover
e) Operating Assets
Turnover
f) Return on Operating
Assets
g) Sales to Fixed Assets
5) Investors Analysis
a) Earning Per Share
b) Price Earning Ratio
1.1 REASON FOR CHOOSING THE ORGANIZATION:

When I was informed that I would have to do the financial analysis of last five years of any
listed company than the primary challenge for me was to choose the organization on which I
can start my working. It was bit difficult and confusing for me to select the organization. I
started brainstorming and came up with many well known organizations having large
operations, both in Pakistan and Worldwide. After gathering data and relevant information I
ended with three business sectors, Automobile industry, Textile industry and Tobacco
industry. I choose best companies in their respective class, but after applying hindsight I
decided to go with Automobile industry and the organization I selected was Indus Motor
Company Limited.
1.2 AIMS AND OBJECTIVES OF THE PROJECT:

The main objectives and aims of this project are to analyze and evaluate the overall
performance of the company by applying different conceptual models and discuss the
liquidity, cash flow situation and produce informative report usable by the users of the
statements assessing the financial position, performance and adaptability of the organization.
The performance evaluation is based on historic and current available data about the
operations of the company. Under the constantly increasing competition in the business
market, these analyses portray a very clear and informative picture to the investors,
shareholders, regulators and other players in the stock market.
Finally the project draws conclusions based on my analysis about the current situation and the
prospects of the Indus Motor Company Limited .
1.3 AUTOMOBILE INDUSTRY IN PAKISTAN:

Auto market is one of the largest segments in world trade. Changing models, improving fuel
efficiency, cutting costs and enhancing user comfort without compromising quality are the
most important challenges of the auto industry in a fast globalizing world.
The automotive assembling in Pakistan started in 1950 when National Motors Limited, a
public limited company and the pioneer in the industry, came into existence, established by
General Motors of USA. National Motors assembled passenger cars as well as commercial
vehicles which carried General Motors brands such as Bedford, Vauxhall, Chevrolet.
The indigenized parts in these vehicles did not exceed 20% with only exception of Bed Ford
trucks with a deletion level of 80%. By the end of 70s practically all automobile assembling
in Pakistan ceased.
A regular car industry started in the country in 1983, when Suzuki commenced production
eyeing the small and LCV car segment of 800cc-1000cc range, and introduced Suzuki car
which targeted the middle-income group (constituting the larger segment of the market) by
providing an affordable car.
Then there was a long gap until the early 90s when Indus Motor Company was established to
manufacture Toyota vehicles in Pakistan. Soon after Honda Atlas came with the Civic and
Gandhara Nissan entered the market with Sunny.
In the late 90,s Dewan Farooque Motors set up a plant to manufacture Hyundai and Kia
vehicles in Pakistan. Since then the market has changed all together. After struggling through

nineties, a decade full of uncertainties and frequent policy the Pakistani Auto Industry has
been able to achieve double digit growth consistently since the last 4 years. The industry
operates under franchise and technical cooperation agreements with Japanese, European and
Korean manufacturers.
Lately Few new market players entered the market such as Gandhara Nissan again with now
the imported Nissan range of vehicles, Dewan Mushtaq Motors with imported Mitsubishi
range of vehicles, Nexus Automotive with Chevrolet imported vehicles and others imported
Chinese vehicles such as Karakoram Motors, Roma Automobiles and Foton by Dewan
Innovations Limited along with Pak Cherry Automobiles. Sigma Motors made its mark with
Rover recently.
Apart from these the big brands of the auto industry also entered the Pakistani market such
as BMW , Mini & Rolls Royce by Dewan Motors, Porsche, Mercedes and Audi have also
launched their brands in Pakistan catering to the very upper niche.
1.4 CURRENT SITUTAION OF CAR INDUSTRY:

Locally produced cars have taken an unexpected drastic downturn to the extent of frustrating
all future growth prospects and projections. According to the current figures, in due
comparison with the figures of year 2007 for September to December period, the sales of cars
has gone down by 15 percent. As a result the production has also gone down culminating
with its impact on supply schedule; both import and local. This downturn has come at a
crucial time as most of the manufacturing had just increased their investment in the expansion
projects and vending industry had made equally huge investment to complement the capacity
expansion exercise. The local vendors have now to face the curtailed orders, which may most
hit the smaller ones with closures. All this obviously has also adversely impacted the

government revenues in substantial terms. The government has suffered a revenue loss of Rs.
One billion (9%) when September to December data is compared with last year.
In the budget 2007-08, government announced a withholding @ 5 percent on purchase of cars

which was reduced to 2.5 percent and imposed from 1st September 2007. The intension was
obviously to enhance government revenue. The current situation however, has proved a
reversal in collection of the revenue.
Last year, the ECC approved the five years policy (AIDP) for auto sector prior to
announcement of budget. Levy of such tax is a deviation from the spirit of preannounced
policy thus causing anxiety to thee auto manufactures.
The uplift in the car market is also suffering due to stringent regulations announced by State
Bank of Pakistan recently for car financing. Moreover, the cost of financing has also
increased interest rates from nearly 8 to 15 percent.
With low custom duty rates for CBUs and unprecedented import of used cars, the local
industry is putting utmost effort to survive and looking at the government not to deviate from
the pre-announced policy and ensure strict compliance of rules on import of used from cars
and stop further release of smuggled vehicles.
2.1 HISTORY:
Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota Motor
Corporation Japan (TMC) and Toyota Tsusho Corporation Japan (TTC) for assembling,
progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990.
IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. vehicles
in Pakistan through its dealership network. It manufactures and Imports Cars and enjoys a
healthy share in the market.
The company was incorporated in Pakistan as a public limited company in December 1989
and started commercial production in May 1993. The shares of company are quoted on the
stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have
25 % stake in the company equity. The majority shareholder is the House of Habib.
IMC is competing with the Honda, Nissan, Suzuki and Mitsubishi. To sustain its lead IMC
must maintain Strategic Competitive Advantage which is its Production Strength, ability to
produce quality cars with respect to low cost and Research and Development in Hybrid and
Bio Fuel Cars. But recently Company is in Stabilization mode trying to improve its functional
area, consolidation of resources and maintaining SCA.
Indus Motor is the country's second largest auto manufacturer, after the Pak Suzuki Motors.
IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an
area measuring over 105 acres, having an assembling capacity of 55,000 units per annum.
Indus Motor Companys plant is the only manufacturing site in the world where both Toyota
and Daihatsu brands are being manufactured. Its core business is to manufacture and market
UNIVERSITY OF EDUCATION OKARA CAMPUS 10

cars. In addition, the company also sells auto parts and accessories. Heavy investment was
made to build its production facilities based on state of art technologies. To ensure highest
level of productivity world-renowned Toyota Production Systems are implemented.
Its product line includes 6 variants of newly introduced Toyota Corolla, Toyota Hilux and 3
variants of Daihatsu Cuore. The company also offers six different imported vehicles namely
Toyota Camry, Prado, Land Cruiser, RAV, Hilux and Hiace. Major contributor to the revenue
is Corolla, having a contribution of 66.5% in company's sales.
2.2 PRODUCT LINE:

2.2.1 COROLLA:
Corolla includes six variants of cars which are:

1) XLi
2) GLi
3) Corolla Altis M/T
4) Corolla Altis A/T
5) 2.0D
6) 2.0D Saloon

2.2.2 CUORE:
Cuore consist of 3 variants of cars that are as under:

1) CX
2) CX CNG
3) CX A/T
2.2.3 HILUX:
Hilux consist of following car.

1) 4 x 2 S/Cab
2.3 COMPANYS PROFILE:

2.3.1 NAME OF COMPANY:
Indus Motor Company Limited.
2.3.2 INDUSTRY TYPE:
Automobile Industry (Cyclical)


2.3.3 MAJOR INVESTORS:
a) House of Habib.
b) Toyota Motor Corporation Japan. (TMC)
c) Toyota Tsusho Corporation Japan. (TTC)
2.3.4 SLOGAN:
2.3.5 VISION:
To be the most respected and successful
enterprise, delighting customers with a wide
range of products and solutions in the
automobile industry with the best people and
the best technology.
2.3.6 MISSION:
IMCs
mission
is
Companys Slogan.
reflected
in
ACT#1
Action, Commitment and Teamwork to
become #1 in Pakistan.
The Indus Team is committed to ACT
so that it achieves the #1 position in
the Auto Industry in:
Respect & Corporate image.

Customer Satisfaction.
Profitability.
Quality & Safety.
Production & Sales.
Best Employer.
2.3.7 CORE VALUES:
Customer Satisfaction.
Team Work.
Ethics and Practices.


2.3.8 STRATEGIC OBJECTIVES:
1. Achieving Market Leadership by Delivering Value to Customers:
a) Following our Customer First philosophy in manufacturing and
providing high quality vehicles and services that meet the needs of
Pakistani customers.
b) Enhancing the quality and reach of our 3S Dealership Network.
c) Employing customer insight and feedback for continuous corporate
renewal, including product development, improving service and customer
care.
2. Bringing Toyota Quality to Pakistan
a) Maximizing QRD (Quality, Reliability and Durability) by built-in
engineering.
b) Transferring technology and promoting indigenization at IMC and
Vendors.
c) Raising the bar in all support functions to meet Toyota Global Standards.
3. Optimizing Cost by Kaizen
a) Fostering a Kaizen culture and mindset at IMC, its Dealers and Vendors.
b) Implementing Toyota Production System.
c)
Removing waste in all areas and operating in the lowest cost quartile of the
industry.
4. Respecting our People

a) Treating employees as the most important sustainable competitive
resource.
b) Providing a continuous learning environment that promotes individual
creativity and teamwork.

c) Supporting equal employment opportunities, diversity and inclusion
without discrimination.
d) Building competitive value through mutual trust and mutual responsibility
between the Indus Team and the Company.

5. Becoming a Good Corporate Citizen
a) Following ethical business practices and the laws of the land.
b) Engaging in philanthropic and social activities that contribute to the
enrichment of Pakistani society, especially in areas that are strategic to
both societal and business needs e.g. Road Safety, Technical Education,
Environment Protection, etc.
c) Enhancing corporate value and respect while achieving a stable and longterm growth for the benefit of our shareholders.
2.4 COMPANYS INFORMATION:

2.4.1 BOARD OF DIRECTORS:
1) Mr. Ali S. Habib (Chairman)
2) Mr. Koji Hyodo (Vice Chairman)
3) Mr. Yutaka Arae
4) Mr. Parvez Ghias (Chief Executive Officer)
5) Mr. Farhad Zulficar
6) Mr. Mohamedali R. Habib
7) Mr. M. Ilyas Suri
8) Mr. Mitsuhiro Sonoda
9) Mr. Yosuki Tsubaki

2.4.2 BANKERS:
Askari Bank Limited.

Bank Alfalah Limited.
Barclays Bank PLC.
Bank Al-Habib Limited.
Citibank N.A.
Habib Bank Limited.
Habib Metropolitan Bank Limited.
HSBC Bank Middle East Limited.
MCB Bank Limited.
National Bank of Pakistan.
NIB Bank Limited.
Soneri Bank Limited.
Standard Chartered Bank (Pakistan) Limited.
The Royal Bank of Scotland Limited.
The Bank of Tokyo-Mitsubishi UFJ Limited.
United Bank Limited.
2.4.3 AUDITORS:
F. Ferguson & Co.
Chartered Accountants,
State Life Building 1-C Chundrigar Road, Karachi
2.4.4 LEGAL ADVISORS:
K. Brohi & Company
Mansoor Ahmed Khan & Co.
Mahmud & Co.
Sayeed & Sayeed Co.
2.4.5 REGISTRAR:

Noble Computer Services (Private) Limited,
Mezzanine Floor, House of Habib Building (Siddiqsons Tower),
3-Jinnah C. H. Society, Main Shahrah-e-Faisal, Karachi - 75350.
2.4.6 FACTORY/REGISTERED OFFICE:
Plot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi.
Phones (PABX) (92-21) 34720041-48
(UAN) (92-21) 111-TOYOTA (869-682)
Fax (92-21) 34720056
www.toyota-indus.com
2.4.7 CHIEF FINANCIAL OFFICER:
Muhammad Faisal
2.4.8 COMPANY SECRETARY:
Mustafa Hasan Lakhani
2.4.9 AUDIT COMMITTEE MEMBERS:
Mohamedali R. Habib (Committee Chairman)
Farhad Zulficar
Yutaka Arae
Mitsuhiro Sonoda
Ahson Tariq (Secretary)
3.1 SWOT ANALYSIS:

In formulating sound strategic plans, an organization must assess its internal strengths
and weaknesses in relation to the external opportunities and threats it faces. An
effective strategy will take advantage of an organizations strengths and opportunities at
the same time it minimizes or overcomes weaknesses and threats. Regular assessment
and SWOT analysis is thus given importance.
3.1.1 STRENGTHS:
Strengths are the core competencies of any organization & as far as Indus Motor
Company Limited is concerned the core competencies of this organization are:
Toyota has become the generic name in the Pakistan market.

Whenever the company launches the new car in the market it has
always the great support of the already market orientation so the car
introduced by it easily covers the introduction stage. People have a lot
20

of trust for their name and this is why Toyota is the leader in
automobile industry.
Toyota has a great strength for its 2.OD car, Toyota is the hot selling
diesel engine car in Pakistan and is the only company offering the
diesel engine in this category of cars.
The important edge over the company editors are the ample
availability of the spare parts in the markets. The price of spare parts
is comparatively low and availability all over the country has proved
to be beneficial for the company.
Toyota is a financially strong company. This can be seen by analysis

of the financial reports of the previous years.
Toyota vehicles have got a much stronger resale value than other car
in Pakistan. This is why people prefer to buy a Toyota.
Toyota vehicles are made according to the Pakistani environment. No

doubt the other cars are available but Toyota has an edge because it
has learnt various conditions of the Pakistan environment and people.
So new additions and changes are proving to be successful.
Toyota has an edge over others because it is the only automobile

company in Pakistan, while offers many variants of its vehicles. Also
Toyota offered many variants of colors.
Toyota is proud to have a successful team of competent managers and

skilled workers. Extensive training has enabled the employees to
perform outstandingly.
Toyota is the only company having the most sophisticated network of

dealerships where customers are treated by professional dealers. There
21

are twenty five dealers in Pakistan where sales, service and spare parts
are offered, leading to convenience for the customers.
3.1.2 WEAKNESSES:
Weaknesses are the lacking points which every organization must avoid in order to
make its operational effectiveness.
There is some weakness in the case of ergonomic interior of Toyota

corolla as well. The power steering is not speed sensitive and the air
conditioning system in severe heat is in-effective. Interior dimensions
are less and heavy body and small engine sometimes create problems
in hilly areas.
There are some weaknesses in the dealership network. The dealers

sometimes tend to deviate from the recommended course of action and
principles of Toyota. This results in customers complaints sometimes.
The company is besieged with internal operating problems which are

not very serious. Because of dependency on Toyotas principles
delivery of cars is done after 4-6 months. This is because CKD kits are
ordered four months before and once they arrive from Japan, assembly
and delivery takes some more time.
A lot of effort is pull into the sales forecasting because of the

changing political and economic scenarios. For this reasons inventory
has to be kept low.
The company feels that one weakness is the changing policies of the
government and also the 30% cash L/C margin. This has lead to an
adverse environment.
22

3.1.3 OPPORTUNITIES:
In fact, when we study all our weaknesses critically & deeply than we come to know
that we can convert our weaknesses into strengths. So basically these are our
opportunities. The opportunities for IMC are:
Export is a major opportunity for Toyota Indus Motors. Vehicles were

exported to Bangladesh just once in order to prove the plant capacity
and efficiency of the company. This should be started again.
The contract with the government departments e.g. Motorway Police,

Shaheen Force and the dignitaries where corolla has an opportunity to
deal with the business markets along with dealing in consumer
markets.
Toyota can do better by focusing on segments much more than

presently being done.
Toyota should also try to lower its price of Corolla in the segment
where Honda city has penetrated.
It can offer discounts to Government departments and large

organizations on purchase of its vehicles in more quantities.
Success of the manufacturing of Daihatsu cuore is a major opportunity

for Toyota to excel further careful planning and the right time to
launch the new car can prove to be a success.
3.1.4 THREATS:
Though Indus Motor Company Limited has a strong footing and maintain a good
number of loyal customer, still bank has threats in various sectors. When we see the
possible threats for IMC, the threats are prevailing such as:
23
Even though Toyota enjoys the position of being the no.1 automobile
company, still it faces some threat from competitors especially Honda.
Honda has adopted aggressive strategies for capturing the market.
Even though Toyota keeps a careful eye on the changing trends, still
the changing customer needs and trends can prove to be a threat.
A major threat is the changing political and economic scenarios of

Pakistan. Changing government policies affect the companys
performance. Devaluation of rupee adverse shifts in foreign exchange
rates, trade policies of governments is a threat. Moreover the
company is threatened by the ongoing rate of 30% cash L/C margin.
Import of re-conditioned cars is also considered as a threat for the

company.
The planned car manufacturing plants of Hyundai and Daewoo can

prove to be tough competition for Toyota if they are successful.
3.2 PEST ANALYSIS:

PEST analysis is the analysis which we tend to perform in order to analyze the external as
well as the internal environment in which organization is currently working. PEST analysis
revolves around the four things.
24

3.2.1 POLITICAL FACTORS:
Government at all levels is an important component of the general environment. No
organization or industry is immune from the various decisions made by the
government. The Pakistan Governments inconsistent policies, frequent change in
duty tariff and smuggling are main reasons of unstable market conduction. Like other
motor companies Toyota is also affected by the current changing policies of the
government.
Previously the automobile industry had to cope with more than 77000 yellow cabs
that were imported during the yellow cabs scheme and was later turned lose to the
market after a change of government and the policy scrapped.
In 1995, all the previous taxes and duties were rolled into one import duty of 30
percent on CKD kits as well as CBU vehicles. In 1996 the sales tax on CBU was
increased cost to 18 percent. In 1997 the ministry of industries and production
recommended that duty on CKD be reduced form 40 percent to 35 percent while the
car sales should be exempted from CVT and the deletion program should be
accelerated.
Just a half year back the general sales tax has been increased to 16 percent
promoting more price like. So there is going to be a Rs. 80,000 to Rs. 1,00,000
increase in vehicles.
3.2.2 ECONOMICAL FACTORS:
Government economic policies at the federal level clearly influence the ability of the
industries to survive and progress. Inflation is a major economic factor which has
affected the Pakistans Automobile industry including Toyota. The current inflation
25

rate is 21% to 23% annually prices in the auto market were deregulated in 2000 and
grew almost 20 percent to 30 percent per annum to allow Toyota to bring their prices
to profitable levels. After three years of Still Market, the market picked up.
The recent increase of 16 percent sale tax is however, going to result in a price
increase.
3.2.3 SOCIAL FACTORS:
Society holds a global or summary belief that an organization is proper and worthy of
support. Toyota takes pride in being the most trusted name all over Pakistan. Its
vehicles are regarded as a status symbol. It is the guiding principles of Toyota which
has strongly developed trust in the people.
Toyota respects the culture and customs of every nation and community and
contributes to the economic and social development through corporate activities in the
communities. Toyota believes in honoring the language and spirit of the law of every
nation and undertakes open and fair corporate activities to be a good corporate citizen
of the world. This is the reason that Toyota is proud of the fact that Pakistani society
considers Toyota vehicles to be a symbol of reliability, comfort, luxury and a have to
be trusted.
3.2.4 TECHNOLOGICAL FACTORS:
Technology is of particular importance because it has been and continues to be the
main source of increases in productivity. Despite changes in the means used to
motivate people and the variety of incentives that have been offered to stimulated
production, the resulting increase has been negligible when compared to that of
created by technology.
26

The locally produced Toyota Corolla introduced in May 1993 is now in its 17 th
year. Its excellent quality, low maintenance cost and high resale value has won it
the support and loyalty of its customers. Product diversification and a wide range
of colors has allowed customers to exercise greater options and has sustained this
threat. The total companys product range comprises of 8 variants of Corolla and
5 variants of Hilux. As a result of the Safety First commitment; for the first
time in Pakistan SRS Secondary Restrain System Airbags have been
introduced in the GLI Automatic and GLI manual models, side impact bars
which protect vehicles for side collisions have however been routinely fitted in
all Corolla variants since inception. The process of making a car more durable
includes Pitospaate Primer, total immersion in a catholic Electro-deposit
primer, which assures long term anti corrosion and an extra thick color coat that
is better than all others, ensuring that New Car look New for years to come.
3.3 BOSTON CONSULTING GROUP MATRIX:

The BCG matrix measures market attractiveness by market growth rate and it assesses the
firms ability to compete by its relative market share. The BCG matrix assumes the causal
relationship between market share and profitability. BCG matrix consists of four factors
which are:
Stars.
Question mark.
Cash cows.
Dogs.
27
3.3.1 STARS:
Toyota Corolla of IMC falls into the category of Stars. It generates large amount of
cash because of its strong relative market share, but also consume large amounts of
cash because of its high growth rate; therefore the cash in each direction
approximately nets out. However companies usually invest in star units as they are
feeling that the future of their company depends on the success or failure of that
particular unit or product.
3.3.2 CASH COWS:
If IMCs Toyota Corolla could maintain its large market share, it will become a Cash
Cow when the market growth rate would decline. The portfolio of a diversified
company always should have stars that will become the next cash cows and ensure
future cash generation. Typically needs this cash to support its rapid and significant
growth. It generates large amounts of cash for the organization and usually segments
in which management can make additional investments and earn attractive returns. In
28

case of Indus Motor Company Limited, the Hilux is a cash cow for the company
which earns a lot of cash for the company and company utilize this cash to run its
future units like Toyota Corolla.
3.3.3 QUESTION MARK:
According to Boston consulting group matrix, a question mark is such a business unit
about which you are not about the success or failure. The unit can be very successful
in the market or it can be simply being ruined of. In case of IMC the question mark is
actually the Cuore. It is due to the large competition of in this category of cars. As the
Suzuki Aulto, Mehran, Santro and some imported vehicles like Vitz are already
present in the market.
3.3.4 DOGS:
This category of BCG matrix includes the product that has no market share as well as
consuming the large amount of cash instead of generating the cash. The company
wants to dissolve that product.
3.4 TOYOTA COROLLA BCG MATRIX:

If we analyze the position of Toyota Corolla by using the Boston consulting group matrix in a
market than it will show the following result.
29
STAR
CASH COWS
2.0D
SE Saloon
2.0D Saloon
GLi
QUESTION MARK
DOGS
Xli 1.3
30
4.1 CONDENSED INCOME STATEMENT:

Indus Motor Company Limited
Condensed Income Statement
For The Year Ended June 30,
2005
2006
2007
2008
2009
(Rupees in '000)
Net Sales
27,601,034
35,236,535
39,061,226
41,423,843
37,864,604
Gross Profit
2,706,178
4,147,629
4,440,594
3,848,487
2,324,186
Operating Profit
Profit before Taxation
2,134,221
2,302,957
3,500,256
4,072,777
3,665,306
4,229,481
3,063,830
3,541,711
1,501,952
2,046,013
Net Profit
1,484,646
2,648,464
2,745,701
2,290,845
1,385,102
It is clearly seen that net sales of the company is showing an increasing trend in all the years
except that of FY 2009 which was caused due to the low productions of cars. The reason
behind low production is the instable environment of Pakistan in last year.
The gross profit is also showing the same trend up to FY 2007 but there is a massive decrease
in gross profit in FY 2008 which was due to the increase in cost of goods sold. Than gross
profit again decrease in FY 2009. It is due to the low sales of the company.
The details and trends are all discussed below in the item wise analysis of summarized
income statement of the company and the annexed notes form an integral part of this income
statement.
32

4.2
NET SALES:
2005
2006
2007
2008
2009
(Rupees in '000)
Net Sales
27,601,034
Comparative
Chain Base
35,236,535
39,061,226
41,423,843
37,864,604
7,635,501
3,824,691
2,362,617
(3,559,239)
Percentage Comparative
Chain Base
27.66%
10.85%
6.05%
2005 Base
127.66%
141.52%
150.08%
137.19%
100.00%
100.00%
100.00%
100.00%
Vertical Common Size
100.00%
-8.59%
In comparison with FY 2005, sales of FY 2006 have been increased by 7.63 billions.
Similarly in FY 2007 and FY 2008 there is an increasing trend by 3.82 billions and 2.36
billions while there is decrease in sales of 3.55 billions in FY 2009 with respect to the
preceding years.
In the term of percentage sales have increased by 27.66% in FY 2006 as compared to FY

2005. In FY 2007, as compared to FY 2006, sales increased by 10.85% whereas the increase
was 6.05% in FY 2008, as compared to FY 2007, while there is a decrease of 8.59% in sales
in FY 2009 as compared to the FY 2008. The sales have increased 41.52%, 50.08% and
37.19% in FY 2007, FY 2008 and FY 2009 as compare to FY 2005.
33
4.3 COST OF GOODS SOLD:

2005
2006
2007
2008
2009
(Rupees in '000)
C.G.S
24,894,856
Comparative
Chain Base
Chain Base
2005 Base
Vertical Common size
90.20%
31,088,906
34,620,632
37,575,356
35,540,418
6,194,050
3,531,726
2,954,724
(2,034,938)
24.88%
11.36%
8.53%
-5.42%
124.88%
139.07%
150.94%
142.76%
88.23%
88.63%
90.71%
93.86%
In FY 2006, FY 2007 and FY 2008 increase in C.G.S has been recorded with 6.19 billions,
3.53 billions and 2.95 billions with respect to the preceding year. In FY 2009 C.G.S has been
decreased by 2.03 billions as compared to FY 2008 due to the low production.
An increasing trend was recorded by 24.88%, 11.36% and 8.53% in FY 2006, FY 2007 and
FY 2008 respectively as compare to the preceding years. While C.G.S decreased by 5.42% in
FY 2009 with respect to FY 2008. As compared to FY 2005 C.G.S increased by 39.07%,
50.94% and 42.76% in FY 2007, FY 2008 and FY 2009 respectively.
There is a deceasing trend in C.G.S as a part of sales. C.G.S has decreased by 9.80%,
11.77%, 11.37%, 9.29% and 6.14% in FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009
respectively.
34
4.4 GROSS PROFIT:

2005
2006
2007
2008
2009
(Rupees in '000)
Gross Profit
2,706,178
4,147,629
4,440,594
3,848,487
2,324,186
1,441,451
292,965
(592,107)
(1,524,301)
Chain Base
53.27%
7.06%
-13.33%
-39.61%
2005 Base
153.27%
164.09%
142.21%
85.88%
11.77%
11.37%
9.29%
6.14%
Comparative
Chain Base
9.80%
G.P of FY 2006 and FY 2007 increased by 1.44 billions and 292 millions as compared to the
FY 2005 and FY 2006 respectively. In FY 2008 and FY 2009 there was a decrease of 592
millions and 1.52 billions in G.P as compared to FY 2007 and FY 2008 respectively.
G.P has been increased by 53.27% and 7.06% in FY 2006 and FY 2007 as compared to the
FY 2005 and FY 2006 respectively. While GP of FY 2008 and FY 2009 decreased by
13.33% and 39.61% with respect to preceding years respectively. As compared to FY 2005
G.P has been increased by 64.09% and 42.21%, in FY 2007 and FY 2008 respectively while
in FY 2009 the decrease of 14.12% as compared to FY 2005 was recorded.
As compared to sales, G.P has been decreased by 90.02%, 88.23%, 88.63%, 90.71% and
93.86% in FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009 respectively.
35
4.5 OPERATING EXPENSES:

2005
2006
2007
2008
2009
(Rupees in '000)
Operating Expenses
647,373
775,288
784,657
822,234
Comparative
Chain Base
75,416
127,915
9,369
37,577
Chain Base
13.19%
19.76%
1.21%
4.79%
2005 Base
113.19%
135.55%
137.19%
143.76%
1.84%
1.98%
1.89%
2.17%
571,957
2.07%
Operating expenses have been increased by 75.1 millions, 127 millions, 9.3 millions and 37.5
millions in FY 2006, FY 2007, FY 2008 and FY 2009 respectively in comparison with the
preceding years.
In terms of percentage, operating expenses have been increased by 13.19%, 19.76%, 1.21%
and 4.79% in FY 2006, FY 2007, FY 2008 and FY 2009 respectively in comparison with the
preceding years. As compared to FY 2005 increase of 35.55%, 37.19%, 43.76% was recorded
in FY 2007, FY 2008 and FY 2009 respectively.
As compare to sales, there is a significant decrease in operating expenses by 97.93%,

98.16%, 98.02%, 98.11% and 97.83% in FY 2005, FY 2006, FY2007, FY 2008 and FY 2009
respectively.
36
4.6 OPERATING PROFIT:

2005
2006
2007
2008
2009
(Rupees in '000)
Operating Profit
2,134,221
3,500,256
3,665,306
3,063,830
1,501,952
1,366,035
165,050
(601,476)
(1,561,878)
Chain Base
64.01%
4.72%
-16.41%
-50.98%
2005 Base
164.01%
171.74%
143.56%
70.37%
9.93%
9.38%
7.40%
3.97%
Comparative
Chain Base
7.73%
Operating profit is increasing from FY 2006 to FY 2007 by 1.36 billions and 165 millions in
comparison with the FY 2005 and FY 2006 respectively. While it decreased in FY 2008 and
FY 2009 by 601 millions and 1.56 billions respectively with respect to the previous years.
In FY 2006 and FY 2007 operating profit increased by 64.01% and 4.72 % respectively as
compared to FY 2005 and FY 2006. Then it decreased by 16.41% and 50.98% in FY 2008
and FY 2009 respectively as compared to FY 2007 and FY 2008. In FY 2007 and FY 2008
increase of 71.74% and 43.56 was recorded as compared to the FY 2005, while the decrease
of 29.63% was recorded on FY 2009 as compared to FY 2005.
Operating profit is 7.73% and 9.93 % of sales in FY 2005 and FY 2006 then it decreased to
9.38%, 7.40% and 3.97 % in FY 2007, FY 2008 and FY 2009 respectively.
37
4.7 OTHER OPERATING EXPENSES:

2005
2006
2007
2008
2009
348,430
306,193
156,479
135,132
26,684
(42,237)
(149,714)
Chain Base
72.41%
8.29%
-12.12%
-48.90%
2005 Base
172.41%
186.71%
164.08%
83.85%
0.91%
0.89%
0.74%
0.41%
(Rupees in '000)
Other Operating
Expenses
186,614
Comparative
Chain Base
321,746
0.68%
In FY 2006 and FY 2007 other operating expenses increased by 135 millions and 26 millions
respectively as compared to the preceding years. While the decrease of 42 millions and 149
millions was recorded in FY 2008 and FY 2009 respectively as compared to preceding years.
In terms of percentage as compared to the preceding years, in FY 2006 and FY 2007 other
operating expenses increased by 72.41% and 8.89% respectively while decreased by 12.12%
and 48.90% in FY 2008 and FY 2009 respectively. As compared to FY 2005 the other
operating expenses increased by 86.71% and 64.08% in FY 2007 and FY 2008 respectively,
while decreased by 16.15% in FY 2009.
Other operating expenses are recorded as less than 1% of the sales in all the years.
38
4.8 OTHER OPERATING INCOME:

2005
2006
2007
2008
2009
(Rupees in '000)
Other Operating
Income
1,021,212
935,290
786,834
727,080
Comparative
Chain Base
571,769
(85,922)
(148,456)
(59,754)
Chain Base
127.22%
-8.41%
-15.87%
-7.59%
2005 Base
227.22%
208.10%
175.07%
161.77%
2.90%
2.39%
1.90%
1.92%
449,443
1.63%
In FY 2006 increase of 571 millions was recorded in other operating income as compared to
the FY 2005 while the decrease by 85 millions, 148 millions and 59 millions was recorded in
and FY 2007, FY 2008 and FY2009 respectively with respect to the preceding years.
In terms of percentage other operating income has increased by 127.22% in FY 2006 as

compared to the FY 2005, while the massive decrease of 8.41%, 15.87 % and 7.59% was
recorded in FY 2007, FY 2008 and FY 2009 respectively with respect to the preceding years.
As compared to FY 2005 the other operating income increased by 108.10%, 75.07% and
61.77% in FY 2007, FY 2008 and FY 2009 respectively.
Other operating income as compared to sales was 1.63% in FY 2005 than it increased to
2.90% in FY 2006 than it decreased to 2.39% and 1.90% in FY 2007 and FY 2008
respectively. While in FY 2009 it decreased to 1.92%.
39
4.9 PROFIT BEFORE INTERST AND TAX:

2005
2006
2007
2008
2009
(Rupees in '000)
Profit before
Interest and Tax
2,397,050
4,199,722
4,252,166
3,544,471
2,072,553
1,802,672
52,444
(707,695)
(1,471,918)
Chain Base
75.20%
1.25%
-16.64%
-41.53%
2005 Base
175.20%
177.39%
147.87%
86.46%
11.92%
10.89%
8.56%
5.47%
Comparative
Chain Base
8.68%
In chain base comparison, EBIT was increased by 1.80 billions and 52 millions in FY 2006
and FY 2007 as compared to preceding years. It decreased by 707 millions and 1.47 billions
in FY 2008 and FY 2009 respectively with respect to the preceding years.
In terms of percentage, the profit increased by 75.20% and 1.25% in FY 2006 and FY 2007
respectively with respect to the preceding years. But massive decrease of 16.64% and 41.53%
was recorded in FY 2008 and FY 2009 respectively as compared to the preceding years. As
compared to FY 2005 the profit increased by 77.39% and 47.87% in FY 2007 and FY 2008
respectively, while profit decreased up to 13.54% in FY 2009.
As a part of sales, EBIT is 8.68 % in FY 2005, 11.92% in FY 2006, 10.89% in FY 2007,

8.56% in FY 2008, and 5.47% in FY 2009.
40
4.10 FINANCE COST:

2005
2006
2007
2008
2009
(Rupees in '000)
Finance Costs
126,945
22,685
2,760
26,540
Comparative
Chain Base
32,852
(104,260)
(19,925)
23,780
Chain Base
34.91%
-82.13%
-87.83%
861.59%
2005 Base
134.91%
24.11%
2.93%
28.21%
0.36%
0.06%
0.01%
0.07%
94,093
0.34%
Finance cost has increased by 32 millions in FY 2006 as compared to the FY 2005 while it
decreased by 104 millions and 19 millions in FY 2007 and FY 2008 respectively as compared
to the preceding years. While it increased by 23 millions in FY 2009 as compared to the FY
2008.
In comparison with the previous years it increased by 34.91% in FY 2006, while it decreased
by 82.13% and 87.83% in FY 2007 and FY 2008 respectively. Than massive increase of
861.59% was recorded in FY 2009. As compared to the FY 2005 finance cost decreased by
75.89%, 97.07% and 71.79% in FY 2007, FY 2008 and FY 2009 respectively.
Finance cost is recorded as less than 1% of the sales in all the years.
41
4.11 PROFIT BEFORE TAXATION:

2005
2006
2007
2008
2009
(Rupees in '000)
Profit before
Taxation
2,302,957
4,072,777
4,229,481
3,541,711
2,046,013
1,769,820
156,704
(687,770)
(1,495,698)
Chain Base
76.85%
3.85%
-16.26%
-42.23%
2005 Base
176.85%
183.65%
153.79%
88.84%
11.56%
10.83%
8.55%
5.40%
Comparative
Chain Base
8.34%
In FY 2006 and FY 2007 profit before taxation increased by 1.76 billions and 156 millions as
compared to FY 2005 and FY 2006. Then it decreased by 687 millions and 1.49 billions in
comparison with the preceding years.
Profit before tax has increased by 76.85% and 3.85% in FY 2006 and FY 2007 in comparison
with the preceding years while it decreased by 16.26% and 42.23% in FY 2008 and FY 2009
as compared to the preceding years. It increased by 83.65% and 53.79% in FY 2007 and FY
2008 respectively while it decreased by 11.16% in FY 2009 in comparison with the FY 2005.
Profit before taxation is 8.34% of sales in FY 2005. It increased to 11.56% in FY 2006, and
then it decreased to 10.83%, 8.55% and 5.40% in FY 2007, FY 2008 and FY 2009
respectively.
42
4.12 TAXATION:
2005
2006
2007
2008
2009
(Rupees in '000)
Taxation
818,311
1,424,313
1,483,780
1,250,866
660,911
Comparative
Chain Base
606,002
59,467
(232,914)
(589,955)
Chain Base
74.06%
4.18%
-15.70%
-47.16%
2005 Base
174.06%
181.32%
152.86%
80.77%
4.04%
3.80%
3.02%
1.75%
2.96%
Tax revenues have increased by 606 millions 59 millions in FY 2006 and FY 2007
respectively in comparison with the previous years. While it decreased by 232 millions and
589 millions in FY 2008 and FY 2009 respectively as compared to the preceding years.
In terms of percentage, it increased by 74.06% and 4.18% in FY 2006 and FY 2007 in

comparison with the preceding years, while it decreased by 15.70% and 47.16% in FY 2008
and FY 2009 respectively as compared to previous years. As compared to FY 2005 tax
revenues increased by 81.32% and 52.86% in FY 2007 and FY 2008 respectively, while it
decreased by 19.23% in FY 2009.
Taxation is 2.96% in FY 2005, 4.04% in FY 2006, 3.80% in FY 2007, 3.02% in FY 2008 and
1.75% in FY 2009 of sales.
43
4.13 PROFIT AFTER TAXATION:

2005
2006
2007
2008
2009
(Rupees in '000)
Profit After
Taxation
1,484,646
2,648,464
2,745,701
2,290,845
1,163,818
97,237
(454,856)
(905,743)
Chain Base
78.39%
3.67%
-16.57%
-39.54%
2005 Base
178.39%
184.94%
154.30%
93.30%
7.52%
7.03%
5.53%
Comparative
Chain Base
5.38%
1,385,102
3.66%
As compared to the previous years, net income of the company increased by 1.16 billions and
97 millions in FY 2006 and FY 2007 respectively, while it increased by 454 millions and 905
millions in FY 2008 and FY 2009 respectively.
In terms of percentage, in comparison with the preceding years the income of company
increased by 78.39% and 3.67% in FY 2006 and FY 2007 respectively, but it decreased
massively by 16.57 and 39.54% in FY 2008 and FY 2009 respectively. As compared to the
FY 2005 the increased of 84.94% and 54.30% was recorded in net income in FY 2007 and
FY 2008, while it decreased by 6.70% in FY 2009.
As a part of sales, profit was 5.38%, 7.52%, 7.03% 5.53% and 3.66% in FY2005, FY 2006,
FY 2007, FY 2008 and FY 2009 respectively.
44
5.1 CONDENSED BALANCE SHEET:

Condensed Balance Sheet
As on June 30,
2005
2006
2007
2008
2009
(Rupees in '000)
Current Assets
11,177,940
14,095,657
13,560,329
9,664,784
16,715,319
Less: Current Liabilities
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
Net Working Capital

Net Fixed Assets
3,513,878
901,035
4,651,103
1,408,314
6,149,403
1,902,912
5,885,153
3,592,271
6,830,469
3,900,977
Capital Work-in-progress
87,307
302,153
187,372
438,696
29,524
Intangible Assets
10,545
6,123
3,568
2,795
3,972
Other Non Current Assets

Net Assets Position
Non-Current Liabilities
Long Term Debt
17,690
10,221
10,869
49,563
35,731
4,530,455
6,377,914
8,254,124
9,968,478
10,800,673
54,650
120,035
210,149
532,138
503,700
Equity
4,475,805
6,257,879
8,043,975
9,436,340
10,296,973
Net Liability and Equity Position
4,530,455
6,377,914
8,254,124
9,968,478
10,800,673
The condensed balance sheet of FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009 is
giving a clear look at the companys resources and claims of outsiders.
Net assets of the company are showing an increasing trend from FY 2005 to FY 2009.
The long term debt position of the company is obvious and seems that company has a real
strong background. There was no claim of outsiders on the companys resources.
The detail of trends of balance sheet is discussed below item wise and the annexed notes are
also at the end of the report which forms an integral part of the above sheet.
46
5.2 CURRENT ASSETS:

2005
2006
2007
2008
2009
16,715,319
(Rupees in '000)
Current Assets
11,177,940
Comparative Chain Base
14,095,657
13,560,329
9,664,784
2,917,717
(535,328)
(3,895,545)
7,050,535
26.10%
-3.80%
-28.73%
72.95%
126.10%
121.31%
86.46%
149.54%
86.56%
70.30%
80.81%
Percentage Comparative Chain Base
Percentage Comparative 2005 Base
91.66%
89.09%
In comparison to the preceding years, the current assets increased in FY 2006 by 2.91 billions
and than decreased by 535 millions and 3.89 billions in FY 2007 and FY 2008 respectively,
while again increase of 7.05 billions was recorded in FY 2009.
In terms of percentage, with respect to the preceding years the increase of 26.10% was
recorded in FY 2006, while current assets decreased by 3.80% and 28.73% in FY 2007 and
FY 2008 respectively, than it increased by 72.95% in FY 2009. As compared to FY 2005,
increase of 21.31% was recorded in FY 2007, than it decreased by 13.54% in FY 2008 and
again it increased by 49.54% in FY 2009.
Current assets were 91.66% of total assets in FY 2005, 89.09% in FY 2006, 86.56% in FY
2007, 70.30% in FY 2008 and 80.81% in FY 2009.
47
5.3 CURRENT LIABILITIES:

2005
2006
2007
2008
2009
(Rupees in '000)
Current Liabilities
7,664,062
62.85%
9,444,554
7,410,926
3,779,631
9,884,850
1,780,492
(2,033,628)
(3,631,295)
6,105,219
23.23%
-21.53%
-49.00%
161.53%
123.23%
96.70%
49.32%
128.98%
59.69%
47.31%
27.49%
47.79%
As compared to the previous years, the current liabilities increased in FY 2006 by 1.78
billions and than decreased by 2.03 billions and 3.63 billions in FY 2007 and FY 2008
respectively. It again increased by 6.10 billions in FY 2009.
The percentage change was increase of 23.23% in FY 2006 than decrease of 21.53% and
49.00% in FY 2007 and FY 2008 respectively, and increase of 161.53% in FY 2009 as
compared to the preceding years. In comparison with FY 2005 the decrease of 3.30% and
50.68% was recorded in FY 2007 and FY 2008 respectively, while it increased by 28.98% in
FY 2009.
As a part of total liabilities and shareholders equity, total currents liabilities were 62.85%,
59.69%, 47.31%, 27.49% and 47.79% in FY2005, FY2006, FY 2007, FY 2008 and FY 2009
respectively.
48
5.4 TOTAL FIXED ASSETS:

2005
2006
2007
2008
2009
(Rupees in '000)
Total Fixed Assets
998,887
1,716,590
2,093,852
4,033,762
717,703
377,262
1,939,910
71.85%
21.98%
92.65%
171.85%
209.62%
10.85%
13.37%
8.19%
3,934,473
403.83%
29.34%
(99,289)
-2.46%
393.89%
19.02%
Total fixed assets were increased by 717 millions, 377 millions and 1.93 billions in FY 2006,
FY 2007 and FY 2008 as compared with FY 2005, FY 2006 and FY 2007 respectively, while
the decrease of 99 millions was recorded in FY 2009 as compared to FY 2008.
There was increase of 71.85%, 21.98% and 92.65% in FY 2006, FY 2007 and FY 2008
respectively as compared to the previous years, while the decrease of 2.46% was recorded in
FY 2009 in comparison with FY 2008. The increase of 109.62% in FY 2007, 303.83% in FY
2008 and 293.89% in FY 2009 was observed in total fixed assets as compare to the FY 2005.
In terms of total assets, total fixed assets were 8.19% in FY 2005, 10.85%in FY 2006,
13.37% in FY 2007, 29.34% in FY 2008 and 19.02 in FY 2009.
49
5.5 TOTAL ASSETS:

2005
2006
2007
2008
2009
(Rupees in '000)
Total Assets
12,194,517
15,822,468
15,665,050
13,748,109
3,627,951
(157,418)
(1,916,941)
6,937,414
Percentage Comparative Chain Base 29.75%
-0.99%
-12.24%
50.46%
20,685,523
129.75%
128.46%
112.74%
169.63%
100.00%
100.00%
100.00%
100.00%
100.00%
Total assets were increased by 3.62 billions in FY 2006 as compared to the FY 2005, while
decreasing trend of 157 millions and 1.91 billions was observed in FY 2007 and FY 2008
respectively as compared to the preceding years. It again increased by 6.93 billions in FY
2009 as compared to the FY 2008.
In percentage change an increase of 29.75% was recorded in FY 2006 as compared with

previous year, while it decreased by 0.99% and 12.24% in FY 2007 and FY 2008 respectively
as compared to the previous years. It gain increased by 50.46% in FY 2009 in comparison
with FY 2008. As compared to the FY 2005 total assets increased by 28.46%, 12.74% and
69.63% in FY 2007, FY 2008 and FY 2009 respectively.
50
5.6 LONG TERM DEBT:

2005
2006
2007
2008
2009
(Rupees in '000)
Long Term Debt
There is no long term debt of the company so there is no change in percentage also.
51
5.7 TOTAL LIABILITIES AND EQUITY:

2005
2006
2007
2008
2009
(Rupees in '000)
Total Liabilities
and Equity
12,194,517
100.00%
15,822,468
15,665,050
13,748,109
20,685,523
3,627,951
(157,418)
(1,916,941)
6,937,414
29.75%
-0.99%
-12.24%
50.46%
129.75%
128.46%
112.74%
100.00%
100.00%
100.00%
169.63%
100.00%
Total liabilities and share holders equity were increased by 3.62 billions in FY 2006 as
compared to the FY 2005, while decreasing trend of 157 millions and 1.91 billions was
observed in FY 2007 and FY 2008 respectively as compared to the preceding years. It again
increased by 6.93 billions in FY 2009 as compared to the FY 2008.
In percentage change an increase of 29.75% was recorded in total liabilities and share
holders equity in FY 2006 as compared with previous year, while it decreased by 0.99% and
12.24% in FY 2007 and FY 2008 respectively as compared to the previous years. It gain
increased by 50.46% in FY 2009 in comparison with FY 2008. In comparison with the FY
2005 total liabilities and share holders equity increased by 28.46%, 12.74% and 69.63% in
FY 2007, FY 2008 and FY 2009 respectively.
52
6.1 SHORT TERM DEBT PAYING ABILITY:

6.1.1 NET WORKING CAPITAL:
Net
working
capital
is
financial
metric
which
represents operating
liquidity available to a business. Along with fixed assets such as plant and equipment,
working capital is considered a part of operating capital. It is calculated by following
formula:
Current Assets - Current Liabilities
2005
2006
2007
2008
2009
3,513,878
4,651,103
6,149,403
5,885,153
6,830,469
Interpretation:
Working capital of the company has always been maintained very high up to
FY 2007. The company then reduced it in FY 2008 to avoid excessive working
capital but in FY 2009 it again increased which shows company has sufficient
capital to pay its liabilities.

6.1.2 CURRENT RATIO:
The current ratio is a financial ratio that measures whether or not a firm has enough
resources to pay its debts over the next 12 months. It compares a firm's current
assets to its current liabilities. It is expressed as follows:
Current Assets
Current Liabilities
2005
2006
2007
2008
2009
1.46 : 1
1.49 : 1
1.83 : 1
2.56 : 1
1.69 : 1
Interpretation:
Current Ratio of the company has a increasing trend up to FY 2008. It was minimum
in FY 2005. As the graph shows that current ratio remains positive in last five years
so the company has the ability to pay its current liabilities with its current assets.
Current ratio was maximum in FY 2008 than once again it decreased in FY 2009 due
to increase in liabilities

6.1.3 ACID TEST RATIO:
A stringent test that indicates whether a firm has enough short-term assets to cover its
immediate liabilities without selling inventory. The acid-test ratio is far more
strenuous than the working capital ratio, primarily because the working capital ratio
allows for the inclusion of inventory assets.
Current Assets - Inventory
Current Liabilities
2005
2006
2007
2008
2009
1.05 : 1
1.07 : 1
1.44 : 1
1.86 : 1
1.28 : 1
Interpretation:
Quick ratio of the company has an increasing trend up to FY 2008 showing the
adequacy in paying off the current liabilities. Then it decreased slightly in FY 2009.
But as a whole the graph shows that company has a tendency that the most liquid
assets of the company are in a position to payoff the current liabilities.

6.1.4 CASH RATIO:
The cash ratio is a formula for measuring the liquidity of the company by calculating
the ratio between all cash and cash equivalent assets and all the current liabilities. The
formula for calculating the cash ratio is as under:
Marketable Securities + Cash
Current Liabilities
2005
2006
2007
2008
2009
0.88 : 1
0.79 : 1
1.15 : 1
1.16 : 1
0.98 : 1
Interpretation:
Cash ratio of the company was quite good in FY 2005 and FY 2006, than it increased
in FY 2007 and FY 2008 showing that company in not using cash to its best
advantage. In FY 2009 the decrease in cash ratio shows that company has now started
using the cash up to its maximum advantage.

6.1.5 CASH FLOW FROM OPERATIONS RATIO:
Cash flow from operations or operating cash flow ratio measure of how well current
liabilities are covered by the cash flow generated from a company's operations. The
formula for calculating the ratio is:
Cash from Operations
Current Liabilities
2005
2006
2007
2008
2009
0.12 : 1
0.28 : 1
0.38 : 1
(0.21) : 1
0.66 : 1
Interpretation:
Cash flow from operations ratio of the company was low in FY 2005 showing that the
operating profit of the company was not meeting the need of short term liabilities
well. Ratio increased in FY 2006 and FY 2007. But the company was facing the
problems in FY 2008 of meeting the need of current liabilities from its operating
profit due to the negative cash flow. In FY 2009 the ratio again increased and now the
company is in a position to meet its short term cash needs well in time.
6.2 LONG TERM DEBT PAYING ABILITY:

6.2.1 TIME INTEREST EARNED RATIO:
The times interest earned ratio is an Indicator of a companys ability to meet the
interest payments on its debt. The times interest earned calculation is a corporations
income before interest and income tax expense, divided by interest expense. The
calculating method is:
Earning before Interest and Tax
Interest Expense
2005
2006
2007
2008
2009
25.48
33.08
187.44
1,284.23
78.09
Interpretation:
The times interest earned ratio of the company was very low in FY 2005 and FY
2006. This is due to the high interest expense of the company. In FY 2007 and FY
2008 a increasing trend is shown in the ratio which shows that company has reduced
its interest expenses. But in FY 2009, after a massive decrease, company is still able
to generate 78 times the expense of interest from its operations.

6.2.2 FIXED CHARGED COVERAGE RATIO:
A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as
interest and leases. A ratio calculated by dividing profits before payment of interest
and income taxes by interest paid on bonds and other long-term debt. It is calculated
as the following:
Interest + Lease Payment + Principal Payment
2005
2006
2007
2008
2009
22.60
32.10
187.44
1,284.23
78.09
Interpretation:
Fixed charged coverage ratio of the company is mostly same as time interest earned
ratio. It shows that company has no long term finances on which company has to pay
interest. Company has the liability against leased assets in FY 2005 and FY 2006.
Figure shows the increasing trend from FY 2005 to FY 2008 which means that
company has better position to pay its debt expenses. Than it decreased in FY 2009
but still company is in good position.

6.2.3 DEBT RATIO:
The ratio gives an idea to the leverage of the company along with the potential risks
the company faces in terms of its debt-load. A low percentage means that the
company is less dependent on leverage. The lower the percentage, the less leverage a
company is using and the stronger its equity position. In general, the higher the ratio,
the more risk that company is considered to have taken on. The formula for
calculating the debt ratio is:
Total Liabilities
Total Assets
)100
2005
2006
2007
2008
2009
63.30%
60.45%
48.65%
31.36%
50.22%
Interpretation:
Debt ratio of the company is significantly decreasing from FY 2005 to FY 2008. It
reached to its lowest of 31.36% in FY 2008 but than there was increase in FY 2009.
The decreasing trend of the debt ratio is due to the decrease in total liabilities. That is
beneficial for company. But in FY 2009 the liabilities of the company increased but
the assets of the company also increased.

6.2.4 DEBT EQUITY RATIO:
This ratio indicates how much the company is in debt by comparing what is owed to
what is owned. A high debt to equity ratio could indicate that the company may be
over-leveraged, and should look for ways to reduce its debt.
Long Term Debt

Share Holder's Equity
)100
2005
2006
2007
2008
2009
0.00%
0.00%
0.00%
0.00%
0.00%
Interpretation:
The figure shows that company had enough equity to serve over period of time. The
graph shows the strategy of the company that company is totally based on equity.
Debt is not taken to run the operations of the company.

6.2.5 DEBT TO TANGIBLE NETWORTH:
Debt to tangible net worth ratio measures the degree of protection that exists for
creditors. The lower the ratio the better is for company. The value is computed by
dividing total liabilities by total equity minus intangible assets. The formula is:
Total Liabilities
Owner's Equity - Intangible Assets
)100
2005
2006
2007
2008
2009
172.86%
152.99%
94.78%
45.71%
100.93%
Interpretation:
Debt to tangible net worth ratios shows the decreasing trend from FY 2005 to FY
2008 which is very good for the company. The decrease in the ratio is due to the
decrease in the intangible assets of the company. The ratios increased once again FY
2009 due to increase in intangible assets of the company.
6.3 SHORT TERM LIQUIDITY:

6.3.1 DAYS SALES IN A/R:
The ratios measure of the average number of days that a company takes to collect
revenue after a sale has been made. The formula of the ratio is:
Gross A/R
Net Sales / 365 days
2005
2006
2007
2008
2009
13.09
24.89
15.86
18.90
26.02
Interpretation:
Accounts receivable turnover in days is 13 days in FY 2005 and then it increased in
FY 2006
up to 25 days but then it decreased to 16 days in FY 2007. After this it
showed an increasing trend up to FY 2009. This shows that receivables management

of the company is not improving as compared to the previous years and 7 days have
been increased in this manner in FY 2009 as compared to the FY 2008.

6.3.2 ACCOUNTS RECEIVABLE TURNOVER:
Measures the number of times accounts receivable are collected during the year. This
ratio measures the efficiency of credit and collection policies and the quality of
outstanding average accounts receivable. The formula of the ratio is:
Net Sales
Gross A/R
2005
2006
2007
2008
2009
27.89
14.66
23.01
19.32
14.03
Interpretation:
Accounts receivable turnover of the company was maximum in FY 2005 i.e. 27.89
times. Than it decreased to 14.66 times in FY 2006. Once again increase was recorded
in FY 2007 of 23.01 times. Than decreasing trend was recorded in FY 2008 and FY
2009. This shows that company in not managing its receivable in better ways as
compared to the previous years. Company is collecting receivable only 14.03 times in
FY 2009 in comparison with the previous years. This is all due to the decrease in the
volume of sales and increase in trade receivable.

6.3.3 DAYS SALES IN INVENTORY:
A financial measure of a company's performance that gives investors an idea of how
long it takes a company to turn its inventory into sales. Generally, the lower (shorter)
the days sale in inventory is the better. It can be calculated by following formula:
Ending Inventory
Cost of Goods Sold / 365 days
2005
2006
2007
2008
2009
11.80
15.55
5.57
10.92
14.20
Interpretation:
Days sales in inventory shows and increasing trend of 4 day in FY 2007 as compared
to the previous year. Than it decreased to 5.57 days in FY 2007. After this increase is
recorded in FY 2007 and FY 2008. Company is taking 14.20 days to convert its
inventory into sales in FY 2009, while company was taking 10.92 days in FY 2008.
The inventory management was best in FY 2007 in which company was taking 5.57
days.

6.3.4 INVENTORY TURNOVER:
The inventory turnover is an equation that measures the number of times inventory is
sold or used over in a period such as a year. The formula is expressed as follow:
Cost of Goods Sold
Average Inventory
2005
2006
2007
2008
2009
42.20
29.20
37.38
45.49
28.36
Interpretation:
In FY 2005, inventory turnover was 42.20 times but then it decreased in FY 2006. In
FY 2007 and FY 2008 it increased. In FY 2009, there was a decrease in inventory
turnover and it reached to 28.36 times. The reason behind a low turnover is the
increase in cost of sales. The cost of sales showed a massive increase because of
increased cost of raw material.
6.4 PROFITABILITY INDEX:

6.4.1 NET PROFIT MARGIN:
A ratio of profitability calculated as net profits divided by net sales. It measures
how much out of every dollar of sales a company actually keeps in earnings. The
formula to calculate the net profit margin is:
Net Income
Net Sales
)100
2005
2006
2007
2008
2009
5.38%
7.52%
7.03%
5.53%
3.66%
Interpretation:
Net profit of the company shows an increasing trend in up to FY 2006. Than from FY
2007 to FY 2009 it shows the decrease in the net profit. Net profit is minimum in FY
2009 i.e.3.66% as compared to the previous years.

6.4.2 TOTAL ASSETS TURNOVER:
A financial ratio that indicates the effectiveness with which a firm's management uses
its assets to generate sales. A relatively high ratio tends to reflect intensive use of
assets. The formula for calculating the ratio is:
Net Sales
Total Assets
2005
2006
2007
2008
2009
2.26
2.23
2.49
3.01
1.83
Interpretation:
The ratio has decreased to 2.23 in FY 2006 from 2.26 in FY 2005. Then it showed a
very good increase in FY 2007 and FY 2008 and reached to 2.49 and 3.01
respectively. But once again ratio decreased to 1.83 in FY 2009. The reason behind
this decrease is the decrease in volume of sales.

6.4.3 RETURN ON ASSETS:
An indicator of how profitable a company is relative to its total assets. ROA gives an
idea as to how efficient management is at using its assets to generate earnings. The
formula for calculating the ratio is:
Net Income
Total Assets
)100
2005
2006
2007
2008
2009
12.17%
16.74%
17.53%
16.66%
6.70%
Interpretation:
The ratio has a increasing trend up to FY 2007. This increase is due to the increase in
total assets. And then it showed the decreasing trend in FY 2008 and FY 2009. The
decrease in the ratio is FY 2007 was due to the decrease in total assets as compared to
the previous years while the reason of decrease in the FY 2009 is the decrease in the
net income of the company.

6.4.4 OPERATING INCOME MARGIN:
A ratio used to measure a company's pricing strategy and operating efficiency.
Operating margin is a measurement of what proportion of a company's revenue is left
over after paying for variable costs of production such as wages, raw materials, etc.
The formula for calculating the ratio is:
Operating Income
Net Sales
)100
2005
2006
2007
2008
2009
7.73%
9.93%
9.38%
7.40%
3.97%
Interpretation:
The operating income margin of the company has an increasing trend up to FY 2006. But
then it decreased slightly in FY 2007 to 9.38% from 9.93% in FY 2006. The trend remains
decreasing in FY 2008 and FY 2009. The decrease in last two years is due to the decrease in
operating profit of the company.

6.4.5 OPERATING ASSETS TURNOVER:
A financial ratio that indicates the effectiveness with which a firm's management uses
its operating assets to generate sales. The calculation technique for the ratio is:
Net Sales
Operating Assets
2005
2006
2007
2008
2009
30.63
25.02
20.53
11.53
9.71
Interpretation:
The turnover is showing a decreasing trend up to FY 2009. The reason behind the
trend is the increase in operating assets.

6.4.6 RETURN ON OPERATING ASSETS:
An indicator of how profitable a company is relative to its operating assets. Return on
operating assets gives an idea as to how efficient management is at using its operating
assets to generate earnings. The ratio is calculated as follow:
Net Income
Operating Assets
)100
2005
2006
2007
2008
2009
164.77%
188.06%
144.29%
63.77%
35.51%
Interpretation:
The ratio has a increasing trend up to FY 2006. This increase is due to the increase in
operating assets. And then it showed the decreasing trend in FY 2007, FY 2008 and
FY 2009. The reason behind the decrease in the ratio is decrease in the net income of
the company.

6.4.7 SALES TO FIXED ASSETS:
Sales to fixed assets ratio measures a company's ability to generate net sales from
fixed asset investments specifically property, plant and equipment. A higher the ratio
shows that the company has been more effective in using the investment in fixed
assets to generate revenues. The ratio is calculated by following formula:
Net Sales
Fixed Assets
2005
2006
2007
2008
2009
27.63
20.53
18.66
10.27
9.62
Interpretation:
The ratio has shown a decreasing trend from FY 2005 to FY 2009. The ratio was
highest in FY 2005 i.e. 27.63 and lowest in FY 2009 i.e. 9.62. It is all because of the
greater increase in fixed assets as compared to the increase in sales volume of the
company. This all shows that company is not making productive use of its fixed assets
by generating good volume of sales.

6.4.8 RETURN ON EQUITY:
The amount of net income returned as a percentage of shareholders equity. Return on
equity measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested. The formula for the ratio is:
Net Income
Total Equity
)100
2005
2006
2007
2008
2009
33.17%
42.32%
34.13%
24.28%
13.45%
Interpretation:
Return on equity of the company shows an increasing trend in FY 2006 as compared
to the FY 2005. The increase was due to the increase in total equity of the company.
Than it shows a decreasing trend from FY 2007 to FY 2009. Here total equity is still
increasing but the decreasing trend is due to the decrease in net income of the
company.

6.4.9 GROSS PROFIT MARGIN:
A financial metric used to assess a firm's financial health by revealing the proportion
of money left over from revenues after accounting for the cost of goods sold. Gross
profit margin serves as the source for paying additional expenses and future savings.
It can be calculated as follow:
Gross Profit
Net Sales
)100
2005
2006
2007
2008
2009
9.80%
11.77%
11.37%
9.29%
6.14%
Interpretation:
The gross shows an increasing trend up to FY 2006. Than there is a decrease in gross
profit in FY 2007 and trend remains same in FY 2008 and FY 2009. The decrease in
FY 2008 was due to the increase in cost of goods sold. While the decrease in FY 2009
is due to the low sales of the company.
6.5 INVESTORS ANALYSIS:

6.5.1 EARNING PER SHARE:
The portion of a company's profit allocated to each outstanding share of common
stock. Earnings per share serve as an indicator of a company's profitability. It is
calculated as follow:
Net Income
No. of Equity Shares
2005
2006
2007
2008
2009
18.89
33.70
34.93
29.15
17.62
Interpretation:
EPS of the company has increasing trend from FY 2005 to FY 2007. It is due to the
high income earned by the company. Than suddenly EPS decreased in FY2008 and
FY 2009 rapidly. This decrease in EPS shows that company has low earnings in last
two years as compared to the previous years.

6.5.2 PRICE EARNING RATIO:
The price earning ratio is a way to show how a companys earning relate to a stock
price. The higher the price earning the more earnings growth investors are expecting
and the higher premium they are willing to pay for that anticipated growth. The
formula for the ratio is:
Market Price Per Share
Earning Per Share
2005
2006
2007
2008
2009
4.76
5.67
8.75
6.86
6.11
Interpretation:
The price earning ratios shows an increasing trend from FY 2005 to FY 2009. This
increase is due to the increase in EPS. Than ratio decreased in FY 2008 and FY 2009.
The decrease in the price earning ratio is due to decrease in EPS. But the decrease in
market price of share is also recorded.

6.5.3 DIVIDEND PAYOUT RATIO:
The dividend payout ratio measures what a companys payout to investors in the form
of dividend. The ratio can be calculated by the following formula:
Dividend Per Share

Earning Per Share
)100
2005
2006
2007
2008
2009
52.94%
35.61%
37.22%
36.02%
56.75%
Interpretation:
The dividend payout ratio of the company is high in the FY 2005 due to the low EPS.
Than it remains stable in FY 2006, FY 2007 and FY 2008 because of almost same
dividend per share of the company in these years. In FY 2009 the ratio decrease due
to the decrease in EPS of the company in that year.

6.5.4 DIVIDEND YIELD RATIO:
The dividend yield ratio allows investors to compare the latest dividend they received
with the current market value of the share as an indictor of the return they are earning
on their shares. The formula for calculating the ratio is:
Dividend Per Common Share
)100
2005
2006
2007
2008
2009
11.11%
6.28%
4.26%
5.25%
9.28%
Interpretation:
The trend is negative in this ratio up to FY 2007 because of the increase in the prices
of the shares up to FY 2007. In FY 2008 and FY 2009 ratio shows increasing trend.
This increase is due to the decrease in the market price of share in those years.
CONCLUSION
Indus Motor Company, with support from Toyota Motor Corporation has worked closely
with its 62 local vendors for increased localization and technology transfer. The company has
expanded its dealership network across Pakistan to 29 dealerships and this will increase
further in the coming years.
IMCs products, renowned for their quality, durability, safety, fuel economy and resale value,
are appreciated by customers in Pakistan. There has been high demand for the Corolla which
is the market leader in this segment. Pakistan is the highest producer of Corolla in Asia.
IMC expect 2009/10 to be a better year but a critical one for sustainable growth and
development of Pakistans economy.
Profit margins are still under pressure due to foreign currency fluctuations.
IMC is working on definitive plans to expand dealer network and launch new
CKD/CBU products.
IMC will do utmost to optimize costs without compromising on quality and delivery.
IMC has improved its market share in a declining market but will continue to remain
aggressive, focused and innovative in their marketing activities coupled with
dealership improvements.
It is essential for the government to effectively address the following challenges concerning
consolidation of macroeconomic stability:
Mitigating the effects of the global economic crisis, in particular on manufacturing

and exports.
Implementing tax policy and administration reforms and managing the security issues
engulfing the nation;
Make a concrete plan to revisit the AIDP and achieve implementation recognizing the
recommendations made by OEMs and the Pakistan Automobile Manufacturers
Association.
REFRENCES
1. Indus Motor Company Limited Annual Report 2005
6. James C. Van Horn, John M. Wachowicz, Jr (1992) Fundaments of Financial
Management, 12th Edition

7. http://www.accaglobal.com
8. http://www.toyota-indus.com
9. http://economicpakistan.wordpress.com/2009/02/01/automobile-industry/
10. http://www.wisegeek.com/what-is-trend-analysis.htm
11. http://www.finpipe.com/equity/finratan.htm
12. http://www.zenwealth.com/BusinessFinanceOnline/RA/RatioAnalysis.html
13. http://www.quickmba.com/strategy/swot/
14. http://www.netmba.com/finance/financial/ratios/
15. http://cbdd.wsu.edu/kewlcontent/cdoutput/TOM505/page26.htm
16. http://www.financialmodelingguide.com/financial-ratios/financial-ratio-limitations/
17. http://www.companypartners.com/content/resource/understanding-financial-ratios#q7
18. http://www.stocktrades.ca/stock-picking/limitations-of-financial-ratios/
19. http://www.referenceforbusiness.com/management/Pr-Sa/SWOT-Analysis.html
20. http://fmaccounting.com/basic-understanding-of-the-swot-%20analysis/
21. http://www.pama.org.pk/historicaldata.htm
22. http://www.businessplans.org/ratios.html
23. http://dictionary.reference.com/browse/acid-test+ratio?jss=1

24. http://www.opfblog.com/8447/inflation-and-its-impact-on-the-pakistan-economy/
25. http://fingad.duedee.com/2008/7/26/Indus-Motors-Company-Limited------
Review/37451/
26. http://www.kitchaloo.com/definitions/investing-definitions/define-net-profit-ratio
27. http://www.valuebasedmanagement.net/methods_roce.html
28. http://financial-dictionary.thefreedictionary.com/Return+on+equity
29. http://www.vitalentusa.com/learn/turnover.php
30. http://www.investopedia.com/terms/g/gearingratio.asp
31. http://www.investopedia.com/terms/e/eps.asp
32. http://moneyterms.co.uk/interest_cover/
33. http://www.egmcartech.com/2009/01/21/toyota-beats-gm-to-become-the-worlds-
largest-automaker/
34. http://www.toyota-indus.com/company/history.asp
35. http://www.toyota-indus.com/concern/environment.asp
36. http://www.toyota-indus.com/concern/default.asp
37. http://www.brecorder.com/index.php?id=948832&currPageNo=1&query=&search=&
term=&supDate
38. http://findarticles.com/p/articles/mi_hb092/is_n9_v28/ai_n28693653/
39. http://www.mindbranch.com/listing/product/R302-1104.html
40. http://www.thenews.com.pk/daily_detail.asp?id=134844
41. http://www.pakistaneconomist.com/issue2000/issue19&20/i&e7.html

Annexure I

Summarized Income Statement
2005
2006
2007
2008
2009
(Rupees in '000)
Sales
27,601,034
35,236,535
39,061,226
41,423,843
37,864,604
21561543
26,677,026
27,846,974
29,654,126
29,789,139
475,117
607,661
643,887
578,773
523,311
149,174
215,007
229,973
290,297
310,377
1,760
1,732
1,833
10,114
3,137
64,519
86,301
84,910
98,800
63,221
260,030
346,626
321,653
410,968
732,376
592
334
797
406
383
11,741
16,021
17,294
11,714
10,555
Transportation
2,289
3,033
1,913
2,154
1,063
Insurance
9,272
15,766
19,168
19,423
26,841
Vehicle running
4,533
5,068
4,812
5,932
10,109
Communication
Printing, stationery and office
supplies
2,684
4,128
4,410
6,675
5,895
3,079
3,211
3,006
3,819
2,084
90
53
288
119
75
Fuel and power
88,491
88,024
125,738
107,121
121,542
Running royalty
184,203
220,920
246,314
278,566
485,092
39,008
29,863
15,968
21,552
20,547
4,572
3,058
1,836
2,211
Raw material consumed

Stores and spares consumed
Salaries, wages and other
benefits
Rent, rate and taxes
Repairs and maintenance
Depreciation
Legal and professional
Travelling
Subscription
Technical fee
Parts development
Staff catering, transport and
87

uniforms
82,812
104,726
105,501
102,413
17
3,314
16,737
21,225
11,638
104,553
106,130
95,520
64,533
71,959
(106,130)
(95,520)
(64,533)
(71,959)
(95,076)
22,862,256
28,425,858
29,740,106
31,629,503
32,200,995
374,806
805,061
1,324,142
528,333
1,123,784
Purchases
2,462,855
3,182,129
4,084,717
6,541,304
3,597,898
Closing stock
(805,061)
(1,324,142)
(528,333)
(1,123,784)
(1,382,259)
24,894,856
31,088,906
34,620,632
37,575,356
35,540,418
2,706,178
4,147,629
4,440,594
3,848,487
2,324,186
Distribution Expenses
294,304
404,917
509,986
487,373
469,985
Administration Expenses
Operating Expenses
277,653
242,456
265,302
297,284
352,249
571,957
647,373
775,288
784,657
822,234
2,134,221
3,500,256
3,665,306
3,063,830
1,501,952
186,614
321,746
348,430
306,193
156,479
1,947,607
3,178,510
3,316,876
2,757,637
1,345,473
449,443
1,021,212
935,290
786,834
727,080
2,397,050
4,199,722
4,252,166
3,544,471
2,072,553
94,093
126,945
22,685
2,760
26,540
2,302,957
4,072,777
4,229,481
3,541,711
2,046,013
818,311
1,424,313
1,483,780
1,250,866
660,911
1,484,646
2,648,464
2,745,701
2,290,845
1,385,102
18.89
33.70
34.93
29.15
17.62
Staff training
Opening work-in-process
Closing work-in-process
Cost of goods manufactured
Opening stock
Cost of Goods Sold

Gross Profit
Operating Profit
Other Operating Expenses
Other Operating Income
Profit before Interest and

Tax
Finance Costs

Taxation
Profit After Taxation
Earning Per Share
88

Annexure I.I

Comparative Chain Base Income Statement
2006
2007
2008
2009
(Rupees in '000)
Sales
7,635,501
3,824,691
2,362,617
(3,559,239)

5,115,483
132,544
1,169,948
36,226
1,807,152
(65,114)
135,013
(55,462)
65,833
14,966
60,324
20,080
(28)
101
8,281
(6,977)
21,782
(1,391)
13,890
(35,579)
Depreciation
86,596
(24,973)
89,315
321,408

Travelling
(258)
4,280
463
1,273
(391)
(5,580)
(23)
(1,159)
Transportation
Insurance
744
6,494
(1,120)
3,402
241
255
(1,091)
7,418
Vehicle running
Communication
supplies
535
1,444
(256)
282
1,120
2,265
4,177
(780)
132
(205)
813
(1,735)
(37)
235
(169)
(44)
Fuel and power

Running royalty
(467)
36,717
37,714
25,394
(18,617)
32,252
14,421
206,526
Technical fee
(9,145)
(13,895)
5,584
(1,005)
Parts development
(1,514)
(1,222)
375
(2,211)
Staff catering, transport and uniforms
82,812
21,914
775
(3,088)
Staff training
Others
3,297
4,171
13,423
11,592
4,488
(9,449)
(9,587)
(3,119)
1,577
(10,610)
(30,987)
7,426
10,610
30,987
(7,426)
(23,117)
5,563,602
1,314,248
1,889,397
571,492
Salaries, wages and other benefits

Subscription
89

Opening stock
430,255
519,081
(795,809)
595,451
Purchases
719,274
902,588
2,456,587
(2,943,406)
(519,081)
795,809
(595,451)
(258,475)
Cost of Goods Sold
6,194,050
3,531,726
2,954,724
(2,034,938)
Gross Profit
1,441,451
292,965
(592,107)
(1,524,301)
110,613
105,069
(22,613)
(17,388)
Operating Expenses
(35,197)
22,846
31,982
54,965
75,416
127,915
9,369
37,577
1,366,035
165,050
(601,476)
(1,561,878)
135,132
26,684
(42,237)
(149,714)
1,230,903
138,366
(559,239)
(1,412,164)
571,769
(85,922)
(148,456)
(59,754)
1,802,672
52,444
(707,695)
(1,471,918)
32,852
(104,260)
(19,925)
23,780
1,769,820
156,704
(687,770)
(1,495,698)
606,002
59,467
(232,914)
(589,955)
1,163,818
97,237
(454,856)
(905,743)
15
(6)
(12)
Closing stock
Operating Profit
Profit before Interest and Tax

Finance Costs

Taxation
Earning Per Share
90
Annexure I.II

Percentage Comparative Chain Base Income Statement
2006
2007
2008
2009
(Rupees in '000)
Sales
27.66%
10.85%
6.05%
-8.59%
23.73%
4.39%
6.49%
0.46%

27.90%
44.13%
-1.59%
5.96%
6.96%
5.83%
-10.11%
26.23%
451.77%
-9.58%
6.92%
-68.98%
33.76%
-1.61%
16.36%
-36.01%
Depreciation
33.30%
-7.20%
27.77%
78.21%
-43.58%
36.45%
138.62%
7.95%
-49.06%
-32.27%
-5.67%
-9.89%
Transportation
32.50%
-36.93%
12.60%
-50.65%
Insurance
Vehicle running
Communication
70.04%
11.80%
53.80%
21.58%
-5.05%
6.83%
1.33%
23.28%
51.36%
38.19%
70.41%
-11.69%
4.29%
-6.38%
27.05%
-45.43%
-41.11%
443.40%
-58.68%
-36.97%
-0.53%
19.93%
42.85%
11.49%
-14.81%
13.09%
13.46%
74.14%
-23.44%
-46.53%
34.97%
-4.66%
-33.11%
#DIV/0!
19394.12%
-39.96%
26.46%
405.04%
20.42%
0.74%
26.81%
-100.00%
-2.93%
-45.17%
372.74%
219.13%
-55.97%
-41.96%
1.51%
-10.00%
-32.44%
11.51%
-10.00%
-32.44%
11.51%
32.13%

Opening stock
24.34%
114.79%
4.62%
64.48%
6.35%
-60.10%
1.81%
112.70%
Purchases
29.20%
28.36%
60.14%
-45.00%
Closing stock
64.48%
-60.10%
112.70%
23.00%
Cost of Goods Sold
24.88%
11.36%
8.53%
-5.42%
Gross Profit
53.27%
7.06%
-13.33%
-39.61%
37.58%
-12.68%
25.95%
9.42%
-4.43%
12.05%
-3.57%
18.49%

Travelling
Printing, stationery and office supplies

Subscription
Fuel and power
Running royalty
Technical fee
Parts development
Staff training
Others
91

Operating Expenses
13.19%
19.76%
1.21%
4.79%
64.01%
4.72%
-16.41%
-50.98%
72.41%
8.29%
-12.12%
-48.90%
63.20%
4.35%
-16.86%
-51.21%
127.22%
-8.41%
-15.87%
-7.59%
75.20%
1.25%
-16.64%
-41.53%
34.91%
-82.13%
-87.83%
861.59%
76.85%
3.85%
-16.26%
-42.23%
74.06%
4.18%
-15.70%
-47.16%
78.39%
3.67%
-16.57%
-39.54%
Earning Per Share
78.40%
3.65%
-16.55%
-39.55%
Operating Profit
Finance Costs

Taxation
92
Annexure I.III

Percentage Comparative 2005 Base Income Statement
2006
2007
2008
2009
(Rupees in '000)
Sales
127.66%
141.52%
150.08%
137.19%
123.73%
129.15%
137.53%
138.16%

127.90%
144.13%
98.41%
135.52%
154.16%
104.15%
121.82%
194.60%
574.66%
110.14%
208.06%
178.24%
133.76%
131.60%
153.13%
97.99%
Depreciation
133.30%
123.70%
158.05%
281.65%

Travelling
56.42%
136.45%
134.63%
147.30%
68.58%
99.77%
64.70%
89.90%
Transportation
132.50%
83.57%
94.10%
46.44%
Insurance
Vehicle running
Communication
supplies
170.04%
111.80%
153.80%
206.73%
106.15%
164.31%
209.48%
130.86%
248.70%
289.48%
223.01%
219.63%
104.29%
97.63%
124.03%
67.68%
58.89%
320.00%
132.22%
83.33%
99.47%
119.93%
142.09%
133.72%
121.05%
151.23%
137.35%
263.35%
Technical fee
76.56%
40.94%
55.25%
52.67%
Parts development
66.89%
40.16%
48.36%
0.00%
#DIV/0!
#DIV/0!
#DIV/0!
19494.12% 98452.94% 124852.94%
472.74% 1508.67%
664.25%
#DIV/0!
68458.82%
385.52%
Subscription
Fuel and power
Running royalty

Staff training
Others
101.51%
91.36%
61.72%
68.83%
90.00%
60.81%
67.80%
89.58%

Opening stock
124.34%
214.79%
130.08%
353.29%
138.35%
140.96%
140.85%
299.83%
Purchases
129.20%
165.85%
265.60%
146.09%
Closing stock
164.48%
65.63%
139.59%
171.70%
Cost of Goods Sold
124.88%
139.07%
150.94%
142.76%
Gross Profit
153.27%
164.09%
142.21%
85.88%
137.58%
173.29%
165.60%
159.69%
93

Operating Expenses
87.32%
95.55%
107.07%
126.87%
113.19%
135.55%
137.19%
143.76%
164.01%
171.74%
143.56%
70.37%
172.41%
186.71%
164.08%
83.85%
163.20%
170.31%
141.59%
69.08%
227.22%
208.10%
175.07%
161.77%
175.20%
177.39%
147.87%
86.46%
134.91%
24.11%
2.93%
28.21%
176.85%
183.65%
153.79%
88.84%
174.06%
181.32%
152.86%
80.77%
178.39%
184.94%
154.30%
93.30%
Earning Per Share
178.40%
184.91%
154.31%
93.28%
Operating Profit

Finance Costs

Taxation
94
Annexure
I.IV

Comparative Vertical Common Size Income Statement
2005
2006
2007
2008
2009
(Rupees in '000)
Sales
100.00%
100.00%
100.00%
100.00%
100.00%
78.12%
1.72%
0.54%
75.71%
1.72%
0.61%
71.29%
1.65%
0.59%
71.59%
1.40%
0.70%
78.67%
1.38%
0.82%
0.01%
0.00%
0.00%
0.02%
0.01%
0.23%
0.24%
0.22%
0.24%
0.17%
Depreciation
0.94%
0.00%
0.98%
0.00%
0.82%
0.00%
0.99%
0.00%
1.93%
0.00%
Travelling
0.04%
0.05%
0.04%
0.03%
0.03%
Transportation
Insurance
Vehicle running
0.01%
0.03%
0.02%
0.01%
0.04%
0.01%
0.00%
0.05%
0.01%
0.01%
0.05%
0.01%
0.00%
0.07%
0.03%
Communication
supplies
0.01%
0.01%
0.01%
0.02%
0.02%
0.01%
0.01%
0.01%
0.01%
0.01%
Subscription
0.00%
0.00%
0.00%
0.00%
0.00%
Fuel and power

Running royalty
0.32%
0.67%
0.25%
0.63%
0.32%
0.63%
0.26%
0.67%
0.32%
1.28%
Technical fee
0.14%
0.08%
0.04%
0.05%
0.05%
Parts development
Staff catering, transport and
uniforms
Staff training
0.02%
0.01%
0.00%
0.01%
0.00%
0.00%
0.00%
0.24%
0.01%
0.27%
0.04%
0.25%
0.05%
0.27%
0.03%
Others

0.00%
0.02%
0.04%
0.02%
0.01%
0.38%
-0.38%
0.30%
-0.27%
0.24%
-0.17%
0.16%
-0.17%
0.19%
-0.25%

Opening stock
82.83%
1.36%
80.67%
2.28%
76.14%
3.39%
76.36%
1.28%
85.04%
2.97%
8.92%
9.03%
10.46%
15.79%
9.50%
-2.92%
-3.76%
-1.35%
-2.71%
-3.65%
90.20%
88.23%
88.63%
90.71%
93.86%
9.80%
11.77%
11.37%
9.29%
6.14%
Purchases
Closing stock
Cost of Goods Sold

Gross Profit
95

1.07%
1.15%
1.31%
1.18%
1.24%
Operating Expenses
1.01%
0.69%
0.68%
0.72%
0.93%
2.07%
1.84%
1.98%
1.89%
2.17%
Operating Profit
7.73%
9.93%
9.38%
7.40%
3.97%
0.68%
7.06%
0.91%
9.02%
0.89%
8.49%
0.74%
6.66%
0.41%
3.55%
1.63%
2.90%
2.39%
1.90%
1.92%
8.68%
11.92%
10.89%
8.56%
5.47%
Finance Costs
0.34%
0.36%
0.06%
0.01%
0.07%
8.34%
11.56%
10.83%
8.55%
5.40%
Taxation
2.96%
4.04%
3.80%
3.02%
1.75%
5.38%
7.52%
7.03%
5.53%
3.66%
1889.00%
1989.00%
2089.00%
2189.00%
2289.00%
Earning Per Share
96

Annexure II

Summarized Balance Sheet
As on June 30,
2005
ASSETS
2006
2007
2008
2009
(Rupees in '000)
Current Assets
Stores and Spares
137,028
226,169
227,191
232,142
128,483
1,380,676
1,627,463
1,108,149
917,921
1,384,179
Work in process
106,130
95,520
64,533
71,959
95,076
Finished goods
214,482
744,469
59,162
277,233
613,117
Vehicles
436,479
413,268
283,400
601,065
498,823
Spare parts
Special service tools and
publications
153,755
165,027
185,549
279,052
356,487
345
1,378
222
851
2,846
(43,308)
(128,752)
876,988
912,191
1,158,936
532,856
1,267,082
3,168,855
3,959,316
2,859,951
2,637,629
4,088,858
384,511
738,281
665,647
1,332,832
1,736,631
29,259
5,811
3,710
302,888
414,338
426,165
737,372
894,459
4,371
9,134
47,523
23,148
16,876
Accrued mark-up
46,543
76,211
132,634
35,012
50,944
Other receivables
302,171
1,250,217
605,725
74,360
67,902
54,171
Raw material and components
Provision for slow moving stock

In transit
Stock-in-trade
Trade debts
Current maturity of finance
under musharika arrangements
Loans and advances
Short-term prepayments
Investments
Taxation-net
Cash and bank balances
82,315
48,520
209,533
6,719,999
7,416,180
8,543,263
4,328,585
9,731,166
98
TOTAL CURRENT ASSETS
11,177,940
14,095,657
13,560,329
9,664,784
16,715,319
388
1,019
4,240
42,341
28,509
5,149
5,181
6,629
7,222
7,222
12,153
4,021
17,690
10,221
10,869
49,563
35,731
901,035
1,408,314
1,902,912
3,592,271
3,900,977
Capital work-in-progress
87,307
302,153
187,372
438,696
29,524
Intangible Assets
10,545
6,123
3,568
2,795
3,972
998,887
1,716,590
2,093,852
4,033,762
3,934,473
12,194,517
15,822,468
15,665,050
13,748,109
20,685,523
2005
2006
2007
2008
2009
Non-Current Assets
Long-term loans
Long-term deposits
Finance under musharika
arrangements
TOTAL NON-CURRENT
ASSETS
Fixed Assets
Property, plant and equipment
TOTAL FIXED ASSETS
TOTAL ASSETS
LIABILITIES AND
SHAREHOLDER'S EQUITY
(Rupees in '000)
LIABILITIES
Current Liabilities
Trade and other payables
Advances from customers and
dealers
Accrued mark-up
Short-term running finances
Current portion of liabilities
against assets subject to finance
lease
Taxation - net
TOTAL CURRENT
LIABILITIES
2,022,227
2,599,911
2,892,017
2,793,554
3,942,988
5,603,342
6,620,869
4,514,480
985,972
5,926,529
10,568
22,250
715
105
673
27,925
5,735
3,714
195,789
14,660
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
99

Non-current Liabilities
Liabilities against assets subject
to finance lease
11,957
3,871
Deferred taxation
TOTAL NON-CURRENT
LIABILITIES
42,693
116,164
210,149
532,138
503,700
54,650
120,035
210,149
532,138
503,700
7,718,712
9,564,589
7,621,075
4,311,769
10,388,550
786,000
786,000
786,000
786,000
786,000
Reserves
3,689,805
5,471,879
7,257,975
8,650,340
9,510,973
TOTAL EQUITY
4,475,805
6,257,879
8,043,975
9,436,340
10,296,973
12,194,517
15,822,468
15,665,050
13,748,109
20,685,523
TOTAL LIABILITIES
Shareholder's Equity
Paid up capital
TOTAL LIABILITIES AND

100
Annexure II.I

Comparative Chain Base Balance Sheet
As on June 30,
2006
ASSETS
2007
2008
2009
(Rupees in '000)
Current Assets
Stores and Spares
89,141
1,022
4,951
(103,659)
246,787
(519,314)
(190,228)
466,258
Work in process
(10,610)
(30,987)
7,426
23,117
Finished goods
529,987
(685,307)
218,071
335,884
Vehicles
Spare parts
(23,211)
11,272
(129,868)
20,522
317,665
93,503
(102,242)
77,435
1,033
(1,156)
629
1,995
(43,308)
(85,444)
35,203
246,745
(626,080)
734,226
Stock-in-trade
790,461
(1,099,365)
(222,322)
1,451,229
Trade debts
353,770
(72,634)
667,185
403,799
Current maturity of finance under

musharika arrangements
Loans and advances
(23,448)
(2,101)
(3,710)
111,450
11,827
311,207
157,087
4,763
38,389
(24,375)
(6,272)
Accrued mark-up
29,668
56,423
(97,622)
15,932
Other receivables
Investments
948,046
-
(644,492)
-
(531,365)
54,171
(6,458)
(54,171)
Taxation-net
(82,315)
48,520
161,013
(209,533)
696,181
1,127,083
(4,214,678)
5,402,581
2,917,717
(535,328)
(3,895,545)
7,050,535
Special service tools and publications

In transit
101
Non-Current Assets
Long-term loans
Long-term deposits
arrangements
631
32
3,221
1,448
38,101
593
(13,832)
-
(8,132)
(4,021)
TOTAL NON-CURRENT ASSETS
(7,469)
648
38,694
(13,832)
507,279
494,598
1,689,359
308,706
214,846
(114,781)
251,324
(409,172)
(4,422)
(2,555)
(773)
1,177
717,703
377,262
1,939,910
(99,289)
(157,418) (1,916,941)
6,937,414
Fixed Assets
Intangible Assets
TOTAL FIXED ASSETS
TOTAL ASSETS
3,627,951
LIABILITIES AND
2006
2007
2008
2009
(Rupees in '000)
LIABILITIES
Current Liabilities
dealers
577,684
292,106
(98,463)
1,149,434
1,017,527
(2,106,389)
(3,528,508)
4,940,557
11,682
(21,535)
(610)
568
Current portion of liabilities against

assets subject to finance lease
(22,190)
(2,021)
(3,714)
Taxation - net
195,789
(195,789)
14,660
1,780,492
(2,033,628)
(3,631,295)
6,105,219
(8,086)
(3,871)
73,471
93,985
321,989
(28,438)
Accrued mark-up
TOTAL CURRENT LIABILITIES

Liabilities against assets subject to
finance lease
Deferred taxation
102

TOTAL NON-CURRENT
LIABILITIES
65,385
90,114
321,989
(28,438)
1,845,877
(1,943,514)
(3,309,306)
6,076,781
Reserves
1,782,074
1,786,096
1,392,365
860,633
TOTAL EQUITY
1,782,074
1,786,096
1,392,365
860,633
(157,418) (1,916,941)
6,937,414
TOTAL LIABILITIES
Paid up capital

3,627,951
103
Annexure II.II

Percentage Comparative Chain Base Balance Sheet
As on June 30,
2006
ASSETS
2007
2008
2009
(Rupees in '000)
Current Assets
Stores and Spares
65.05%
0.45%
2.18%
-44.65%
17.87%
-10.00%
247.10%
-31.91%
-32.44%
-92.05%
-17.17%
11.51%
368.60%
50.80%
32.13%
121.16%
-5.32%
-31.42%
112.09%
-17.01%
Spare parts
7.33%
299.42%
12.44%
-83.89%
50.39%
283.33%
27.75%
234.43%
#DIV/0!
#DIV/0!
#DIV/0!
197.29%
4.01%
27.05%
-54.02%
137.79%
Stock-in-trade
Trade debts
24.94%
92.01%
-27.77%
-9.84%
-7.77%
100.23%
55.02%
30.30%

-80.14%
-36.16%
-100.00%
#DIV/0!
36.80%
2.85%
73.03%
21.30%
Accrued mark-up
Other receivables
108.97%
63.74%
313.74%
420.29%
74.04%
-51.55%
-51.29%
-73.60%
-87.72%
-27.10%
45.50%
-8.68%
Investments
#DIV/0!
#DIV/0!
#DIV/0!
-100.00%
Taxation-net
-100.00%
#DIV/0!
331.85%
-100.00%
10.36%
15.20%
-49.33%
124.81%
26.10%
-3.80%
-28.73%
72.95%
Long-term loans
Long-term deposits
162.63%
0.62%
316.09%
27.95%
898.61%
8.95%
-32.67%
0.00%
Finance under musharika arrangements
-66.91%
-100.00%
#DIV/0!
#DIV/0!
-42.22%
6.34%
356.00%
-27.91%
56.30%
35.12%
88.78%
8.59%
246.08%
-37.99%
134.13%
-93.27%

Work in process
Finished goods
Vehicles
In transit
Loans and advances
Non-Current Assets
Fixed Assets
104

Intangible Assets
-41.93%
-41.73%
-21.66%
42.11%
TOTAL FIXED ASSETS
71.85%
21.98%
92.65%
-2.46%
TOTAL ASSETS
29.75%
-0.99%
-12.24%
50.46%
LIABILITIES AND
2006
2007
2008
2009
(Rupees in '000)
LIABILITIES
Current Liabilities
Advances from customers and dealers
28.57%
18.16%
11.24%
-31.81%
-3.40%
-78.16%
41.15%
501.08%
Accrued mark-up
110.54%
-96.79%
-85.31%
540.95%
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
-79.46%
-35.24%
-100.00%
#DIV/0!
#DIV/0!
-100.00%
#DIV/0!
#DIV/0!
23.23%
-21.53%
-49.00%
161.53%

Taxation - net
finance lease
Deferred taxation
-67.63%
-100.00%
#DIV/0!
#DIV/0!
172.09%
80.91%
153.22%
-5.34%
TOTAL NON-CURRENT LIABILITIES
119.64%
75.07%
153.22%
-5.34%
TOTAL LIABILITIES
23.91%
-20.32%
-43.42%
140.93%
Paid up capital
0.00%
0.00%
0.00%
0.00%
Reserves
48.30%
32.64%
19.18%
9.95%
TOTAL EQUITY
39.82%
28.54%
17.31%
9.12%

29.75%
-0.99%
-12.24%
50.46%
105
Annexure II.III

Percentage Comparative 2005 Base Balance Sheet
As on June 30,
2006
ASSETS
2007
2008
2009
(Rupees in '000)
Current Assets
Stores and Spares
165.05%
165.80%
169.41%
93.76%

Work in process
Finished goods
117.87%
90.00%
347.10%
80.26%
60.81%
27.58%
66.48%
67.80%
129.26%
100.25%
89.58%
285.86%
94.68%
64.93%
137.71%
114.28%
Spare parts
107.33%
399.42%
120.68%
64.35%
181.49%
246.67%
231.85%
824.93%
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
In transit
104.01%
132.15%
60.76%
144.48%
Stock-in-trade
Trade debts
124.94%
192.01%
90.25%
173.12%
83.24%
346.63%
129.03%
451.65%
19.86%
12.68%
0.00%
0.00%
Loans and advances
136.80%
140.70%
243.45%
295.31%
Accrued mark-up
Other receivables
208.97%
163.74%
413.74%
1087.23%
284.97%
200.46%
529.58%
75.23%
24.61%
386.09%
109.46%
22.47%
Investments
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
Taxation-net
0.00%
58.94%
254.55%
0.00%
110.36%
127.13%
64.41%
144.81%
126.10%
121.31%
86.46%
149.54%
1092.78% 10912.63%
128.74%
140.26%
7347.68%
140.26%
Vehicles

Non-Current Assets
Long-term loans
Long-term deposits
262.63%
100.62%
Finance under musharika arrangements
33.09%
0.00%
0.00%
0.00%
57.78%
61.44%
280.18%
201.98%
156.30%
211.19%
398.68%
432.94%
346.08%
214.61%
502.48%
33.82%
Fixed Assets
106

Intangible Assets
TOTAL FIXED ASSETS
TOTAL ASSETS
LIABILITIES AND
58.07%
33.84%
26.51%
37.67%
171.85%
209.62%
403.83%
393.89%
129.75%
128.46%
112.74%
169.63%
2006
2007
2008
2009
(Rupees in '000)
LIABILITIES
Current Liabilities
Advances from customers and dealers
128.57%
118.16%
143.01%
80.57%
138.14%
17.60%
194.98%
105.77%
Accrued mark-up
210.54%
6.77%
0.99%
6.37%
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

Taxation - net
20.54%
13.30%
0.00%
0.00%
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
123.23%
96.70%
49.32%
128.98%
finance lease
Deferred taxation
32.37%
0.00%
0.00%
0.00%
272.09%
492.23%
1246.43%
1179.82%
TOTAL NON-CURRENT LIABILITIES
219.64%
384.54%
973.72%
921.68%
TOTAL LIABILITIES
123.91%
98.74%
55.86%
134.59%
Paid up capital
100.00%
100.00%
100.00%
100.00%
Reserves
148.30%
196.70%
234.44%
257.76%
TOTAL EQUITY
139.82%
179.72%
210.83%
230.06%
129.75%
128.46%
112.74%
169.63%

107
Annexure
II.IV

Comparative Vertical Common size Balance Sheet
As on June 30,
2005
ASSETS
2006
2007
2008
2009
(Rupees in '000)
Current Assets
Stores and Spares
1.12%
1.43%
1.45%
1.69%
0.62%
11.32%
10.29%
7.07%
6.68%
6.69%
Work in process
Finished goods
0.87%
1.76%
0.60%
4.71%
0.41%
0.38%
0.52%
2.02%
0.46%
2.96%
Vehicles
Spare parts
Special service tools and
publications
In transit
3.58%
1.26%
2.61%
1.04%
1.81%
1.18%
4.37%
2.03%
2.41%
1.72%
0.00%
0.00%
7.19%
0.01%
0.00%
5.77%
0.00%
0.00%
7.40%
0.01%
-0.32%
3.88%
0.01%
-0.62%
6.13%
25.99%
3.15%
0.24%
25.02%
4.67%
0.04%
18.26%
4.25%
0.02%
19.19%
9.69%
0.00%
19.77%
8.40%
0.00%
Loans and advances

2.48%
0.04%
2.62%
0.06%
2.72%
0.30%
5.36%
0.17%
4.32%
0.08%
Accrued mark-up
0.38%
0.48%
0.85%
0.25%
0.25%
Other receivables
2.48%
7.90%
3.87%
0.54%
0.33%
Investments
Taxation-net
0.00%
0.68%
55.11%
0.00%
0.00%
46.87%
0.00%
0.31%
54.54%
0.39%
1.52%
31.48%
0.00%
0.00%
47.04%
91.66%
89.09%
86.56%
70.30%
80.81%
Long-term loans
0.00%
0.01%
0.03%
0.31%
0.14%
Long-term deposits
arrangements
0.04%
0.03%
0.04%
0.05%
0.03%
0.10%
0.03%
0.00%
0.00%
0.00%
0.15%
0.06%
0.07%
0.36%
0.17%
Stock-in-trade
Trade debts
Non-Current Assets
Fixed Assets
108

7.39%
8.90%
12.15%
26.13%
18.86%
Intangible Assets
0.72%
0.09%
1.91%
0.04%
1.20%
0.02%
3.19%
0.02%
0.14%
0.02%
TOTAL FIXED ASSETS
8.19%
10.85%
13.37%
29.34%
19.02%
100.00%
100.00%
100.00%
100.00%
100.00%
2005
2006
2007
2008
TOTAL ASSETS
LIABILITIES AND
2009
(Rupees in '000)
LIABILITIES
Current Liabilities
dealers
16.58%
16.43%
18.46%
20.32%
19.06%
45.95%
41.84%
28.82%
7.17%
28.65%
Accrued mark-up
0.09%
0.00%
0.14%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%

Taxation - net
0.23%
0.04%
0.02%
0.00%
0.00%
0.00%
1.24%
0.00%
0.00%
0.07%
62.85%
59.69%
47.31%
27.49%
47.79%

finance lease
0.10%
0.02%
0.00%
0.00%
0.00%
Deferred taxation
TOTAL NON-CURRENT
LIABILITIES
0.35%
0.73%
1.34%
3.87%
2.44%
0.45%
0.76%
1.34%
3.87%
2.44%
TOTAL LIABILITIES
63.30%
60.45%
48.65%
31.36%
50.22%
Paid up capital
6.45%
4.97%
5.02%
5.72%
3.80%
Reserves
30.26%
34.58%
46.33%
62.92%
45.98%
TOTAL EQUITY
36.70%
39.55%
51.35%
68.64%
49.78%
100.00%
100.00%
100.00%
100.00%
100.00%


109

Annexure III
2005
2006
2007
2008
2009
Current Assets - Current Liabilities
1. Net Working Capital

11,177,940
14,095,657
13,560,329
9,664,784
16,715,319
-7,664,062
-9,444,554
-7,410,926
-3,779,631
-9,884,850
3,513,878
4,651,103
6,149,403
5,885,153
6,830,469
Current Assets
Current Liabilities
2. Current Ratio
11,177,940
14,095,657
13,560,329
9,664,784
16,715,319
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
1.46 : 1
1.49 : 1
1.83 : 1
2.56 : 1
1.69 : 1
Current Assets - Inventory
3. Acid Test Ratio
Current Liabilities
8,009,085
10,136,341
10,700,378
7,027,155
12,626,461
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
1.05 : 1
1.07 : 1
1.44 : 1
1.86 : 1
1.28 : 1
Marketable Securities + Cash
4. Cash Ratio
Current Liabilities
6,719,999
7,416,180
8,543,263
4,382,756
9,731,166
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
0.88 : 1
0.79 : 1
1.15 : 1
1.16 : 1
0.98 : 1
5. Cash Flow from

Operations Ratio
Cash from Operations

Current Liabilities
884,945
2,675,847
2,823,727
(811,077)
6,536,529
7,664,062
9,444,554
7,410,926
3,779,631
9,884,850
0.12 : 1
0.28 : 1
0.38 : 1
(0.21) : 1
0.66 : 1
111

Annexure IV
2005
2006
1. Time Interest
Earned Ratio
2. Fixed
Charged
Coverage Ratio
3. Debt Ratio
4. Debt Equity
Ratio
2008
2009

Interest Expense
2,397,050
4,199,722
4,252,166
3,544,471
2,072,553
94,093
126,945
22,685
2,760
26,540
25.48
33.08
187.44
1,284.23
78.09

Interest + Lease Payment + Principal Payment
2,397,050
106,050
4,199,722
130,816
4,252,166
22,685
3,544,471
2,760
2,072,553
26,540
22.60
32.10
187.44
1,284.23
78.09
Total Liabilities
Total Assets
)100
7,718,712
12,194,517
9,564,589
15,822,468
7,621,075
15,665,050
4,311,769
13,748,109
10,388,550
20,685,523
63.30%
60.45%
48.65%
31.36%
50.22%
(
4,475,805
0.00%
5. Debt to
Tangible Net
worth
2007
(
7,718,712
4,465,260
172.86%
Long Term Debt

Share Holder's Equity
6,257,879
0.00%
)100
8,043,975
9,436,340
10,296,973
0.00%
0.00%
0.00%
Total Liabilities
Owner's Equity - Intangible Assets
9,564,589
6,251,756
152.99%
7,621,075
8,040,407
94.78%
)100
4,311,769
9,433,545
45.71%
10,388,550
10,293,001
100.93%
113

Annexure V
2005
1. Day's Sales in
A/R
2006
2007
2008
2009
Gross A/R
Net Sales / 365 days
989,570
2,402,836
1,697,537
2,144,564
2,698,992
75,619.27
96,538.45
107,017.06
113,489.98
103,738.64
13.09
24.89
15.86
18.90
26.02
2. Accounts
Receivable
Turnover
Net Sales
Gross A/R
27,601,034
989,570
35,236,535
2,402,836
39,061,226
1,697,537
41,423,843
2,144,564
37,864,604
2,698,992
27.89
14.66
23.01
19.32
14.03
3. Day's Sales in
Inventory
Ending Inventory
Cost of Goods Sold / 365 days
805,061
68,205
1,324,142
85,175
528,333
94,851
1,123,784
102,946
1,382,259
97,371
11.80
15.55
5.57
10.92
14.20
4. Inventory
Turnover
Cost of Goods Sold

Average Inventory
24,894,856
589,933.50
31,088,906
1,064,601.50
34,620,632
926,237.50
37,575,356
826,058.50
35,540,418
1,253,021.50
42.20
29.20
37.38
45.49
28.36
115

Annexure VI
2005
2006
1. Net Profit
Margin
2007
2008
2009
Net Income
Net Sales
)100
1,484,646
2,648,464
2,745,701
2,290,845
1,385,102
27,601,034
35,236,535
39,061,226
41,423,843
37,864,604
5.38%
7.52%
7.03%
5.53%
3.66%
2. Total Asset
Turnover
Net Sales
Total Assets
27,601,034
12,194,517
35,236,535
15,822,468
39,061,226
15,665,050
41,423,843
13,748,109
37,864,604
20,685,523
2.26
2.23
2.49
3.01
1.83
3. Return on
Assets
Net Income
Total Assets
)100
1,484,646
12,194,517
2,648,464
15,822,468
2,745,701
15,665,050
2,290,845
13,748,109
1,385,102
20,685,523
12.17%
16.74%
17.53%
16.66%
6.70%
4. Operating
Income Margin
Operating Income
Net Sales
)100
2,134,221
27,601,034
3,500,256
35,236,535
3,665,306
39,061,226
3,063,830
41,423,843
1,501,952
37,864,604
7.73%
9.93%
9.38%
7.40%
3.97%
5. Operating
Assets Turnover
Net Sales
Operating Assets
27,601,034
901,035
35,236,535
1,408,314
39,061,226
1,902,912
41,423,843
3,592,271
37,864,604
3,900,977
30.63
25.02
20.53
11.53
9.71
117

6. Return on
Operating Assets
Net Income
Operating Assets
)100
1,484,646
901,035
2,648,464
1,408,314
2,745,701
1,902,912
2,290,845
3,592,271
1,385,102
3,900,977
164.77%
188.06%
144.29%
63.77%
35.51%
7. Sales to Fixed
Assets
Net Sales
Fixed Assets
27,601,034
998,887
35,236,535
1,716,590
39,061,226
2,093,852
41,423,843
4,033,762
37,864,604
3,934,473
27.63
20.53
18.66
10.27
9.62
8. Return on
Equity
Net Income
Total Equity
)100
1,484,646
4,475,805
2,648,464
6,257,879
2,745,701
8,043,975
2,290,845
9,436,340
1,385,102
10,296,973
33.17%
42.32%
34.13%
24.28%
13.45%
9. Gross Profit
Margin
Gross Profit
Net Sales
)100
2,706,178
27,601,034
4,147,629
35,236,535
4,440,594
39,061,226
3,848,487
41,423,843
2,324,186
37,864,604
9.80%
11.77%
11.37%
9.29%
6.14%
118

Annexure VII
2005
2006
2007
1. Earning Per
Share
2009
Net Income
No. of Equity Shares
1,484,646
2,648,464
2,745,701
2,290,845
1,385,102
78,600
78,600
78,600
78,600
78,600
18.89
33.70
34.93
29.15
17.62
2. Price Earning
Ratio

Earning Per Share
90.00
18.89
191.00
33.70
305.50
34.93
200.05
29.15
107.72
17.62
4.76
5.67
8.75
6.86
6.11
3. Dividend
Payout Ratio
4. Dividend Yield
Ratio
2008
Dividend Per Share

Earning Per Share
)100
10.00
18.89
12.00
33.70
13.00
34.93
10.50
29.15
10.00
17.62
52.94%
35.61%
37.22%
36.02%
56.75%
Dividend Per Common Share

)100
10.00
90.00
12.00
191.00
13.00
305.50
10.50
200.05
10.00
107.72
11.11%
6.28%
4.26%
5.25%
9.28%
120

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PROFESSIONAL PROJECT

INDUS MOTOR COMPANY LIMITED

Department Of Management Sciences

Indus Motor Company Ltd (Financial Analysis)

Project Supervisor: Mr. Rai Imtiaz Hussain

Submitted by: Mansoor Humayun

In the Name of Allah the Most Gracious, the

Read (O Prophet,) in the name of yours Rub,

I am much obliged to my loving Parents whose prayers have enabled me

It is also a matter of immense pleasure for me to express my gratitude to

I wish to thanks all my Friends and Classmates who really helped me by

Obviously this achievement was not possible without all of you.

REASON FOR CHOOSING THE ORGANIZATION

AIMS AND OBJECTIVES OF THE PROJECT

AUTOMOBILE INDUSTRY IN PAKISTAN

CURRENT SITUTATION OF CAR INDUSTRY

INDUS MOTOR COMPANY LIMITED

2.3.1 NAME OF COMPANY

2.3.2 INDUSTRY TYPE

2.3.3 MAJOR INVESTORS

2.3.7 CORE VALUES

2.3.8 STRATEGIC OBJECTIVES

2.4.1 BOARD OF DIRECTORS

2.4.4 LEGAL ADVISORS

2.4.6 FACTORY/REGISTERED OFFICE

2.4.8 COMPANY SECRETARY

2.4.9 AUDIT COMMITTEE MEMBERS

3.2.1 POLITICAL FACTORS

3.2.2 ECONOMICAL FACTORS

3.2.3 SOCIAL FACTORS

3.2.4 TECHNOLOGICAL FACTORS

BOSTON CONSULTING GROUP MATRIX

3.3.2 CASH COWS

3.3.3 QUESTION MARK

TOYOTA COROLLA BCG MATRIX

INCOME STATEMENT ANALYSIS

CONDENSED INCOME STATEMENT

COST OF GOODS SOLD

OTHER OPERATING EXPENSES

OTHER OPERATING INCOME

PROFIT BEFORE INTEREST AND TAX

4.10 FINANCE COST

4.11 PROFIT BEFORE TAXATION

4.13 PROFIT AFTER TAXATION

BALANCE SHEET ANALYSIS

CONDENSED BALANCE SHEET

TOTAL FIXED ASSETS

LONG TERM DEBT

TOTAL LIABILITIES AND EQUITY

SHORT TERM DEBT PAYING ABILITY

6.1.1 NET WORKING CAPITAL

6.1.2 CURRENT RATIO

6.1.3 ACID TEST RATIO

6.1.4 CASH RATIO

6.1.5 CASH FLOW FROM OPERATIONS RATIO

LONG TERM DEBT PAYING ABILITY

6.2.1 TIME INTEREST EARNED RATIO

6.2.2 FIXED CHARGED COVERAGE RATIO

6.2.3 DEBT RATIO

6.2.4 DEBT EQUITY RATIO

6.2.5 DEBT TO TANGIBLE NETWORTH

SHORT TERM LIQUIDITY

6.3.1 DAYS SALES IN A/R